ASSET PURCHASE AGREEMENT
AMONG
LABELON CORPORATION,
ECO PRO IMAGING CORPORATION
AND
OYO INSTRUMENTS, LP
FEBRUARY 8, 2001
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of this 8th day of February, 2001, among Labelon Corporation ("Labelon"),
EcoPRO Imaging Corporation ("Seller"), and OYO Instruments, LP ("Purchaser").
RECITALS
WHEREAS, Seller is a wholly owned subsidiary of Labelon; and
WHEREAS, Seller is engaged in the business of marketing and distributing a
12 1/2" thermal imagesetter (the "Imagesetter") and related supplies under the
EcoPRO(TM) brand, and providing technical support and warranty service and
support for the Imagesetter (the "Business"); and
WHEREAS, Seller desires to sell, and Purchaser desires to purchase, certain
assets of Seller (as described herein) used or held in connection with the
Business, upon the terms and subject to the conditions set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions. As used in this Agreement, the following terms shall have
the following meanings:
"Agreement" shall have the meaning ascribed such term in the preamble
to this Agreement.
"Assumed Liabilities" shall have the meaning ascribed such term in
Section 3.3 of this Agreement.
"Balance Sheet" shall have the meaning ascribed such term in Section
2.1 of this Agreement.
"Business" shall have the meaning ascribed such term in the recitals
to this Agreement.
"Closing" shall have the meaning ascribed such term in Section 7.3 of
this Agreement.
"Closing Date" shall have the meaning ascribed such term in Section
7.3 of this Agreement.
"Closing Net Working Capital" shall have the meaning ascribed such
term in Section 3.2 of this Agreement.
"Distribution Agreement" means the Distribution and Supply Agreement
to be entered into by Labelon and Purchaser at Closing in substantially the form
attached hereto as Exhibit A.
"Employee Benefit Plan" shall have the meaning ascribed such term in
Section 4.17 of this Agreement.
"Excluded Assets" shall mean all assets of the Seller other than the
Purchased Assets, including without limitation, all cash, investments, rights
pursuant to any leases of real property, equipment, furniture, claims, causes of
action, prepaid items, deferred charges, deposits, security deposits and any
other property or rights not explicitly included in the definition of Purchased
Assets, whether or not used in the conduct of the Business.
"Financial Statements" shall have the meaning ascribed such term in
Section 4.2 of this Agreement.
"Imagesetter" shall have the meaning ascribed such term in the
preamble to this Agreement.
"Indemnified Party" shall have the meaning ascribed such term in
Section 10.3 of this Agreement.
"Indemnifying Party" shall have the meaning ascribed such term in
Section 10.3 of this Agreement.
"Intellectual Property" shall have the meaning ascribed such term in
Section 4.8 of this Agreement.
"Know-How" shall mean all factual knowledge or information developed
or derived by Seller over time pertaining to the Business or marketing or sale
of Seller's products and provision of its services which is embodied in a
tangible medium including but not limited to trade secrets, inventions, designs,
drawings, specifications, marketing information, vendor lists, customer lists
and associated data.
"knowledge of Seller", "Seller's knowledge" and like phrases or
variations thereof shall refer to the actual knowledge of Xxxxx Xxxxxxxxx,
Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxxxx.
"Labelon" shall have the meaning ascribed such term in the preamble to
this Agreement.
"Material Adverse Effect" means a material adverse effect on the
business, operations, property, condition or prospects of the Purchased Assets
and the Business, taken as a whole.
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"Material Contracts" shall have the meaning ascribed such term in
Section 4.6 of this Agreement.
"Permitted Liens" shall have the meaning ascribed such term in Section
4.5 of this Agreement.
"Proprietary Rights" shall mean all scientific, technical and other
information existing in printed or graphic form including but not limited to
drawings, blueprints, design information, spare part and component lists,
diagrams, charts and other data and information, including any information
embodied in any patents, patent rights or patent applications used in the
Business and printed material disseminated to customers of the Business and all
goodwill, Know-How, trade secrets, whether or not in writing, that are connected
with the products of the Business, including technical information and all other
information which is used in the Business regardless of whether such information
is patentable or otherwise protectable or whether such information constitutes
or contains trade secrets, and all Proprietary Software.
"Proprietary Software" shall mean software described in Schedule 1.2
that Seller has developed or customized for its use in connection with the
Business or the Imagesetter.
"Purchased Assets" shall have the meaning ascribed such term in
Section 2.1 of this Agreement.
"Purchase Price" shall have the meaning ascribed such term in Section
3.1 of this Agreement.
"Purchase Price Adjustment" shall have the meaning ascribed such term
in Section 3.2 of this Agreement.
"Purchaser" shall have the meaning ascribed such term in the preamble
to this Agreement.
"Retained Liabilities" shall mean all liabilities and obligations of
Seller of any kind that are not Assumed Liabilities.
"Schedules" shall mean the various schedules attached hereto and made
a part hereof. The term "Schedule" shall mean any one of such Schedules as
specified.
"Seller" shall have the meaning ascribed such term in the preamble to
this Agreement.
"Seller Disclosure Schedule" shall mean Schedules 4.2 through 4.18
inclusive.
1.2 Interpretation.
(a) Unless the context of this Agreement requires otherwise, the
plural includes the singular, the singular includes the plural, and
"including" has the inclusive meaning of "including without limitation".
The words "hereof", "herein", "hereby", "hereunder" and other similar terms
of this Agreement refer to this Agreement as a whole
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(including the Schedules) and not exclusively to any particular provision
of this Agreement. All pronouns and any variations thereof shall be deemed
to refer to masculine, feminine, or neuter, singular or plural, as the
identity of the person or persons may require.
(b) Article, Section and other headings are for convenience of
reference only, and shall not affect the interpretation or meaning of any
provision of this Agreement.
(c) A reference to a person in this Agreement includes the successors
and assigns of such person, but such reference shall not modify in any way
the provisions in this Agreement governing the assignment of rights and
obligations under or the binding effect of any provision of this Agreement.
ARTICLE 2
SALE AND PURCHASE OF ASSETS
2.1 Purchased Assets. Subject to the terms and conditions of this
Agreement, on the Closing Date, Seller shall sell, assign, transfer, convey and
deliver to Purchaser, and Purchaser shall purchase, acquire and accept from
Seller all Seller's right, title and interest, free and clear of all liens and
encumbrances of any nature (except Permitted Liens) in and to all assets of the
Seller other than the Excluded Assets (the "Purchased Assets"). The Purchased
Assets include the following assets of Seller as shown or reflected on the
unaudited December 30, 2000 balance sheet of the Seller attached as Schedule 4.2
(the "Balance Sheet") subject to changes thereafter in the ordinary course of
business between the date of the Balance Sheet and the Closing Date, except to
the extent such assets are Excluded Assets:
(a) all inventories of the Seller wherever located, which have been
acquired by Seller in connection with the conduct by Seller of the Business
including finished goods, packaging and supplies;
(b) all accounts receivable of the Seller which are attributable to
the Business;
(c) all spare parts, repair parts and refurbished imagesetters on hand
as of the Closing Date;
(d) all office supplies, advertising and promotional materials and
supplies and other miscellaneous supplies, used by the Seller primarily in
the conduct of the Business;
(e) all of the rights and benefits accruing to the Seller under all
sales orders, sales contracts, supply contracts (including those certain
Supply Agreements by and between Seller and each of Labelon Corporation and
Imaging Systems Group, Inc.), distributor agreements, agency agreements,
employment agreements, purchase orders and purchase commitments made by or
to the Seller in the conduct of the Business;
(f) all operating, transportation and other licenses (including
licenses of computer software) and permits of every kind and variety issued
to or relied upon by the Seller with respect to the Business to the extent
transferable by Seller;
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(g) all Seller's rights in and to agreements relating to the Business
to which the Seller is a party or by which the Seller is bound, including
without limitation, the right to collect accounts receivable (excluding
leases and agreements pertaining to real property, such as utility service
agreements, maintenance and cleaning agreements, etc., all of which are
Excluded Assets);
(h) all operating data and records, whether printed or electronic,
which are used by the Seller primarily with respect to the Business,
including, without limitation, customer lists, financial accounting and
credit reports, personnel files, records pertaining to suppliers,
distributors, customers and governmental agencies, correspondence, budgets
and all other files, documents and records of or pertaining to the
Business;
(i) all Proprietary Rights and Intellectual Property owned by the
Seller with respect to the Business or used by the Seller primarily in the
conduct of the Business, including all names, marks, slogans, caricatures,
logos, sales brochures, instruction manuals and promotional graphics used
by the Seller in the conduct of the Business;
(j) all transferable licenses, permits and authorizations issued or
granted to Seller by any governmental or other public agencies or
authorities or by private parties, in each case, relating to the use or
operation of the above described Purchased Assets or the conduct of the
Business;
(k) all rights of Seller in and to in-process research and
development; and
(l) all goodwill and going concern value of the Business.
2.2 Consent to Assignment. Except for the consent of Congress Financial
Corporation (New England), no approvals, consents or waivers of any party or
parties is necessary to permit Seller to convey to Purchaser the Purchased
Assets as required by this Agreement. Seller shall use commercially reasonable
efforts, and Purchaser shall cooperate with Seller, to obtain the consent of
Congress Financial Corporation (New England) as soon as is reasonably
practicable in order to permit the Closing to occur as contemplated by this
Agreement.
ARTICLE 3
PAYMENT
3.1 Purchase Price. Purchaser shall pay Seller consideration in the amount
of $2,000,000.00 (the "Purchase Price") by wire transfer on the Closing Date of
immediately available funds in accordance with the wire instructions set forth
in Schedule 3.1 hereto.
3.2 Purchase Price Adjustment.
(a) Not later than ninety-five days following the Closing Date,
Purchaser shall in good faith and in accordance with generally accepted
accounting principals, consistently applied, determine the net value of the
Purchased Assets less the Assumed Liabilities and shall promptly provide
Seller a written statement of such determination in such detail as to
permit Seller to evaluate such determination; provided that all accounts
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receivable included in the Purchased Assets that have not been collected
within ninety days of closing shall be deemed to be of no value and shall
be assigned back to Seller; and provided further that obsolete or impaired
inventory shall be deemed to be of no value and shall be assigned back to
Seller.
(b) If Purchaser determines the value of the net assets to exceed
$360,000.00, or to be less than $360,000.00, an upward or downward
adjustment shall be made to the Purchase Price, respectively, in the amount
of the difference between the value of the net assets and $360,000.00 (the
"Purchase Price Adjustment").
(c) If the Purchase Price Adjustment is an upward adjustment,
Purchaser shall, not later than thirty days after delivery of the written
statement of Purchaser's determination of net assets referred to above, pay
the amount of the Purchase Price Adjustment to Seller by wire transfer of
immediately available funds pursuant to wire instructions to be provided by
Seller for such purpose or, at the election of Seller, by delivery to
Seller of a certified check in the amount of the Purchase Price Adjustment.
If the Purchase Price Adjustment is a downward adjustment, Seller shall,
not later than thirty days after delivery of the written statement of
Purchaser's determination of net assets referred to above, pay the amount
of the Purchase Price Adjustment to Purchaser by wire transfer of
immediately available funds pursuant to wire instructions to be provided by
Purchaser for such purpose or, at the election of Purchaser, by delivery to
Seller of a certified check in the amount of the Purchase Price Adjustment.
3.3 Assumption of Liabilities. Upon the terms and subject to the conditions
of this Agreement, Purchaser agrees, effective as of the Closing, to assume and
to pay, perform and discharge when due all obligations, contracts and
liabilities of the Seller listed on Schedule 3.3 arising from and after the
Closing Date (the "Assumed Liabilities").
3.4 Allocation of Purchase Price. The Purchase Price shall be allocated
among the various classes of assets to be purchased hereunder as the Purchaser
and the Seller shall agree within ten days of Purchaser delivering the notice
required by Section 3.2, and such allocation shall be used by the parties in
reporting the transaction contemplated by this Agreement for federal, state and
local tax purposes. Purchaser and Seller shall prepare and timely file all such
reports and returns as may be required by Section 1060 of the Internal Revenue
Code of 1986, as amended (or any similar provision of state or local law) to
report such allocation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF LABELON AND SELLER
Labelon and Seller jointly and severally represent and warrant to Purchaser
that, except as otherwise set forth in the Seller Disclosure Schedule:
4.1 Corporate Status; Power and Authority. The Seller is a corporation duly
organized, presently existing and in good standing under the laws of the State
of New York. The Seller has the corporate power to own or lease its properties
and the Purchased Assets and to carry on the Business as it is now being
conducted and is (and has been since required by law) duly qualified to do
business and is in good standing in every jurisdiction in which the failure to
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do so would have a Material Adverse Effect. Labelon is a corporation duly
organized, presently existing and in good standing under the laws of the State
of New York. Each of Labelon and the Seller has the full corporate power and
authority to enter into and perform its respective obligations under this
Agreement. Labelon has the full corporate power and authority to enter into and
perform its obligations under the Distribution Agreement.
4.2 Financial Standing and Documents.
(a) Set forth in Schedule 4.2 are the Balance Sheet and unaudited
income statements for Seller's fiscal years ended September 30, 2000 and
September 25, 1999 and Seller's unaudited interim balance sheet and income
statement for the three (3) month period ended December 30, 2000
(collectively the "Financial Statements").
(b) The Financial Statements (i) are true and correct in all material
respects and present fairly the information contained therein as of the
respective dates indicated as a result of operations for the respective
periods indicated; (ii) are in accordance with the books and records of the
Seller and reflect only bona fide transactions of the Seller relating to
the Business; and (iii) have been prepared in accordance with generally
accepted accounting principles consistently applied.
4.3 No Liabilities. Seller has no material indebtedness or liability
(absolute or, to its knowledge, after due inquiry, contingent) arising out of or
associated with the Business except for indebtedness or liabilities arising from
leases, purchase or sales agreements, contracts or other obligations disclosed
in this Agreement or the Seller Disclosure Schedule.
4.4 Taxes. With regard to all taxes other than sales taxes, Seller has
filed all tax reports and returns of any nature whatsoever that are required to
be filed prior to the date (including valid extensions) hereof and has made
timely payments of all taxes, license and registration fees, charges or
withholdings of any and every nature whatsoever due and payable in respect of
such returns and reports. Seller has not executed any waiver of any statute of
limitations on the assessment or collection of any taxes on or affecting the
Business or the Assets. With regard to sales taxes, the Seller has filed all
sales tax reports and returns that are required to be filed prior to the date
hereof and has made timely payments of all sales taxes payable in respect of
such returns and reports, or to the extent of any such failure, Seller will
correct such failure promptly upon notice of the same.
4.5 No Encumbrances. Seller has good and valid title to each item of the
Purchased Assets, free and clear of any liens, changes or encumbrances other
than liens, financing statements and encumbrances of Congress Financial
Corporation (New England) which shall be released or terminated prior to Closing
("Permitted Liens").
4.6 Material Contracts. Schedule 4.6 contains a list of all oral and
written contracts and other agreements relating to the Purchased Assets or the
Business (including all Membership Agreements) to which the Seller is a party,
or by or to which it or its assets or properties are bound or subject, of the
following types: (a) customer and supplier contracts, except for contracts and
commitments providing for payments of less than One Thousand Dollars ($1,000),
(b) extended service contracts of Seller, (c) any contracts entered into outside
the ordinary course of
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the Business, (d) any contracts providing for the sale by Seller of products at
less than Seller's cost, (e) any contract for which Seller's liability for
consequential damages or lost profits is not expressly waived and (f) any
contract not terminable by Seller without penalty within 60 days (collectively
the "Material Contracts"). Seller has provided Purchaser with a true, correct
and complete copy of each written Material Contract and has included on Schedule
4.6 a true, correct and complete description of the material terms of each oral
Material Contract.
4.7 The Purchased Assets. With respect to the Purchased Assets, the Seller
represents and warrants that:
(a) The Purchased Assets are located at 0000 Xxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000-0000 and Xxxxxxxxxxxxxx 000, 0000 XX Xxxxxxxxx
(Botlek), The Netherlands.
(b) The Purchased Assets are in good operating condition and repair,
normal wear and tear excepted, and are suitable to the uses to which they
are being put in connection with the Business.
(c) All accounts receivable to be included in the Purchased Assets
will represent valid obligations collectible in the ordinary course of the
Business (but in no event later than 90 days from the due date), are fully
transferable to Purchaser and are not subject to any offset or other
defenses to the payment thereof
(d) Except as set forth in Schedule 4.7(d), the Purchased Assets do
not include any obsolete, slow-moving, damaged or otherwise impaired
inventory.
(e) Except for Permitted Liens, none of the Purchased Assets is held
under any lease, security agreement, conditional sales contract, or other
title retention or security arrangement or is subject to any mortgage, lien
or other encumbrance. The Seller owns outright all the personal property
used by Seller in the conduct of the Business, in each case free and clear
of all mortgages, liens, security interests, or other encumbrances.
4.8 Intellectual Property.
(a) Schedule 4.8 includes a list of all rights of the Seller in and to
trademarks, trade names, trade secrets, know-how, copyrights, computer
software systems, patents and applications for patents related to the
Business or the Purchased Assets owned by or registered in the name of, or
used by, the Seller (collectively the "Intellectual Property").
(b) Each item comprising the Intellectual Property is transferable to
the Purchaser. The Seller owns all the Intellectual Property, has the right
to use those computer software systems used by the Seller in the conduct of
the Business, pays no royalty to anyone under any of them, and has the
right to bring actions for the infringement thereof. To the best of
Seller's knowledge after due inquiry, no other person is infringing upon
the Intellectual Property.
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(c) Seller has not received any notice to the effect that, and after
due inquiry has no knowledge that, any service rendered, any product
manufactured or sold, or any process, computer software system, method,
part or material employed in the service rendered or in the manufacture of
any product made or sold, or in the marketing or use by the Seller of any
product in connection with the Business (including the Proprietary
Software), may infringe any franchise, trademark, trade name, copyright,
computer software system or patent of another. There is no pending or, to
the best of Seller's knowledge, after due inquiry, threatened claim or
litigation against the Seller contesting the right to use any of the
Intellectual Property or Proprietary Software or the validity thereof, or
asserting the misuse thereof which would deprive it of its right to assert
its rights thereunder or would prevent the performance of any service
provided by it or the manufacture or sale of any product manufactured or
sold by it.
4.9 Litigation and Claims. Except as set forth on Schedule 4.9:
(a) No order, writ, injunction or decree of any court or Federal,
state or municipal or other governmental department, commission, board,
bureau, agency or instrumentality against or affecting the Seller, the
Business or the Purchased Assets is outstanding or, to Seller's knowledge
after due inquiry, threatened;
(b) No suit, action, claim, arbitration, or legal, administrative, or
other proceeding, or governmental investigation related to the Seller, the
Business or the Purchased Assets is pending or, to the best of Seller's
knowledge, after due inquiry, threatened, and Seller has no knowledge of
any pending or threatened action against any third party which would
adversely affect the Business or the Assets.
4.10 Compliance with Laws. Seller is in material compliance with all laws,
ordinances, regulations and orders of the United States and any state, agency,
instrumentality or subdivision of any of them applicable to the Business or the
Purchased Assets and has no notice or knowledge of any claimed violations
thereof or investigations with respect thereto which would result in a Material
Adverse Effect.
4.11 Accuracy. No representation or warranty by the Seller or Labelon
contained in this Agreement nor any statement or certificate furnished or to be
furnished pursuant hereto by the Seller contains or shall contain any untrue
statement of a material fact or omits or shall omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they are made, not misleading.
4.12 Conduct of Business. Since the date of the Balance Sheet, there has
not been any change in the operations, prospects, properties, assets or
condition, financial or otherwise, of the Business, which individually or in the
aggregate have been materially adverse to the Business or the Purchased Assets.
Except as agreed to by the Purchaser and the Seller, the Seller agrees that from
and after the date hereof and until the Closing, it will operate the Business in
the ordinary course and in accordance with past practices and shall not take or
permit any action that will result in any of the Purchased Assets becoming
subject to any lien, nor execute, amend or terminate any agreement or Material
Contract (other than in the ordinary course of business and as contemplated by
this Agreement) relating to the Purchased Assets or the Business.
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4.13 Labor Disputes. Seller is not a party to any collective bargaining
agreement and has not received notice of any proposed union certification or
recognition election. There are no labor disputes pending or to the Seller's
knowledge after due inquiry threatened, involving employees of the Seller.
4.14 Absence of Restrictions. Except as provided in Section 2.2 of this
Agreement, the Seller is not subject to the provisions of any charter, bylaw,
mortgage, agreement, instrument or other restriction of any kind or character
which would prevent, or which requires the consent of any other party to, its
execution or performance of this Agreement or consummation of the transactions
contemplated hereby.
4.15 No Consent Required. Except as provided in Section 2.2 of this
Agreement, no consent, approval or authorization of, or exemption by, or filing
with, any party is required to effect Seller's execution, delivery and
performance of this Agreement or the taking of any other action contemplated
hereby, excluding, however, consents, approvals, authorizations, exemptions and
filings, if any, that Purchaser is required to obtain or make.
4.16 Due Authorization. Each of Labelon's and Seller's execution, delivery
and performance of this Agreement have been duly authorized by all necessary
action on its part. Each of Labelon and Seller has duly and validly executed and
delivered this Agreement, which constitutes its valid and binding obligation
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors rights and remedies generally and subject, as
to enforceability, to general principles of equity. The execution, delivery and
performance of this Agreement by each of Labelon and Seller and consummation by
each of Labelon and Seller of the transactions contemplated hereby, and the
execution, delivery and performance of the Distribution Agreement by Labelon and
consummation by Labelon of the transactions contemplated thereby will not, with
or without the giving of notice or the lapse of time, or both, subject to
obtaining any required consents, approvals, authorizations or exemptions, (i)
violate any provision of law, rule or regulation to which either is subject,
(ii) violate any order, judgment or decree applicable to either or (iii)
conflict with, or result in a breach or default under, either's certificate of
incorporation or bylaws or any of either's contracts; except, in each case, for
violations, conflicts, breaches or defaults which in the aggregate would not
result in a Material Adverse Effect.
4.17 Employee Benefit Plans. The Purchaser shall not by reason of this
Agreement or the transactions contemplated hereby, incur or otherwise assume any
liability under any employee benefit plan maintained by Seller.
4.18 Employees. Schedule 4.18 sets forth (a) the name of each employee,
consultant, agent or other representative of the Seller whose current annual
rate of compensation (including bonuses and commissions) exceeds Five Thousand
Dollars ($5,000), (b) the amount of compensation (including bonuses and
commissions) paid to such person by Seller during Seller's fiscal year 2000 and
(c) a list of each employment agreement or contract to which the Seller is a
party.
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4.19 Key Employees. The Seller hereby acknowledges that the opportunity for
Purchaser to employ certain people currently employed by Seller comprises a
portion of the goodwill of the Business being transferred to Purchaser. As such,
Seller agrees to use reasonable efforts to encourage employees to accept offers
of employment with Purchaser, if and to the extent such offers are made by
Purchaser.
4.20 Real Property. None of the Purchased Assets includes any interest in
any real property. Seller has never, and does not currently, own any real
property. Seller presently leases office space located at 0000 Xxxx XxXxxxxx
Xxxxxx, Xxxxx X, Xxxxxxxx Xxxxxxxxxx 00000-0000 which is used by Seller in the
conduct of the Business. Seller's rights with respect to such office space is an
Excluded Asset and is not being sold or otherwise transferred to Purchaser in
connection with the transactions contemplated by this Agreement. Seller's
liabilities and obligations with respect to such office space are Retained
Liabilities and are not being assumed or otherwise transferred to Purchaser in
connection with the transactions contemplated by this Agreement.
4.21 Customers and Suppliers. Seller is not engaged in any material dispute
with any customer or supplier associated with the Business except for disputes
which occur in the ordinary course of business and disputes between customers or
suppliers of any of the Seller which, individually or in the aggregate, will not
have a Material Adverse Effect.
4.22 Brokers. Except for The Xxxxx-Xxxxxxxx Company, whose fees shall be
paid by Seller, no agent, broker, finder, investment banker, or other firm or
person has acted directly or indirectly on behalf of Seller or Labelon in
connection with the transactions contemplated hereby, and no such person is
entitled to any broker's or finder's fee or similar concession in respect
thereof based on any agreements, arrangements or understandings made by or on
behalf of Seller or Labelon.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Purchaser represents and warrants to Seller as follows:
5.1 Organization, Standing and Authority. Purchaser is a limited
partnership duly organized and validly existing under the laws of the State of
Texas and has full power and authority to enter into and to perform this
Agreement.
5.2 Effect of Agreement. Purchaser's execution, delivery and performance of
this Agreement and the Distribution Agreement have been duly authorized by all
necessary action on its part. Purchaser has duly and validly executed and
delivered this Agreement, which constitutes its valid and binding obligation
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors, rights and remedies generally and subject, as
to enforceability, to general principles of equity. The execution, delivery and
performance of this Agreement and the Distribution Agreement by Purchaser and
consummation by Purchaser of the transactions contemplated hereby and thereby
will not, with or without the giving of notice or the lapse of time, or both,
(i) violate any provision of law, rule or regulation to which it is subject,
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(ii) violate any order, judgment or decree applicable to it or (iii) conflict
with, or result in a breach or default under, its charter documents or any of
its contracts; except, in each case, for violations, conflicts, breaches or
defaults which in the aggregate would not have a Material Adverse Effect.
5.3 Consents. No consent, approval or authorization of, or exemption by, or
filing with, any party is required to effect Purchaser's execution, delivery and
performance of this Agreement or the taking of any other action contemplated
hereby.
5.4 Litigation. There are no judicial or administrative actions,
proceedings or investigations pending or, to Purchaser's knowledge, threatened
that question the validity of this Agreement or any action taken or to be taken
by it in connection with this Agreement or that, if adversely determined, would
have a material adverse effect upon its ability to perform its obligations under
this Agreement.
5.5 Brokers. No agent, broker, finder, investment banker, or other firm or
person has acted directly or indirectly on behalf of Purchaser in connection
with the transactions contemplated hereby, and no such person is entitled to any
broker's or finder's fee or similar concession in respect thereof based on any
agreements, arrangements or understandings made by or on behalf of Purchaser.
ARTICLE 6
FURTHER AGREEMENTS OF THE PARTIES
6.1 Conduct of the Business Pending Closing. Until the Closing, except as
otherwise permitted herein:
(a) Seller shall operate the Business and the Purchased Assets in the
ordinary course in all material respects; and
(b) Seller shall use reasonable efforts to maintain and preserve, in
all material respects, the value of the Business and the Purchased Assets
and to maintain the relationships of the Business with its material
customers, suppliers and others having material business dealings with it.
6.2 Conduct of the Business After Closing.
(a) From and after the Closing, unless and until instructed by
Purchaser that Purchaser is prepared to operate the Business and the
Purchased Assets (but in no event beyond March 31, 2001), Seller shall
continue to operate the Business and the Purchased Assets as provided in
Sections 6.1(a) and (b) hereof. Seller shall be reimbursed by Purchaser for
Seller's actual direct operating costs incurred in performing its
obligations pursuant to this Section 6.2(a), including without limitation,
actual costs of occupancy for Seller's facility in Anaheim during such
period and payroll and benefits paid in the ordinary course of and
consistent with the past practices of the Business by Seller to Seller's
personnel, prorated to reflect only the portion of such payroll and
benefits attributed to performance of Seller's obligations pursuant to this
Section 6.2(a).
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(b) As soon as practicable following Closing, Seller shall notify
customers having outstanding and unpaid invoices to remit payment to
Purchaser. Payments received by Seller after Closing will be deposited in
Seller's account and amounts will be deducted therefrom to reimburse
Seller's expenses pursuant to Section 6.2(a) hereof. Each week, Seller
shall remit to Purchaser the balance remaining, if any, from such payments
received after deduction of Seller's expenses. If Seller's expenses in
accordance with Section 6.2(a) hereof shall in any week exceed the
aggregate payments received by Seller during such period, Seller shall so
notify Purchaser and Purchaser shall promptly thereafter remit to Seller an
amount equal to any shortfall.
6.3 Other Action. Each party hereto shall use commercially reasonable
efforts to cause the fulfillment of all of the conditions to its respective
obligations and to consummate the transactions contemplated hereby as soon as
practicable.
6.4 Expenses. Except as otherwise expressly provided for herein, each of
Purchaser and Seller shall bear its own expenses incurred in connection with
this Agreement and in connection with the performance of its obligations
hereunder.
6.5 Publicity. Except as may otherwise be required by applicable law or
governmental or the Nasdaq National Market rules or regulations, neither party,
nor any affiliate of any party, shall issue any press release or public
announcement of any kind concerning this Agreement or the transactions
contemplated hereby without the prior written consent of the other party.
6.6 Access to Information. During the period commencing with the date
hereof and continuing until the earlier of the date on which this Agreement
terminates in accordance with its terms or the Closing Date, Seller shall
disclose and make available to Purchaser all books, agreements, papers and
records relating to the ownership and operations of Seller and shall afford to
Purchaser, its accountants, legal counsel, lenders, financial advisors, and
other representatives reasonable access, during normal business hours (or any
other reasonable time), to conduct due diligence relating to the financial
condition, results of operations, properties or prospects of Seller, and to
inspect the Purchased Assets and the Business.
6.7 Confidentiality. Each of Seller and Purchaser covenants and agrees that
it shall, and shall cause its subsidiaries and affiliates to, maintain the
confidentiality of all information it receives from the Purchaser and Seller,
respectively, which is identified as being confidential or non-public
information.
6.8 Name. Seller shall, within one business day following Closing, file a
certificate of amendment to its certificate of incorporation changing its
corporate name to a name that does not include "EcoPRO" or any words confusingly
similar thereto.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Purchaser. The obligation of Purchaser to
consummate the transactions contemplated by this Agreement is subject, at the
option of Purchaser, to the satisfaction or waiver of the following conditions:
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(a) The representations and warranties of Seller set forth in this
Agreement shall be true and correct in all material respects;
(b) Seller shall have performed all material obligations required to
be performed by it under this Agreement;
(c) Seller shall have obtained all required consents as described in
Section 2.2;
(d) There shall have been no material adverse change in the financial
condition, results of operations, properties or prospects of the Seller
from the date of completion of Purchaser's due diligence review thereof and
the Closing Date;
(e) Purchaser shall have received all of the items called for in
Section 8.1 below; and
(f) Purchaser shall have completed to its satisfaction its due
diligence investigation of the Business and Purchased Assets.
7.2 Conditions to Obligations of Seller. The obligation of Seller to
consummate the transactions contemplated by this Agreement is subject, at the
option of Seller, to the satisfaction or waiver of the following conditions:
(a) The representations and warranties of Purchaser set forth in this
Agreement shall be true and correct in all material respects;
(b) Purchaser shall have performed all material obligations required
to be performed by it under this Agreement prior to the Closing Date; and
(c) Purchaser shall have received all of the items called for in
Section 8.2 below.
7.3 Closing. Closing of the transactions contemplated hereby (the
"Closing") shall be held at the offices of Fulbright & Xxxxxxxx L.L.P., Houston,
Texas, at 9:00 a.m., local time, on the date of this Agreement, or at such other
place and time as the parties may mutually agree (the "Closing Date").
ARTICLE 8
DOCUMENTS TO BE DELIVERED AT THE CLOSING
8.1 Documents to be Delivered by Seller. At Closing, Labelon and Seller
shall deliver or caused to be delivered to Purchaser the following:
(a) Bills of sale, certificates of title, and assignment and
assumption agreements, dated as of the Closing Date, transferring to
Purchaser all of Seller's right, title and interest in and to the Purchased
Assets each in a form reasonably satisfactory to Purchaser;
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(b) A copy of resolutions authorizing Labelon's and Seller's
execution, delivery and performance of this Agreement and the Distribution
Agreement, as applicable, and a certificate of its secretary or assistant
secretary, or other officer dated the Closing Date, that such resolutions
were duly adopted and are in full force and effect;
(c) A certificate, dated as of the Closing Date, and signed by one of
its executive officers, certifying that the conditions set forth in Section
7.1(a) through (d) have been satisfied;
(d) The consent of Congress Financial Corporation (New England) to the
conveyance of the Purchased Assets as identified in Section 2.2 and the
release by Congress Financial Corporation (New England) of any liens or
encumbrances on any Purchased Assets, together with a UCC-3 termination
statement reflecting such release;
(e) A certificate of the Secretary of State of the state of New York
evidencing that Seller is a subsisting corporation; and
(f) A duly executed copy of the Distribution Agreement.
8.2 Documents to be Delivered by Purchaser. At Closing, Purchaser shall
deliver, or cause to be delivered, the following:
(a) Payment of the Purchase Price by wire transfer of immediately
available funds in an amount equal to the Purchase Price;
(b) A duly executed Assignment and Assumption Agreement in form and
substance reasonably satisfactory to Labelon and Seller; and
(c) A copy of resolutions authorizing its execution, delivery and
performance of this Agreement and the Distribution Agreement, and a
certificate of its secretary or assistant secretary, or other officer dated
the Closing Date, that such resolutions were duly adopted and are in full
force and effect;
(d) A certificate dated as of the Closing Date, and signed by one of
its executive officers, certifying that the conditions set forth in Section
7.2(a) and (b) have been satisfied;
(e) A duly executed copy of the Distribution Agreement; and
(f) A Certificate of Existence issued by the Secretary of State of the
state of Texas; and
ARTICLE 9
INDEMNIFICATION
9.1 Survival of Representations and Warranties. The representations and
warranties of Labelon and Seller contained in Sections 4.4, 4.5, and 4.8(b)
hereof shall survive the Closing Date for an indefinite time, and the remaining
representations, warranties and agreements of
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Seller and Purchaser contained in this Agreement shall survive the Closing for
twenty four (24) months after the Closing Date. Notwithstanding any contrary
provision contained herein, no indemnification claim may be made under this
Article 9 unless such claim is asserted prior to the expiration of such period.
9.2 Indemnification.
(a) After the Closing Date, Labelon and Seller shall jointly and
severally indemnify and hold harmless Purchaser, its affiliates and their
respective stockholders, partners, members, directors, officers, employees,
agents, consultants, representatives, successors transferees and assignees
(collectively, the "Parties to be Indemnified by Labelon") from and against
any claims, causes of action, demands, judgements, assessments,
encumbrances, fines, penalties, administrative orders, deficiencies,
duties, liabilities, obligations, costs, losses, damages, or expenses,
including, without limitation, interest, reasonable legal fees and expenses
(collectively, "Damages"), arising out of or resulting from (i) any breach
by Labelon or Seller of any representations, warranties or covenants
contained in this Agreement or (ii) any Retained Liability; provided
however, that neither Labelon nor Seller shall have any liability pursuant
to this Article 9 unless and until the aggregate amount of Damages incurred
by the Parties to be Indemnified by Labelon exceeds $20,000.00 (the
"Basket"), and then such liability shall include those Damages comprising
the Basket amount.
(b) After the Closing Date, Purchaser shall indemnify and hold harmless
Labelon, Seller, their affiliates and their respective stockholders,
partners, members, directors, officers, employees, agents, consultants,
representatives, successors transferees and assignees (collectively, the
"Parties to be Indemnified by Purchaser") from and against Damages arising
out of or resulting from any breach by Purchaser of any representations,
warranties or covenants contained in this Agreement; provided however, that
Purchaser shall have no liability pursuant to this Article 9 unless and
until the aggregate amount of Damages incurred by the Parties to be
Indemnified by Purchaser exceeds the Basket, and then such liability shall
include those Damages comprising the Basket amount.
9.3 Claims for Indemnification. Whenever any claim for indemnification
shall arise under this Article 9, the party seeking indemnification (the
"Indemnified Party") shall promptly notify the party from whom indemnification
is sought (the "Indemnifying Party") of the claim and, when known, the facts
constituting the basis for such claim. If any such claim for indemnification
results from or is in connection with any claim or legal proceedings by a third
party, the notice to the Indemnifying Party shall specify, if known, the amount
or an estimate of the amount of the liability arising therefrom. The Indemnified
Party shall not settle or compromise any claim by a third party for which it is
entitled to indemnification hereunder without the prior written consent of the
Indemnifying Party.
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ARTICLE 10
TERMINATION
10.1 Termination. Provided Closing has not occurred prior to February 28,
2001, either Seller or Purchaser may terminate this Agreement by giving written
notice of termination to the other on or after such date and prior to Closing.
If this Agreement is terminated pursuant to the terms of the preceding sentence,
all obligations of either party hereto shall cease, except that Purchaser and
Seller agree to return to the other any information, data, software, business
plans, specifications, trade secrets, copyrightable material or other
confidential information that they received in contemplation of this transaction
and to maintain the confidential nature of such information.
ARTICLE 11
MISCELLANEOUS
11.1 Payment of Sales, Use or Similar Taxes. Any United States or federal,
state or local, sales, use, transfer, transfer gains or similar taxes payable in
connection with the sale and purchase of the Business or any Asset shall be paid
by Seller. At the Closing, Seller will provide Purchaser with appropriate resale
certificates with respect to inventory of Seller included in the Purchased
Assets.
11.2 Entire Agreement. This Agreement (including the Schedules and any
exhibits hereto) contains the entire agreement between the parties with respect
to those matters contained herein and expresses the complete and final
understanding with respect to the subject matter hereof.
11.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Texas applicable to
contracts made and performed wholly within Texas by Texas residents.
11.4 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally, or, if
mailed by registered mail, return receipt requested, three business days after
such mailing. Notices shall be given to the parties at the following addresses
(or to such other address as a party may have specified by notice given to the
other party pursuant to this provision):
If to Purchaser: OYO Instruments, LP
0000 Xxxx Xxxx Xxxx, Xxxxx 00
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxx Xxxx
With a copy to: Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxx X. Xxxxx
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If to Labelon: Labelon Corporation
00 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
With a copy to: Xxxxx Peabody LLP
Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxx, III, Esq.
If to Seller: Eco PRO Imaging Corporation
00 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
With a copy to: Xxxxx Peabody LLP
Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxx, III, Esq.
11.5 Severability. If any provision of this Agreement is held to be invalid
or unenforceable by a court of competent jurisdiction, the balance of this
Agreement shall remain in effect.
11.6 Waiver. Any party entitled to the benefit of any provision of this
Agreement may waive observance or performance thereof. No waiver of any
provision shall be construed as a waiver of any other provision nor shall any
failure to insist on strict compliance with any obligation operate as a waiver
of, or estoppel with respect to, any subsequent or other failure. Any waiver
must be in writing.
11.7 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. No assignment of this Agreement or of any rights or
obligations hereunder may be made by any party (by operation of law or
otherwise) without the prior written consent of the other and any attempted
assignment without consent shall be void.
11.8 Further Assurances. At any time or from time to time after the Closing
Date, any party shall, at the request of another party and at such other party's
expense, execute and deliver any further instruments or documents and take all
such further actions as such party reasonably may request in order to consummate
and make effective the transactions contemplated hereby.
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11.9 Counterparts. This Agreement may be executed in counterparts which,
taken together, shall constitute a single document.
11.10 Resolution of Disputes. If a dispute arises under this Agreement
between Labelon or Seller, on one hand, and Purchaser, on the other, either
party deliver a written notice to the other stating the grounds for the dispute
in reasonable detail (a "Dispute Notice"). If the parties are unable to resolve
the dispute among themselves within 30 days of the Dispute Notice, the parties
agree that the dispute shall be submitted to binding arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
("AAA"), as modified or clarified by the following:
(a) The arbitral panel shall consist of a single arbitrator to be
selected by the AAA.
(b) The seat of the arbitration shall be in Houston, Texas if the
Dispute Notice is delivered by Labelon or Seller. The seat of the
arbitration shall be in Rochester, New York if the Dispute Notice is
delivered by Purchaser.
(c) The arbitrator shall use his or her best efforts to render an
award within six months of the Dispute Notice.
(d) The arbitrator shall issue a reasoned award.
(e) The arbitrator shall not be authorized to award special, punitive,
consequential or lost profits damages.
(f) For purposes of enforcement of an arbitral award, the parties
agree to submit to the jurisdiction of the United States District Court for
the district in which the seat of arbitration is located pursuant to (b),
above.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as
of the date first written above.
LABELON CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Vice President-Chief Financial
Officer
ECO PRO IMAGING CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Treasurer
OYO INSTRUMENTS, LP
By: /s/ Xxxxx Xxxx
------------------------------
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