EXHIBIT 10.3
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made and entered
into as of June 5, 1998, by and between INNOVATIVE TRANSDUCERS INC., a Delaware
corporation, with offices at 00000 Xxxx Xxx, Xxxxxxx, Xxxxx 00000-0000 ("ITI" or
"Buyer"), and BISON INSTRUMENTS, INC., a Minnesota corporation, with offices at
0000 Xxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000 ("Bison" or "Seller").
RECITALS
Seller desires to sell and Buyer desires to purchase all of Seller's
right, title and interest in and to the Assets defined herein pursuant to the
terms and conditions of this Agreement.
Therefore, Seller agrees to sell and Buyer agrees to purchase the
Assets on the terms and conditions set forth in this Agreement.
ARTICLE 1. PURCHASE AND SALE
1.1 Assets. Subject to the terms of this Agreement, Seller agrees to
convey, transfer and assign to Buyer, and Buyer agrees to accept, as of
the Closing Date, all of Seller's right, title and interest in and to
the Jupiter and Galileo product lines (hereinafter collectively
referred to as the "Assets"). The Assets including without limitation:
1.1.1 Inventories. All of Seller's right, title and interest in the
inventory of finished goods, work in progress, raw materials,
parts, rental equipment and all other materials and supplies
associated with the Jupiter and Galileo product lines as
listed and valued on Schedule 1.1.1 (the "Inventories");
1.1.2 Intellectual Property. All of Seller's intellectual property
used in developing or operating the Assets, including without
limitation proprietary computer software, patents, trade
secrets, copyrights, marks, logos, goodwill, and the property
licensed to Seller in that certain License Agreement With One
Time Fee dated November 1, 1996, between Bison Instruments,
Inc. and Xxxx Xxxxxxx, but excluding those assets identified
in Section 1.2.7 of the Agreement (the "Intellectual
Property");
1.1.3 Contracts. All of Seller's right, title and interest in the
contracts, agreements and commitments related to the purchase
of the Jupiter and Galileo products, as listed on Schedule
1.1.3 hereto;
1.1.4 Records. All of Seller's right, title and interest in all
files, records and other data (including but not limited to
those in electronic format) in the actual
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possession of Seller related to the Inventories and
Intellectual Property including without limitation all
operational records, technical records, contract files,
computer records, computer tapes and disks, supplier lists,
marketing document, credit information, operating guides and
manuals, sales records, research and development reports and
records, and production reports and records, but excluding
accounting and tax records and any documents covered by the
attorney-client communication or attorney work product
privileges (the "Seller Records");
1.1.5 Names. All rights of any kind whatsoever in the names "Bison
Instruments", "Galileo", and "Jupiter". However, Buyer agrees
that (a) for a period of one (1) year, Seller may continue to
use the name "Bison Instruments" in connection with Seller's
sale and servicing of its inventory that exists for
seismographic product lines other than the Jupiter and Galileo
product lines, and (b) Seller may continue to use the name
"Bison Instruments, Inc." in connection with Seller's
operation of its Bison Instruments, Inc. company only if such
company's operations do not compete in the same market
encompassing Buyer's seismographic products;
1.1.6 Manufacturing Documentation. All of Seller's right, title, and
interest in all manufacturing documentation associated with
the seismograph product lines listed on Schedule 1.1.6.
1.2 Retained Assets. The Assets to be conveyed to Buyer do not include any
assets other than those set forth in Section 1.1 and exclude
specifically, without limitation, the following property:
1.2.1 Records. Any of Seller's corporate, financial and accounting
and tax records, and legal files, except that Seller will
provide Buyer with copies of any tax records that are
necessary for Buyer's ownership, administration or operation
of the Assets.
1.2.2 Confidential Information. Notwithstanding any other provision
of this Agreement to the contrary, any records or data that
Seller reasonably considers proprietary or confidential
(including without limitation employee information and
excepting the documents described in 1.1.6 above), or which
Seller cannot provide to Buyer because of third-party
restrictions;
1.2.3 Cash. All of Seller's cash.
1.2.4 Accounts Receivable. All of Seller's accounts receivable.
1.2.5 Tax Refunds. Any tax refunds due to Seller.
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1.2.6 Other Product Lines. The assets associated with product lines
of Seller other than the Jupiter and Galileo product lines,
other than those assets described in Section 1.1.7 above.
1.2.7 Retained Intellectual Property. All of Seller's right, title,
and interest in the BISON graphic logo identified in Schedule
1.2.7 as the "BISON LOGO". Buyer shall have no rights in or to
the BISON LOGO, including, without limitation, the right to
use the BISON LOGO. Seller grants a non-exclusive, worldwide
license to Buyer to use the BISON Word Xxxx in connection with
the Assets and for no other use. All other rights in the BISON
Word Xxxx are reserved to Seller. Buyer acknowledges that the
BISON Word Xxxx is the property of the Seller and that by this
Agreement Buyer acquires license rights and not the right,
title or interest in or to the BISON Word Xxxx. Buyer shall
not, during the term of this Agreement or thereafter, adopt or
use any service xxxx, trade name, or trademark confusingly
similar to the BISON Word Xxxx. Buyer acknowledges that strict
observance and performance of the terms of this section of the
Agreement are necessary to protect Seller and the BISON Word
Xxxx. IN that regard, Buyer agrees that the BISON Word Xxxx
shall be used only in connection with the Assets and the
quality of the Assets will be the same quality or better than
the quality of the Assets as presently manufacturing and
distributed by Seller. In all agreements entered into by Buyer
in which Buyer's right in the BISON Word Xxxx are assigned,
Buyer shall specify that all such assignments are subject to
the terms of this Section 1.2.7 and such assignees shall agree
to include such terms in any subsequent assignments. Buyer and
any and all subsequent assignees shall notify Seller of such
assignments of any rights to the BISON Word Xxxx.
1.2.8 Customer Lists. All of Seller's right, title and interest in
Seller's customer lists. However, Seller shall provide Buyer
with copies of Seller's customer lists used for developing or
operating the Assets and Buyer shall have the exclusive right
to use such lists only in connection with the marketing and
selling of the Assets in the seismographic market.
ARTICLE 2. CONSIDERATION AND PAYMENT
2.1 Consideration. At Closing, Buyer will pay Seller Four Hundred
Seventy-four Thousand Dollars ($474,000) in cash, such amount being
subject to adjustment as provided in Section 2.2 of this Agreement
(collectively the "Cash Consideration").
2.2 Adjustments to the Cash Consideration after Closing. Adjustments to the
Cash Consideration shall be made as between the Seller and the Buyer,
as follows:
2.2.1 Settlement Statement. The Cash Consideration payable to Seller
at Closing will be subject to the adjustments set forth in
Section 2.2.2 and
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2.2.3. Within sixty (60) days after Closing, the Buyer will
prepare and provide to Seller a settlement statement showing
all adjustments to the Cash Consideration paid at Closing
pursuant to this Section 2.2. (However, failure of Buyer to
complete the settlement statement within sixty (60) days after
Closing will not constitute a waiver of any right to an
adjustment otherwise due.) Seller will have thirty (30) days
after receiving the settlement statement to provide Buyer with
any written exceptions to any items in the settlement
statement that Seller believes in good faith to be
questionable. Any such disputed items will be resolved as
provided in Section 2.3.1 All items in the settlement
statement to which Seller does not except in writing within
the thirty (30) day review period will be deemed correct.
2.2.2 Upward Adjustments. The Cash Consideration will be increased
by any increase in value of the Inventories, such value to be
determined in accordance with Section 7.1.
2.2.3 Downward Adjustments. The Cash Consideration will be decreased
by any decrease in value of the Inventories, such value to be
determined in accordance with Section 7.1.
2.2.4 Payment of Undisputed Adjustments. Seller and Buyer, as
applicable, will pay each other the undisputed adjustment to
the Cash Consideration contained in the settlement statement
within ten (10) days after the expiration of Seller's thirty
(30) day review period for the settlement statement.
2.3. Resolution of Disputed Adjustments.
2.3.1 Resolution of Disputed Adjustments. If Seller and Buyer are
unable, within ten (10) days after the expiration of Seller's
thirty (30) day review period for the settlement statement, to
resolve any disputed items pertaining to the settlement
statement, the Seller and the Buyer agree to promptly and
jointly retain the independent accounting firm of Price
Waterhouse LLP to evaluate the items in dispute as between
such parties and render an opinion on their validity, with
each such affected party paying one-half of the charges of
Price Waterhouse LLP. The determination of Price Waterhouse
LLP will be final and binding on the parties. If the
independent accounting firm determines that a payment or
refund is due, the owing party shall pay the full amount
determined by Price Waterhouse LLP to be due within ten (10)
days after receiving written notice of Price Waterhouse LLP's
opinion.
2.4 Payment Method. Unless the parties otherwise agree in writing, all
payments under this Agreement will be by wire transfer in immediately
available funds to an account designated by the party receiving
payment.
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ARTICLE 3. REPRESENTATIONS
3.1 Reciprocal Representations. By their execution of this Agreement,
Seller and Buyer make the following representations as to themselves as
an executing party. These representations are deemed to be made as of
the Closing Date.
3.1.1 Requisite Authority. Seller is a corporation duly organized
and in good standing under the laws of Minnesota, is duly
qualified to carry on its business in the State of Minnesota,
and has all the requisite power and authority to enter into
and perform this Agreement. Buyer is a corporation duly
organized and in good standing under the laws of Delaware, is
duly qualified to carry on its business in the state of Texas,
and has all the requisite power and authority to enter into
and perform this Agreement.
3.1.2 Requisite Approvals. The executing party has taken all
necessary or appropriate actions to authorize (i) the
execution and delivery of this Agreement and the other
transaction documents referenced in this Agreement; (ii) the
performance of its obligations under this Agreement and the
other transaction documents; and (iii) the consummation of
this transaction.
3.1.3 Validity of Obligation. This Agreement and the other
transaction documents referenced in this Agreement (I) have
been duly executed and delivered by the executing party; (ii)
constitute the legal, valid and binding obligations of the
executing party, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, or other similar laws
relating to creditors' rights generally and general equitable
principles; and (iii) are enforceable against the executing
party in accordance with their respective terms, subject to
the effect of bankruptcy, insolvency, reorganization,
moratorium, or other similar laws relating to credits' rights
generally and general equitable principles.
3.1.4 No Conflicts or Impediments. The consummation of the
transaction contemplated by this Agreement (i) does not
require the approval, authorization, consent or other action
by, or filing with, any governmental authority, administrative
agency, court or other party; (ii) will not breach, violate or
conflict with any material agreement or instrument to which
either the executing party or the Assets being transferred by
the executing party is subject, including without limitation
covenants imposed on the executing party by any bank or other
financial institution, lender or debtholder and other terms,
provisions or conditions of the Certificate of Incorporation,
By-Laws or applicable shareholder agreement of the party; and
(iii) does not violate any judgment, decree, law, rule or
regulation of any governmental authority or administrative
agency, in the case of each
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clause (i), (ii) and (iii), in a manner that would adversely
affect the transaction.
3.1.5 Bankruptcy. There are no bankruptcy, reorganization or
receivership proceedings pending, being contemplated by, or to
its actual knowledge, threatened against it.
3.1.6 Broker's Fee. The executing party has not incurred any
obligation for brokers, finders or similar fees for which the
other executing party or parties would be liable.
3.2 Seller's Representations. By its execution of this Agreement, Seller
makes the following representations to Buyer as to the Assets. These
representations are deemed to be made as of the Closing Date.
3.2.1 Preferential Rights and Consents. There are no prior or
preferential rights to purchase, rights of first refusal, or
other similar rights vested in any other party to purchase or
otherwise acquire the Assets.
3.2.2 Mortgages and Other Instruments. The transfer of the Assets
does not violate any covenants or restrictions imposed on
Seller by any bank or other financial institution in
connection with a mortgage or other instrument, and will not
result in the creation or imposition of a lien on any portion
of the Assets.
3.2.3 Compliance with Law and Agreements. Except as disclosed on
Schedule 3.2.3(a), to the best of Seller's knowledge, (i)
Seller is in compliance with al applicable laws, rules, and
regulations of federal, state and local authorities in
connection with Seller's ownership and operation of the
Assets; and (ii) Seller is in compliance with all of its
obligations under the Contracts and any other agreements
relating to or involving the Assets. Seller is not a party to
any partnership agreements, joint venture agreements,
operating agreements and agreements for the sale of the
Assets. Except as disclosed on Schedule 3.2.3(b), Seller is
not obligated to sell, lease, market, distribute or service
the Assets through or with any Person.
3.2.4 Litigation and Claims. To the best of Seller's knowledge,
there are no material actions, suits or other proceedings
pending before any court or governmental agency in which
Seller is a party or any other claims that (i) would result in
loss of Seller's title to the Assets, (ii) would affect the
value of the Assets, or (iii) would subject Buyer to an legal
or monetary liability, except for those listed in Schedule
3.2.4 to this Agreement.
3.2.5 FIRPTA. Seller is not a "foreign person" as defined in Section
1445 of the Internal Revenue Code of 1986, as amended.
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3.2.6 Bulk Sales Laws. Seller represents that Seller has no
creditors or situations which would require the parties hereto
to comply with or which would result in the violation of the
requirement of any bulk sales act concerning or relating to
the transactions contemplated by this Agreement.
3.3 Buyer's Representations. By execution of this Agreement, Buyer makes
the following representations:
3.3.1 Licensing. Buyer acknowledges that Buyer has met all of the
requirements under applicable local, state and federal law to
accept assignment of the Assets, and is not otherwise
prevented from having the Assets transferred to such Buyer,
and is properly authorized to operate said Assets.
ARTICLE 4. WARRANTIES AND WARRANTY DISCLAIMERS.
4.1 Title to Assets. Seller has good and marketable title to all of the
Assets. Seller represents that it has taken no steps to register or
apply for registration with respect to he Intellectual Property.
4.2 Encumbrances. Seller represents and warrants that it owns and is
assigning, conveying and transferring full legal and beneficial
ownership of Seller's interest in the Assets, free and clear of all
assessments, charges, liens, pledges, mortgages, security interests and
other encumbrances caused by Seller, other than Permitted Liens. For
purposes of this Agreement, "Permitted Liens" means the following:
(i) liens for taxes not due or due but not yet delinquent or which
are being contested in good faith by appropriate proceedings;
(ii) mechanics', materialmens', repairmen's or other like liens
arising in the ordinary course of business;
4.3 Condition and Fitness of Assets. To the best of Seller's knowledge, the
Inventories are of a quality usable and saleable consistent with past
practice in the ordinary course of Seller's business. The Inventories
will not include any obsolete, damaged or defective goods.
4.4 Subrogation of Warranties. To the extent transferable without consent
of a third party, Seller will give and grant to Buyer, its successors
and assigns, as to the Assets, full power and right of substitution and
subrogation in and to all covenants and warranties (including
warranties of title) by preceding owners, vendors, or others, given or
made with respect to the Assets or any part thereof prior to the
Closing Date.
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4.5 Representations and Warranties Exclusive. All representations and
warranties contained in this Agreement (including without limitation
those in Article 3 and 4 of this Agreement) are exclusive, and are
given in lieu of all other representations and warranties, express or
implied.
ARTICLE 5. CASUALTY LOSSES
5.1 Casualty Losses.
5.1.1 Notice of Casualty Losses. If, prior to the date of shipment
of the Assets from Seller's facilities to Buyer's facilities,
all or part of the Assets are damaged or destroyed by fire,
flood, storm or other casualty ("Casualty Losses"), Seller
must promptly notify the Buyer in writing of the nature and
extent of the Casualty Loss and Seller's estimate of the cost
required to repair or replace that portion of the Assets
affected by the Casualty Loss.
5.1.2 Adjustments to Cash Consideration for Casualty Losses. With
respect to each Casualty Loss to the Assets, the Buyer will
have the following rights:
(i) If Seller and the Buyer agree on the cost to repair
or replace the portion of the Assets affected by the
Casualty loss, the Cash Consideration will be
adjusted by the agreed cost of the Casualty Loss.
(ii) If Seller and the Buyer are unable to agree on the
cost to repair or replace the portion of the Assets
affected by the Casualty Loss, then the parties shall
submit the issue to arbitration, as provided for in
Section 9.10, and upon determination of such cost
pursuant to arbitration, the Cash Consideration will
be adjusted by the arbitration derived cost of the
Casualty Loss.
5.1.3 Insurance Proceeds and Settlement Payments. If the Seller and
Buyer agree to an adjustment in the Cash Consideration, Seller
will be entitled to retain (i) all insurance proceeds payable
to Seller with respect to such Casualty Loss, and (ii) all
sums paid to Seller by third parties by reason of the Casualty
Loss.
ARTICLE 6. CLOSING AND POST-CLOSING OBLIGATIONS
6.1 Closing. The closing of the sale (the "Closing") shall take place on or
before 5:00 p.m. CST on June 5, 1998, (the actual date on which Closing
occurs being the "Closing Date") at the offices of Bison Instruments,
Inc., 0000 Xxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx, unless the parties
agree in writing to another location.
6.2 Closing Obligations. At Closing, the following events will occur, each
being a condition precedent to the others and each being deemed to have
occurred simultaneously with the others.
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6.2.1 Payment of Cash Consideration. Buyer will pay Seller the Cash
Consideration by wire transfer.
6.2.2 Execution and Delivery of Closing Documents. Seller and Buyer
will execute, acknowledge, and deliver the following closing
documents:
(i) Seller will execute, acknowledge and deliver to Buyer
an Assignment, Assumption and Xxxx of Sale (in
sufficient counterparts for recording) transferring
Seller's interest in the Assets to Buyer. The
Assignment, Assumption and Xxxx of Sale will be in
the form set forth in Exhibit A.
(ii) Seller will obtain and deliver to Buyer releases of
any and all liens affecting the Assets.
(iii) Seller and Buyer will execute and deliver any other
documents and instruments necessary to consummate the
transaction contemplated by this Agreement.
6.3 Post-Closing Obligations.
6.3.1 Recording Transfer Documents. Buyer, within thirty (30) days
after Closing, will record the Assignment and Xxxx of Sale and
all other instruments that must be recorded to effectuate the
transfer of the Assets the Seller is transferring to Buyer.
All costs of recording and filing these documents will be
responsibility of the Buyer.
6.3.2 Files and Records. No later than thirty (30) days after
Closing, Seller will deliver to Buyer (at a location
designated by Buyer) the originals or legible copies of the
Seller Records relating to the Assets, the Seller is
transferring to Buyer. Thereafter, Seller will forward to the
Buyer any other correspondence, documents and other
information Seller receives relating to the Assets the Seller
is transferring to Buyer. Thereafter, Seller will forward to
the Buyer any other correspondence, documents and other
information Seller receives relating to the Assets the Seller
transfers to Buyer. The freight costs and costs of counting
and packing the Seller Records will be borne by Buyer. Seller
shall pay the costs of packaging materials and will provide
assistance with packing the Seller Records. If Seller retains
any original Seller Records, the Buyer will have the right to
review those original Seller Records during normal business
hours. Seller will maintain its computer systems associated
with the Assets for a period up to and including September 30,
1998 and will assist Buyer in obtaining any reasonable
information from the computer systems needed to operate the
Assets. After such period, Seller will give Buyer thirty (30)
days' notice of Seller's intention to destroy any Seller
Records, whereby Buyer xxxx
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have the right to obtain such Seller Records from Seller.
After the thirty (30) days' notice period expires, Seller
shall have the right to destroy any Seller Records it retains
in accordance with its usual and customary records retention
policies. Nothing herein shall be deemed to require the Buyer
to maintain or refrain from disposing of any books and records
transferred pursuant to this Agreement for any period of time
after the Closing Date. However, if Buyer desires to dispose
of any such books or records, Buyer agrees to give Seller
notice of such intention and the opportunity to retain such
books and records, at Seller's expense. From and after the
Closing Date and upon reasonable written require, Seller and
Buyer shall cooperate with each other in providing the other
party with copies of books or records needed in connection
with customer complaints, lawsuits, investigations, and tax
audits and examination. Such books or records shall be
provided at the cost and expense of the requesting party.
6.3.3 Training Cooperation. At no cost to Buyer, Seller agrees to
assist in the training of two of Buyer's technicians on
assembly of the Assets over a period of five (5) full business
days at Seller's facilities. Seller shall have no liability
and Buyer shall have no recourse to Seller with respect to any
assistance provided to Buyer by Seller as a result of its
undertakings pursuant to this section.
6.3.4 Non-competition. Seller and Buyer acknowledge that as an
inducement to Buyer to enter into this Agreement and in
partial consideration of the Purchase Price, Buyer has
required that Seller agree that for a period of three (3)
years after the Closing Date, Seller will not engage directly
or indirectly anywhere in the Restricted Market (as defined
below) in a business which involves products similar to the
Jupiter and Galileo product lines, or solicit customers who
have purchased from Seller the Jupiter and Galileo products.
However, Seller may sell and service any of its existing
inventory not sold to Buyer. "Restricted Market" shall mean
all international markets and all areas of the United States.
Seller agrees that if this Section 6.3.4 is violated, Buyer
shall be entitled to seek injunctive relief in addition to any
other legal remedies available to it. Seller and Buyer hereby
waive any provision of applicable law that would render any
provision of this Section 6.3.4 invalid or unenforceable.
6.3.5 Subrogation of Rights. From and after the Closing Date, if
Buyer becomes liable for or suffers any damage with respect to
any matter associated with the Jupiter and Galileo product
lines that was covered by insurance maintained by Seller or in
which Seller is a named insured at or before the Closing Date,
Buyer shall be and is hereby subrogated to any rights of
Seller under the insurance coverage. Seller shall promptly
remit to Buyer any insurance proceeds received by them on
account of any such liability or damage less Seller's cost
(including any claim amounts), expenses,
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and fees relating thereto. In the event of Seller's liability,
such insurance proceeds shall be used by Seller to satisfy
that liability.
6.3.6 Customer and Business Relationships. From and after the
Closing Date, Seller will cooperate with Buyer in its efforts
to continue and maintain, with customers, suppliers, or other
business associates of Seller, the same business relationship
with Buyer after the Closing Date as maintained with Seller
prior to the Closing Date, with respect to the business to be
carried on by Buyer with the Assets. Seller will not take any
action designed or intended to have the effect of discouraging
any person from continuing or maintaining a business
relationship with Buyer after the Closing Date.
6.3.7 Further Assurances. Seller and Buyer agree to execute and
deliver from time to time such further instruments and do such
other acts as may be reasonably necessary to effectuate the
purposes of this Agreement.
6.3.8 Products Liability Insurance. For a period of one (1) year
following Closing, Buyer shall maintain products liability
insurance in adequate and appropriate amounts to cover the
Inventories. For such period, if Seller becomes liable for or
suffers any damage with respect to any matter that is covered
by such insurance, Seller shall be and is hereby subrogated to
any rights of Buyer under the insurance coverage. Buyer shall
promptly remit to Seller any insurance proceeds received by
them on account of any such liability or damage less Buyer's
cost (including any claim amounts), expenses, and fees
relating thereto. In the event of Buyer's liability, such
insurance proceeds shall be used by Buyer to satisfy that
liability.
6.3.9 Letter of Credit. Within ten (10) business days after Closing,
Seller shall obtain a standby letter of credit with terms
mutually agreeable to Buyer and Seller in favor of Buyer to
cover Seller's Retained Obligations, as defined in Section 8.3
of the Agreement, with the following terms:
$184,000 available up to thirty (30) days after Closing;
$100,000 available from thirty (30) days to sixty (60) days
after Closing;
$75,000 available from sixty (60) days to ninety (90) days
after Closing;
$0 available after ninety (90) days after Closing.
The letter of credit shall be payable up to the amount of the
claim by the issuer bank upon presentation by Buyer of a
written notice of claim. Seller may request arbitration in
accordance with Section 9.10 of the Agreement if it disputes
Buyer's claim.
ARTICLE 7. INVENTORIES, REVENUES, EXPENSES AND TAXES
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7.1 Accounting for Inventories. The Buyer will take a physical count of the
Inventories within sixty (60) days of the Closing Date and will
determine the fair value of the Inventories. Seller shall assist Buyer
in counting the Inventories.
7.2 Expenses. Seller will be responsible for the payment of all operating
expenses and capital expenditures related to the Assets the Seller
transfer under this Agreement and attributable to the period prior to
the Closing Date. Buyer will be responsible for the payment of all
operating expenses and capital expenditures related to the Assets
attributable to the period on and after the Closing Date. Any party
that pays any expenses that are the responsibility of another party
will be reimbursed for those expenses.
7.3 Taxes and Incidental Expenses
7.3.1 Ad Valorem and Personal Property Taxes. Ad valorem and
personal property and similar obligations on the Assets the
Seller transfers under this Agreement are the obligation of
Seller for periods before the Closing Date and are the
obligation of the Buyer for periods after the Closing Date.
All such taxes will be prorated as of the Closing Date.
7.3.2 Income Taxes. Each party shall be responsible for its own
state income and federal income taxes, if any, as may result
from this transaction.
7.3.3 Sales and Use Taxes. Buyer will be responsible for all sales,
use and similar taxes applicable to the transfer of the
Assets. If Seller is required to pay such sales, use or
similar taxes on behalf of Buyer, Buyer will reimburse Seller
for such taxes paid by Seller.
7.3.4 Incidental Expenses. Each party shall bear its own respective
expenses incurred in connection with the negotiation and
Closing of this transaction, including it own consultants'
fees, attorneys' fees, accountants' fees, and other similar
costs and expenses.
ARTICLE 8. RETAINED AND ASSUMED RIGHTS AND OBLIGATIONS
8.1 Buyer's Rights After Closing. Upon and after Closing, Buyer will
receive and assume all of Seller's right, title and interest to the
Assets, as of the Closing Date.
8.2 Buyer's Obligations After Closing. Upon and after Closing, Buyer will
unconditionally and irrevocably assume, pay, perform and discharge all
of the liabilities, obligations and duties with respect to the
ownership of the Assets on or after the Closing Date, except as
otherwise provided in this Agreement (the "Buyer's Assumed
Obligations"). The Buyer's Assumed Obligations include without
limitation:
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8.2.1 All performance obligations under the Contracts the Buyer
receives that are attributable to and accrue in the period on
and after the Closing Date;
8.2.2 All Claims (as defined in Section 8.4.1) arising from Buyer's
ownership or operating of the Assets on and after the Closing
Date; and
8.2.3 All Claims (as defined in Section 8.4.1) arising from any
inaccuracy in any representations or warranties of Buyer under
this Agreement.
8.2.4 All warranty obligations, expressed or implied, of Buyer with
respect to the Jupiter and Galileo products sold or services
rendered by Buyer after the Closing Date.
8.2.5 All Claims arising out of any suits, claims or proceedings
brought or asserted by a third party and which are alleged to
have arisen or are attributable to the period on or after the
Closing Date.
8.3 Seller's Obligations After Closing. After Closing, Seller will retain
responsibility for all liabilities, obligations and duties with respect
to the ownership of the Assets before the Closing Date, except as
otherwise specifically provided in this Agreement (the Seller's
Retained Obligations"). The Seller's Retained Obligations include
without limitation:
8.3.1 All performance obligations under the Contracts that are
attributable to and accrue in the period before the Closing
Date;
8.3.2 All Claims (as defined in Section 8.4.1) arising from Seller's
ownership or operation of the Assets before the Closing Date.
8.3.3 All Claims (as defined in Section 8.4.1) arising from any
inaccuracy in any representations or warranties of Seller
under this Agreement.
8.3.4 All warranty obligations, expressed or implied, of Seller with
respect to the Jupiter and Galileo products sold or services
rendered by Seller on or prior to the Closing Date and as set
forth in Schedule 8.3.4 hereto ("Warranty Obligations").
Seller and Buyer agree that Buyer will perform the services
necessary to fulfill the Warranty Obligation that continue
after the Closing Date, and that Seller shall pay all direct
material and labor costs, plus a ten percent (10%) xxxx-up,
borne by Buyer to fulfill such Warranty Obligations that
continue after the Closing date.
8.3.5 All Claims arising out of any suits , claims or proceedings
brought or asserted by a third party and which are alleged to
have arisen or are attributable to the period prior to the
Closing Date.
8.4 Indemnities.
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8.4.1 Definition of Claims. As used in this Agreement, the term
"Claims" means any and all losses, liabilities, damages,
obligations, expenses, fines, penalties, costs, claims, causes
of action and judgments for: (i) breaches of contract; (ii)
loss or damage to property, injury to or death of persons, and
other tortious injury; (iii) liability assessments due to
strict liability of which notice has been given by the
relevant third party, and (iv) violations of which notice has
been given by the relevant third party of published, binding
and applicable laws, rules, regulations, orders or any other
legal right or duty actionable at law or equity. The term
"Claims" also includes reasonable attorneys; fees, court
costs, and other reasonable costs of litigation resulting from
the defense of any claim or cause of action within the scope
of the indemnities in this Agreement.
8.4.2 Application of Indemnities. All indemnities set forth in this
Agreement extend to the officers, directors, employees and
affiliates of the party indemnified. The indemnities set forth
in this Agreement do not extend to any part of an indemnified
Claim to the extent caused by the negligence, willful
misconduct or fraud of the indemnified party or the result of
the imposition of punitive damages on the indemnified party.
8.4.3 Seller's Indemnity. To the extent that Buyer is not otherwise
indemnified pursuant to indemnification provisions of
Contracts that have been conveyed, transferred and assigned to
Buyer in connection with this Agreement, Seller shall
indemnify, defend and hold Buyer harmless from and against any
and all Claims caused by, resulting from or incidental to
Seller's Retained Obligations described in Section 8.3 of this
Agreement, to the extent such Claims related to the Assets.
8.4.4 Buyer's Indemnity. Buyer shall indemnify, defend and hold
Seller harmless from and against any and all Claims caused by,
resulting from or incidental to Buyer's Assumed Obligations
set forth in Section 8.2 of this Agreement, to the extent such
Claims relate to the Assets.
8.4.5 Notices and Defense of Claims. Each party shall immediately
notify the other affected party of any Claim of which it
becomes aware and for which it is entitled to indemnification
from the other party under this Agreement. The indemnifying
party shall be obligated to defend at the indemnifying party's
sole expense any litigation or other administrative or
adversarial proceeding against the indemnified party relating
to any Claim for which the indemnifying party has agreed to
indemnify and hold the indemnified party harmless under this
Agreement. However, the indemnified party shall have the right
to participate with the indemnifying party in the defense of
any such Claim at its own expense.
8.4.6 Limitations.
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(i) Each warranty, covenant and agreement of indemnity
contained in this Agreement shall survive the Closing
and the delivery of instruments of conveyance by the
parties hereto, and shall not be deemed to have been
superseded by the terms and conditions of the
instruments delivered at the Closing. All warranties,
representations and agreements of indemnity shall
survive for a period of one (1) year from the Closing
Date, except Buyer's obligation xxxxxx Section 8.2.4
and Seller's obligations under Section 8.3.4 which
shall survive without any limitation.
(ii) In calculating the amount of any Claim for which any
indemnifying person is liable under this Section 8.4,
there shall be taken into consideration the value of
any federal or state income tax effects on, or
insurance amounts recovered by, the indemnified
person that result from the circumstances to which
the Claim related or from which the Claim arose.
8.4.7 Limitation of Seller's Liability.
(i) Notwithstanding anything to the contrary contained in
this Agreement, after the Closing, the aggregate
liability of the Seller for any Claim, individually
or in the aggregate with all other Claims covered by
this Agreement, for which indemnification is required
by Seller pursuant to Section 8.4.3, shall be limited
to the full amount of the adjusted Cash
Consideration. Buyer agrees to hold Seller harmless
for any Claims greater than such amount.
(ii) The Buyer is entitled to indemnification pursuant to
this Agreement only to the extent that the amount of
any Claim, individually or in the aggregate with all
other Claims covered by this Agreement, exceeds Ten
Thousand Dollars ($10,000) and is not a Buyer's
Assumed Obligation.
8.4.8 Limitation of Buyer's Liability.
(i) Notwithstanding anything to the contrary contained in
this Agreement, after the Closing, the aggregate
liability of the Buyer for any Claim, individually or
in the aggregate with all other Claims covered by
this Agreement, for which indemnification is required
by a Buyer pursuant to Section 8.4.4, shall be
limited to the full amount of the adjusted Cash
Consideration. Seller agrees to hold Buyer harmless
for any Claims greater than such amount.
(ii) The Seller is entitled to indemnification pursuant to
this Agreement only to the extent that the amount of
any Claim, individually or in
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the aggregate with all other Claims covered by this
Agreement, exceeds Ten Thousand Dollars ($10,000) and
is not a Seller's Retained Obligation.
8.4.9 Limitation on Claims. Neither party to this Agreement shall
make a claim against the other party to this Agreement except
pursuant to and subject to the limitations contained in, this
Section 8.4.
8.4.10 Inconsistent Provisions. The provisions of this Section 8.4
shall govern and control over any inconsistent provisions of
this Agreement.
ARTICLE 9. MISCELLANEOUS PROVISIONS
9.1 Notices. All notices under this Agreement must be in writing. Any
notice under this Agreement may be given by personal delivery,
facsimile transmission, U.S. mail (postage prepaid), or commercial
delivery service, and will be deemed duly given when received by the
party charged with such notice and addressed as follows:
Buyer Seller
----- ------
Innovative Transducers Inc. Bison Instruments, Inc.
00000 Xxxx Xxx 0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000-0000 Xxxxxxxxxxx, Xxxxxxxxx
00000-0000
Attn.: Xxx Xxxx Attn.: Xxxxx Xxxxxx
Fax: 000-000-0000 Fax: 000-000-0000
with required copy (which shall not constitute notice) to:
Tech-Sym Corporation
00000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn.: General Counsel
Fax: 000-000-0000
Either party, by written notice to the other, may change the address or
the individual to which or to whom notices are to be sent under this
Agreement.
9.2 Public Announcements. Neither party may make press releases or other
public announcements concerning this transaction, without the other
party's prior written approval and agreement to the form of the
announcement except: (a) as may be required by applicable laws or rules
and regulation of any governmental agency or stock exchange; and (b)
Seller may disclose the transaction to its shareholders in writing and
by announcement.
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9.3 Survival or Representations and Warranties. All of the representations,
warranties, indemnities and other agreements of or by the parties to
this Agreement shall survive the execution and delivery of the closing
documents and the transfer of assets between the parties.
9.4 Exhibits. The Exhibits attached to this Agreement are incorporated into
and make a part of this Agreement. In the event of a conflict between
the provisions of the Exhibits or the executed Closing documents and
the foregoing provisions of this Agreement, the provisions of this
Agreement shall take precedence. The omission of certain provisions of
this Agreement from the Closing documents does not constitute a
conflict between this Agreement and the Closing documents and will not
effect of merger of the omitted provisions.
9.5 Integration and Amendment. This Agreement represents the entire
agreement between the parties, superseding all prior negotiations, and
may not be amended or modified except by written agreement between duly
authorized representatives of the parties.
9.6 Successors and Assigns. This Agreement binds and inures to the benefit
of the parties hereto and their respective permitted successors and
assigns, and nothing contained in this Agreement, express or implied,
is intended to confer upon any other person or entity any benefits,
rights, or remedies.
9.7 Severability. If any provision of this Agreement is found by a court of
competent jurisdiction to be invalid or unenforceable, that provision
will be deemed modified to the extent necessary to make it valid and
enforceable and if it cannot be so modified, it shall be deemed deleted
and the remainder of the Agreement shall continue and remain in full
force and effect.
9.8 Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original and all of which shall constitute
one document.
9.9 Governing Law. This Agreement shall be governed by the laws of the
State of Texas.
9.10 Arbitration.
(i) All disputes, differences or questions arising out of or
relating to this Agreement (including, without limitation,
those as to the validity, interpretation, breach, violation or
termination hereof) shall, at the written request of any party
hereto, be finally determined and settled pursuant to
arbitration in Wilmington, Delaware by three arbitrators, one
to by appointed by Buyer, and one by Seller, and a neutral
arbitrator to be appointed by such two appointed arbitrators.
The neutral arbitrator shall be an attorney and shall act as
chairman. Should (a) either party fail to appoint an
arbitrator as hereinabove contemplated within ten (10) days
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after the party not requesting arbitration has received such
written request, or (b) the two arbitrators appointed by or on
behalf of the parties as contemplated by this Section 9.10
fail to appoint a neutral arbitrator as hereinabove
contemplated within ten (10) days after the date of the
appointment of the last arbitrator appointed, then any person
sitting as a Judge of the United Stated District Court for a
district covering Wilmington, Delaware, upon application of
Seller or of Buyer, shall appoint an arbitrator to fill such
position with the same force and effect as though such
arbitrator had been appointed as hereinabove contemplated.
(ii) The arbitration proceeding shall be conducted in accordance
with the Rules of the American Arbitrator Association. A
determination, award of other action shall be considered the
valid action of the arbitrators if supported by the
affirmative vote of two or three of the three arbitrators. The
costs of arbitration (exclusive of extending the arbitration,
and of the fees and expenses of legal counsel to such party,
all of which shall be borne by such party) shall be shared
equally by Buyer and Seller. This arbitration award shall be
final and conclusive and shall receive recognition, and
judgment upon such award may be entered and enforced in any
court of competent jurisdiction.
IN WITNESS WHEREOF, the authorized representatives of the Parties
executed this Agreement on the date indicated in the opening paragraph
of this Agreement.
INNOVATIVE TRANSDUCERS INC. BISON INSTRUMENTS, INC.
By: /s/ Xxxxxx "Xxx" Bull By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------- --------------------------------
Name: Xxxxxx "Xxx" Bull Name: Xxxxxxxx X. Xxxxxx
Title: President Title: General Manager
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