EXHIBIT 10.54
Page 1
ASSET PURCHASE AGREEMENT
This Agreement (this "Agreement") is made this 3rd day of November 2000
(the "Effective Date") by and between ELECTROPURE, INC., a California
corporation (the "Seller"), having an address at 00000 Xxxxx Xxxxxx Xxxxx, Xxxxx
X, Xxxxxx Xxxxx, Xxxxxxxxxx 00000-0000 and RESINTECH, INC. a New Jersey
corporation (the "Buyer"), having an address at 0000 Xxx Xxxxxxxx Xxxx, Xxxxxx
Xxxx, Xxx Xxxxxx 00000-0000 (the Seller and the Buyer each, a "Party" and
collectively, the "Parties").
BACKGROUND
A. The Seller is currently engaged in the business of marketing water and
wastewater treatment products through its division known as Hydro Components
("Hydro").
B. The Seller desires to sell to the Buyer and the Buyer desires to
purchase from the Seller all of the assets of the Seller that are related solely
to Hydro in accordance with, and as more particularly described in, this
Agreement.
The Parties, for good and valuable consideration, the sufficiency of
which is hereby acknowledged by each Party to the other, intending to be legally
bound hereby covenant, acknowledge and agree, as follows:
TERMS
1. SALE OF ASSETS. The Seller hereby agrees to sell to the Buyer and the
Buyer hereby agrees to purchase from the Seller, in accordance with the
terms of this Agreement, all of the Seller's right, title and interest
in and to the Assets (as defined below) (the "Transaction").
2. ASSETS; TITLE TO ASSETS. The Seller's assets that shall be conveyed to
the Buyer pursuant to this Agreement shall consist of all of the assets
of Hydro as set forth and more particularly described on the attached
Schedule 2 , which Schedule 2 is incorporated into and made a part of
this Agreement (collectively, the "Assets"). The Seller shall convey to
the Buyer good, clear and marketable title in and to the Assets, free
and clear of any judgments, liens or encumbrances of any nature
whatsoever (collectively, "Liens") and shall deliver to the Buyer the
Xxxx of Sale (as defined below) evidencing such conveyance.
3. PURCHASE PRICE.
(i) Purchase Price. The total purchase price for the Assets shall be
Two Hundred Fifteen Thousand Dollars ($215,000).
(ii) Payment of Purchase Price. The Purchase Price shall be paid, by
wire transmittal of immediately available funds to the Seller, as follows:
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A. Upon receipt by Fox, Rothschild (as defined below) of both
this Agreement and the original Xxxx of Sale (as defined below) as executed by
the Seller, the Buyer shall pay the Seller the amount of Fifty Thousand Dollars
($50,000) (the "Deposit"); and
B. The Buyer shall pay the balance of the Purchase Price,
i.e., One Hundred Sixty Five Thousand Dollars ($165,000) (the "Balance") to the
Seller upon the occurrence of each of the following: (i) the satisfactory
completion of the Inspection (as defined below); and (ii) the receipt by the
Buyer, of either (a) Searches (as defined below) indicating the absence of any
Liens; or (b) the Discharges (as defined below).
In the event that this Agreement is cancelled (i) the Seller shall
return the Deposit to the Buyer; and (ii) upon receipt by the Buyer of the
Deposit: (a) Fox, Rothschild shall return the Xxxx of Sale to the Seller, (b) in
the event the Assets shall have been delivered to the Buyer, the Buyer shall
ship the assets back to the Seller at the Seller's sole cost and expense, and
(c) neither Party shall have any further obligation to the other under this
Agreement.
4. XXXX OF SALE. The Seller shall deliver to Fox, Rothschild on or after
the Effective Date a fully executed xxxx of sale with regard to the Assets in
the form attached to this Agreement as Exhibit 4 (the "Xxxx of Sale"), which
Exhibit 4 is incorporated into and made a part of this Agreement. Fox,
Rothschild shall hold the Xxxx of Sale in escrow, to be released to the Buyer on
the Sale Date. In the event the sale is not consummated, Fox, Rothschild shall
return the Xxxx of Sale to the Seller.
5. SEARCHES. Upon the execution of this Agreement, the Buyer shall obtain,
at the Buyer's sole cost, judgment searches and UCC searches regarding the
Assets (collectively, the "Searches"). In the event that any of the Searches
reveals the existence of any Liens, the Seller shall immediately obtain and
provide to the Buyer such discharges, satisfaction, releases or UCC-3
Termination Statements, in a form acceptable to the Buyer, as the Buyer may
require in order to release, satisfy or evidence the release or satisfaction of
any Liens (collectively, the "Discharges"). If the Seller is unable to provide
the Buyer with any required Discharges within fifteen (15) days following the
Shipping Date, the Buyer may cancel this Agreement upon written notice to the
Seller.
6. SHIPPING. Upon a date following the Effective Date mutually agreeable to
the Parties (the "Shipping Date"), the Seller shall commence delivery of the
Assets to the Buyer at the Buyer's address set forth above (the "Buyer's
Facility") by means of an appropriate transportation method acceptable to the
Buyer. The Seller shall bear the risk of loss with regard to the Assets, and
shall maintain a policy of insurance covering the Assets in an amount no less
than the Purchase Price, until the Assets have been delivered to the Buyer's
Facility. The Seller shall be solely responsible for, and shall pay, all of the
expenses associated with shipping and insuring the Assets.
7. RIGHT OF INSPECTION. The Buyer shall have the right to inspect the
Assets upon delivery to the Buyer's Facility. Within five (5) business days
after the delivery of the Assets (the "Inspection Period"), the Buyer shall
notify the Seller of any claim the Buyer may have with respect to the condition,
quality or grade of any of the Assets or the non-conformance of any of the
Assets to the provisions of this Agreement (a "Claim"), specifying in
commercially
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reasonable detail the basis of any Claim. The Seller may, at its option, inspect
the Assets at the Buyer's Facility in order to confirm any Claim. If the Buyer
notifies the Seller of a Claim, the Parties shall attempt to reach a mutually
agreeable resolution of the Claim or the Buyer may, at the Buyer's sole option,
cancel this Agreement upon written notification of the Seller. If the Buyer does
not notify the Seller of a Claim prior to the expiration of the Inspection
Period, the Buyer shall be deemed to have irrevocably accepted the Assets as of
such date (the earlier of such date or the date the Buyer notifies the Seller
that it accepts the Assets, the "Sale Date") and the Buyer shall transmit the
Balance to the Seller. In the event any of the Assets are returned to the Seller
in accordance with the Inspection, the Seller shall pay all costs associated
with the return shipping.
8. TECHNICAL SUPPORT. The Seller shall provide the Buyer, at the Seller's
sole cost and expense, except for travel, lodging and transportation expenses
which shall be borne by the Buyer, the technical support of the Seller's
employee, Xxxxx Xxxxx ("White"), at the Buyer's Facility for a period of five
(5) consecutive business days (the "Technical Support"), the dates of which
shall be mutually agreed to by the Parties. The Buyer shall not be required to
pay White, and White shall not seek, any additional compensation from the Buyer
in connection with providing the Technical Support.
9. ORDERS SUBSEQUENT TO SALE DATE. Immediately upon receipt, the Seller
shall transmit to the Buyer, via facsimile with originals following via mail
service, all orders for Hydro products or services received by the Seller
subsequent to the Shipping Date. In addition, the Seller shall:
(i) notify all Hydro customers, at least twice in writing as soon as
practicable after the Sale Date that the Buyer has purchased the Assets;
(ii) for a period of sixty (60) days following the Sale Date (the
"Sixty Day Period"), forward all telephone calls related to Hydro and/or
the Assets to the Buyer's business telephone;
(iii) for a period of ten (10) months following the expiration of the
Sixty Day Period, refer all persons who call the Seller regarding Hydro
and/or the Assets to the Buyer and provide such callers with the Buyer's
telephone number and address;
(iv) provide the Buyer with any and all technical, administrative and
accounting support as may be reasonably necessary to effect a smooth
transition of the change in the ownership of the Assets.
10. WARRANTY. Except as set forth in this Agreement, the Seller makes no
warranty to the Buyer with respect to the Assets and the Buyer disclaims all
other warranties, express or implied, including, without limitation, any implied
warranty or merchantability or fitness for a particular purpose.
11. RESTRICTIVE COVENANTS. As a material consideration for the Buyer
entering into this Agreement without which the Buyer would not agree to purchase
the Assets, the Seller agrees that it shall, and that it shall require its
officers and directors (the foregoing, collectively, the "Restrained Parties")
to, comply with the following restrictive covenants:
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(i) Non-Solicitation Agreement. For a period of sixty (60) months
commencing with the Sale Date, neither the Seller nor any of the Restrained
Parties shall, without the Buyer's express prior written consent, directly or
indirectly, in any capacity, for its, his or her own benefit or the benefit of
any person or entity, solicit, service, contact, or aid in the solicitation of
any person which is or was the Seller's customer or prospective customer
(collectively, the Customers) for the purpose of (a) selling goods or services
in competition with the Buyer's operations relating to the Assets and/or Hydro;
(b) inducing any of the Customers to cease doing business in whole or in part
with the Buyer; or (c) inducing any of the Customers to do business with any
person or entity in competition with the Buyer relating to the Assets or Hydro.
The Seller acknowledges and agrees on its own behalf and that of the Restrained
Parties that the restrictions contained in this Section 11(i) (the
"Non-Solicitation Agreement") are reasonable and necessary to protect the
Buyer's investment in the Assets and legitimate business interests in the
Customers.
(ii) Non-Competition Agreement. For a period of sixty (60) months
commencing with the Sale Date, neither the Seller nor any of the Restrained
Parties shall, without the Buyer's express prior written consent, directly or
indirectly, in any capacity, for its, his or her own benefit or the benefit of
any person or entity, establish, engage in, own, manage, operate, be employed
by, join, participate in, or control any business that competes or is reasonably
expected to compete, directly or indirectly, with the business of the Buyer
relating to the Assets and/or Hydro. The Seller acknowledges and agrees on its
own behalf and that of the Restrained Persons that the restrictions contained in
this Section 4(ii) (the "Non-Competition Agreement") are reasonable and
necessary to protect the Seller's legitimate business interests.
(iii) Amendment by the Court. In the event that a court of competent
jurisdiction shall determine that the scope of any of the provisions of either
the Non-Solicitation Agreement or the Non-Competition Agreement (collectively,
the "Restrictive Covenants") shall be overly broad and unenforceable as written,
the Parties agree that the scope of such provision(s) shall be amended by the
court so as to be enforceable and the court shall, to the greatest extent
possible, give effect to Restrictive Covenants.
(iv) Breach of Agreement. The Seller acknowledges and agrees, on its
own behalf and that of the Restrained Parties, that a breach or violation of
either of the Restrictive Covenants will result in immediate and irreparable
injury and harm to the Buyer and that the Buyer shall therefore have, in
addition to any and all remedies of law, the right to an injunction, specific
performance or other equitable relief to prevent the violation of either of the
Restrictive Covenants, plus reasonable attorneys' fees and costs incurred in
obtaining any such relief. The Seller hereby expressly waives any right to claim
that any breach of either or the Restrictive Covenants is adequately compensable
in monetary damages.
12. PRESS RELEASES. Subject to the approval of the Seller, which approval
shall not be unreasonably withheld and which shall be deemed to be given unless
denied in a writing delivered to the Buyer within three (3) days receipt by the
Seller of the proposed press release, the Buyer shall have the right, at the
Buyer's sole option, to issue any press releases with regard to the Buyer's
purchase of the Assets.
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13. NO ASSUMPTION OF LIABILITIES. The Parties acknowledge and agree that the
Seller shall not assign to the Buyer and the Buyer shall not assume from the
Seller any of the Seller's liabilities whatsoever including, without limitation,
any liabilities under any contractual obligations of the Seller and/or Hydro or
any tax liabilities of the Seller.
14. INDEMNIFICATION BY SELLER. The Seller hereby agrees to defend, indemnify
and hold the Buyer, the Buyer's shareholders, directors, officers, agents and
successors (collectively, the Buyer's Indemnified Parties) harmless from and
against any and all claims, actions, judgments, demands, costs, expenses,
liabilities, and losses (including court costs and reasonable attorneys' fees),
whether in contract, tort or otherwise, suffered by the Buyer by reason of: (i)
any and all liabilities and obligations of, or claims against, the Seller and/or
Hydro, except for claims which arise from the operations of the Buyer on or
after the Sale Date; (ii) any breach by the Seller of any of the Seller's
representations, warranties and covenants in this Agreement; (iii) any and all
past, present or future claims brought by any governmental agency or person in
connection with the ownership or operation of the Assets and/or Hydro which
arise from or relate to the Assets and/or the operations of Hydro prior to the
Sale Date; and (iv) any liability of the Seller and/or Hydro under any
applicable bulk sale notification or similar requirement.
15. TAXES. The Buyer shall pay or reimburse the Seller, as appropriate, for
any sales, use, excise or other tax imposed or levied with respect to the
payment of the Purchase Price or the conveyance of title in the Assets to the
Buyer. In no event shall the Buyer be responsible for, and the Seller shall
defend, indemnify and hold the Buyer's Indemnified Persons harmless from, any
tax imposed upon the Seller based upon the Seller's income or for the privilege
of doing business.
16. NOTICES. All notices, requests, demands and other communications shall
be in writing and shall be deemed to have been duly given or made when: (i)
personally delivered; (ii) delivered by overnight courier; (iii) delivered by
facsimile; or (iv) if mailed by registered or certified mail, postage prepaid,
on the third day following deposition in a United States mail receptacle:
If to Buyer, addressed to: If to Seller, addressed to:
Xxxxxxx X. Xxxxxxxx, Vice President Xxxxx X. Xxxxxxx, President
RESINTECH, INC. Electropure, Inc.
0000 Xxx Xxxxxxxx Xxxx 00000 Xxxxx Xxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000-0000 Xxxxxx Xxxxx, XX 00000-0000
Phone: (000) 000-0000 (000) 000-0000
Fax: (000) 000-0000 (000) 000-0000
or such other address as either Party may advise the other in accordance with
the provisions set forth in this Section..
17. NON-ASSIGNMENT. Neither the Buyer nor the Seller may transfer or assign
all or any of its respective rights, duties or obligations under this Agreement
without the prior written consent of the other Party.
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18. SEVERABILITY. In the event any one or more provisions or portions of
this Agreement should be determined to be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
19. TITLES AND HEADINGS. Title and headings to Sections in this Agreement
are for convenience only and shall in no way limit, define or otherwise affect
this Agreement.
20. COUNTERPARTS; FACSIMILE. This Agreement may be executed by facsimile
and/or in two counterparts, each of which facsimile and counterpart shall be
deemed an original, but all of which counterparts together shall constitute one
and the same instrument.
21. RIGHTS AND REMEDIES ARE CUMULATIVE. The rights and remedies provided in
this Agreement are (i) cumulative, and the use of any one right or remedy by any
Party shall not preclude or waive its right to use any or all other remedies;
and (ii) given in addition to any other rights which either Party may have by
law, statute, ordinance, or otherwise.
22. BINDING ON SUCCESSORS. The provisions of this Agreement shall be binding
upon and inure to the benefit of the Parties' successors and permitted assigns.
23. ATTORNEYS' FEES. In the event of any dispute regarding the obligations
or the respective rights and interests of the Parties, the prevailing party
shall recover, upon demand, from the other party, all reasonable fees, costs and
expenses (including, without limitation, such fees, costs and expenses of
litigation and appeals) incurred by such prevailing Party in enforcing any
provision of this Agreement, whether or not litigation has commenced and without
regard to any schedule or the determination by a court as to the fees, costs and
expenses of such enforcement.
24. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
Parties and may be modified or amended only by a written instrument executed by
both Parties.
25. AUTHORIZATION; NO CONFLICT. Each Party hereby represents, warrants and
covenants to the other Party, as follows (i) the person executing this Agreement
on behalf of such Party is authorized to do so; and (ii) the execution and
delivery of this Agreement and the performance by the Parties of their
respective obligations under this Agreement (A) are within the corporate powers
of the respective Parties, (B) have been authorized by all necessary corporate
action, (C) have received all necessary approvals and/or consents (if any shall
be required), and (D) do not and will not contravene or conflict with any
provision of the law or of the charter or By-Laws of the Parties or any
agreement binding upon either of them.
IN WITNESS WHEREOF, the Parties have executed this Agreement as
of the Effective Date.
[signatures on following page]
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ATTEST: ELECTROPURE, INC.
XXXXX XXXXXXX, PRESIDENT By: /S/ XXXXX XXXXXXX
----------------------------- -----------------------------------
Name/Title: Xxxxx Xxxxxxx, President
ATTEST: RESINTECH, INC.
XXXXXXX X. XXXXXXXX BY: /S/XXXXXXX X. XXXXXXXX 11/3/00
----------------------------- -----------------------------------
Name/Title: Xxxxxxx X. Xxxxxxxx, Vice President
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GENERAL ASSIGNMENT, CONVEYANCE
AND XXXX OF SALE
ELECTROPURE, INC, a California corporation (the "Grantor"), having its
principal place of business at 00000 Xxxxx Xxxxxx Xxxxx, Xxxxxx Xxxxx,
Xxxxxxxxxx 00000, for the sum of Two Hundred Fifteen Thousand Dollars ($215,000)
and other good and valuable consideration received to its full satisfaction from
RESINTECH, INC., a New Jersey corporation (the "Grantee"), having its principal
place of business at 0000 Xxx Xxxxxxxx Xxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000,
pursuant to that certain Asset Purchase Agreement, dated November ___, 2000,
by and between the Grantor and the Grantee (the "Asset Purchase Agreement"),
does hereby convey, grant, sell, transfer, assign and deliver over to the
Grantee, its successors and assigns, all right, title and interest of the
Grantor in and to all of the assets (collectively, the "Assets") described in
Schedule 1 attached to, incorporated into and made a part of this General
Assignment, Conveyance and Xxxx of Sale (this "Xxxx of Sale").
TO HAVE AND TO HOLD the same, unto the Grantee, its successors
and assigns forever.
This Xxxx of Sale is being delivered subject and pursuant to the
terms of the Asset Purchase Agreement and the rights and obligations of the
Grantor and the Grantee set forth in the representations, warranties, covenants,
indemnities, agreements and other terms and provisions of the Asset Purchase
Agreement shall be neither limited, altered or impaired, nor enhanced or
enlarged, by this Xxxx of Sale.
The Grantor represents and warrants that all of the Assets are
being conveyed to the Grantee free and clear of all liens, mortgages,
hypothecations and encumbrances of any kind whatsoever.
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IN WITNESS WHEREOF, the Grantor has executed this Xxxx of Sale on
this 2nd day of November, 2000.
ATTEST: ELECTROPURE, INC.,
Grantor
By: /S/ XXXXX XXXXXXX
------------------------------ ---------------------------------
Xxxxx X. Xxxxxxx, President
AGREED TO AND ACCEPTED BY:
RESINTECH, INC.
Grantee
XXXXXXX X. XXXXXXXX 11/3/00
-----------------------------------
Xxxxxxx X. Xxxxxxxx, Vice President
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STATE OF CALIFORNIA :
: SS.:
COUNTY OF ORANGE :
BE IT REMEMBERED, that on this 2nd day of November, 2000, before me, the
subscriber, a Notary Public of the State of California, personally appeared
Xxxxx X. Xxxxxxx, being by me duly sworn upon his oath according to law, did
depose and say that he is the President of the Grantor named in the within
instrument, that he executed the within instrument for and on behalf of the
Grantor, and that he did duly acknowledge to me that he signed, sealed and
delivered the same as the voluntary act and deed of the Grantor.
/S/ XXXXX XXXXXXXXXX
---------------------------------
Notary Public
STAMP/SEAL
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SCHEDULE 1
Assets
All of the following assets of the Grantor that relate solely to
the Grantor's former Hydro Components division constitute the Assets conveyed by
the Grantor to the Grantee by this Xxxx of Sale:
1. All raw materials;
2. All marketing materials;
3. A complete list of all customers, material vendors and prospective
customers in writing and on computer diskette, if available;
4. A complete and accurate list of all accounts receivable; provided that
the accounts receivables, themselves, shall remain the sole and separate
property of Seller and shall not constitute part of the Assets;
5. Xxxx of Materials and Manufacturing Instructions as currently
maintained;
6. To the greatest extent permitted by law, all of the Seller's right,
title and interest in and to the name "Hydro Components" and the name
"HC." The Seller represents and warrants to the Buyer that the Seller
has not secured a registered trademark or trade name for either of the
foregoing
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