Exhibit 10.4
ASSET PURCHASE AGREEMENT
AMONG
BLUE RHINO CORPORATION
AND
INTERNATIONAL PROPANE PRODUCTS, LLC
AND
XXXXXXX X. XXXXXX
ASSET PURCHASE AGREEMENT
Agreement entered into on as of March 31, 2000, among Blue Rhino
Corporation, a Delaware corporation ("Buyer"), International Propane Products,
LLC, an Illinois limited liability company ("IPP"), and Xxxxxxx X. Xxxxxx
("Waters") (collectively IPP and Waters are referred to herein as the
"Sellers"). Buyer and the Sellers are referred to collectively herein as the
"Parties."
R E C I T A L S:
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A. Buyer desires to purchase, and IPP desires to sell, substantially all
of the assets of IPP.
X. Xxxxxx is the sole member of IPP.
A G R E E M E N T
- - - - - - - - -
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions.
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"Accredited Investor" has the meaning set forth in Regulation D promulgated
under the Securities Act.
"Acquired Assets" means all right, title, and interest in and to (a) all
assets of IPP directly relating to or necessary for the manufacture or sale of
patio heaters or brass gas cylinder valves, consisting of all tangible personal
property (such as machinery, equipment, inventories of raw materials and
supplies, manufactured and purchased parts, goods in process and finished goods,
tools, jigs, molds and dies) listed on Schedule 1(a) (the "Tangible Assets"),
(b) the Intellectual Property, goodwill associated therewith, licenses and
sublicenses granted and obtained with respect thereto, and rights thereunder,
remedies against infringements thereof, and rights to protection of interests
therein under the laws of all jurisdictions listed on Schedule 1(b), (c) IPP's
claims, contractual deposits, prepaid assets, refunds, causes of action, chooses
in action, rights of recovery, rights of set off (except those which could be
asserted against any Person making a claim against IPP which claim was not
included as an Assumed Liability) and rights of recoupment, (d) IPP's assignable
approvals, permits, licenses, orders, registrations, certificates, variances,
and similar rights obtained from governments and governmental agencies listed on
Schedule 1(d), (e) all leases, contracts, agreements, arrangements, commitments
and understandings to which IPP is a party listed on Schedule 1(e) (the
"Contracts"), and (f) access to all of the of books, records, ledgers, files,
documents, correspondence, lists, drawings, and specifications, creative
materials, advertising and promotional materials, studies, reports, and other
printed or written materials related to the manufacture or sale of the Patio
Heater and
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valves; provided, however, that the Acquired Assets shall not include
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the Excluded Assets.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of Code
Section 1504(a) or any similar group defined under a similar provision of state,
local, or foreign law.
"Assignment and Assumption Agreement" means the Assignment and Assumption
Agreement in the form attached hereto as Exhibit C-3.
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"Assumed Liabilities" means (a) the liabilities for payment under and
performance of all Contracts included in the Acquired Assets, (b) any Liability
arising out of product liability claims related to products designed,
manufactured, imported or sold by IPP prior to the date of this Agreement that
are made or occur after the five (5) year anniversary date of this Agreement and
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(c) accrued vacation pay for employees of IPP employed by Buyer after the
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Closing, provided, however, that the Assumed Liabilities shall not include (i)
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any trade accounts payable, (ii) accrued payroll, (iii) accrued liabilities
(other than accrued vacation pay as provided herein above) (iv) Liability of any
Seller for Taxes, (ii) any Liability of any Seller for the unpaid Taxes of any
Person under Reg. Section 1.1502-6 under the Code (or any similar provision of
state, local, or foreign law), as a transferee or successor, by contract, or
otherwise, (iii) any obligation of any Seller to indemnify any Person (including
any of the Seller Members) by reason of the fact that such Person was the
manager, officer, employee, or agent of IPP or was serving at the request of any
such entity as a partner, trustee, director, officer, employee, or agent of
another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such indemnification is pursuant to any statute, charter
document, bylaw, agreement, or otherwise), (iv) any Liability of any Seller
arising under an Employee Benefit Plan that the Seller maintains, or (v) any
Liability or obligation of any Seller under this Agreement (or under any side
agreement between any Seller on the one hand and Buyer on the other hand entered
into on or after the date of this Agreement).
"Average Closing Price" means the average closing price for a share of
Buyer's common stock, as listed in The Wall Street Journal, Central Edition,
reported for the five (5) trading days prior to the date of this Agreement.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that has caused or reasonably could be expected
to cause any specified consequence.
"Cash" means cash and cash equivalents (including bank deposits, marketable
securities and short term investments) calculated in accordance with GAAP
applied on a basis consistent with the preparation of the Financial Statements.
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"Closing" has the meaning set forth in Section 2(d) below.
"Closing Date" has the meaning set forth in Section 2(d) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Buyer's Common Stock, par value $.001 per share.
"Consulting Agreement" means the Consulting Agreement in the form attached
hereto as Exhibit C-4.
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"Deferred Payment Term" means the lesser of (a) the life of the Patio
Heater Patent (which time period includes the application process thereto), but
in no event less than five (5) years, or (b) until Buyer stops making, using or
selling the invention claimed in the Patio Heater Patent for a period of one (1)
year.
"Deferred Purchase Price" has the meaning set forth in Section 2(g).
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation or
retirement plan or arrangement, (b) qualified defined contribution retirement
plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified
defined benefit retirement plan or arrangement which is an Employee Pension
Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit
Plan or material fringe benefit or other retirement, bonus, or incentive plan or
program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Section
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Section
3(1).
"Environmental, Health, and Safety Requirements" shall mean all federal,
state, local and foreign statutes, regulations, ordinances and other provisions
having the force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning public
health and safety, worker health and safety, and pollution or protection of the
environment, including without limitation all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials, substances
or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation, each as amended and as now or
hereafter in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"Excluded Assets" means (i) any documents relating to the organization,
maintenance, and existence of IPP as a limited liability company, (ii) any of
the rights of the Sellers under this Agreement (or under any side agreement
between any Seller on the one hand and Buyer on the other hand entered into on
or after the date of this Agreement), (iv) Cash, (v) Accounts Receivable and
(vi) any of the assets listed on Schedule 2, including the list of accounts
receivable as of March 31, 2000 attached thereto.
"Financial Statement" has the meaning set forth in Section 3(g) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Gross Profits" has the meaning set forth in Section 2(g)(i).
"Indemnification Agreement" means the Indemnification Agreement among
Buyer, IPP and Waters entered into concurrently herewith and attached hereto as
Exhibit B.
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"Intellectual Property" means the Patio Heater Patent and all of IPP's (a)
inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent applications, and
patent disclosures, together with all reissuances, continuations, continuations-
in-part, revisions, extensions, and reexaminations thereof related to valves or
patio heaters, (b) trademarks, service marks, trade dress, logos, trade names,
and corporate names, together with all translations, adaptations, derivations,
and combinations thereof and including all goodwill associated therewith, and
all applications, registrations, and renewals in connection therewith, (c)
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (d) mask works and all applications,
registrations, and renewals in connection therewith, (e) trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (f) computer software (including data and related
documentation), (g) other proprietary rights, and (h) all copies and tangible
embodiments thereof (in whatever form or medium).
"Intellectual Property Assignment" means the Intellectual Property
Assignment attached hereto as Exhibit C-2.
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"IPP Manager" means Waters.
"Knowledge" means actual knowledge of Waters.
"Liability" means any liability (whether known or unknown, whether asserted
or
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unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet contained within the
Financial Statements.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"License Agreement" means the License Agreement, dated of even date
herewith between Buyer and Waters, attached hereto as Exhibit D.
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"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Patio Heater" means the patio heaters that are the subject of the Patio
Heater Patent and all equivalents or continuations thereof.
"Patio Heater Business" means the business operated by IPP of importing and
selling Patio Heaters and brass valves for propane cylinders.
"Patio Heater Patent" means the patent applications listed on Schedule 3
filed with the United States Patent and Trademark Office and all reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof. A description of the status of the Patio Heater Patent is set forth on
Schedule 3.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, a limited
liability company, a legal entity, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, or a governmental entity
(or any department, agency, or political subdivision thereof).
"Purchase Price" has the meaning set forth in Section 2(c) below.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest.
"Subsidiary" means any corporation or other Person with respect to which a
specified Person (or a Subsidiary thereof) owns more than eighty percent (80%)
of the equity interests.
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"Seller Member" means any person who or which is a member of IPP.
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
environmental (including taxes under Code Section 59A), customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
2. Basic Transaction.
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(a) Purchase and Sale of Assets. On and subject to the terms and
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conditions of this Agreement, Buyer agrees to purchase from the Sellers, and the
Sellers agree to sell, transfer, convey, and deliver to Buyer, all of the
Acquired Assets at the Closing for the consideration specified below in this
Section 2.
(b) Assumption of Liabilities. On and subject to the terms and conditions
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of this Agreement, Buyer agrees to assume and become responsible for all of the
Assumed Liabilities at the Closing. Buyer will not assume or have any
responsibility, however, with respect to any other obligation or Liability of
the Sellers not included within the definition of Assumed Liabilities.
(c) Purchase Price. The total purchase price (the "Purchase Price") to be
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paid by Buyer to IPP for the Acquired Assets shall be as follows:
(i) Buyer's Common Stock. At the Closing, Buyer shall deliver to
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Waters Common Stock with a market value of One Million One Hundred Twenty-
Three Thousand Dollars ($1,123,000) (the "Purchase Shares"). The number of
Purchase Shares to be delivered to Waters constituting a market value of
$1,123,000 will be the number of shares of Buyer's Common Stock valued at
Average Closing Price which have an aggregate Average Closing Price equal
to One Million One Hundred Twenty-Three Thousand Dollars ($1,123,000). No
fractional shares will be issued. With respect to any fractional share,
Buyer shall pay to Waters an amount in cash equal to such fraction.
(ii) Cash. Cash in the amount of $1,206,471.17, the calculation of
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which is set forth on Section 2(c)(ii) of the Disclosure Schedule.
(iii) Assumed Liabilities. The assumption of the Assumed Liabilities.
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(iv) Deferred Purchase Price. The Deferred Purchase Price payable to
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Waters pursuant to Section 2(g).
(d) The Closing. The closing of the transactions contemplated by this
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Agreement (the "Closing") shall take place at the offices of Xxxxxxxx & Xxxxx in
Chicago, Illinois, commencing at 11:00 a.m. local time on or before March 31,
2000 or such other date as the Parties may mutually determine (the "Closing
Date").
(e) Deliveries at the Closing. At the Closing,
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(i) Sellers shall deliver to Buyer:
(A) the various certificates, instruments, and documents referred
to in Section 6(a) below and;
(B) an executed xxxx of sale transferring the Acquired Assets to
Buyer;
(C) Intentionally deleted;
(D) an executed Intellectual Property Assignment;
(E) an executed Assignment and Assumption Agreement;
(F) an executed the Consulting Agreement;
(G) an executed License Agreement;
(H) an acknowledgement from the Sellers that the oral license
agreement between IPP and Waters for the Patio Heater Patent
has been terminated;
(I) copies of all necessary third-party consents; and
(J) such other instruments of sale, transfer, conveyance, and
assignment as Buyer and its counsel reasonably may request,
including an Amendment of IPP's Certificate of Formation to
effectuate a change of name which shall be filed by IPP
within 15 days of the Closing Date.
(ii) Buyer will deliver to the Sellers:
(A) the various certificates, instruments, and documents referred
to in
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Section 6(b) below;
(B) a certificate (with a legend restricting transferability)
representing that number of Purchase Shares as determined
pursuant to Section 2(c)(I);
(C) cash in the amount determined pursuant to Section 2(c)(ii),
payable by wire transfer or delivery of other immediately
available funds:
(D) an executed Assignment and Assumption Agreement;
(E) an executed License Agreement;
(F) an executed Consulting Agreement; and
(G) such other instruments of assumption as the Sellers and its
counsel reasonably may request.
(f) Allocation. The Parties agree to allocate the Purchase Price (and all
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other capitalizable costs) among the Acquired Assets for all purposes (including
financial accounting and tax purposes) in accordance with the allocation
schedule attached hereto as Exhibit E.
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(g) Deferred Purchase Price.
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(i) The "Deferred Purchase Price " shall mean payments from
the Buyer to Waters pursuant to this Section 2(g) within thirty (30)
days of the close of each and every calendar quarter except that
Buyer shall make Deferred Purchase Price payments to Waters for the
last quarter of the year within ninety (90) days of the close of each
and every calendar year during the Deferred Payment Term, at which
time adjustments, if any, to Net Sales and payments will be made based
on fiscal year end audited financial statements of Buyer. The
Schedule of Deferred Payments in Section 2(g)(ii) below is based on
the Net Sales of the Patio Heaters. For purposes of this Agreement,
"Net Sales" shall mean the sales price at which the Patio Heaters and
parts therefor are sold as adjusted for returns, discounts, and
allowances, unless otherwise agreed by the parties in good faith.
Buyer's Deferred Purchase Price payments to Waters shall be
accompanied by a report setting forth, Net Sales of the Patio Heaters
for the appropriate period(s). Buyer will keep records showing the
products sold or otherwise disposed of during the Term in such detail
as to enable the amounts payable hereunder to be readily determined
by an accountant or other person with comparable financial statement
and general ledger sophistication. Buyer shall also permit its books
and records to be examined by Waters up to twice annually to the
extent necessary to verify the sales, deductions and payments provided
for
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herein. Such examination shall be made during normal business hours,
at times convenient to Waters and Buyer. In the event that such
examination reveals an underpayment in the Deferred Purchase Payments
of more than 5%, Buyer shall pay Waters' costs for such examination.
(ii) The Deferred Purchase Price shall equal 1.0% of the Net
Sales from Patio Heaters. The Deferred Purchase Price shall be
payable during the Deferred Payment Term. Notwithstanding anything to
the contrary contained herein, in the event (A) a patent is issued
within three (3) years from the date hereof by the United States
Patent and Trademark Office in connection with the Patio Heater
Patent, the minimum Deferred Purchase Price payment made to Waters
during the first seven (7) years of the Deferred Payment Term shall be
as follows: year 1 - $25,000; year 2 - $40,000; year 3 - $65,000; and
years 4-7 - $100,000 each year or (B) a patent is not issued within
three (3) years from the date hereof by the United States Patent and
Trademark Office in connection with the Patent Heater Patent the
minimum Deferred Purchase Price payment made to Waters during the
first three (3) years of the Deferred Payment Term shall be as
follows: year 1 - $25,000; year 2 - $40,000; year 3 - $65,000 (in
each case, the "Minimum Deferred Purchase Price"). The Minimum
Deferred Purchase Price may be paid to Waters from Blue Rhino out of
any source of income, regardless of whether it is related to the Net
Sales from Patio Heaters.
In the event that either: (a) Buyer fails to make the Minimum Deferred
Purchase Price payments within thirty (30) days after notice from Waters that
the same has become due and payable pursuant to Section 2(g), or (b) Deferred
Payment Term ends before the end of the life of the Patio Heater Patent (which
time period includes the application process thereto), then Waters shall have
the right to manufacture and sell Patio Heaters pursuant to the License
Agreement and the non-competition agreement contained in the Indemnification
Agreement shall not apply to such sales.
(h) Purchase Shares. Buyer will use its best efforts to prepare, file and
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have become effective with the Securities and Exchange Commission (the
"Commission") an amendment or supplement to Buyer's Form S-1 registration
statement last amended July 21, 1999 (the "Shelf Registration Statement")
relating to the issuance of all of the Purchase Shares to be issued to Waters
pursuant to this Agreement on or before one (1) month after the date of this
Agreement. Buyer shall cause the Purchase Shares to be listed on the Nasdaq
National Market at its expense so as to permit the sale by Waters of the
Purchase Shares without further action under any state securities or blue sky
laws. Buyer's obligation hereunder to so prepare and file the Shelf
Registration Statement relating to the Purchase Shares is subject to the full
cooperation of Waters in furnishing any and all information about themselves and
any contemplated method of resale of such shares as may be necessary to make
such statements not misleading, and any such information so furnished shall be
treated as representations and warranties made by IPP under this Agreement,
covered by the indemnification provisions set forth in the Indemnification
Agreement. Buyer shall not be obligated to pay any underwriting discounts,
selling
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commissions, brokers' fees or other offering expenses of any kind attributable
to any sale of the Purchase Shares, which fees and expenses will be paid by
Waters. Water's rights under this Section 2(h) are not transferable without
Buyer's prior written consent. Upon the effectiveness of the Shelf Registration
Statement, Buyer will issue Seller an certificate (without restrictive legends)
representing that number of Purchase Shares as determined pursuant to Section
2(c)(I) in exchange for the certificate issued at Closing pursuant to Section
2(e)(II)(B).
(i) Collection of Certain Monies. In the event IPP receives monies for
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Patio Heaters or other products relating to the Acquired Assets shipped after
April 3, 2000, IPP hereby agrees to hold such monies for the benefit of Buyer
and to forward all such amounts to Buyer on a timely basis.
3. Representations and Warranties of the Sellers. IPP represents and
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warrants to Buyer that the statements that are made by IPP contained in this
Section 3 are correct and complete as applied to IPP 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 3) except as set forth in the disclosure
schedule accompanying this Agreement and initialed by the Parties (the
"Disclosure Schedule"). Waters represents and warrants that the statements that
are made by Waters in this Section 3 are correct ad complete as applied to
Waters 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) except as set forth on the
Disclosure Schedule. The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Section
3.
(a) Organization of the Seller. IPP represents that it is a limited
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liability company, duly organized, validly existing, and in good standing under
the laws of the State of Illinois.
(b) Authorization of Transaction. IPP represents that it has full power
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and authority (including full company power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. Without
limiting the generality of the foregoing, the Seller Members and the manager of
IPP have duly authorized the execution, delivery, and performance of this
Agreement by IPP. This Agreement constitutes the valid and legally binding
obligation of IPP, enforceable in accordance with its terms and conditions.
Waters represents that he has full power and authority to execute and deliver
this Agreement and to perform his obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of Waters, enforceable in
accordance with its terms and conditions.
(c) Non-contravention. Sellers represent that neither the execution and
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the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby (including the assignments and assumptions referred to in
Section 2 above), will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any Seller is subject or any
provision of
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the Seller LLC Agreements or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which any Seller is a party or by which any Seller is bound or to which any
of the Acquired Assets is subject (or result in the imposition of any Security
Interest upon any of the Acquired Assets). With the exception of the filing of
the Trademark Assignment and Intellectual Property Assignment with the United
States Patent and Trademark Office, the Sellers have not and are not required to
(i) give any notice to, (ii) make any filing with or (iii) obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement (including the assignments and assumptions referred to in Section 2
above).
(d) Brokers' Fees. The Sellers have not engaged nor authorized any
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broker, investment banker or third party to act on the Sellers' behalf, either
directly or indirectly, as a broker, finder or advisor in connection with the
transaction contemplated hereby.
(e) Title to Assets. IPP and Waters each have good and marketable title
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to the Acquired Assets to be transferred by each hereunder, free and clear of
all Security Interests and any restrictions on transfer except for the leased
postage meter, the printer supplied by UPS for printing UPS shipping documents
and the air tanks provided by the supplier of compressed air for a nominal
monthly fee.
(f) Financial Statements. IPP and Waters represent that attached hereto
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as Exhibit F are unaudited balance sheets and statements of income, changes in
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stockholders' equity, and cash flow as of and for the fiscal year ended December
31, 1999 (the "Most Recent Fiscal Year End") and for the two (2) month period
ended February 29, 2000 for IPP (the "Financial Statements"). The Financial
Statements (including any notes thereto) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby,
subject only to normal year end adjustments and notes, present fairly the
financial condition of IPP as of such dates and the results of operations of IPP
for such periods as limited by the notes therein, are materially correct and
complete, and are consistent with the books and records of IPP (which books and
records are materially correct and, except as noted therein complete). On or
before April 30, 2000, the Sellers hereby covenant and agree to provide Buyer
with Financial Statements for the month ended March 31, 2000.
(g) Events Subsequent to Most Recent Fiscal Year End. Since the Most
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Recent Fiscal Year End:
(i) no Seller has sold, leased, transferred, or assigned any of the
Acquired Assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business;
(ii) no Seller has entered into any agreement, contract, lease, or
license (or
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series of related agreements, contracts, leases, and licenses) affecting
the Acquired Assets either involving more than $22,000 or outside the
Ordinary Course of Business;
(iii) no party (including any Seller) has accelerated, terminated,
modified, or canceled any agreement, contract, lease, or license (or series
of related agreements, contracts, leases, and licenses) involving more than
$22,000 to which any Seller is a party or by which it is bound;
(iv) no Seller has caused or allowed to be imposed any Security
Interest upon any of the Acquired Assets;
(v) no Seller has canceled, compromised, waived, or released any
right or claim (or series of related rights and claims) affecting the
Acquired Assets either involving more than $22,000 or outside the Ordinary
Course of Business;
(vi) no Seller has granted any license or sublicense of any rights
under or with respect to any of the Intellectual Property included in the
Acquired Assets except for the License Agreement;
(vii) there has been no change made or authorized in the Seller LLC
Agreement;
(viii) IPP has not issued, sold, or otherwise disposed of any of its
equity, or granted any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any of its
equity;
(ix) IPP has not has declared, set aside, or made any distribution
with respect to its equity (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its equity except distributions of
proceeds from the transactions pursuant to this Agreement;
(x) no Seller has experienced any damage, destruction, or loss
(whether or not covered by insurance) to any of the Acquired Assets; and
(xi) no Seller has committed to do any of the foregoing and to the
best of each Seller's knowledge, none of the foregoing is reasonably likely
to occur in the foreseeable future.
(h) Undisclosed Liabilities. IPP does not have any Liability, except for
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(i) Liabilities set forth on the face of the Most Recent Balance Sheet or in the
notes thereto; (ii) Liabilities which have arisen after the Most Recent Fiscal
Year End in the Ordinary Course of Business; (iii) Liabilities which are not
Assumed Liabilities and were incurred in connection with the business of IPP
other than the Patio Heater Business; and (iv) Liabilities which are unknown to
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Waters and IPP. Nothing in this representation shall limit the obligation of the
Sellers under the Indemnification Agreement to indemnify Buyer for any losses
suffered by Buyer as a result of any Liabilities of the Sellers other than the
Assumed Liabilities.
(i) Legal Compliance. The Sellers have complied with all material
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applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof) related to the
Acquired Assets (the failure to comply with which would have a material adverse
affect on the business of IPP or the Acquired Assets) and neither Seller has
received any notice of any action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice which has been filed or commenced
against either Seller alleging any failure so to comply.
(j) Tax Matters.
-----------
(i) IPP has filed or caused to be filed on a timely basis all Tax
Returns that are or were required to be filed by or with respect to it. IPP
shall make available to Buyer copies of, and Section 3(j) of the Disclosure
Schedule hereof contains a complete and accurate list of, all such Tax
Returns relating to income or other Taxes filed since the date of IPP's
formation. IPP has paid all Taxes that have or may have become due pursuant
to those Tax Returns, or pursuant to any assessment received by any Seller
or any Seller Member or Manager of IPP.
(ii) No deficiency for Taxes has been claimed, proposed or assessed
against IPP. There are not pending, nor to either Seller's knowledge,
threatened audits, investigations, or claims for or relating to additional
liability in respect of Taxes owed by IPP. All Taxes that IPP is or was
required by applicable legal authority or otherwise to withhold or collect
have been duly withheld or collected and have been paid to the proper
governmental body or other Person. All Tax Returns filed by IPP are
materially true, correct, and complete. Neither Seller has been audited
during the last three (3) years and has any knowledge of any future IRS or
other tax authority audits.
(k) Real Property. Section 3(k) of the Disclosure Schedule lists and
-------------
describes briefly all real property leased to IPP. IPP has delivered to Buyer
correct and complete copies of such leases. With respect to each lease:
(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 and the receipt of
consent of the lessor thereunder.
(iii) The tenant is not, and to the best knowledge of Waters, the
lessor is not in breach or default, and no event has occurred which, with
notice or lapse of time, would
13
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 material disputes, oral agreements, or forbearance
programs in effect as to the lease.
(vi) IPP 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 as operated by IPP 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 said facilities as
operated by IPP.
(l) Intellectual Property.
---------------------
(i) To the knowledge of the Sellers, the Sellers own or have the
right to use pursuant to license, sublicense, agreement, or permission all
Intellectual Property necessary to manufacture, market, use and/or sell the
Patio Heaters. IPP and Waters jointly and severally warrant and represent
that Waters owns Patio Heater Patent that is being licensed to IPP pursuant
to an oral license agreement.
(ii) To the knowledge of the Sellers, none of the Sellers has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of third parties in
connection with the manufacture, use or sale of the patio heaters, and none
of the Sellers, Seller Members or officers (and employees with
responsibility for Intellectual Property matters) of any Seller has ever
received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including any
claim that any Seller must license or refrain from using any Intellectual
Property rights of any third party in connection with the manufacture, use
or sale of the Patio Heaters). To the Knowledge of any Seller and the
Manager of IPP (and employees with responsibility for Intellectual Property
matters), no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of any Seller other than Intellectual Property rights of
Waters which are not related to the business of IPP.
(iii) Neither IPP nor Waters has granted to any third party any
license,
14
agreement or other permission with respect to, or any other current or
future rights in, any of its Intellectual Property, including rights in any
now existing or hereafter filed or granted domestic or foreign patent
applications or patents, excepts those manufactures of Patio Heaters
specifically listed on Section 3(l) of the Disclosure Schedule. Section
3(l)(iii) of the Disclosure Schedule identifies each (1) trade name or
registered or unregistered trademark used by IPP and (2) each patent or
patent application filed by the Sellers relating to the business of IPP.
There are no actions, suits, proceedings, hearings, investigations,
charges, complaints, claims, or demands pending and, to the Knowledge of
Sellers, none are threatened which challenge the legality, validity,
enforceability or use, or ownership of the License Agreement, the
Intellectual Property licensed thereunder, or the names, marks, patents or
patent applications. No Seller has ever agreed to indemnify any Person for
or against any interference, infringement, misappropriation, or other
conflict with respect to any of the Intellectual Property.
(iv) Other than the computer software which was not written for the
Sellers, there is no item of Intellectual Property that any third party
owns and that IPP uses pursuant to license, sublicense, agreement, or
permission in connection with the manufacture, use or sale of Patio
Heaters.
(v) Other than the Patio Heater Patent, the Sellers are not the
holders of, and have not filed any patent applications with, any United
States or foreign patents with respect to Patio Heaters.
(m) Tangible Assets. Each Tangible Asset is in good operating condition
---------------
and repair (subject to normal wear and tear), and is suitable for the purposes
for which it is presently used.
(n) Inventory. The inventory of IPP consists of raw materials and
---------
supplies, manufactured and purchased parts, goods in process, and finished
goods, all of which is merchantable and fit for the purpose for which it was
procured or manufactured, and none of which is slow-moving, obsolete, damaged,
or defective, subject only to the reserve for inventory writedown set forth on
the face of the Most Recent Balance Sheet as adjusted for the passage of time
through the Closing Date in accordance with the past custom and practice of the
Sellers. Buyer acknowledges that Seller has been engaged in the Patio Heater
Business for less than eighteen months and, therefore, does not have the
operating experience to determine which parts and products in its inventory are
excess or obsolete in accordance with GAAP.
(o) Contracts.
---------
(i) The Contracts are all of the existing material contracts,
agreements, leases and commitments (both written and oral) relating to the
Acquired Assets. The Sellers have delivered to Buyer prior to the execution
of this Agreement true and complete copies or descriptions of all of the
Contracts (and all amendments and modifications thereto). Each Contract is
in full force and effect, and constitutes a valid and binding obligation
of,
15
and is legally enforceable in accordance with its terms against, the
parties thereto. To the Sellers' Knowledge, the parties thereto have
complied with all of the provisions of the Contracts and are not in default
thereunder, and there has not occurred any event which (whether with or
without notice, lapse of time, or the happening or occurrence of any other
event) would constitute such a default. Except as set forth in Section 3(o)
of the Disclosure Schedule, such Contract does not require the consent of
any party thereto to the consummation of the transactions contemplated
hereby.
(ii) The Sellers have delivered to Buyer a correct and complete copy
of the License Agreement. With respect to the License Agreement: (A) no
party 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, under the License Agreement;
(B) no party has repudiated any provision of the License Agreement; and (C)
other than the sublicenses to the manufacturers set forth in Schedule 3
(l)(iii); Neither Seller has granted any sublicense or similar right with
respect to the License Agreement.
(q) Insurance. The Sellers carry insurance, which is adequate in character
---------
and amount, with reputable insurers, covering all of the Acquired Assets. With
respect to each such insurance policy: (A) the policy is legal, valid, binding,
enforceable, and in full force and effect; (B) the policy 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
(including the assignments and assumptions referred to in Section 2 above),
provided, however, that none of such policies will be assigned to the Buyer or
insure any interest of the Buyer; (C) neither the Sellers nor any other party to
the policy is in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which, with notice
or the lapse of time, would constitute such a breach or default, or permit
termination, modification, or acceleration, under the policy; and (D) no party
to the policy has repudiated any provision thereof. The Sellers have been
covered since its formation by insurance in scope and amount customary and
reasonable for the businesses in which it has engaged during the aforementioned
period. Section 3(q) of the Disclosure Schedule describes any self-insurance
arrangements affecting the Sellers and lists each insurance policy currently or
previously in effect with respect to the Acquired Assets.
(r) Litigation. Except as listed in Section 3(R) of the Disclosure
----------
Schedule There are no claims, suits, actions, administrative, bankruptcy,
arbitration or other proceedings or governmental investigations pending or, to
the Sellers' Knowledge, threatened against IPP or the Acquired Assets, and the
Sellers do not know of any facts which could reasonably form the basis for any
such claim, suit, action, proceeding, or investigation. There are presently no
outstanding judgments, decrees, or orders of any court or any governmental or
administrative agency against or, in any proceeding in which IPP is a party,
affecting IPP or any of the Acquired Assets. No insolvency proceedings of any
character including, without limitation, bankruptcy, receivership,
reorganization, or arrangement with creditors, voluntary or involuntary,
affecting IPP or any of
16
the Acquired Assets are pending, or to the Sellers' Knowledge, threatened. IPP
has not made or taken any assignment for the benefit of creditors or any actions
with a view to, or which would constitute the basis for, the institution of any
such insolvency proceedings.
(s) Product Warranty. Each product manufactured, sold, leased, or
----------------
delivered by the Sellers has been in conformity with all applicable contractual
commitments and all express and implied warranties, and no Seller has any
Liability (and, to Seller's knowledge, there is no Basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any of them giving rise to any Liability) for
replacement or repair thereof or other damages in connection therewith, subject
only to the reserve for product warranty claims set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the Sellers. No product manufactured, sold, leased, or delivered by
any Seller is subject to any guaranty, warranty, or other indemnity beyond the
applicable standard terms and conditions of sale or lease. Section 3(s) of the
Disclosure Schedule includes copies of the standard terms and conditions of sale
or lease for the Sellers (containing applicable guaranty, warranty, and
indemnity provisions).
(t) Product Liability. Except as set forth on Schedule 3(t), to the
-----------------
Knowledge of the Seller's, IPP has no Liability (and there is no Basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against IPP giving rise to any Liability) arising
out of any injury to individuals or property as a result of the ownership,
possession, or use of products manufactured, sold or leased by IPP. Sellers
hereby covenants and agrees to carry products liability insurance, for a period
of five (5) years after the date of this Agreement, covering claims related to
products designed, manufactured, imported or sold prior to the date of this
Agreement.
(u) Employee Benefits. There are no Employee Benefit Plans applicable to
-----------------
any employee of IPP, except the group health and life insurance plan through
Principal Financial Group, which have been maintained in accordance with all
applicable federal, state and local laws, rules and regulations.
(v) Environmental, Health, and Safety Matters.
-----------------------------------------
(i) IPP in all material respects, has complied with and is in
compliance with all Environmental, Health, and Safety Requirements.
(ii) Without limiting the generality of the foregoing, IPP has
obtained and complied with, and is in compliance with, all permits,
licenses and other authorizations that are required pursuant to
Environmental, Health, and Safety Requirements for the occupation of its
facilities and the operation of its business.
(iii) IPP has not received any written or oral notice, report or
other information
17
regarding any actual or alleged violation of Environmental, Health, and
Safety Requirements, or any Liabilities or potential Liabilities, including
any investigatory, remedial or corrective obligations, relating to IPP or
the Acquired Assets arising under Environmental, Health, and Safety
Requirements.
(iv) None of the following exists at any property or facility
operated by IPP: (A) underground storage tanks, (B) asbestos-containing
material in any form or condition, (C) materials or equipment containing
polychlorinated biphenyls, or (D) landfills, surface impoundments, or
disposal areas.
(v) Neither Seller has treated, stored, disposed of, arranged for
or permitted the disposal of, transported, handled, or released any
substance, including without limitation any hazardous substance, or owned
or operated any property or facility (and no such property or facility is
contaminated by any such substance) in a manner that has given or would
give rise to liabilities, including any liability for response costs,
corrective action costs, personal injury, property damage, natural
resources damages or attorney fees, pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Solid Waste Disposal Act, as amended ("SWDA") or any other
Environmental, Health, and Safety Requirements.
(vi) Neither this Agreement nor the consummation of the transaction
that is the subject of this Agreement will result in any obligations for
site investigation or cleanup, or notification to or consent of government
agencies or third parties, pursuant to any of the so-called "transaction-
triggered" or "responsible property transfer" Environmental, Health, and
Safety Requirements.
(vii) IPP has not, either expressly or by operation of law, assumed
or undertaken any liability, including without limitation any obligation
for corrective or remedial action, of any other person or entity relating
to Environmental, Health, and Safety Requirements.
(viii) No facts, events or conditions relating to the past or present
facilities, properties or operations of IPP will prevent, hinder or limit
continued compliance with Environmental, Health, and Safety Requirements,
give rise to any investigatory, remedial or corrective obligations pursuant
to Environmental, Health, and Safety Requirements, or give rise to any
other liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise) pursuant to Environmental, Health, and Safety Requirements,
including without limitation any relating to onsite or offsite releases or
threatened releases of hazardous materials, substances or wastes, personal
injury, property damage or natural resources damage.
4. Representations and Warranties of Buyer. Buyer represents and
---------------------------------------
warrants to the Sellers that the statements contained in this Section 4 are
correct and complete as of the date of
18
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 4).
(a) Organization of Buyer. Buyer is a corporation duly organized, validly
---------------------
existing, and in good standing under the laws of the State of Delaware.
(b) Authorization of Transaction. Buyer has full power and authority
----------------------------
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of Buyer, enforceable in accordance
with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
----------------
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above and
the issuance by Buyer of the Buyer Common Stock, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which Buyer is subject or any provision of its charter or bylaws or
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which Buyer is a party or by which
it is bound or to which any of its assets is subject. Buyer does not need to
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Section 2 above).
(d) Brokers' Fees. Buyer has not engaged nor authorized any broker,
-------------
investment banker or third party to act on Buyer's behalf, either directly or
indirectly, as a broker, finder or advisor in connection with the transaction
contemplated hereby.
(e) Buyer Stock. The Buyer Stock, when issued, shall be fully paid and non
-----------
assessable and shall be delivered to Seller free and clear of all Security
Interests and restrictions except restrictions required pursuant to the
Securities Act.
5. Pre-Closing Covenants. The Parties agree as follows with respect to
---------------------
the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable best efforts to
-------
take all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in Section 6
below).
(b) Notices and Consents. The Sellers will give any notices to third
--------------------
parties, and the
19
Sellers will use their reasonable best efforts to obtain any third party
consents, that Buyer reasonably may request in connection with the matters
referred to in Section 3(c) above. Each of the Parties will give any notices to,
make any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Section 3(c) and Section 4(c)
above.
(c) Operation of Business. IPP will not engage in any practice, take any
---------------------
action, or enter into any transaction outside the Ordinary Course of Business.
Without limiting the generality of the foregoing, IPP will not (i) declare, set
aside, or pay any distribution to the Seller Members, (ii) purchase, or
otherwise acquire any membership units of IPP, (iii) modify the terms of the
License Agreement except pursuant to the written request of Buyer to effect the
Closing, or (iv) otherwise engage in any practice, take any action, or enter
into any transaction of the sort described in Section 3(h) above.
(d) Preservation of Business. IPP will keep its business and properties
------------------------
substantially intact, including its present operations, physical facilities,
working conditions, and relationships with lessors, licensors, suppliers,
customers, and employees.
(e) Full Access. IPP will permit representatives of Buyer to have full
-----------
access at all reasonable times, and in a manner so as not to interfere with the
normal business operations of IPP, to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to IPP.
(f) Notice of Developments. Each Party will give prompt written notice to
----------------------
the other Party of any material adverse development causing a breach of any of
its own representations and warranties in Section 3 and Section 4 above. No
disclosure by any Party pursuant to this Section 5(f), however, shall be deemed
to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
(g) Exclusivity. The Sellers will not (i) solicit, initiate, or encourage
-----------
the submission of any proposal or offer from any Person relating to the
acquisition of any membership units or other voting securities, or any
substantial portion of the assets, of IPP (including any acquisition structured
as a merger, consolidation, or share exchange) or (ii) participate in any
discussions or negotiations regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other manner any effort or
attempt by any Person to do or seek any of the foregoing. The Sellers will
notify Buyer immediately if any Person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
(h) Public Disclosures. Buyer will provide to the Sellers simultaneously
-------------------
with the filing thereof copies of all filings of Buyer with the S.E.C. and all
press releases or other public disclosures of Buyer relating to this
acquisition.
6. Conditions to Obligation to Close.
----------------------------------
20
(a) Conditions to Obligation of Buyer. The obligation of Buyer to
---------------------------------
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Sellers shall have performed and complied with all of their
covenants hereunder in all material respects through the Closing;
(iii) the Sellers shall have procured all of the third party consents
specified in Section 5(b) above;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would
(A) prevent consummation of any of the transactions contemplated by this
Agreement, (B) cause any of the transactions contemplated by this Agreement
to be rescinded following consummation, or (C) affect adversely the right
of Buyer to own the Acquired Assets and to operate the business of the
Sellers relating to the Patio Heaters;
(v) the Sellers shall have delivered to Buyer a certificate to the
effect that each of the conditions specified above in Section 6(a)(i)-(iv)
is satisfied in all respects;
(vi) all actions to be taken by the Sellers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to Buyer.
(b) Conditions to Obligation of the Sellers. The obligation of the
---------------------------------------
Sellers to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 4 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign
21
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent consummation
of any of the transactions contemplated by this Agreement or (B) cause any
of the transactions contemplated by this Agreement to be rescinded
following consummation (and no such injunction, judgment, order, decree,
ruling, or charge shall be in effect);
(iv) Buyer shall have delivered to the Sellers a certificate to the
effect that each of the conditions specified above in Section 6(b)(i)-(iii)
is satisfied in all respects;
(v) all actions to be taken by Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Sellers.
7. Miscellaneous.
--------------
(a) Survival of Representations and Warranties. All of the
------------------------------------------
representations and warranties of the Parties contained in this Agreement shall
survive the Closing hereunder as and to the extent provided in the
Indemnification Agreement, which provides the sole remedy of Buyer after Closing
for any claims of breach of any representation or warranty.
(b) Press Releases and Public Announcements. No Party shall issue any
---------------------------------------
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
other Party; provided, however, that any Party may make any public disclosure it
-----------------
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise the other Party
prior to making the disclosure and will, in any event, provide a copy of any
such disclosure (including transcripts of any analysts' meetings or conference
calls) within two (2) business days of its release).
(c) No Third-Party Beneficiaries. This Agreement shall not confer any
----------------------------
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents referred to
----------------
herein and agreements executed and delivered pursuant hereto) constitutes the
entire agreement between the Parties and supersedes any prior understandings,
agreements, or representations by or between the Parties, written or oral, to
the extent they related in any way to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon and
-------------------------
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder
22
without the prior written approval of the other Party; provided, however, that
-----------------
Buyer may (i) assign any or all of its rights and interests hereunder to one or
more of its Affiliates and (ii) designate one or more of its Affiliates to
perform its obligations hereunder (in any or all of which cases Buyer
nonetheless shall remain responsible for the performance of all of its
obligations hereunder).
(f) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement are
--------
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
-------
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given two (2) days after
it is sent by registered or certified mail, return receipt requested, postage
prepaid, and on the day after it is sent by next day air courier or ground
messenger service or by telecopy and on the day of actual delivery by personal
delivery, and addressed to the intended recipient as set forth below:
If to the Sellers: Xxxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
With a copy to the Seller's
attorneys: Xxxxx X. Xxxxxxx, Esq.
Xxxxx & Xxxxxxxxxx, Ltd.
00 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If to the Buyer: Blue Rhino Corporation
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Fax: (000) 000-0000
With a copy to the Buyer's Xxxx X. Xxxxxxxxxx, Esq.
attorneys: Xxxxxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
23
Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Party notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the domestic laws of the State of Illinois without giving
effect to any choice or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of Illinois.
(j) Amendments and Waivers. No amendment of any provision of this
----------------------
Agreement shall be valid unless the same shall be in writing and signed by Buyer
and the Seller. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(k) Severability. Whenever possible, each provision of this Agreement
------------
shall be construed and interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition without invalidating the remainder of such provision or any other
provision of this Agreement or the application of such provision to other
parties or circumstances.
(l) Expenses. Each of the Parties will bear his or its own costs and
--------
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
(m) Construction. The Parties have participated jointly in the
------------
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
---------------------------------------
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(o) Specific Performance. Each of the Parties acknowledges and agrees
--------------------
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to
24
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any action instituted in
any court of the United States or any state thereof having jurisdiction over the
Parties and the matter, in addition to any other remedy to which it may be
entitled, at law or in equity.
[The next page is the Signature Page]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
SELLERS: INTERNATIONAL PROPANE PRODUCTS
By__________________________________
Its: Manager and Sole Member
_____________________________________
Xxxxxxx X. Xxxxxx
BUYER: BLUE RHINO CORPORATION
By__________________________________
Its_________________________________
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