1
Exhibit 10.20
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") dated as of March
14, 1995, is by and between Waterlink, Inc., a Delaware corporation
("Purchaser"), and Xxxxxxx, Inc., a Delaware corporation as Debtor and
Debtor-in-Possession in that certain Bankruptcy Case No. 94- 40207-HJB
("Seller"). Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to them in Article VII of this Agreement.
WHEREAS, Seller is a designer, fabricator and distributor of industrial
separation systems primarily used in the metalworking industry, and whose
products utilize centrifugal, classical settling and advance membrane separation
technologies to provide high performance, solid-liquid and liquid-liquid
separation;
WHEREAS, Seller operates its equipment business through the Xxxxxxx
Technologies Division (a/k/a SanTech) and the Process Equipment Division (the
"Divisions"), together with licenses of certain patents, if any, from Separation
Methods, Inc., a wholly-owned subsidiary of Seller ("SMI");
WHEREAS, Seller filed a voluntary petition, and is currently operating
its business as a debtor-in-possession, under Chapter 11 of the United States
Bankruptcy Code under the supervision of the United States Bankruptcy Court for
the District of Massachusetts Case No. 94-40207-HJB;
WHEREAS, Seller has decided to dispose of certain of its operating
divisions and subsidiaries in an attempt to satisfy the secured and unsecured
claims of its creditors;
WHEREAS, Seller has determined that a sale of such assets to Purchaser,
upon the terms and subject to the conditions set forth in this Agreement,
represents the highest and best offer for such assets and is in the best
interests of Seller's estate and its creditors; and
WHEREAS, Seller desires to sell and convey to Purchaser, and Purchaser
desires to purchase from Seller, such assets and Seller and Purchaser desire to
enter into certain other agreements in connection with the purchase and sale of
such assets upon the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements contained herein, intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
---------------------------
Section 1.01 ASSETS TO BE SOLD. Subject to and in accordance with the
terms and conditions of this Agreement, at the Effective Time, Seller shall
transfer, convey, assign and deliver, or shall cause to be transferred,
conveyed, assigned and delivered, to Purchaser, and Purchaser will acquire and
accept from Seller, all of Seller's right, title and interest, of every kind and
description, to the following properties and assets (any item qualified by the
term "of the Divisions" meaning any such
2
item relating to, or used or useful in connection with, the businesses or
operations of the Divisions irrespective of whether title to or ownership of
such item is in the name of Seller, one of the Divisions or SMI):
(a) All of Seller's right, title and interest in and to the business of
the Divisions as a going concern and the goodwill pertaining thereto;
(b) All of Seller's right, title and interest in and to the Inventory
plus all work-in-progress of the Divisions;
(c) All of Seller's right, title and interest, in whatever media or
form, of every kind and description whatsoever, in and to all sales and
equipment documentation of the Divisions, including without limitation, all
sales literature (including original artwork and all stationery, envelopes and
related items), forms of sales invoices, purchase orders and sales contracts,
bills of materials, instruction and repair manuals, sales training materials,
equipment designs, specifications, drawings and notes, blueprints, technical
drawings and notes and other technical information;
(d) All of Seller's right, title and interest, in whatever media or
form, of every kind and description whatsoever, in and to all proprietary
information of the Divisions, including without limitation all historical and
current sales information, historical and current accounting data, software
programs, computer data files, customer lists and files, price lists, competitor
files, quote files, sales invoices, purchase orders, costing files, log books,
sales contracts and manufacturing and purchasing records and files and all other
books and records of the Divisions;
(e) All of Seller's right, title and interest, in and to all of the
following tooling and other equipment of the Divisions: all patterns, jigs and
fixtures, trade show booths and sales demonstration models;
(f) All of Seller's right, title and interest in and to all United
States and foreign patents, patent rights, patent applications and licenses,
trademarks, trademark rights, service marks, service xxxx rights, trade names,
trade name rights, copyrights, trade secrets, shop rights, inventions, know-how,
formulae, product designs, engineering documentation, drawing specifications,
research and development material, product improvements, production schedules,
testing procedures, technical information, unpatented inventions, techniques,
discoveries, designs, proprietary rights and non-public information, whether
patentable or not, and registrations, reissues and extensions thereof and
applications and licenses therefor, of the Divisions, including without
limitation, all such intellectual property owned by or in the name of SMI that
is used in, useful or necessary to the business or operations of the Divisions
(the "Patents and Technology");
(g) All of Seller's right, title and interest in and to the customer
sales contracts, customer purchase orders, customer rental agreements and other
customer agreements of the Divisions;
2
3
(h) All of Seller's right, title and interest in and to all of the
goodwill and trade connections of the Divisions and the Seller's right to use
the following names: "Xxxxxxx", "Xxxxxxx Technologies", "Xxxxxxx Process
Equipment", "Separation Technologies, Inc.", and "SanTech";
(i) The demonstration equipment listed and described on Schedule
1.01(i);
(j) The furniture and office equipment listed and described on Schedule
1.01(j);
(k) The laboratory equipment listed and described on Schedule 1.01(k);
(1) The computer equipment listed and described on Schedule 1.01(l);
(m) The shop equipment listed and described on Schedule 1.01(m);
(n) The Toshiba Perception Telephone System listed and described on
Schedule 1.01(n);
(o) The MicroVax computer system listed and described on Schedule
1.01(o);
(p) The MicroVax computer enhancements listed and described on Schedule
1.01(p);
(q) The additional demonstration equipment listed and described on
Schedule 1.01(q);
(r) The machines and raw materials listed and described on Schedule
1.01(r);
(s) The finished goods listed and described on Schedule 1.01(s);
(t) All phone numbers (including facsimile numbers) used in connection
with the business of the Divisions including, but not limited to, (i)
(000)000-0000, (ii) (000)000-0000, and (iii) (000)000-0000 which Seller using
its best efforts is able to transfer to Purchaser; and
(u) All of Seller's right, title and interest in and to all rights,
claims and causes of actions of Seller against any officer, former officer,
employee, former employee or other person arising out of the disclosure or use,
or threatened disclosure or threatened use, of any proprietary Information
relating to the Assets or the businesses or operations of the Divisions
including without limitation, any invention, process, method, formulae,
treatment, discovery or improvement or application thereof, or other "know-how",
or compilation of information, list of customers or suppliers, documents or
records with respect thereto or contained therein.
The assets, properties and rights of Seller listed in Section 1.01(a)-(u) are
hereinafter collectively referred as the "Assets."
3
4
Section 1.02. RETAINED EQUIPMENT.
(a) Subject to the right of use contained in Section 1.02(b) below,
Seller shall have the option to retain any Asset listed on Schedules 1.01(j),
(k) and (l) by providing to Purchaser written notice of the exercise of its
option hereunder no later than five (5) days after the execution hereof, which
notice shall state with particularity a description of each item of Retained
Equipment, the aggregate Allocated Value of the Retained Equipment, and the
reduction of the Purchase Price resulting from the exercise by Seller of its
option hereunder.
(b) Seller hereby grants to Purchaser a right of usage on each piece of
Retained Equipment in accordance with the terms set forth in this paragraph. The
usage of Retained Equipment shall be for an initial term of 30 days and shall be
renewable for successive 30-day terms unless either Purchaser or Seller notifies
the other party in writing at least 15 days prior to the expiration of the
initial or any successive term of usage of its election to not renew the rental
obligation for t he next-successive 30-day term. The monthly usage fee for the
Retained Equipment shall be calculated by dividing the aggregate Allocated Value
of the Retained Equipment by five (5) and further dividing such amount by twelve
(12).
Section 1.03 THIRD PARTY EQUIPMENT. If Seller is unable to sell,
assign, deliver or convey title to any Asset listed and described in Sections 1.
01 (m), (n), (o) or (p), Seller may retain any such item of Third Party
Equipment by giving Purchaser written notice thereof no less than five (5) court
days (as computed pursuant to Bankruptcy Rule 9006) prior to the Closing, which
notice shall state with particularity a description of each item of Third Party
Equipment, the Allocated Value of the Third Party Equipment and the reduction of
the Purchase Price resulting therefrom. Seller hereby grants to Purchaser the
right to use each item of Third Party Equipment until such time as Seller loses
possession thereof. Purchaser shall pay to Seller a daily usage fee for the
Third Party Equipment in an amount calculated by dividing the Allocated Value of
such Assets by five (5), dividing such amount by twelve (12) and further
dividing such amount by thirty (30). The usage fee shall be paid monthly in
arrears. Seller shall immediately notify Purchaser of any notices, claims or
actions instituted by or asserted against Seller that may result in Seller
losing possession of any item of Third Party Equipment.
Section 1.04 TRANSFER OF TITLE. The Assets shall be sold, conveyed,
assigned, transferred and delivered by Seller to Purchaser at Closing pursuant
to Section 363 of the Bankruptcy Code by appropriate instruments of transfer,
bills of sale, endorsements and assignments, as the case may be, all in form and
substance reasonably satisfactory to Purchaser and its counsel.
Section 1.05 FREE AND CLEAR OF LIENS. The Assets shall be sold,
conveyed, assigned, transferred and delivered by Seller to Purchaser at Closing
free and clear of any and all liens, mortgages, pledges, security interests,
restrictions, prior assignments liabilities, obligations, encumbrances, charges,
tenancies, licenses, encroachments, covenants, successor or transferee
liabilities, and claims of any and every kind, nature and description
whatsoever, including any "interest in property" within the meaning of that term
as it is used in the Bankruptcy Code.
4
5
Section 1.06 ASSUMPTION OF LIABILITIES. Purchaser agrees to assume, at
the Closing, all of Seller's obligations to deliver Products pursuant to the
Purchase Orders assigned by Seller to Purchaser pursuant to this Agreement.
Except to the extent set forth in the preceding sentence, the Parties understand
and agree that Purchaser does not assume or agree to pay, perform or otherwise
be responsible for any debts, liabilities, contracts, commitments or obligations
of Seller that initially arise prior to the Closing Date, whether post-petition
or pre-petition and whether or not associated with the Assets, including,
without limitation, those obligations and liabilities relating to employee
compensation, collective bargaining agreements, pension, profit-sharing,
vacation, health insurance, disability insurance or other employee benefit
programs, worker's compensation, breach or negligent performance of any contract
or breach of warranty relating thereto, and any product liability relating to
products manufactured or sold by Seller. All such liabilities, debts and
obligations shall remain the responsibility of Seller.
Section 1.07 DISCLAIMERS. The Assets are being acquired by Purchaser on
an "AS IS, WHERE IS" basis, based solely on Purchaser's investigation, without
any representations or warranties by Seller, express or implied, as to
condition, fitness or merchantability, all of which are hereby expressly
disclaimed.
ARTICLE II
PURCHASE PRICE; PAYMENT; ADJUSTMENTS TO THE PURCHASE PRICE
----------------------------------------------------------
Section 2.01 PURCHASE PRICE. The aggregate purchase price (the
"Purchase Price") for the Assets shall be Seven Hundred Fifty-One Thousand
Dollars ($751,000), as adjusted pursuant to Section 2.02. The Purchase Price
shall be payable by certified check or by wire transfer of immediately available
funds as follows:
(a) Two Hundred Fifty Thousand Dollars ($250,000) bid deposit (the "Bid
Deposit") upon the execution and delivery of this Agreement, and
(b) Five Hundred One Thousand Dollars ($501,000) at the Closing.
Section 2.02. ADJUSTMENTS OF THE PURCHASE PRICE. Purchaser and Seller
hereby agree that the Purchase Price payable at Closing shall be subject to
adjustment as follows:
(a) RETAINED EQUIPMENT. The Purchase Price shall be reduced by the
Allocated Value of any Asset retained by Seller pursuant to Sections 1.02 and
1.03, if any.
(b) INVENTORY. In the event that the Inventory List shall reflect a
value that is greater than the Inventory Base Price, then the Purchase Price
shall be increased by such amount. In the event that the Inventory List shall
reflect a value that is less than the Inventory Base Price, then the Purchase
Price shall be reduced by such amount.
5
6
(c) NET WIP. In the event the Net WIP is a positive number, then the
Purchase Price shall be increased by such amount. In the event Net WIP is a
negative number, the Purchase Price shall be reduced by such amount.
ARTICLE III
BANKRUPTCY COURT APPROVAL
-------------------------
Section 3.01 CONDITION PRECEDENT. Subject to the provisions of Section
3.03 below, it shall be a condition precedent to the obligations of all Parties
to this Agreement that the Bankruptcy Court shall have entered a final and
non-appealable judgment or order pursuant to the Bankruptcy Code confirming the
sale and transfer of good and marketable title of the Assets to Purchaser
substantially in the form of Exhibit A attached hereto (after proper notice
under the Bankruptcy Code and a hearing as defined in Section 102(1) of the
Bankruptcy Code) authorizing and approving the terms and conditions of this
Agreement and authorizing Seller to perform all acts necessary to consummate the
transactions contemplated hereby.
Section 3.02 APPEALS. Purchaser shall have the right, at its exclusive
option, to (i) either terminate this Agreement, or (ii) postpone the Closing
Date through the appeal period (or if the sale of the Assets is subject to any
stay, pending any such appeal), without any liability to Seller or any of its
successors in interest, if any order of the Bankruptcy Court approving,
modifying or confirming this Agreement, providing for notice of any related
court hearing, overruling any objection to this Agreement, or rejecting any
purportedly "higher and/or better" offer(s) for the Assets, is modified or
vacated by the Bankruptcy Court, or appealed by an Entity. Seller shall provide
Purchaser with written notice of any such modification, appeal or stay
immediately upon receipt of notice thereof, which notice to Purchaser shall
contain a copy of the notice of appeal or any other applicable pleadings,
applications or orders.
Section 3.03 BANKRUPTCY CODE SECTION 363(m). The Parties acknowledge
and agree that Purchaser is a "good faith purchaser" within the meaning of
Section 363(m) of the Bankruptcy Code and is thereby entitled to the Bankruptcy
Code protection afforded good faith, arm's-length purchasers. In the event that
any Entity files a Notice of Appeal from any order of the Bankruptcy Court
approving or otherwise related to this Agreement and the underlying
transactions, nothing in this Agreement constitutes or shall be construed or
interpreted to constitute either a waiver of Section 363(m) or Purchaser's
consent to a stay of this Agreement, pending any appeal. At its option, to a
exercised by written notice to Seller within five (5) business days after
receipt of Seller's written notice referred to in Section 3.02, Purchaser may
close this Agreement subsequent to the entry of the Bankruptcy Court order and
during the applicable period for appeal, without waiving the protection afforded
Purchaser pursuant to Section 363(m) of the Bankruptcy Code. Purchaser has
negotiated in good faith and at arm's length with Seller.
6
7
ARTICLE IV
CLOSING
-------
Section 4.01 CLOSING DATE. The closing hereunder (the "Closing") shall
occur on the seventh court day (as computed pursuant to Bankruptcy Rule 9006)
after all conditions precedent contained in Article VI herein are satisfied or
on such other date as Seller and Purchaser shall mutually agree (the "Closing
Date"). Notwithstanding the foregoing, unless the Purchaser otherwise agrees,
the Closing Date shall not occur after April 7, 1995. The Closing shall take
place on the Closing Date, at 2:00 p.m., local time (the "Effective Time"), at
the offices of Xxxxxx, Xxxx & Xxxxxxx in Boston, Massachusetts or at such other
time or place as may be mutually agreed to by the Parties.
Section 4.02 PHYSICAL INVENTORY. At least three (3) days prior to the
Closing, Purchaser and Seller shall complete the Physical Inventory and the
Inventory List.
Section 4.03 CLOSING DOCUMENTS. At or prior to the Closing, the Parties
shall execute any and all Closing Documents reasonably required to effectuate,
consummate and implement the terms and conditions of this Agreement. The Closing
Documents shall include, but not be limited to, the documents and instruments
required to be delivered by Purchaser and Seller, and their respective
representatives, pursuant to Section VI hereof.
Section 4.04 PASSAGE OF TITLE. Title to all Assets shall pass from
Seller to Purchaser at Closing, subject to the terms and conditions of this
Agreement. Purchaser assumes no risk of loss to the Assets prior to Closing.
Section 4.05 PROCEEDINGS. All proceedings to be taken by Seller and all
Closing Documents to be executed an, delivered by Seller in connection with this
Agreement shall be reasonably satisfactory in form and substance to Purchaser,
in its reasonable discretion. All proceedings to be taken and all Closing
Documents to be executed and delivered by purchaser in connection with this
Agreement shall be satisfactory in form and substance to Seller, in its
reasonable discretion.
Section 4.06 SIMULTANEOUS EXECUTION. All proceedings to be taken and
all Closing Documents to be executed and delivered by the Parties at Closing
shall be deemed to have been taken and executed simultaneously and no
proceedings shall be deemed taken nor any Closing Documents executed or
delivered until all Closing Documents have been taken, executed and delivered.
Section 4.07 FURTHER ASSURANCES. If, at any time prior to or subsequent
to the Closing Date, Purchaser shall reasonably consider or be advised that
further assignments, conveyances or assurances in law are necessary or desirable
to vest, perfect or confirm of record the respective interests of Purchaser to
any of the Assets as provided in this Agreement, free and clear of any liens,
claims, and encumbrances or otherwise to carry out the provisions hereof, the
proper officers,
7
8
directors and/or agents of Seller, as the case may be, shall execute and deliver
any and all proper assignments, endorsements, documents, powers of, attorney and
assurances in law, and do all things reasonably necessary or proper to vest,
perfect or confirm the interest in question or otherwise to carry out the
provisions and intent of this Agreement; provided, however, such officers,
directors and/or agents of Seller shall not be required to institute any legal
proceedings or incur any significant costs in the accomplishment of such acts
after the Closing Date.
Section 4.08 FAILURE TO CLOSE. If the Closing shall not occur pursuant
to the terms of this Agreement for any reason other than a breach hereof by
Purchaser, then the Bid Deposit and all other sums deposited by Purchaser shall
be refunded promptly to Purchaser.
ARTICLE V
COVENANTS OF SELLER AND PURCHASER
---------------------------------
Section 5.01 COVENANTS OF SELLER.
(a) NEGATIVE COVENANTS. From and after the date hereof until the
Closing Date, except with the prior written approval of Purchaser (which
Purchaser agrees to use its best efforts to give promptly to Seller) and subject
to the supervision of the Bankruptcy Court, Seller shall not: (i) sell, assign,
transfer, donate, dividend, exchange, pledge or encumber any of the Assets
(other than (x) pledges and encumbrances which will not survive the Closing and
(y) sales of Inventory in the ordinary course); (ii) permit through any action
or inaction any ownership or other rights to the Assets to lapse or become void
or unenforceable; (iii) enter into contracts, commitments or agreements
adversely affecting the value of the Assets; or (iv) engage in any other conduct
or course of conduct intended to or reasonably expected to adversely affect the
value of the assets including specifically, but without limitation, the value of
the business of the Divisions as a going concern and the goodwill pertaining
thereto.
(b) AFFIRMATIVE COVENANTS. From and after the date hereof and until the
Closing Date, except with the prior written approval of Purchaser (which
Purchaser agrees to use its best efforts to respond promptly to Seller) and
subject to the supervision of the Bankruptcy Court, Seller shall, except to the
extent prohibited by Section 5.01(a):
(i) Conduct the business of the Divisions and operate the
Assets in a prudent and businesslike manner consistent with maintaining
the going concern value of the Divisions and take all actions which are
reasonably necessary to preserve the value of the Assets;
(ii) Use its reasonable best efforts (which shall not include
the expenditure by Seller of amounts in excess of amounts ordinarily or
customarily expended with respect to such matters plus normal and
customary increases in such amounts) to preserve the Divisions'
business organization intact and retain the services of the Divisions'
officers and key employees and to maintain its existing relationships
with suppliers, customers and others so that they will be preserved for
Purchaser on and after the Closing Date;
8
9
(iii) Maintain in full force and effect the policies of
insurance now in effect as to any Assets;
(iv) Permit Purchaser and its representatives and agents
access during regular business hours to all facilities of Seller and
the Divisions and to all records relating to Seller and the businesses
conducted by the Divisions; and
(v) Use its best efforts to retain the services of The
Recovery Group up to the Closing Date.
(c) CONSENTS. Seller shall take all necessary corporate action and use
its reasonable best efforts to obtain the issuance of the Bankruptcy Court order
and to obtain all other consents, approvals and amendments of agreements, and
waivers of preferential rights of third parties to acquire any of the Assets, if
any, which are necessary to enable Seller to carry out the transactions
contemplated by this Agreement.
(d) SCHEDULE OF ASSETS IN THE POSSESSION OF OTHERS. No later than ten
business days prior to the Closing Date, Seller shall deliver to Purchaser
Schedule 5.01(d) which schedule shall comprise a full and complete list of all
Assets in the possession or name of any Entity other than Seller, including
without limitation any Patents and Technologies held in the name of SMI. On or
before the Closing Date, Seller shall make arrangements for the transfer of the
Assets listed on Schedule 5.01(d) to Purchaser.
(e) NOTICE OF LITIGATION. From the date hereof through the Closing
Date, Seller shall notify Purchaser promptly of any action or proceeding pending
or threatened against Seller which could impair its ability to perform its
obligations under this Agreement and any requests for additional information or
documentary materials by any governmental or regulatory body in connection with
the transactions contemplated hereby.
(f) CONFIDENTIALITY. Seller agrees from the date hereof not to divulge,
communicate, use to the detriment of Purchaser for the benefit of itself, its
Affiliates or any other person or persons, or misuse in any way any confidential
information or trade secrets of Purchaser (which shall include from and after
the Closing Date any confidential information or trade secrets included in the
Assets) in connection with Seller's business, including personnel information,
secret processes, know-how, customer lists, formulas, or other technical data;
provided, however, Seller shall not be liable hereunder for the disclosure of
such information (i) in the ordinary course of business prior to the Closing
Date, (ii) to professional consultants and advisors that need to know such
information (it being understood that such professional consultants and advisors
shall be informed of the confidential nature of such information and shall be
directed by Seller to treat such information confidentially) or (iii) that is
(a) required by law, (b) pursuant to a proper subpoena from a court or
administrative agency of competent jurisdiction or (c) made upon the written
demand of an official involved in the regulation of either Party, provided that
the other Party is notified orally by the most immediate means of communication
and in writing within five (5) business days of its receipt.
9
10
(g) NAME CHANGE. Seller agrees that from and after the Closing Date
Purchaser shall have the right to use the names "Xxxxxxx," "Xxxxxxx
Technologies," "Process Equipment Division," "Xxxxxxx Process Equipment",
"SanTech" and "Separation Methods, Inc." in Purchaser's trade or business.
Effective on the Closing Date, Seller shall change its name and the names of its
subsidiaries to names not containing "Xxxxxxx Technologies," "Process Equipment
Divisions," "SanTech," "Xxxxxxx", "Xxxxxxx Process Equipment" and "Separation
Methods, Inc." and which are sufficiently dissimilar such that they will not be
confused with such names; provided however, that Seller and its successors shall
have the non-exclusive right to use the names "Xxxxxxx Technologies," 'Process
Equipment Division," "SanTech," "Xxxxxxx" and "Separation Methods, Inc." as may
be necessary to prosecute any litigation related to the Chapter 11 Case, in
connection with the liquidation or disposition of any assets (other than the
Assets) or for any other non-competitive purchase necessary to conclude the
Chapter 11 Case.
(h) ACCESS TO PREMISES. Seller shall use its best efforts to ensure
Purchaser's unrestricted access to the Seller's premises in Wrentham,
Massachusetts for a period of at least ninety days after Closing, with monthly
payment for such access at the same rates as Seller currently pays.
Section 5.02 COVENANTS OF PURCHASER.
(a) BEST EFFORTS. Purchaser agrees that from the date hereof to the
Closing Date, it will use its best efforts to satisfy the conditions precedent
to the Closing, to the extent that such conditions are to be performed by
Purchaser, and to respond promptly to requests by Seller for approval under
Section 5.01(a) and (b) hereof.
(b) CONFIDENTIALITY. Purchaser agrees from the date hereof not to
divulge, communicate, use to the detriment of Seller for the benefit of itself,
its affiliates or any other person or persons, or misuse in any way, any
confidential information or trade secrets of Seller (except, from and after the
Closing Date, any such confidential information or trade secrets included in the
Assets) in connection with Purchaser's business, including personnel
information, secret processes, know-how, customer lists, formulas, or other
technical data; provided, however, Purchaser shall not be liable hereunder for
the disclosure of such information (i) in the ordinary course of business after
the Closing Date, (ii) to professional consultants and advisors that need to
know such information (it being understood that such professional consultants
and advisors shall be informed of the confidential nature of such information
and shall be directed by Purchaser to treat such information confidentially) or
(iii) that is (a) required by law, (b) pursuant to a proper subpoena from a
court or administrative agency of competent jurisdiction or (c) made upon the
written demand of an official involved in the regulation of either Party,
provided that the other Party is notified orally by the most immediate means of
communication and in writing within five (5) business days of its receipt.
10
11
ARTICLE VI
CONDITIONS OF CLOSING
---------------------
Section 6.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. In
addition to the Bankruptcy Court Order required by Article III of this
Agreement, the obligation of Purchaser to consummate any transaction provided
for in this Agreement shall, at the option of Purchaser, be subject to the
satisfaction of the following conditions as of the Closing Date:
(a) PERFORMANCE AND COMPLIANCE. All of the covenants and provisions of
this Agreement to be complied with by Seller on or before the Closing Date shall
have been complied with and performed in all respects.
(b) NO LITIGATION. No order of any court shall have been entered which
enjoins or restrains the sale of any of the Assets to Purchaser, nor shall any
court have determined that the acquisition by Purchaser of the Assets or the
effectuation, consummation or implementation of this Agreement constitutes a
violation of applicable law or would be in contravention of the rights of any
Entity.
(c) CERTIFICATE. Purchaser shall have received a certificate to the
effect set forth in subparagraphs (a) and (b) of this Section 6.01 dated the
Closing Date and signed by the President of Seller.
(d) CLOSING DOCUMENTS. Seller shall have delivered to Purchaser the
Closing Documents (including, without limitation, the evidence of right of
access provided for in Section 6.01(h)(vi)), and all of such Closing Documents
shall be approved, in form and content, by Purchaser in its reasonable
discretion.
(e) TRANSFER OF ASSETS. Arrangements, reasonably satisfactory to
Purchaser, shall have been made to transfer the Assets to Purchaser free and
clear of any claims by any taxing authority for taxes (including, without
limitation, income, sales, and use) incurred as a consequence of the use of the
Assets by Seller or sale of any Assets hereunder, whether such claims are
asserted either directly against Purchaser as transferee of any Assets, by means
of a lien or claim against any Assets, or otherwise.
(f) NO ADVERSE EFFECT. No event shall have occurred and Purchaser
shall not have become aware of any event which has or will have a material
adverse effect on the Assets or the ongoing business of the Divisions.
(g) PATENTS AND TECHNOLOGY. Arrangements, reasonably satisfactory to
Purchaser, have been made to Purchaser, have been made to transfer the Patents
and Technology to Purchaser; and Purchaser shall be satisfied that the Patents
and Technologies transferred to it hereby are all of the Patents and
Technologies used, useful or necessary to the business and operations of the
Divisions.
11
12
(h) DELIVERIES. Seller shall have delivered, or cause to be delivered,
to Purchaser, at Closing, the following:
(i) the Xxxx of Sale;
(ii) the Patent Assignment;
(iii) the Non-Competition Agreement;
(iv) the Seller's Closing Certificate;
(v) the Closing Statement;
(vi) evidence of Seller's agreement to use its best
efforts to ensure Purchaser's right to have the
access to Seller's premises as described in Section
5.01(h):
(vii) evidence reasonably satisfactory to Purchaser that
Seller is authorized to consummate the transactions
contemplated by this Agreement and that the persons
executing this Agreement and the Closing Documents on
behalf of Seller are authorized to do so; and
(viii) such other documents and instruments as in the
opinion of Purchaser may be necessary to vest in
Purchaser good and marketable title to the Purchased
Assets, free and clear of all liens, claims,
encumbrances and other interests, as provided in
Section 1.01, and as may be reasonably necessary to
effectuate, consummate and implement the terms of
this Agreement.
(j) AFFIDAVIT OF COUNSEL TO SELLER. Seller shall have caused to be
delivered to Purchaser an affidavit of bankruptcy counsel to Seller, to the
effect that all known secured creditors of Seller shall have been delivered
proper service of the notice of the proposed sale of assets contemplated by this
Agreement, which affidavit shall be in form satisfactory to Purchaser's counsel.
(k) TERMINATION OPTION. In the event that the Closing has not occurred
on or prior to April 7, 1995 and Purchaser is not in default hereunder, then in
such event Purchaser, at its sole option, may declare this Agreement terminated
by serving written notice thereof to Seller upon receipt of which Purchaser
shall be relieved of and have no remaining obligations or liabilities to Seller
hereunder.
Section 6.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. In addition
to the Bankruptcy Court approval required by Article III of this Agreement, the
obligations of Seller to consummate this Agreement are, at the option of Seller,
subject to the satisfaction of the following conditions as of the Closing Date:
12
13
(a) PERFORMANCE AND COMPLIANCE. All of the material covenants and
provisions of this Agreement to be complied with by Purchaser on or before the
Closing Date shall have been complied with and performed in all respects.
(b) CERTIFICATE. Seller shall have received a certificate, to the
effect set forth in subparagraphs (a) and (b) of this Section 6.02 dated the
Closing Date and signed by an officer of Purchaser.
(c) CLOSING DOCUMENTS. Purchaser shall have delivered to Seller the
Closing Documents, required to be delivered by Purchaser, which documents
reasonably comply with Purchaser's obligations hereunder and all of such Closing
Documents shall be approved in form and content, by Seller in its reasonable
discretion.
(d) DELIVERIES. Purchaser shall have delivered, or caused to be
delivered, to Seller as required by the Bankruptcy Court order at Closing or as
otherwise set forth herein, the following:
(i) the Purchase Price due at Closing pursuant to Section
2.01 hereof;
(ii) the Purchaser's Closing Certificate;
(iii) such other documents or instrument as may be
reasonably necessary to consummate, effectuate and
implement the terms of the Agreement.
ARTICLE VII
DEFINITIONS
-----------
For purposes of this Agreement, the following terms shall be defined
and have the respective meanings hereinafter set forth:
7.01 "Affiliates" shall mean any subsidiary of Seller or any other
Entity in which Seller holds a controlling interest or which holds any equity
interest in Seller.
7.02 "Agreement" shall mean this Purchase and Sale Agreement, together
with the Schedules and Exhibits hereto, as any or all thereof may hereafter be
amended from time to time in accordance with the terms hereof and thereof.
7.03 "Allocated Value" shall mean the dollar amount, if any, set forth
opposite the description of any Asset on any Schedule to this Agreement. If a
value is not set forth opposite the description of any Asset, Purchaser and
Seller shall mutually determine the Allocated Value of such Asset for purposes
of this Agreement at least two (2) court days (as determined pursuant to
Bankruptcy Rule 9006) prior to Closing. If the Parties are unable to agree as to
the Allocated Value of any Asset pursuant to the preceding sentence, the matter
shall be reserved by the Bankruptcy Court judge and set forth in an amendment to
the Bankruptcy Court order.
13
14
7.04 "Bankruptcy Code" shall mean 11 USC Section 101, et seq. and any
amendments thereto.
7.05 "Bankruptcy Court" shall mean the United States Bankruptcy Court
for the District of Massachusetts presiding for the Chapter 11 Case.
7.06 "Bankruptcy Court Order" shall mean the final, nonappealable Order
substantially in the form of Exhibit A hereto entered by the Bankruptcy Court
pursuant to the Bankruptcy Code approving and authorizing the Seller's
execution, consummation and implementation of this Agreement. The "Date of
Bankruptcy Order" shall be the date when the aforementioned Order entered by the
Bankruptcy Court becomes final and non-appealable.
7.07 "Xxxx of Sale" shall mean a Xxxx of Sale and Assignment in the
form of Exhibit B attached hereto by which Seller shall convey to Purchaser, and
Purchaser shall accept title to, the Assets.
7.08 "Chapter 11 Case" shall mean the proceedings under Chapter 11 of
the Bankruptcy Code which is presently pending in Bankruptcy Court, as Case No.
94-40207-HJB.
7.09 "Closing" shall mean the consummation of the transactions
contemplated by this Agreement on the terms and conditions set forth herein.
7.10 "Closing Date" shall be as defined in Section 4.01 hereof, or such
other date as may be mutually agreed to in writing by the Parties.
7.11 "Closing Documents" shall mean the documents, pleadings, bills of
sale, assignments, releases and other writings referred to herein and/or
necessary to effectuate, consummate and implement this Agreement.
7.12 "Closing Statement" shall mean a written statement, delivered at
the Closing, and signed by both Purchaser and Seller, which shall show the
calculation of the Purchase Price required to be made by Purchaser at the
Closing.
7.13 "Date of this Agreement" shall mean March 14, 1995.
7.14 "Divisions" shall mean the business of the Seller engaged in the
design, fabrication and distribution of industrial separation systems, which
Seller operates through its Xxxxxxx Technologies Division and Process Equipment
Division, together with licenses of certain patents and technology, if any, from
SMI.
7.15 "Effective Time of Closing" shall mean 12:01 A.M. on the Closing
Date.
7.16 "Entity or Entities" shall mean an individual, a partnership, a
corporation, an estate, a trust, or a governmental unit, or the plural thereof.
14
15
7.17 "Inspection Date" shall mean the date of the Physical Inventory or
as otherwise agreed to in writing by the Parties.
7.18 "Inventory" shall mean all inventories relating to the Divisions
listed and described on Seller's Stock Status Report generated by its MicroVAX
Computer System, whether such Inventory is located at Seller's premises, is in
transit thereto or elsewhere as of the Effective Time of Closing.
7.19 "Inventory Base Price" shall mean the value of the Inventory shown
on the December 31, 1994, Stock Status Report, which is estimated to be
approximately $601,000.
7.20 "Inventory List" shall mean the listing of the items or general
classes of Inventory which results from the Physical Inventory and shall include
the calculation of the cost of the Inventory to Seller, as adjusted from the
Inspection Date to the Closing Date based on the Seller's records of receipts
and shipments during said period.
7.21 "Net WIP" shall mean a positive or negative amount calculated as
follows: All direct costs incurred by Seller in fabricating and assembling its
Products that remain unfinished as of the Closing Date, including all direct
labor and materials, payments to subcontractors and all other direct costs
(exclusive of all indirect costs such as general overhead, capitalized design
costs and similar indirect costs), minus all deposits, advances and prepayments
by purchasers of Products.
7.22 "Non-Competition Agreement" shall mean a noncompetition agreement
in the form of Exhibit C attached hereto.
7.23 "Parties" shall mean Purchaser and Seller.
7.24 "Party" shall mean any one of the Parties.
7.25 "Patent Assignment" shall mean the assignment of Patents and
Technology in the form of Exhibit D attached hereto together with such
applications to assign trade-names or trade marks or service-marks and the
goodwill associated therewith which Purchaser and its counsel may deem necessary
to carry out the effect of this Agreement.
7.26 "Patents and Technology" shall have the meaning set forth in
Section 1.01(f) hereof.
7.27 "Physical Inventory" shall mean an actual physical count of the
Inventory which shall be taken by the Purchaser and its representatives and
observed by the Seller in accordance with the terms of this Agreement, which
shall include a valuation of the Inventory based on Seller's cost.
7.28 "Products" shall mean all finished goods associated with the
Divisions held for sale to customers.
7.29 "Purchaser" shall have the meaning set forth in the preambles to
this Agreement.
15
16
7.30 "Purchase Orders" shall mean those customer order for Products
existing as of the Closing Date.
7.31 "Purchaser's Closing Certificate" shall mean the certificate of
Purchaser contemplated by Section 6.02(c) of this Agreement.
7.32 "Retained Equipment" shall mean any Asset retained by Seller
pursuant to Section 1.02(a) of this Agreement.
7.33 "SMI" shall mean Separation Methods, Inc., a wholly-owned
subsidiary of Seller.
7.34 "Seller" shall have the meaning set forth in the preambles to this
Agreement.
7.35 "Seller's Closing Certificate" shall mean the certificate of the
Seller contemplated by Section 6.01(c) of this Agreement.
7.36 "Stock Status Report" shall mean a report generated by Seller from
the MicroVax computer system that reflects Seller's Inventory and the value
thereof.
7.37 "Third Party Equipment" shall xxxxx [sic] any Asset retained by
Seller pursuant to Section 1.03 of this Agreement.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
------------------------
8.01 NOTICES. Any notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given or
made when personally delivered or when mailed by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
(a) Seller: Xxxxxxx, Inc.
00 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
with copy to counsel:
Xxxxxx, Hall & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
16
17
(b) Purchaser: Waterlink, Inc.
000 XxXxxx Xxxxxxx, X.X. Xxxxx 000
Xxxxxx, Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
with copy to counsel:
Xxxxx & Xxxxxxxxx
0000 Xxxx 0xx Xxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx Xxxxxxxx, Esq.
Such addresses may be changed only by giving written notice of such change of
address to the other Party in the manner set forth herein. Notices shall be
deemed received on the fifth business day after the date of mailing in the
manner set forth herein, except as otherwise set forth in this Agreement.
8.02 ASSIGNMENT. Neither Party shall have the right to assign this
Agreement or delegate any of its duties hereunder without the other Party's
written consent.
8.03 SUCCESSORS. This Agreement shall be binding upon and shall inure
to the benefit of the Parties and their respective successors and assigns.
8.04 CLOSING DOCUMENTS AND CLOSING EXPENSES. Each Party shall pay its
own expenses incident to this Agreement and the other agreements and instruments
to be delivered pursuant thereto, including legal and accounting fees and
disbursements. The Seller and its counsel shall prepare the Bankruptcy Court
pleadings necessary to obtain the Bankruptcy Court Order, subject to approval in
form and substance to counsel for Purchaser.
8.05 PARAGRAPH HEADINGS. The paragraph heading contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement. Wherever any gender is used, it
shall include any other gender, masculine, feminine or neuter, as the context
may require. Any exhibit or schedule referred to herein shall be deemed
incorporated herein and made a part hereof. Unless otherwise indicated,
"herein", "hereto" and similar phrases refer to this Agreement as a whole
(including exhibits attached hereto and documents delivered pursuant hereto) and
not to any particular paragraph or other subdivision.
8.06 APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Ohio.
8.07 NO WAIVER. No waiver by either Party of any term or condition of
this Agreement shall constitute or be construed as a waiver of any other term or
condition of this Agreement. No waiver by either Party of any default or breach
of this Agreement by the other Party shall constitute or be construed as a
waiver of any other default or breach of this Agreement.
17
18
8.08 SURVIVAL; ENTIRE AGREEMENT. Except as specifically set forth
herein, all covenants, promises, warranties, representations, understandings and
agreements herein contained shall survive the Closing. This Agreement integrates
all negotiations and agreements of the Parties, supersedes all prior agreements
and understandings, whether oral or written, and contains the entire
understanding and agreement between the Parties, and no Party is bound by any
agreements, understandings or conditions, except as stipulated and set forth
herein. This Agreement cannot be modified or discharged except by written
instrument duly executed by the Party against whom enforcement of such
modification or discharge is sought. Subsequent to the date of the Bankruptcy
Court Order, the Parties may consent to technical and non-material modifications
and/or amendments to this Agreement reasonably necessary to effectuate this
Agreement without further approval by the Bankruptcy Court.
8.09 SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
8.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18
19
SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have duly executed this
Agreement as of the day and year first above written.
WITNESSES: Seller:
XXXXXXX, INC.
/s/ By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxxxx
/s/ Title: President
---------------------------
Purchaser:
WATERLINK, INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxx, Cfo
-------------------------- ---------------------------
Authorized Officer
/s/ Xxxxx X. Xxxx
---------------------------
19
20
ACKNOWLEDGMENT
--------------
STATE OF OHIO
COUNTY OF CUYAHOGA
BE IT KNOWN, that on this 11th day of March, 1995, before me, the
undersigned authority, duly commissioned, qualified and sworn within and for the
State and County aforesaid, personally came and appeared Xxxxx Xxxxxxx appearing
in her capacity as the Chief Financial officer of WATERLINK, INC., to me
personally known to be the identical person whose name is subscribed to the
foregoing instrument; who declared and acknowledged to me, Notary, in the
presence of the undersigned competent witnesses, that she executed the same with
full authority and that the said instrument is the free act and deed of the said
corporation and was executed for the uses, purposes and benefits therein
expressed.
WITNESSES:
/s/ Xxxxx Xxxxxxxx /s/ Xxxxx X. Xxxxxxx, Cfo
----------------------- -------------------------------
-----------------------
/s/ Xxxxxxx X. Xxxxxxxx
---------------------------
NOTARY PUBLIC
XXXXXXX X. XXXXXXXX, Attorney
NOTARY PUBLIC - STATE OF OHIO
My commission has no expiration date.
Section 147.03 R.C.
20
21
LIST OF SCHEDULES
-----------------
Schedule 1.01(i) Demonstration Equipment
Schedule 1.01(j) Furniture and Office Equipment
Schedule 1.01(k) Laboratory Equipment
Schedule 1.01(l) Computer Equipment
Schedule 1.01(m) Shop Equipment
Schedule 1.01(n) Toshiba Perception Telephone System
Schedule 1.01(o) MicroVax Computer System
Schedule 1.01(p) MicroVAX Computer Enhancements
Schedule 1.01(q) Additional Demonstration Equipment
Schedule 1.01(r) Machines and Raw Materials
Schedule 1.01(s) Finished Goods
Schedule 5.01(d) Assets in Possession of Third Parties
LIST OF EXHIBITS
----------------
Exhibit A Bankruptcy Court Order
Exhibit B Xxxx of Sale
Exhibit C Non-Competition Agreement
Exhibit D Patent Assignment
21
