ASSET PURCHASE AGREEMENT
MTN HOLDINGS INC.
&
DVIR & XXXXXX ENTERPRISES, INC.
XXXXX XXXXXX & XXXXX & LLP
000 XXXXXXX XXXXXX
XXXXX XXXXX
XXX XXXX, XXX XXXX 00000
THIS ASSET PURCHASE AGREEMENT made the day of August, 2001, by and
among MTN Holdings Inc., a Nevada corporation, with its offices at 000
Xxxx 00xx Xxxxxx (5th floor) Xxx Xxxx, Xxx Xxxx 00000 (hereinafter
referred to as "MTNO") and Dvir & Xxxxxx Enterprises, Inc., with its
offices at 00 Xxxx 00xx Xxxxxx (0xx xxxxx) Xxx Xxxx, Xxx Xxxx 00000
(hereinafter referred to as "D&SE").
RECITALS
D&SE is engaged in the business of first level refining of small pieces and
particles of gold, silver and platinum alloys resulting from the manufacture of
jewelry in order to remove foreign metals and other impurities (the "Business").
The Business does not include the refining of such precious metals into their
pure form. D&SE wishes to sell to MTNO and MTNO wishes to buy, substantially all
of D&SE's assets related to the Business and to assume only liabilities
specified in this Agreement.
MTNO intends to form a subsidiary corporation which will acquire the assets to
be sold to MTNO and to assume the obligations of MTNO under this Agreement and
such documents specified herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
undertakings herein contained, the parties agree as follows.
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
meanings set forth below.
(A) "ACQUISITION SUBSIDIARY" shall mean the corporation to be established
by MTNO to acquire the Assets as contemplated by this Agreement.
(B) "ASSETS" shall include the Equipment, the Customer and Vendor Lists,
and the Other Property together with any and all other assets and property used
in or relating to the Business, including without limitation service and
equipment rental agreements, provided, however, that the term "Assets" does not
include accounts receivable.
(C) "ASSUMED LIABILITIES" shall mean only those liabilities of D&SE listed
in Exhibit 1(c). Under no circumstances shall the Assumed Liabilities include
unfunded pension liabilities, taxes payable by D&SE, tort liabilities, product
warranty liabilities, criminal claims, pending or threatened litigation, and any
other liabilities of any kind, whether disclosed or undisclosed.
(D) "BUSINESS KNOW-HOW" shall mean all the technical information,
processes, and trade secrets, if any, in possession of DS&E relating to the
Business, including without limitation, to the extent they exist, methods of
manufacture, laboratory journals, manufacturing, engineering and other drawings,
design and engineering specifications, hardware, software and similar items
recording or evidencing such information.
(E) "CUSTOMER AND VENDOR LISTS" shall mean all names, addresses and all
information in the possession of D&SE relating to customers and vendors for of
D&SE in respect of the Business or planned for the Business.
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(F) "DEPOSIT ESCROW AGREEMENT" shall mean an escrow agreement substantially
in the form attached hereto as Exhibit 1(f).
(G) "DEPOSIT ESCROW FUND" shall mean the amount to be deposited in
accordance with Section 3(a)(i) plus all interest earned thereon.
(H) "ENVIRONMENTAL LAW" shall mean any law or regulation that requires or
relates to:
(i) advising appropriate authorities, employees, or the public of
intended or actual releases of pollutants or hazardous substances or materials,
violations of discharge limits, or other prohibitions and of the commencements
of activities, such as resource extraction or construction, that could have
significant impact on the environment;
(ii) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the environment;
(iii) reducing the quantities, preventing the release, or minimizing
the hazardous characteristics of wastes that are generated;
(iv) assuring that products are designed, formulated, packaged, and
used so that they do not present unreasonable risks to human health or the
environment when used or disposed of;
(v) protecting resources, species, or ecological amenities;
(vi) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances;
(vii) cleaning up pollutants that have been released, preventing the
threat of release, or paying the costs of such clean up or prevention; or
(viii) making responsible parties pay private parties, or groups of
them, for damages done to their health or the environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.
(I) "EQUIPMENT" shall mean all machinery and equipment used by D&SE in the
operation of the Business. The Equipment is listed in Exhibit 1(i).
(J) "ESCROW AGENT" shall mean D&SE's attorneys as escrow agent under the
Deposit Escrow Agreement.
(K) "FORCE MAJEURE" shall mean (i) war, whether declared or undeclared,
revolution or act of public enemy, (ii) riot or civil commotion, (iii) strike or
lockout or stoppage or restraint of labor, (iv) act of God, (v) fire, flood,
xxxxx, xxxxxxx or washaway, (vi) act or restraint of any government or
semi-governmental authority; or (vii) any other cause not reasonably within the
affected party's control.
(L) "MATERIAL" shall mean involving a loss, damage, liability, potential
liability or exposure, exceeding, individually or in the aggregate, U.S.
$10,000.00. Notwithstanding the preceding sentence, losses and exposures arising
solely from changes in the price of gold, market conditions or the inability to
collect accounts receivable shall not be deemed Material regardless of the
dollar amount involved, and that the loss of old accounts and/or their
replacement by new
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accounts, if any, in the ordinary course of business shall not be deemed
Material unless the amounts involved are not reasonably consistent with prior
experience in the Business.
(M) "OTHER PROPERTIES" shall mean:
(i) all real or personal properties leased by D&SE for use in the
operation of the Business;
(ii) supply contracts, purchase contracts, service contracts and
confidentiality agreements to which D&SE is a party and are related or connected
with the Business;
(iii) intangible assets (including intellectual property), including
but not limited to pending or issued trademarks, brand names, service marks,
trade secrets, know-how, pending or issued patents, confidential information,
copyrights, domain names, franchises and licenses and authorizations relating to
the Business; and
(iv) all rights and claims of D&SE relating to the Business, including
claims under insurance policies for damages or losses suffered by D&SE or for
damage to equipment, inventory or the properties to the extent that such damage
to equipment, inventory or properties has occurred between signing and closing
and has not been repaired or replaced prior to the closing or for which there
has not been an offset against the purchase price.
2. SALE AND PURCHASE OF ASSETS. Upon the terms and subject to the conditions
hereinafter set forth, at the Closing, D&SE shall sell to MTNO, and MTNO shall
purchase, the Assets at the price set forth in Section 3 and MTNO will assume
the Assumed Liabilities. MTNO may designate a subsidiary to purchase and take
title to the Assets under this Agreement provided MTNO shall first deliver to
D&SE a duly executed assignment of this Agreement containing an assumption by
such assignee of all obligations and liabilities of MTNO hereunder, all in form
suitable for recording. Upon such assignment, the assignee shall succeed to the
rights of MTNO hereunder and under any agreement or instrument theretofore or
thereafter delivered pursuant hereto and shall assume and thereafter promptly
pay and perform all of the obligations of MTNO hereunder, including without
limitation's, all of the obligations of MTNO under this Agreement, the Deposit
Escrow Agreement, the Note and the security agreement referred to in Section
10(c)(iv). No such designation of a nominee, however, shall relieve or discharge
MTNO of direct or primary liability under any of the foregoing.
3. PURCHASE PRICE, PAYMENT, SECURITY AND DEFAULT.
(A) PURCHASE PRICE. The purchase price shall be One Million Dollars
($1,000,000), which shall be payable as follows.
(i) TWENTY-FIVE THOUSAND DOLLARS ($25,000) simultaneous with the
execution of this Agreement by check subject to collection, which sum shall be
deposited with the Escrow Agent, to be held in accordance with the terms of the
Deposit Escrow Agreement.
(ii) NINE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($975,000) at Closing
as follows:
(A) FOUR HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($475,000) by wire transfer
of certified or bank check payable to the order of D & SE; and
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(B) FIVE HUNDRED THOUSAND DOLLARS ($500,000) with interest thereon at the
rate of seven and one-half (71/2%) percent per annum by the payment of
$22,499.80 one month after the date of Closing and monthly thereafter until the
sum of $500,000 with interest has been paid. All sums paid on account of such
sum shall first be credited to the payment of interest and the balance, if any,
to the payment of principal, all as set forth in the amortization schedule
annexed to Exhibit 3(a)(ii)(B). As Evidence of such debt, MTNO shall execute and
deliver to D&SE at Closing, its promissory note in form similar to Exhibit
3(a)(ii)(B) hereof ("Note").
(B) ALLOCATION OF PURCHASE PRICE. The purchase price shall be allocated as
set forth in Exhibit 3(b). MTNO shall pay at closing any sales tax which may be
applicable to the Equipment.
(C) SECURITY FOR PAYMENT OF THE NOTE. As security for the timely and
faithful payment of the installments due under the Note, at Closing, MTNO shall
deliver a duly executed security agreement in form identical to Exhibit 3(c)
hereto sufficient to create a first security interest and superior lien (when
perfected) in favor of D&SE with respect to the Assets, accounts receivable
created by MTNO or its assignee on and after the Closing with respect to the
Business and inventory. In connection therewith, MTNO shall execute any and all
documents reasonably necessary to create a first perfected security interest in
the Collateral, as such term is defined in the security agreement, including but
not limited to UCC-1 Filing Statements.
(D) EVENTS OF DEFAULT. The following shall constitute a default hereunder:
(i) There shall be any default in the payment of any installment of
principal and interest under the Note when due and payable, whether at maturity,
by acceleration, or otherwise;
(ii) Any representation or warranty made in, or any financial
statement or other information furnished by MTNO pursuant to, this Agreement
shall prove to be false in any Material respect;
(iii) MTNO or any guarantor of MTNO's obligations under the Note,
Security Agreement or this Agreement shall: 1. make an assignment for the
benefit of creditors or commence any proceeding seeking similar relief, whether
judicial or otherwise; 2. consent to or apply for the appointment of a trustee,
interim trustee, custodian or receiver for all or a major portion of its
property; 3. commence any action or proceeding under any other federal or state
bankruptcy, insolvency, composition, debtor relief, reorganization or other
similar law, or suffer the commencement of such a proceeding against any of them
(unless dismissed or stayed within 60 days) or suffer the entry of an order of
insolvency or reorganization against any of them; 5. suffer the entry of a final
judgment for the payment of money in a Material amount against any of them
unless discharged within 30 days of its entry, or if later the expiration
without appeal of the period within which an appeal may be taken; or 6. The
dissolution of MTNO, whether voluntary or involuntary, or 7. the issuance of any
attachment, garnishment, execution, federal tax levy, or other process or
seizure against any Material amount of their property; and
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(iv) Any material default in performance or compliance with any
provision(s) of the Security Agreement.
In the event of a default as heretofore set forth, then the Note, at option of
D&SE, shall immediately become due and payable by acceleration without notice or
demand. D&SE shall have all rights as are provided by law and as may be set
forth in the Note, Security Agreement or herein. Nothing herein contained shall
be construed as a modification or limitation of any rights which D&SE may have
in the event of a default.
The provisions of this Section 4 shall survive the Closing and shall remain in
full force and effect until all obligations of MTNO to D&SE have been satisfied
and paid in full.
4. REPRESENTATIONS AND WARRANTIES OF D&SE. D&SE represents and warrants to MTNO
that the statements contained in this Section 4 are correct and complete as of
the date of this Agreement and will be correct and complete as of the time of
Closing (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Section).
(A) ORGANIZATION AND QUALIFICATION. D&SE is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of New York. It has no subsidiaries.
(B) DUE AUTHORIZATION. All necessary corporate proceedings have been had to
authorize the execution and delivery by D&SE of this Agreement and the
consummation by D&SE of the transactions contemplated hereby.
(C) LEGAL REQUIREMENTS. No notices, filings with the authorities, permits
or authorizations are required to permit the consummation of the transfers and
transactions contemplated by this Agreement.
(D) POWER TO PERFORM. D&SE has full corporate power and authority to enter
into this Agreement and to carry out the transactions contemplated hereby.
(E) NO BREACH. The execution and delivery by D&SE of this Agreement and the
consummation of the transactions contemplated hereby,
(i) do not violate any provisions of the certificate of incorporation
or bylaws of D&SE ; and
(ii) will not violate, be in conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under, any of
the terms or provisions of any agreement or instrument to which D&SE is a party
or by which D&SE or any of its property may be bound or affected.
(F) ENFORCEABILITY. This Agreement constitutes the legal, valid, and
binding obligation of D&SE, enforceable against D&SE in accordance with its
terms.
(G) ALL NECESSARY ASSETS. The Assets include all tangible and intangible
assets required for the conduct of the Business as conducted during the
preceding 12 months.
(H) FINANCIAL STATEMENTS. D&SE's Balance Sheet dated as of _____, 2001, is
true and correct in all material respects, has been prepared in accordance with
generally accepted accounting principles consistently applied and presents
fairly D&SE's financial position as of, and for the periods, indicated therein.
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(I) ABSENCE OF CERTAIN CHANGES. Since the date of the aforementioned
Balance Sheet referred to above there has not been:
(i) any sale, lease, abandonment or other disposition by D&SE of any
Assets relating to the Business other than in the ordinary course of business;
(ii) any Material damage, loss (whether or not covered by insurance)
affecting such Assets;
(iii) any change in the compensation of any employee except for normal
year end raises in the ordinary course of D&SE's Business, or any hiring of any
employee;
(iv) any Material adverse change in the condition (financial or other)
of the Business other than as the result of then current market conditions; or
(v) any Material adverse changes in the value of the Assets other than
depreciation in accordance with generally accepted accounting principles or
increase in its liabilities (excluding in each case changes resulting solely
from increases or decreases in the market price of gold) other than in the
ordinary course of business, or
(vi) any other transaction by D&SE not in the ordinary course of its
business.
(J) LITIGATION. There are no actions, suits, arbitrations or other
proceedings or investigations pending or threatened against or affecting D&SE
which would, if determined adversely to D&SE, affect the Business or MTNO's
title to the Assets, or increase the Assumed Liabilities or create any mortgage,
lien, charge or encumbrance thereon. D&SE is not subject to any order, writ,
injunction or decree of any court or any federal, State, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
applicable to the Business or Assets.
(K) CUSTOMER AND VENDOR LISTS. D&SE is the sole owner of the Customer and
Vendor Lists free and clear of any claim thereto by any third party and of all
mortgages, liens, charges or encumbrances whatsoever.
(L) OWNERSHIP OF ASSETS. Except as specifically stated on an Exhibit 4(l)
to this Agreement, the Assets owned by D&SE and being conveyed hereunder shall
on the closing date be free and clear of all mortgages, liens, charges or
encumbrances whatsoever.
(M) CONDITION OF EQUIPMENT. The equipment is in operating condition and
capable of performing the tasks required of it in the Business as presently
operated,
(N) PATENTS, TRADEMARKS, TRADE NAMES. D&SE has no patents or patent
applications, and has not received notice of any claims by a third party
suggesting that its conduct of the Business to date has infringed any patents
held by a third party. D&SE has not received notice of any claims by a third
party suggesting that D&SE's use of any trade marks or trade names would
infringe the rights of any third party.
(O) BUSINESS KNOW-HOW. The Business Know-How is owned by DS&E free and
clear of all mortgages, liens, charges or encumbrances whatsoever. DS&E is free
to transfer the Business Know-How to MTNO and has no obligation to pay any
royalty to any third party with respect thereto. DS&E has not granted any
license or other permission with respect to the use of such Know-How and DS&E
has not received notice of any claims by a third party suggesting that DS&E's
use of the Business Know-How would infringe the rights of any third party.
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(P) REAL PROPERTY. D&SE does not own any real property and is not a lessor,
sublessor or sublessee under any lease of real property. Exhibit 4(p) lists and
describes all real property leased to D&SE. D&SE has delivered to MTNO correct
and complete copies of the leases listed in Exhibit 4(p), receipt of which is
hereby acknowledged. With respect to each lease listed in Exhibit 4(p):
(i) the lease is legal, valid, binding, enforceable, and in full force
and effect;
(ii) the lease will continue to be legal, valid, binding, enforceable,
and in full force and effect on identical terms following the consummation of
the transactions contemplated hereby;
(iii) no party to the lease is in breach or default, and no event has
occurred which, with notice or lapse of time, would constitute a breach or
default or permit termination, modification, or acceleration thereunder;
(iv) no party to the lease has repudiated any provision thereof;
(v) there are no disputes, oral agreements, or forbearance programs in
effect as to the lease ;
(vi) D&SE has not assigned, transferred, conveyed, mortgaged, deeded
in trust, or encumbered any interest in the leasehold;
(vii) all facilities leased thereunder have received all approvals of
governmental authorities (including licenses and permits) required in connection
with the operation thereof and have been operated and maintained in accordance
with applicable laws, rules, and regulations;
(viii) all facilities leased thereunder are supplied with utilities
and other services necessary for the operation of such facilities as the
Business is currently operated;
(ix) all necessary approvals and consents for the transfer and
assignment of the lease to MTNO have been obtained and security deposits
thereunder, if any, are being assigned to MTNO by the Assignment and Assumption
Agreement referred to herein and will remain in place for MTNO's benefit,
subject, however, to the provisions of the lease.
(Q) ENVIRONMENTAL MATTERS.
(i) D&SE is, and at all times has been, in full compliance with, and
has not been and is not in violation of or liable under, any Environmental Law.
D&SE does not have any basis to expect, and has not received, any actual or
threatened order, notice, or other communication from (i) any governmental body
or private citizen acting in the public interest, or (ii) the current or prior
owner or operator of any facilities, of any actual or potential violation or
failure to comply with any environmental law, or of any actual or threatened
obligation to undertake or bear the cost of any environmental, health, and
safety liabilities with respect to any of the facilities or any other properties
or assets (whether real, personal, or mixed) in which D&SE has had an interest,
or with respect to any property or facility at or to which hazardous materials
were generated, manufactured, refined, transferred, imported, used, or processed
by D&SE, or any other person for whose conduct D&SE is or may be held
responsible, or from which hazardous materials have been transported, treated,
stored, handled, transferred, disposed, recycled, or received.
8
(ii) There are no pending or, threatened claims, encumbrances, or
other restrictions of any nature, resulting from any environmental, health, and
safety liabilities or arising under or pursuant to any Environmental Law, with
respect to or affecting any properties and assets (whether real, personal, or
mixed) in which D&SE has or had an interest.
(iii) D&SE has not received, any citation, directive, inquiry, notice,
order, summons, warning, or other communication that relates to hazardous
activity, hazardous materials, or any alleged, actual, or potential violation or
failure to comply with any Environmental Law, or of any alleged, actual, or
potential obligation to undertake or bear the cost of any environmental, health,
and safety liabilities with respect to any properties or assets (whether real,
personal, or mixed) in which D&SE had an interest, or with respect to any
property or facility.
(iv) D&SE has no environmental, health, and safety liabilities with
respect to any properties and assets (whether real, personal, or mixed) in which
D&SE (or any predecessor), has or had an interest, or at any property
geologically or hydrologically adjoining any such other property or assets.
(v) There are no hazardous materials present on or in the environment
at D&SE's principal place of business. D&SE has not permitted or conducted, and
is not aware of, any hazardous activity conducted with respect to any properties
or assets (whether real, personal, or mixed) in which D&SE has or had an
interest except in full compliance with all applicable Environmental Laws.
(vi) DSE does not have any, nor has it ever had any, release or,
threat of release, of any hazardous materials at or from any locations where any
hazardous materials were generated, manufactured, refined, transferred,
produced, imported, used, or processed from or by any properties and assets
(whether real, personal, or mixed) in which D&SE has or had an interest.
(R) EMPLOYEE CONTRACTS. D&SE is not a party to any collective bargaining or
other contract with any of its employees. D&SE is not aware of any existing or
threatened strike, labor action or demand for recognition against D&SE by any
labor organization or of any pending or threatened claim under any sexual
harassment, equal employment opportunity or occupational safety and health law.
D&SE does not maintain any bonus, pension, profit sharing, deferred
compensation, retirement, stock purchase, stock option, severance,
hospitalization, insurance or other plan or arrangement providing benefits to
any present or former employee or his dependents, beneficiaries or heirs. All
employees are at will employees and may be terminated at any time with or
without cause. Exhibit 4(r) constitutes a complete and true list of each
employee of D&SE, their position, their compensation, their years with D&SE,
their accrued vacation as of the date of the list and D&SE's custom or law as to
severance pay and continued health coverage.
(S) EXECUTORY CONTRACTS. The only executory contracts of D&SE being assumed
by MTNO are listed on Exhibit 4(s) and all have been entered into in the
ordinary course of business, were the result of arms length negotiations and
were deemed fair and equitable when entered into and are so deemed by D&SE's
management as of the Closing.
(T) PENSION, BONUS, PROFIT SHARING & RETIREMENT PLANS. D&SE has no pension,
bonus, profit-sharing or retirement plans for officers or employees, and is not
required to
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contribute to any multi-employer pension plan. It is understood and agreed that
no unfunded pension liabilities are being assumed by MTNO hereunder.
(U) TAXES. Except as set forth in Exhibit 4(u), as of the Closing date,
D&SE will not be liable for any taxes or assessments attributable to the
operation of the Business (including without limitation of the foregoing, income
taxes, excise, unemployment, social security, occupation, franchise, real or
personal property, sales or use taxes, import duties or charges or any penalties
or interest with respect thereof). Except for taxes for the current fiscal year
from operations, and for taxes which may result from the transaction
contemplated by this Agreement, all taxes which are or will become due and
payable have been paid or will be paid when due or at such time as the due date
for payment thereof may be extended, and all returns and reports required to be
filed in connection therewith will be filed with the appropriate taxing
authorities. All taxes and other assessments and levies which D&SE is required
by law to withhold or to collect have been duly withheld and collected and have
been paid over to the proper governmental authorities or are not yet payable and
are or will be held by D&SE for such payment.
(V) COMPLIANCE WITH LAW. Except as set forth in Exhibit 4(v), D&SE's
conduct of the Business has fully complied with all laws, ordinances, rulings
and regulations of all constituted governmental authorities having jurisdiction
with respect to the conduct of such Business, and no violations have been noted
in, or issued by, any governmental authority in consequence of the conduct of
such Business.
(W) PURCHASE ORDERS AND CONTRACTS. D&SE is not aware of any facts which
would indicate that any of the purchase orders and contracts to be assumed by
MTNO at the Closing will result in a loss upon completion.
(X) BROKERS. D&SE is obligated to pay a commission to TBC Business Brokers
but that commission is the obligation of D&SE, and not MTNO, and shall be paid
by D&SE pursuant to separate agreement. No other finders' fees or broker's
commissions are payable connection with the transactions contemplated by this
Agreement by reason of any action taken by DS&E.
(Y) DISCLOSURE. No representation or warranty by D&SE in this Agreement or
any statement furnished or to be furnished by D&SE pursuant hereto, or in
conjunction with the transactions contemplated hereby, contains or will contain
any untrue or misleading statement of a fact or omits or will omit to state a
fact necessary to make the statements so made or furnished not misleading.
5. REPRESENTATIONS AND WARRANTIES OF MTNO. MTNO represents and warrants to D&SE
that the statements contained in this Section 5 are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
date (as though made then and as though the closing date were substituted for
the date of this Agreement throughout this Section).
(A) ORGANIZATION; QUALIFICATION. MTNO is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of its
incorporation. Any assignee of MTNO as permitted by this Agreement shall execute
a separate document representing the state of its incorporation and the address
of the principal place of its office.
(B) DUE AUTHORIZATION. All necessary corporate proceedings have been had to
authorize the execution and delivery by MTNO of this Agreement and the
consummation by
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MTNO of the transactions contemplated hereby, including but not limited to the
delivery of the Note, Security Agreement and documents executed in connection
therewith and such deliveries have in fact been authorized.
(C) POWER TO PERFORM. MTNO has full corporate power and authority to enter
into this Agreement and to carry out the transactions contemplated hereby.
(D) NO BREACH. The execution and delivery by MTNO of this Agreement and the
consummation of the transactions contemplated hereby,
(i) do not violate any provisions of the certificate of incorporation
or bylaws of MTNO, and
(ii) will not violate, be in conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under, any of
the terms or provisions of any agreement or instrument to which MTNO is a party
or by which MTNO or any of its property may be bound or affected.
(E) ENFORCEABILITY. This Agreement constitutes the legal, valid, and
binding obligation of MTNO, enforceable against MTNO in accordance with its
terms.
(F) FINANCIAL STATEMENTS. MTNO has heretofore furnished D&SE with copies of
its Annual Report on Form 10-K for its most recent fiscal year, together with
all filings made by MTNO with the Securities and Exchange Commission subsequent
to the date of that Report. The financial statements included in such reports
have been prepared in accordance with generally accepted accounting principles
consistently applied and present fairly MTNO's financial position and results of
operations as of, and for the periods, indicated therein, subject, in the case
of unaudited financial statements included therein to normal year-end
adjustments.
(G) DISCLOSURE. No representation or warranty by MTNO in this Agreement or
any statement furnished or to be furnished by MTNO pursuant hereto, or in
conjunction with the transactions contemplated hereby, contains or will contain
any untrue or misleading statement of a material fact or omits or will omit to
state a material fact necessary to make the statements so made or furnished not
misleading.
(H) BROKERS. MTNO is obligated to pay a commission to Xxxx Xxxxxxxxxx in
connection with the transaction, and shall be paid by MTNO pursuant to separate
agreement. No other finders' fees or broker's commissions are payable connection
with the transactions contemplated by this Agreement by reason of any action
taken by MTNO.
In the event of an assignment of this Agreement, representations and warranties
of Sections 5(a) through 5(e) shall be deemed applicable and binding upon and
with respect to such assignee.
6. COVENANTS OF D&SE. D&SE covenants as follows.
(A) ASSISTANCE AND COOPERATION. As promptly as practicable after the date
of this Agreement, D&SE will make all filings required by law and obtain such
approvals and consents or waivers as may be necessary to be made or obtained by
them in order to consummate the contemplated transactions. Between the date of
this Agreement and the closing date, D&SE will (i) cooperate with MTNO with
respect to all filings that MTNO elects to make or is required by legal
requirements to make in connection with the contemplated transactions, and (ii)
cooperate with MTNO in obtaining all consents required from any person to effect
the transactions
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contemplated hereunder (including taking all actions requested by MTNO to cause
early termination of any applicable waiting period).
(B) ACCESS AND INVESTIGATION. Between the date of this Agreement and the
closing date, D&SE will, and will cause its representatives to, (a) afford MTNO
and its representatives (collectively, "MTNO's Advisors") full and free access
to D&SE's personnel, properties (including subsurface and environmental
compliance testing), contracts, books and records, and other documents and (b)
furnish MTNO and MTNO's Advisors with copies of all such contracts, books and
records, other documents and data as MTNO may reasonably request, and (c)
furnish MTNO and MTNO's Advisors such additional financial, operating, and other
data and information as MTNO may reasonably request. Such access shall be during
normal business hours and shall not unreasonably interfere with the operation of
the Business.
(C) OPERATION OF THE BUSINESS. Between the date of this Agreement and the
closing date, D&SE will:
(i) operate the Business only in the ordinary course consistent with
past practice and procedure and use its best efforts to preserve intact the
current business organization, keep available the services of the current
officers, employees, and agents, and maintain the relations and good will with
suppliers, customers, landlords, creditors, employees, agents, and others having
business relationships with it;
(ii) confer with MTNO concerning operational matters of a Material
nature; and
(iii) otherwise report periodically to MTNO concerning the status of
its Business, and finances.
(D) NOTIFICATION. Between the date of this Agreement and the closing date,
D&SE will promptly notify MTNO in writing if D&SE becomes aware of any fact or
condition that causes or constitutes a breach of any of D&SE's representations
and warranties as of the date of this Agreement, or if D&SE becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. D&SE will promptly deliver to MTNO a letter specifying such change.
During the same period D&SE will promptly notify MTNO of the occurrence of any
breach of any covenant of D&SE in this Section 6 or of the occurrence of any
event that may make the satisfaction of the conditions in Section 8 impossible
or unlikely.
(E) NO NEGOTIATION. Until such time, if any, as this Agreement is
terminated pursuant to Section 10, D&SE will not, alone or through its
representatives, directly or indirectly solicit, initiate, or encourage any
inquiries or proposals from any person relating to any transaction involving the
sale of the Business or Assets or any of its capital stock, or any merger,
consolidation, business combination, or similar transaction.
(F) TRANSFER OF KNOW-HOW. For a period of not less than 12 months after the
Closing, D&SE will make available to MTNO during normal business hours and at
the MTNO business location at which the Business is conducted, the services of
D&SE to teach the Know-how to one or more persons designated by MTNO. The
parties anticipate that the services will be provided pursuant to a separate
consulting agreement in the form of Exhibit 6(f).
12
7. COVENANTS OF MTNO. MTNO covenants as follows.
(A) REQUIRED APPROVALS. As promptly as practicable after the date of this
Agreement, MTNO will make all filings required to be made by it in order to
consummate the contemplated transactions. Between the date of this Agreement and
the closing date, MTNO will, and will: (i) cooperate with D&SE with respect to
all filings that D&SE elects to make or is required by legal requirements to
make in connection with the contemplated transactions, and (ii) cooperate with
D&SE in obtaining all consents.
(B) NOTIFICATION. Between the date of this Agreement and the Closing, MTNO
will promptly notify D&SE in writing if MTNO becomes aware of any fact or
condition that causes or constitutes a breach of any of MTNO's representations
and warranties as of the date of this Agreement, or if MTNO becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. In such event MTNO will promptly deliver to D&SE a letter specifying
such change. During the same period, MTNO will promptly notify D&SE of the
occurrence of any breach of any covenant of MTNO in this Section or of the
occurrence of any event that may make the satisfaction of the conditions in
Section 8 impossible or unlikely.
8. CONDITIONS PRECEDENT TO MTNO'S OBLIGATIONS. The obligations of MTNO hereunder
shall be subject to the satisfaction, on or before the date of closing, of the
following conditions precedent or concurrent.
(A) TRUTH OF REPRESENTATIONS. Each of the representations and warranties of
D&SE contained in this Agreement shall be true and correct at and as of the time
of closing date as if made as of such time and the due diligence was completed
to MTNO's satisfaction.
(B) CONSENT TO ASSIGNMENT OF LEASE, EXECUTORY CONTRACTS BEING ASSUMED AND
OTHER ASSETS THE TRANSFER OF WHICH REQUIRES CONSENT. D&SE shall have obtained,
and delivered copies to MTNO, of all consents required for the assignment of its
lease, the executory contracts being assumed by MTNO and all other contracts or
instruments for which consent is required for the completion of the transactions
contemplated by this Agreement.
(C) DELIVERY OF DOCUMENTS. All documents required to be delivered by D&SE
at or prior to the Closing shall have been delivered.
(D) NO DAMAGE TO ASSETS OR MATERIAL ADVERSE CHANGE IN BUSINESS. No
materially adverse change in the condition of the Assets (other than ordinary
wear and tear) or in the Business of D&SE shall have occurred from the date of
this Agreement until the Closing.
(E) NON-COMPETITION AGREEMENT. Xxxxxx Xxxxxx, Xxxxx Xxxx D&SE and MTNO
shall have entered into a separate indemnity and non-competition agreement in
form identical to Exhibit 8(e) hereto.
(F) OPINION OF COUNSEL. MTNO shall have received an opinion dated the date
of Closing of Messrs. Xxxxxxxx, Xxxxxxxx & Xxxxxxxx, P.C., counsel for D&SE in
the form of Exhibit 8(f).
13
9. CONDITIONS PRECEDENT TO D&SE'S OBLIGATIONS. The obligations of D&SE hereunder
shall be subject to the satisfaction, on or before the date of closing, of the
following conditions precedent or concurrent.
(A) TRUTH OF REPRESENTATIONS. Each of the representations and warranties of
MTNO contained in this Agreement shall be true and correct at and as of the time
of closing date as if made as of such time.
(B) DELIVERY OF DOCUMENTS. All documents required to be delivered by MTNO
at or prior to the closing shall have been delivered.
(C) OPINION OF COUNSEL. D&SE shall have received an opinion dated the date
of closing of Xxxxx Xxxxxx & Xxxxx LLP, counsel for MTNO in the form of Exhibit
9(c)
10. THE CLOSING. The Closing hereunder shall take place at 10:00 A.M. Eastern
Standard Time at the offices of Xxxxx Xxxxxx & Xxxxx LLP or at such other time
or place as the parties may mutually agree, on or before the expiration of sixty
(60) days from the date hereof. At the Closing:
(A) DOCUMENTS TO BE EXECUTED BY THE PARTIES. DS&E and MTNO shall execute
and deliver:
(i) An Assignment and Assumption Agreement in the form of Exhibit
10(a)(i);
(ii) A Deposit Escrow Agreement in form identical to Exhibit 1(f); and
(iii) the Consulting Agreement referred to in Section 6(f)
(B) DOCUMENTS TO BE DELIVERED BY D&SE. D&SE shall deliver to MTNO:
(i) certified copies of resolutions of D&SE's Board of Directors
authorizing execution and delivery of this Agreement and consummation of the
transactions contemplated hereby;
(ii) to the extent not previously delivered, the Customer and Vendor
Lists;
(iii) the opinion referred to in Section 8(f);
(iv) consent(s) of landlord(s);
(v) evidence reasonably satisfactory to MTNO that all claims of D&SE's
present employees employed in the Business for salary, accrued vacation, sick
leave and other employee benefits accrued through the closing date have been
paid; and
(vi) an indemnity and non-competition agreement referred to in Section
8(e), duly executed by each of the shareholders of D&SE.
(C) DOCUMENTS TO BE DELIVERED BY MTNO TO D&SE. MTNO will deliver to D&SE:
(i) certified copies of resolutions of MTNO's Board of Directors
authorizing execution and delivery of this Agreement and consummation of the
transactions contemplated hereby;
(ii) the Note
14
(iii) the opinion referred to in Section 9(c);
(iv) the Security Agreement and UCC-1 Financing Statements;
(v) if MTNO's rights under this Agreement have been assigned to
another corporation, a guarantee (in substantially the form heretofore agreed by
the parties) of the obligations of that corporation.
(D) ADJUSTMENT FOR CERTAIN CLAIMS. At the closing the parties shall adjust
for:
(i) prepaid or unpaid rent, fuel and utility charges; and
(ii) unearned prepaid premiums on insurance policies to be assigned to
MTNO.
11. POST-CLOSING TRANSACTIONS.
(A) FURTHER INSTRUMENTS. After the Closing, on the reasonable request of
either party, the other shall do, execute, acknowledge and deliver all such
further acts, assurances, deeds, assignments, transfers, conveyances, powers of
attorney and other instruments and documents as may be required to grant,
convey, assign and deliver to and vest in MTNO, and protect its interest in and
use of, the Assets and Business purchased hereunder as may be appropriate, and
otherwise to carry out the transactions contemplated by this Agreement.
(B) ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE. D&SE shall retain title to
all accounts receivable arising prior to the Closing. To the extent such
accounts receivable are not otherwise collected by D&SE, MTNO may collect such
accounts receivable for the account of D&SE and shall remit the proceeds of such
collection to D&SE promptly upon receipt. At all relevant times MTNO shall act
as a trustee with respect to the collection of such accounts receivable for the
benefit of D&SE and shall account to D&SE upon demand for such collections. All
funds received by MTNO on behalf of D&SE shall be deemed trust funds and D&SE's
property. To the extent that MTNO receives any payment on account (whether in
the form of cash or gold) from any customer having an unpaid account balance
with DS&E, such payment shall first be applied to the unpaid account balance
owed to DS&E by such customer regardless of any contrary direction from the
customer as to the account to which payment is to be credited. All accounts
receivable in favor of MTNO arising after the Closing, regardless of the name in
which the applicable purchase order was placed, shall belong to MTNO, subject to
the priority of payment heretofore set forth. All accounts payable in respect of
items received prior to the Closing shall be the responsibility of D&SE; all
accounts payable in respect of items received after the Closing shall be the
responsibility of MTNO, regardless of the name appearing on the invoice.
12. INDEMNIFICATION; REMEDIES.
(A) SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE. All
representations, warranties, covenants, and obligations in this Agreement, and
any other certificate or document delivered pursuant to this Agreement will
survive for a period of two years from the date of the Closing. The right to
indemnification, payment of Damages (as defined below) or other remedy based on
such representations, warranties, covenants, and obligations will not be
affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the date of Closing, with respect to
the accuracy or inaccuracy of
15
or compliance with, any such representation, warranty, covenant, or obligation.
The waiver of any condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant or
obligation, will not affect the right to indemnification, payment of damages, or
other remedy based on such representations, warranties, covenants, and
obligations.
(B) INDEMNIFICATION AND PAYMENT OF DAMAGES BY D&SE. D&SE will indemnify and
hold harmless MTNO, and its representatives, stockholders, controlling persons,
and affiliates (collectively, the "Indemnified Persons") for, and will pay to
the Indemnified Persons the amount of, any loss, liability, claim, damage
(including incidental and consequential damages), expense (including costs of
investigation and defense and reasonable attorneys' fees) or diminution of
value, whether or not involving a third-party claim (collectively, "Damages"),
arising, directly or indirectly, from or in connection with:
(i) any breach of any representation or warranty made by D&SE in this
Agreement or any certificate or document delivered by D&SE or the D&SE
Shareholders pursuant to this Agreement;
(ii) any material breach by D&SE or the D&SE Shareholders of any
covenant or obligation of D&SE or the D&SE Shareholders in this Agreement;
(iii) any claim by any person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such person with D&SE (or any person acting on its
behalf) in connection with any of the transactions contemplated by this
Agreement other than as set forth herein and only in the event such claiming
party prevails; and
(iv) any claim arising out of a transaction by DS&E prior to the
Closing Date.
The remedies provided in this Section 12(b) will not be exclusive of or limit
any other remedies that may be available to MTNO or the other indemnified
persons.
(C) INDEMNIFICATION AND PAYMENT OF DAMAGES BY MTNO. MTNO will indemnify and
hold harmless D&SE, and will pay to D&SE the amount of any Damages arising,
directly or indirectly, from or in connection with
(i) any breach of any representation or warranty made by MTNO in this
Agreement or in any certificate delivered by MTNO pursuant to this Agreement,
(ii) any material breach by MTNO of any covenant or obligation of MTNO
in this Agreement, or
(iii) any claim by any person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such person with MTNO (or any person acting on its
behalf) in connection with any of the transactions contemplated by this
Agreement other than as set forth herein and only in the event such claiming
party prevails;.
(D) RIGHT OF SET-OFF. Upon notice to D&SE specifying in reasonable detail
the basis for such set-off and the amount thereof, MTNO, subject to the further
provisions hereof, may set off any amount to which it may be entitled under this
Section 12 against amounts otherwise payable under the Note. If D&SE contests
the basis for such set-off or the amount thereof, it shall, not later than the
close of business on the fifth day after its receipt of MTNO's notice,
16
notify MTNO of its objection in writing, specifying the amount, if any, which it
believes MTNO to be entitled to set off against the Note. In the event of any
such objection, MTNO shall be entitled to withhold from the first payments
thereafter due on the Note the amount specified by DS&E in its notice, provided
however, that MTNO shall immediately pay to the Escrow Agent the amount entitled
to be withheld or disputed, it being the intention of the parties to require
MTNO to pay disputed amounts in escrow until a resolution of any and all claims
relating thereto. After paying such amount to the Escrow Agent, all payments
thereafter due on the Note shall be paid in accordance with the terms thereof.
The escrow agents shall hold such amounts in escrow subject to the terms of the
Escrow Deposit Agreement.
THE FAILURE OF MTNO TO DEPOSIT SUCH DISPUTED AMOUNTS WITH THE ESCROW AGENT SHALL
BE DEEMED A MATERIAL DEFAULT HEREUNDER AND UNDER THE NOTE.
(E) PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.
(i) Promptly after receipt by an indemnified party under Section 12(b)
or 12(c), of notice of the commencement of any proceeding against it, such
indemnified party will, if a claim is to be made against an indemnifying party
under such Section, give notice to the indemnifying party of the commencement of
such claim, but the failure to notify the indemnifying party will not relieve
the indemnifying party of any liability that it may have to any indemnified
party, except to the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the indemnifying party's failure to give
such notice.
(ii) If any proceeding referred to in Section 12(e) is brought against
an indemnified party and it gives notice to the indemnifying party of the
commencement of or making of such proceeding, the indemnifying party will,
unless the claim involves taxes, be entitled to participate in such proceeding
and, to the extent that it wishes (unless (i) the indemnifying party is also a
party to such proceeding and the indemnified party determines in good faith that
joint representation would be inappropriate, or (ii) the indemnifying party
fails to provide reasonable assurance to the indemnified party of its financial
capacity to defend such proceeding and provide indemnification with respect to
such proceeding), to assume the defense of such proceeding with counsel
reasonably satisfactory to the indemnified party and, after notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such proceeding, the indemnifying party will not, as long as it
diligently conducts such defense, be liable to the indemnified party under this
Section 12 for any fees of other counsel or any other expenses with respect to
the defense of such proceeding, in each case subsequently incurred by the
indemnified party in connection with the defense of such proceeding, other than
reasonable costs of investigation. The parties agree that the firms of Xxxxx
Xxxxxx & Xxxxx LLP and Xxxxxxxx, Xxxxxxxx & Xxxxxxxx, P.C. are among those
satisfactory for purposes of this Section. If the indemnifying party assumes the
defense of a proceeding, (i) unless the indemnifying party has, prior to
assuming such defense, notified the indemnified party that that defense is being
undertaken without prejudice to any later claim that the claims made in the
proceeding are not within the scope of, or subject to, indemnification, it will
be conclusively established for purposes of this Agreement that the claims made
in that proceeding are within the scope of and subject to indemnification; (ii)
no compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent unless (A) there is no finding or
admission of any violation of legal requirements or any violation of the rights
of any person and no effect on any other claims that may be made against the
indemnified party, and (B) the sole relief provided is monetary damages that are
paid in full by the indemnifying party; and (iii) the
17
indemnified party will have no liability with respect to any compromise or
settlement of such claims effected without its consent. If notice is given to an
indemnifying party of the commencement of any proceeding and the indemnifying
party does not, within ten days after the indemnified party's notice is given,
give notice to the indemnified party of its election to assume the defense of
such proceeding, the indemnifying party will be bound by any determination made
in such proceeding or any compromise or settlement effected by the indemnified
party.
(iii) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
proceeding may adversely affect it other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume the exclusive
right to defend, compromise, or settle such proceeding, but the indemnifying
party will not be bound by any determination of a proceeding so defended or any
compromise or settlement effected without its written consent (which may not be
unreasonably withheld).
(iv) D&SE consents to the non-exclusive jurisdiction of any court in
which a proceeding is brought against any indemnified person for purposes of any
claim that an indemnified person may have under this Agreement with respect to
such proceeding or the matters alleged therein.
(F) PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
13. TERMINATION.
(A) TERMINATION EVENTS. This Agreement may, by notice given prior to or at
the Closing, be terminated:
(i) by either MTNO or D&SE if the other party has committed a material
breach of any provision of this Agreement and such breach has not been waived;
(ii) by MTNO if any of the conditions in Section 8 have not been
satisfied as of the time of Closing or if satisfaction of such a condition is or
becomes impossible (other than through the failure of MTNO to comply with its
obligations under this Agreement) and MTNO has not waived such condition on or
before the Closing;
(iii) by D&SE, if any of the conditions in Section 9 has not been
satisfied at the Closing or if satisfaction of such a condition is or becomes
impossible (other than through the failure of D&SE to comply with their
obligations under this Agreement) and D&SE has not waived such condition on or
before the Closing;
(iv) by mutual consent of MTNO and D&SE; or
(v) By either party to this Agreement in the event the Closing does
not occur on before the expiration of sixty (60) days from the date hereof, time
being of the essence with respect thereto. In the event the Closing does not
occur within such period solely as a result of MTNO's failure or refusal to
close and not as a result of Force Majeure or D&SE's default, then in such
event, D&SE shall have the right to retain the Deposit as its liquidated damages
and not as a penalty, which damages would be otherwise difficult or impossible
to determine with precision. The Escrow Agent shall pay same to D&SE as provided
in the Escrow Deposit Agreement, whereupon, the parties hereto shall have no
further obligation to the other and this
18
Agreement shall have no further force and effect. In the event MTNO or D&SE
shall elect to terminate this Agreement under the provisions of this
subparagraph 13(a)(v) for any reason other than MTNO's failure or refusal to
close as heretofore provided, then in such event, upon the return of the Deposit
to MTNO, this Agreement shall be of no further force and effect and no party
hereto shall have any further liability to the other.
(B) EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 13(a)(i), then the non-breaching party shall be entitled to such
remedies as are provided by law. If this Agreement is terminated pursuant to
Sections 13(a)(ii), 13(a)(iii) or 13(a)(iv), then all further obligations of the
parties under this Agreement shall terminate without any liability of either
party to the other. If this Agreement is terminated pursuant to Section
13(a)(v), then the provisions of such section shall be applicable.
14. MISCELLANEOUS.
(A) ENTIRE AGREEMENT; MODIFICATION. This Agreement, and the documents
delivered pursuant hereto, constitute the entire agreement among the parties
hereto and supersedes all prior agreements and understandings, both written and
oral, between them with respect thereto, and neither party has made any
representation, warranty, covenant or agreement except to the extent expressly
set forth in this Agreement and such other documents. This Agreement may be
amended only by a written instrument executed by MTNO and D&SE.
(B) SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
(C) WAIVER. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
(D) PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity with
respect to this Agreement or the transactions contemplated hereby will be
issued, if at all, at such time and in such manner as MTNO determines. Unless
consented to by MTNO in advance or required by legal requirements, prior to the
Closing D&SE shall keep this Agreement strictly confidential and may not make
any disclosure of this Agreement to any person. D&SE and MTNO will consult with
each other concerning the means by which D&SE's employees, customers, and
suppliers and others having dealings with D&SE will be informed of the
contemplated transactions, and MTNO will have the right to be present for any
such communication.
19
(E) RETENTION OF EMPLOYEES, CONTRACTORS, AGENTS. Nothing contained herein
shall constitute an undertaking, on the part of MTNO to continue the employment
of any employee, contractor or agent of D&SE except as set forth in the
Consulting Agreement referred to in Section ____, and as to which MTNO's entire
obligation is limited to that which is expressly set forth in such Consulting
Agreement.
(F) GOVERNING LAW; FORUM. This Agreement shall be construed and interpreted
according to the laws of the State of New York applicable to contracts wholly
executed and to be performed therein. Each party to this Agreement irrevocably
consents and agrees that any legal action arising out of or in any way in
connection with this Agreement shall only be maintained in the courts of the
State of New York, County of New York, or in the United States District Court
for the Southern District of New York, and each party hereto accepts and submits
to the exclusive jurisdiction and venue of such courts.
(G) NOTICES. All communications under this Agreement shall be in writing
and shall be deemed to have been duly given on the date of service if served
personally on the party to whom notice is to be given, or on the third day after
mailing, if mailed to the party to whom notice is to be given, by first class
mail, registered or certified, return receipt requested, postage prepaid and
properly addressed as follows:
To MTNO:
MTN Holdings Inc. .
c/o Xxxxx Xxxxxxx, President
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With copies (which shall not constitute notice) to:
Xxxxxxx Xxxxx, Esq.
Xxxxx Xxxxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
To D&SE:
Xxxxxx Xxxxxx, President
Dvir & Xxxxxx Enterprises, Inc.
00 Xxxx 00xx Xxxxxx (0xx xxxxx)
Xxx Xxxx, Xxx Xxxx 00000
With copies (which shall constitute notice) to:
Xxxxxxxx, Xxxxxxxx & Xxxxxxxx, P.C.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, X.X. 00000
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Attention: Xxxxx X. Xxxxxxxx, Esq.
(H) JURISDICTION; SERVICE OF PROCESS. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
may be brought against any of the parties in the courts of the State of New
York, County of New York, or, if it has or can acquire jurisdiction, in the
United States District Court for the Southern District of New York, and each of
the parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
21
(I) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(J) HEADINGS. The Article and Section headings in this Agreement are
for convenience or reference only and shall not be deemed to alter or affect any
provisions thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
MTN HOLDINGS INC. DVIR & XXXXXX ENTERPRISES, INC.
By:/s/ Xxxxx Xxxxxxx By:/s/ Xxxxxx Xxxxxx
----------------------- ---------------------------
Xxxxx Xxxxxxx, President Xxxxxx Xxxxxx, President
22
Exhibit 1(c)
Assumed Liabilities
None other than lease liabilities to be assumed in accordance with Assignment
and Assumption Agreement (Exhibit 10(a)(i))
Exhibit 1(f)
Deposit Escrow Agreement
Exhibit 1(i)
Equipment
Exhibit 3(a)(ii)(B)
Form of Note
Exhibit 3(b)
Allocation of Purchase Price
Build-outs and permits: $400,000
Equipment and machinery: $400,000
Customer lists/goodwill: $200,000
Exhibit 3(c)
Form of Security Agreement
Exhibit 4(l)
EXISTING LIENS
1. Security interest in accounts receivable held by HSBC Bank USA;
2. There is a UCC-1 filed by Xxxxxx Metals, Inc. and covering equipment
and other property. Underlying obligation is satisfied and Termination
Statements to be filed.
Exhibit 4(p)
Description of Leased Property
Exhibit 4(r)
Employee List
Exhibit 4(s)
Executory contracts
None
Exhibit 4(u)
Taxes
1. New York State and New York City Franchise or General Corporation
Business Taxes, if any, for 2001 to the extent estimated taxes have not
been remitted.
2. Any and all Payroll Taxes to the extent not heretofore or hereafter
paid.
3. Any and all taxes which may arise as a result of the transactions
contemplated by the Agreement.
As between the parties, taxes described in 1 and 2 above remain the
responsibility of D&SE.
Exhibit 4(v)
Violations of Law
None
Exhibit 6(f)
Consulting Agreement
Exhibit 8(e)
Indemnity and Non-Competition Agreement
Exhibit 8(f)
Opinion of Xxxxxxxx, Xxxxxxxx & Xxxxxxxx, P.C.
Exhibit 9(c)
Opinion of Xxxxx Xxxxxx & Xxxxx LLP
Exhibit 10(a)(i)
Assignment and Assumption Agreement
