77 Exhibit 2.04
29th May 1998
Purchase Agreement
between
EIO Morphy Xxxxxxxx GmbH
("Purchaser")
and
(Shop-Vac Vertriebs-GmbH, Werthe, Xxxxx-Xxxxxxx-Xxx. 00, 00000 Xxxxxx,
represented by its Geschaftsfuhrer Xxxxxxx Xxxxxx)
("Seller")
and
Shop-VacCorporation, a United States corporation with
principal office at 0000 Xxxxx Xxxx, Xxxxxxxxxxxx
Xxxxxxxxxxxx 00000 - 0307 USA
("Guarantor")
(Paragraph) 1
PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
1. Purchaser, acquires all assets as recorded in the balance sheet at
Annex 1 and as further developed and recorded (e.g. sale and purchase
of assets) as per Closing Date in the ordinary course of business,
goodwill, the name and customer-relationships and any asset disclosed
to the Purchaser in writing.
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2. Purchaser assumes and holds harmless Seller from all liabilities as
recorded in the balance sheet at Annex I and as further developed and
recorded (e.g. discharge of liabilities and new liabilities as per
Closing Date in the ordinary course of business together with those
liabilities listed in Annex II.
3. The equity acquired by Purchaser thus shall be the net asset value of
DM 1,492,000 as per 31st December, 1997 plus or minus the profit or
loss as developed and recorded in the normal course of business until
Closing Date.
4. In addition, Seller assigns herewith its non-recorded VAT refund claim
for the fiscal year 1994 to Purchaser and commits itself immediately to
sign the official VAT refund form at Purchaser's request.
5. Further, Purchaser assumes the non-recorded liabilities under the
existing property lease of Seller. Seller confirms that the lease is
terminated as per 31st August, 1998.
(Paragraph) 2
PURCHASE PRICE
The Purchase Price shall be: US $ 230,000.
(Paragraph) 3
CLOSING DATE
Closing Date will be the date hereof.
(Paragraph) 4
LIABILITIES
1. Seller will use reasonable endeavours to ensure that no creditor of the
business (including trade agents) will raise claims against Purchaser
for any liability which has its cause prior to Closing Date and which
is not recorded in the books of the company; this also applies to tax
liabilities.
2. Seller and Guarantor will indemnity Purchaser for any liability
suffered by Purchase., which has its cause in any activity related with
the business prior to Closing Date and which has not been recorded in
the books of the
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company except for the non-recorded liabilities referred to in
paragraph 1 - 5 above or described in Annex II.
(Paragraph) 5
TRANSFER OF TITLE
The parties agree herewith on the transfer of title/rights of all
assets on Closing Date.
(Paragraph) 6
WARRANTIES
1. All assets will be transferred in their actual condition,
2. The transferred assets are free from any encumbrances or rights of
third parties. Insofar as the sold assets are encumbered by third Party
rights on Closing Date (e.g. security title, mortgage liability,
retention of title, at al.), Seller and Guarantor shall undertake the
necessary steps to have the encumbrances on such assets released.
(Paragraph) 7
CONTRACTS
1. Purchaser will take over the contracts of the business. Purchaser
assumes all rights and obligations under such contracts arising after
Closing Date (in addition to those liabilities set out in Annex 2).
2. The contracting parties will inform the parties to such contracts and
will jointly request the consent to the transfer of the contracts to
Purchaser.
3. In the event that a consent to such a transfer will not be granted or
will only be granted at disadvantageous conditions, the contracting
parties agree to proceed as follows:
(1) The contract will be continued vis-a-vis the third party by Seller.
(2) With respect to the relationship between Purchaser and Seller, the
risk and the benefit of the contract is for the account of
Purchaser.
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(3) The parties will put each other in the same position that they
would hold if the contract had been transferred to Purchaser,
4. Insofar as Seller has provided performance securities for the lease (e.
g. "Mietburgschaft"), Purchaser shall indemnity Seller from such
liabilities out of such securities which are based on a cause
established after Closing Date and shall following the Closing Date
procure the release of Seller from such performance securities.
(Paragraph) 8
LITIGATION
Seller currently pursues two lawsuits in which Seller claims approximately DM
1.3 million from a Russian customer and approximately DM 420;000 from a former
German employee. Those lawsuits remain with Seller provided that if any amount
in respect of such law suits is recorded as an asset (net of applicable
reserves) in the balance sheet at Annex 1 and Seller recovers any amount in
respect of the same, Seller shall pay the net amount so recorded to Purchaser.
(Paragraph) 9
EMPLOYMENT CONTRACTS
1. Purchaser shall take over the four employment contracts mentioned in
Annex 3 subject to the conditions mentioned in Annex 3.
2. Seller shall Indemnify Purchaser if Purchaser has to assume the
employment contracts subject to conditions less advantageous than the
conditions of the employment contracts mentioned in Annex 3.
(Paragraph) 10
GUARANTEE
Guarantor hereby guarantees the performance of all obligations of Seller under
this Agreement.
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(Paragraph) 11
GENERAL PROVISIONS
1. This contract shall be governed by German law.
2. If any provision under this contract is invalid, the remaining
provisions shall not be affected and the parties shall agree on a
provision which is as close as legally possible to the Invalid
provision.
\s\ Xxxx X'Xxxxxxxx
----------------------------------
EIO Morphy Xxxxxxxx GmbH
\s\ Xxxxxxx Xxxxxx
----------------------------------
Shop-Vac Vertriebs-GmbH
\s\ Xxxxxxx Xxxxxx
----------------------------------
Shop-Vac Corporation
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Annex 3
EMPLOYMENT CONTRACTS
1. Xxxxxxx Xxxxxx: No written employment contract available; according to
payroll accounting, Mr. Parzor has a monthly salary of DM 4,000.
2. Xxxxxx Machhoiz, Salary: 13 times DM 4,800 plus DM 500 guaranteed bonus
3. Xxxxxxx Xxxx. No written employment contract available. Salary: DM
5,500 according to payroll accounting.
4. Xxxxxxxx Xxxx: No written employment contract available. Salary: DM
4,500 according to payroll accounting.
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