ASSET PURCHASE AGREEMENT
Exhibit
2.1
This
Asset Purchase Agreement (this “Agreement”) is entered into this 31st day of
March 2010 by and among NEW NYCON, INC., a Delaware corporation, a wholly owned
subsidiary of Pure Earth, Inc. (“Seller”) and PURE EARTH, INC., a Delaware
corporation (“Shareholder”), NYCON CORPORATION, a Pennsylvania
corporation (hereinafter "Buyer") and XXXX XXXXXXXXXXX, the owner
of certain patents and technology relating to the use of recycled
fibers in congealable materials such as concrete, asphalt, soil and plastic
(hereinafter “Licensor’).
WHEREAS,
Seller operates a business primarily engaged in the sales, marketing, packaging
and distribution of reinforcing fibers used in concrete materials (the
“Business”), and
WHEREAS,
Seller owns equipment, inventory, contract rights, trademarks, product names,
assigned patents, customer lists and miscellaneous assets used in connection
with the operations of the Business; and
WHEREAS,
Buyer desires to acquire substantially all of the assets used or useful, or
intended to be used in the operation of Seller’s Business and Seller desires to
sell such assets to Buyer;
WHEREAS,
the Shareholders are the sole Shareholders of Seller, and
WHEREAS,
Licensor is willing to enter a new exclusive license with Buyer to permit Buyer
to make, market, package, distribute and sell Licensor’s fiber products to be
sold by Buyer.
NOW, THEREFORE, in
consideration of mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
SECTION
1. ASSETS PURCHASED;
LIABILITIES ASSUMED
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1.1
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ASSETS
PURCHASED. Seller agrees to sell to Buyer and Buyer
agrees to purchase from Seller, on the terms and subject to the conditions
set forth in this Agreement, the following assets as set forth in Sections
1.1.1, 1.1.2 and 1.1.3 ("Assets"):
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1.1.1
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All
equipment, rolling stock, tools, assigned patents, trademarks, customer
lists, employment, sales representative and non-compete agreements, trade
and product names and miscellaneous inventory listed on Exhibit A,
together with any replacements or additions to the same made prior to the
Closing Date.
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1.1.2
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All
inventories and supplies owned by Seller listed on Exhibit A together with
any replacements or additions to the inventories made prior to the Closing
Date, but excluding inventory disposed of in the ordinary course of
Seller's business prior to the Closing
Date.
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1.1.3
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Seller's
goodwill and Customer List; such customers are identified on Exhibit
H.
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1.2
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ASSUMPTION OF
LIABILITIES. Buyer shall assume certain of Seller’s
liabilities as listed in Exhibit Band Seller shall retain all of its other
liabilities, including Seller’s retained liabilities as listed in Exhibit
C.
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SECTION
2. EXCLUDED
ASSETS
Excluded
from this sale and purchase are Seller's real estate and cash and any and all
excluded assets listed in Exhibit D.
SECTION
3. PURCHASE PRICE FOR ASSETS/
LICENSE
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3.1
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Subject
to adjustment as provided below, the Total Purchase Price for the Assets
plus Premium shall equal the sum of the Net Purchase Price of Two Hundred
Seventeen Thousand Two Hundred Eighty Two and 11/100 Dollars
($217,282.11) plus a Premium of up to Fifty Thousand and 00/100
Dollars ($50,000.00), with both values in accordance with the Settlement
Worksheet attached hereto. The Premium amount of up to Fifty
Thousand and 00/100 Dollars ($50,000.00) shall be subject to a post
closing reduction. The amount of the reduction shall be the
amount of accounts receivable that Buyer purchased from Seller (“Accounts
Receivable”) that were not collected by Buyer within (90) days after the
Closing Date. For purposes of clarity, if the amount of
uncollected Accounts Receivable equals $5,000 then Buyer shall pay to
Seller the reduced Premium amount of $45,000.00. The uncollected Accounts
Receivable shall be reassigned to Seller by Buyer which shall then have
the right to retain and collect on the uncollected accounts
receivable. The Net Purchase Price shall be payable based on
the following arrangement: (i) $217,282.11 shall be paid by wire transfer
from the Buyer to the Seller on the Closing Date and (ii) the Premium
shall be paid by check on ninety (90) days from the Closing Date, subject
to adjustments provided for herein.
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3.2
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In
accordance with the Letter of Intent (“LOI”) dated November 30, 2009, and
no later than fourteen (14) calendar days after the Closing Date, the
Buyer and Licensor shall agree to a New Exclusive License Agreement as
well as related Agreements concerning the ownership and governance of the
Buyer, which Agreements shall be acceptable to both Buyer and Licensor,
not only for Licensor’s rights in Buyer and also to fiber and other novel
fiber products to be sold in Buyer’s business relating to the sales,
marketing, packaging and distribution of reinforcing and fibers in
congealable materials.
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3.3
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Buyer
and Seller shall each be responsible for one-half of all sales and
transfer taxes associated with the contemplated asset purchase
transaction; provided, however, each party agrees to execute or provide
whatever documents are necessary for such
transfer.
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3.4
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Personal
property taxes, if any, imposed upon Assets being transferred shall be pro
rated based on the taxation period and the ownership of the Assets during
the taxation period allocated with Seller paying for the period prior to
Closing and Buyer paying for the period after
Closing.
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SECTION
4. OTHER AGREEMENTS AND
INFORMATION
On the
Closing Date, the parties shall execute the following additional
agreements:
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4.1
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Non-competition
Agreements between Buyer & Seller and Buyer & Selling Shareholders
in the form of Exhibit E.
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4.2
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Commercial
Lease and Operating Agreement between Buyer and Seller in the form of
Exhibit F.
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4.3
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Seller
and Shareholder Assignment Agreements, a License Termination and
Extinguishing Agreement, and a Xxxx of Sale in the forms of Exhibit
G.
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SECTION
5 SELLER'S AND SHAREHOLDERS’
REPRESENTATIONS AND WARRANTIES
Seller
and Shareholders each represent and warrant to Buyer as follows:
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5.1
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CORPORATE
EXISTENCE. Seller is now, and on the Closing Date will
be, a corporation duly organized and validly existing and in good standing
under the laws of the State of Delaware. Seller has all
requisite corporate of power and authority to own, operate and/or lease
the Assets, as the case may be, and to carry on its business as now being
conducted.
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5.2
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AUTHORIZATION. The
execution, delivery and performance of this Agreement have been duly
authorized and approved by the Board of Directors and Shareholders of
Seller, and will not violate the terms of any other agreement of Seller,
and this Agreement constitutes a valid and binding agreement of Seller in
accordance with its terms.
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5.3
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TITLE TO ASSETS AND
CONDITION. Except as described in this Agreement, Seller
holds good and marketable title to the Assets, free and clear of
restrictions on or conditions to transfer or assignment, and free and
clear of liens, pledges, charges or encumbrances, except for liens that
will be terminated on the Closing Date. Seller warrants that
all the Accounts Receivable are bona fide accounts receivable generated in
the ordinary course of the Business . Buyer is purchasing the
Assets "as is" and "where is", Seller is making no representation or
warranty concerning the condition of the Assets, including, without
limitation warranties of merchantability or fitness for a particular
purpose.
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5.4
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BROKERS AND
FINDERS. Neither Seller nor Shareholders have employed
any broker or finder in connection with the transaction contemplated by
this Agreement or taken action that would give rise to valid claims
against any party for a brokerage commission, finder's fee or other like
payment.
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5.5
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TRANSFER NOT SUBJECT TO
ENCUMBRANCES OR THIRD PARTY APPROVAL. The execution and
delivery of this Agreement by Seller and Shareholders, and the
consummation of the contemplated transactions, will not result in the
creation or imposition of any valid lien, charge or encumbrance on any of
the Assets, and will not require the authorization, consent, or approval
of any third party, including any governmental division or regulatory
agency.
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5.6
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LABOR AGREEMENTS AND
DISPUTES. Seller is neither a party to, nor otherwise
subject to, any collective bargaining or other agreement governing the
wages, hours or terms of employment of Seller's
employees. Neither Seller nor Shareholders is aware of any
labor dispute or labor trouble involving employees of
Seller.
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5.7
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NONCANCELLABLE
CONTRACTS. On the Closing Date, there will be no
material leases, employment contracts, contracts for services, or
maintenance, or other similar contacts, existing or related to or
connected with the operation of Seller's business that are not cancelable
within thirty (30) days except for the month-to-month Lease for the
Vineland location of Seller referenced in Article
4.2.
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5.8
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LITIGATION. Seller
and Shareholders have no knowledge of any claim, litigation, proceeding,
or investigation pending or threatened against Seller that might result in
any material adverse change in the business or condition of the assets
being conveyed under this
Agreement.
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5.9
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ACCURACY OF REPRESENTATIONS AND
WARRANTIES. None of the financial information provided
by Seller to Buyer, or representations or warranties of Seller or Selling
Shareholder to Buyer contains or will contain any untrue statements of a
material fact or omit or will omit or misstate a material fact necessary
in order to make statements
in this Agreement not misleading. Seller and Shareholders
represent that information such as the Seller P&L, Income Statement
and Balance Sheet attached hereto as Exhibit I is true and correct in
accordance with generally accepted accounting
practices.
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SECTION
6. REPRESENTATIONS AND
WARRANTIES OF BUYER
Buyer
represents and warrants as follows:
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6.1
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CORPORATE
EXISTENCE. Buyer is an S corporation duly organized,
validly existing, and in good standing under the laws of the Commonwealth
of Pennsylvania. Buyer has all requisite corporate power and
authority to enter into this Agreement and perform its obligations
hereunder.
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6.2
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AUTHORIZATION. The
execution, delivery and performance of this Agreement have been duly
authorized and approved by the Board of Directors and shareholders of
Buyer, and this Agreement constitutes a valid and binding agreement of
Buyer in accordance with its
terms.
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6.3
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BROKERS AND
FINDERS. Buyer has not employed any broker or finder in
connection with the transactions contemplated by this Agreement and has
taken no action that would give rise to a valid claim against any party
for a brokerage commission, finder’s fee or other like
payment.
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6.4
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ACCURACY OF REPRESENTATIONS AND
WARRANTIES. None of the representations or warranties of
Buyer contain or will contain any untrue statement of a material fact or
omit or will omit or misstate a material fact necessary in order to make
the statements contained herein not
misleading.
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SECTION
7. COVENANTS OF SELLER AND
SELLING SHAREHOLDER/DUE DILIGENCE
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7.1
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SELLER'S OPERATION OF BUSINESS
PRIOR TO THE CLOSING DATE. Seller and Shareholders agree
that between the date of this Agreement and the Closing Date, Seller
will:
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7.1.1
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Use
its normal commercial efforts to preserve its business organization and
preserve the continued operation of its business with its customers,
suppliers, and others having business relations with
Seller.
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7.1.2
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Not
assign, sell, lease or otherwise transfer or dispose of any of the Assets,
except to Buyer.
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7.1.3
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Maintain
all of its Assets other than inventories in their present conditions,
reasonable wear and tear and ordinary usage accepted and maintain the
inventories at levels normally
maintained.
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7.2
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ACCESS TO PREMISES AND
INFORMATION. At reasonable times after the execution
date of this Agreement and prior to the closing on March 31, 2010, Seller
will provide Buyer and its representatives with reasonable access during
business hours to Seller’s business premises to inspect the assets to be
purchased under this Agreement, including any titles, contracts and
records of Seller and Seller shall furnish such additional information
concerning Seller's businesses as Buyer may from time to time reasonably
request. From the date of execution by the parties of this
Agreement through March 31, 2010, (a) Seller will give Buyer
and Buyer’s management personnel, legal counsel, accountants, and
technical and financial advisors, full access and opportunity to inspect,
investigate and audit the books, records, contracts, and other documents
of Seller as they relate to Seller’s business and all of Seller’s assets
and liabilities (actual or contingent), including, without limitation,
inspecting Seller’s property and conducting additional environmental
inspections of Seller’s property and reviewing financial records,
contracts, operating plans, and other business records, for the purposes
of evaluating issues related to the operation of Seller’s business; and
(b) Buyer will provide Seller and the Shareholders with such financial
information relating to Buyer to allow them to assess the ability of Buyer
to consummate the transactions contemplated by this Agreement and to
operate the business (all activities described in this Section 7.2 to be
performed by Buyer shall constitute “Due Diligence”). After the Closing
Date, Buyer shall have access to such financial information as necessary
and in accordance with provisions of Article
14.1.
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7.3
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EMPLOYEE
MATTERS.
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7.3.1
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Prior
to the Closing Date, Seller will deliver to Buyer lists of the names of
all persons on the payroll of Seller, together with a statement of amounts
paid to each during Seller's most recent fiscal year and amounts paid for
services from the beginning of the current fiscal year to the Closing
Date. Seller will also provide Buyer with a schedule of all
employee bonus arrangements and a schedule of other material compensation
or personnel benefits or policies in
effect.
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7.3.2
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Prior
to the Closing Date, Seller will not, without Buyer's prior written
consent, enter into any material agreements with its employees, increase
the rate of compensation or bonus
payable to or to become payable to any employee or effect any change in
the management, personnel policies, or employee benefits, except in
accordance with existing employment
practices.
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7.3.3
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As
of or prior to the Closing Date, Seller will terminate all of its
employees and will pay each employee all wages, commissions, and accrued
vacation pay earned up to the time of termination, including overtime pay,
required by applicable law.
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7.4
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CONDITIONS AND BEST
EFFORTS. Seller and Shareholders will use their best
efforts to effectuate the transactions contemplated by this Agreement and
to fulfill all the conditions of the obligations of Seller and
Shareholders under this Agreement, and will do all acts and things as may
be required to carry out their respective obligations under this Agreement
and to consummate and complete this
Agreement.
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SECTION
8. COVENANTS OF
BUYER
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8.1
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CONDITIONS AND BEST
EFFORTS. Buyer will use its best efforts to effectuate
the transaction contemplated by this Agreement and to fulfill all the
conditions of Buyer's obligations under this Agreement, and shall do all
acts and things as may be required to carry out Buyer's obligations and to
consummate this Agreement.
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8.2
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CONFIDENTIAL
INFORMATION. If for any reason the sale of Assets is not
closed pursuant to this Agreement, the Parties will not use or disclose to
third parties any confidential information received from the other in the
course of investigating, negotiating, and performing the transactions
contemplated by this Agreement and in accordance with the Confidentiality
Agreement already executed by the Licensor and Buyer and the Letter of
Intent already executed by the
Parties.
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SECTION
9. CONDITIONS PRECEDENT TO
BUYER'S OBLIGATIONS
The
obligation of Buyer to purchase the Assets is subject to the fulfillment, prior
to or at the Closing Date, of each of the following conditions, any one or
portion of which may be waived in writing by Buyer:
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9.1
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REPRESENTATIONS,
WARRANTIES AND COVENANTS OF SELLER AND
SHAREHOLDERS.
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All
representations and warranties made in this Agreement by Seller and Shareholders
shall be true as of the Closing Date as fully as if those such representations
and warranties had been made on or as of the date of execution of this
Agreement, and, as of the Closing Date, neither Seller nor Shareholders shall
have violated or shall have failed to perform in accordance with any covenant
contained in this Agreement.
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9.2
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LICENSES AND
PERMITS. Buyer shall have obtained all licenses and
permits from public authorities necessary to authorize the ownership and
operation of the business of
Seller.
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9.3
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CONDITIONS OF THE
BUSINESS. There shall have been no material adverse
change in the manner in of operation of Seller's business prior to the
Closing Date.
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9.4
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Buyer
shall have satisfactorily completed its Due Diligence and acquisition
audit showing that the assets of Seller and any actual or contingent
liabilities against those assets, and the prospective business operations
by Buyer of Seller’s business are substantially the same as currently
understood by Buyer as of the date of execution of this Agreement
(determined without regard to any documents which Seller or any party may
have previously delivered to
Buyer).
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9.5
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NO SUITS OR
ACTIONS. At the Closing Date, no suit, action or other
proceeding shall have been threatened or instituted to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the contemplated
transactions. Should any such proceeding occur, the Seller shall indemnify
and hold harmless the Buyer.
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9.6
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OTHER
DELIVERIES. Customary evidence as to good standing,
authorization and authority must be delivered, the content of which shall
be mutually agreed upon.
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9.7.
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SUCCESSFUL
FINANCING. Buyer must secure the approval for any debt
or equity financing necessary to acquire the Assets of
Seller.
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9.8.
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ENVIRONMENTAL. An
environmental inspection by a licensed environmental inspection firm
contracted and paid for by Buyer must show the Assets of Seller to be free
from significant environmental liabilities. Buyer shall be
given access to the property of Seller and documents as necessary for
Buyer and its agents to conduct the inspection and prepare the reports at
the Buyer’s cost. At Seller’s request, it will be supplied with
a copy of such report. Selling Shareholder and Seller shall
represent and warrant as a condition of closing that to the best of their
knowledge there are no material adverse environmental liabilities
associated with Seller, with Seller’s products, assets or the property it
owns.
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SECTION
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
AND SHAREHOLDERS
The
obligations of Seller and Shareholders to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or at
the Closing Date, of the following condition, which may be waived in writing by
Seller:
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10.1
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All
representations and warranties made in this Agreement by Buyer shall be
true as of the execution
date of this Agreement as fully as though such representations and
warranties have been made on and as of the Closing Date, and Buyer shall
not have violated or shall not have failed to perform in accordance with
any covenant contained in this
Agreement.
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10.2
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Customary
evidence as to good standing, authorization and authority must be
delivered.
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10.3
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The
execution by Seller and Seller Shareholder of the Seller and
Shareholder
License Termination and Extinguishing Agreement attached hereto as Exhibit
G.
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SECTION
11. BUYER'S
ACCEPTANCE
Buyer
represents and acknowledges that it has entered into this Agreement on the basis
of its own examination, personal knowledge, and opinion as to the value of the
Seller’s business. Buyer further acknowledges that Seller and Shareholders has
made no agreement or promise to repair or improve any equipment, rolling stock
or other personal property being sold to Buyer under this Agreement, and that
Buyer takes all such property in the condition existing on the date of this
Agreement without express or implied warranties.
SECTION
12. INDEMNIFICATION AND
SURVIVAL
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12.1
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SURVIVAL OF REPRESENTATIONS AND
WARRANTIES. All representations and warranties made in
this Agreement shall survive the closing of this Agreement, except that
any party to whom a representation or warranty has been made in this
Agreement shall be deemed to have waived any misrepresentation or breach
of representation or warranty which such party had knowledge of prior to
the Closing Date. Any party learning of a misrepresentation or
breach of representation or warranty under this Agreement shall
immediately give notice thereof to all other parties to this
Agreement. The representations and warranties in this Agreement
shall terminate eighteen months (18) from the Closing Date, and such
representations or warranties shall thereafter be without force or effect,
except any claim with respect to which notice has been given to the party
to be charged prior to such expiration
date.
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12.2
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SELLER’S
AND SHAREHOLDERS INDEMNIFICATION.
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12.2.1
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Seller
and Shareholder’s each hereby agree to indemnify and hold Buyer, its
successors and assigns harmless from and
against:
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(1)
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Any
and all claims, liabilities and obligations of every kind and description,
contingent or otherwise, arising out of or related to the operation of
Seller's business (including Seller’s agreement to pay liabilities of
Seller retained by Seller when due in the ordinary course), prior to the
close of business on the day before the Closing Date, except for claims,
liabilities and obligations of Seller expressly assumed by Buyer under
this Agreement.
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(2)
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Any
and all damages, deficiencies, or fees, including reasonable attorneys’
fees, resulting from any material misrepresentation or breach of warranty
or covenant, or non-fulfillment of any agreement on the part of Seller or
the Shareholders under this
Agreement.
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12.2.2
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Seller’s and Shareholder’s indemnity obligations
under 12.2.1 shall be subject to
the
following:
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(1)
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If
any claim is asserted against Buyer that would give rise to a claim by
Buyer against Seller and Shareholders for indemnification under the
provisions of this paragraph, the Buyer shall promptly give written notice
to Seller and Shareholder concerning such claim so Seller and Shareholder
shall, at no expense to Buyer, defend such
claim.
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(2)
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The
maximum aggregate liability of Seller and Shareholders under this
Agreement shall not exceed, and Seller and Shareholders shall not be
required to indemnify Buyer for an amount that exceeds the total of Three
Hundred Thousand and 00/100 Dollars ($300,000) (“Liability
Cap”). No direct claim shall be made by Buyer against Seller or
the Shareholders unless and until the aggregate of all such claims against
them aggregates in excess of Ten Thousand and 00/100 Dollars
($10,000.00). The parties acknowledged that Seller has a
General Liability, Professional Liability and Environmental Liability
Policy Number 000126500 from Ironshore Specialty Insurance Company
(“Insurance Policy”). Notwithstanding the first sentence of
this Section 12.2.2, the parties agree that if an indemnity claim by Buyer
is covered by and coverage is accepted under the Insurance Policy, Buyer
may seek indemnity in excess of the Liability Cap, to the extent and only
to the extent of the accepted coverage paid under the Insurance Policy,
with their being no recovery by Buyer for any
deductable.
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12.3
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BUYER’S
INDEMNIFICATION. Buyer agrees to defend, indemnify and
hold harmless Seller and Shareholders from and
against:
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12.3.1
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Any
and all claims, liabilities and obligations of every kind and description
arising out of or related to the operation of the business following the
Closing Date or arising out of Buyer’s agreement to pay liabilities of
Seller assumed by Buyer under Section 1.2 when due in the ordinary course
pursuant to this Agreement.
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12.3.2
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Any
and all damages, deficiencies, or fees, including reasonable attorneys’
fees, resulting from any material misrepresentation or breach of warranty
or covenant, or non-fulfillment of any agreement on the part of Buyer
under this Agreement.
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SECTION
13. CLOSING
DATE
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13.1
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TIME AND
PLACE. The closing for the purchase of the Assets shall
be at the offices of Seller on the 31st day of March, 2010 or such other
date, time and place as the parties may agree in writing (the “Closing
Date”). If the Closing Date has not been extended by the
parties or occurred on or before March 31, 2010, then either party may
elect to terminate this Agreement. If, however, the Closing
Date has not occurred because of a breach of contract by one or more of
the parties, the breaching party or parties shall remain liable for breach
of contract.
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13.2
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OBLIGATIONS OF SELLERS AND
SHAREHOLDERS AT CLOSING DATE. On the Closing Date,
Seller and Shareholders shall deliver to Buyer the
following:
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13.2.1
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Bills
of Sale, Assignments, properly endorsed Certificate of Titles, and other
instruments of transfer, in form and substance reasonably satisfactory to
counsel for Buyer, necessary to transfer and convey all of the Assets to
Buyer.
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13.2.2
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The
Agreements referenced in Section 4.
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13.2.3
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Such
other certificates and documents as may be called for by the provisions of
this Agreement.
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13.2.4
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Any
payments required under Section
13.4.
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13.3
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OBLIGATIONS OF
BUYER AT CLOSING. At the closing Buyer shall deliver to
Seller the following:
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13.3.1
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An
Assumption of Assets and Liability and such other certificates and
documents as may be called for by the provisions of this
Agreement.
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13.2.2
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Any
payments required under Section 3 of this
Agreement.
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SECTION
14. RIGHTS AND OBLIGATIONS
SUBSEQUENT TO CLOSING DATE
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14.1
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BOOKS AND
RECORDS. This sale does not include the books of account
and records of Seller's business. However, possession and
custody of such books and records, including Seller's general ledger and
systems, shall be retained by Buyer for a period of up to twelve (12)
months. During this period, Buyer and Seller or its agents
shall have access to such books and records during normal business hours
upon advance notice and may make copies thereof. Buyer
will exercise reasonable care in the safekeeping of such
records. Seller shall retain its general ledger but shall make
it available for inspection by Buyer from time to time upon reasonable
request.
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14.2
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SELLER'S RIGHT TO
PAY. In the event Buyer fails to make any payment of
taxes, assessments, insurance premiums, or other charges that Buyer is
required to pay to third parties under this Agreement, Seller shall have
the right, but not the obligation, to pay the same. Buyer will
reimburse Seller for any such payment immediately upon Seller's demand,
together with interest at the annual rate of 8% from the date of Seller's
payment until Buyer reimburses Seller. Any such payment by
Seller shall not constitute a waiver by Seller of any remedy available by
reason of Buyer's default for failure to make the
payments.
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14.3
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LICENSE. No later than
fourteen (14) calendar days after the Closing Date, the Buyer and Licensor
shall agree to a New Exclusive License Agreement and related Agreements
concerning the ownership and governance of the Buyer, which Agreements
shall be acceptable to both Buyer and Licensor, for Licensor’s rights in
Buyer and also to fiber and other novel fiber products to be sold in
Buyer’s business relating to the sales, marketing, packaging and
distribution of reinforcing and fibers in congealable
materials.
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14.4
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RELEASE AND CERTAIN
REPRESENTATIONS AND WARRANTIES. Licensor is one of two directors of
the Seller. Licensor has at the request of Seller been involved
with some of the operational details of the Seller. Seller and
Shareholder, their respective affiliates, officers, directors, employees
and agents hereby release Licensor from any and all claims or liabilities,
causes of action and damages, whether known or unknown, contingent or
accrued, including all legal fees, witness fees and costs of suit, arising
from or relating to the Business and operation of the Seller, including,
but not limited to any claims presented by Buyer under Section 12.2 of the
Asset Purchase Agreement, as well as any and all third party claims
arising thereunder from the beginning of time through the date of this
Agreement (“Release”). In consideration of the foregoing
Release and as an exclusion from the Release, Licensor hereby covenants,
represents and warrants to Seller and Shareholder the following
(“Exclusions”): (i) Licensor took no actions or omissions to intentionally
harm the Business and/or operation of Seller; (ii) Licensor has not
suppressed any orders or accounts for the Business and to Licensor’s
knowledge there are no pending orders or accounts with respect to the
Business other than orders of the Buyer; and (iii) to Licensor’s knowledge
the representations and warranties in Section 5.8 and 5.9 of this
Agreement are true and correct as of the Closing Date. The
parties agree that the Release and Exclusions survive the Closing
Date. The Release does not bar or prevent any action by Seller
or Shareholder for damages against the Licensor based on the Exclusions
being false or not true.
|
SECTION
15. BULK
SALES LAW. Buyer waives compliance by Seller with the
Bulk Transfer Act. In the event any creditor
of Seller, other than the creditors whose liabilities Buyer is assuming under
Section 1.2 and Exhibit B of this Agreement ("Assumed Liabilities"), claims the
benefit of the Bulk Transfer Law as against Buyer or any of the Assets being
conveyed to Buyer under this Agreement, Seller and Selling Shareholder shall
immediately pay or otherwise satisfy such claim or undertake its
defense. It is understand that the foregoing does not obligate Seller
to pay the Assumed Liabilities which are to be paid by Buyer. Seller
and Selling Shareholder shall indemnify and hold Buyer harmless from and against
any and all loss, expense, or damage resulting from the failure to comply with
the Bulk Transfer law, except for the payment of the Assumed
Liabilities. If Seller fails to comply with the provision of this
Section 15 and Buyer is required to pay any creditor of Seller, other than
creditors of the Assumed Liabilities, in order to protect the
property purchased under this agreement from claims or liens of Seller's
creditors, including any legal fees, the Buyer may offset the amount it pays
against the balance due Seller by furnishing to the Seller proof of such payment
in the form of a receipt from the creditor involved and a cancelled check
evidencing payment.
SECTION
16. TERMINATION OF
AGREEMENT
|
16.1
|
This
Agreement may be terminated by mutual written consent of Buyer and
Seller.
|
|
16.2
|
BREACH OF REPRESENTATIONS AND
WARRANTIES; FAILURE OF CONDITIONS. Buyer may elect by
notice to Seller, and Seller may elect by notice to Buyer, to terminate
this Agreement if;
|
|
16.2.1
|
The
terminating party shall have discovered a material error, misstatement, or
omission in the representations and warranties made in this Agreement by
the other party.
|
|
16.2.2
|
All
of the conditions precedent of the terminating party's obligations under
this Agreement as set forth in either Section 9 or 10, as the case may be,
have not occurred and have not been waived by the terminating party on or
prior to the Closing Date.
|
|
16.3
|
CLOSING NOTWITHSTANDING THE
RIGHT TO TERMINATE. The party with a right to terminate
this Agreement pursuant to Section 16.2.1 or 16.2.2 shall not be bound to
exercise such right, and its failure to exercise such right shall not
constitute a waiver of any other right it may have under this Agreement,
including but not limited to remedies for breach of a representation,
warranty, or covenant.
|
SECTION
17. CONFIDENTIALITY
By their
signature below, each party agrees to keep in strict confidence all information
regarding the terms of the proposed acquisition of the Assets, except to the
extent Buyer must disclose information to lenders and equity partners to obtain
necessary debt and equity financing. If this Agreement is terminated
as provided in Section 16, each party upon request will promptly return to the
other party all documents, contracts, records, or other information received by
it that disclose or embody confidential information of the other
party. Buyer agrees to keep all material and information obtained by
it or provided to it by Seller as confidential, and not to use same except to
evaluate the transaction contemplated by this Agreement, and to promptly return
the same to Seller upon termination of this Agreement. The provisions
of this paragraph shall survive termination of this Agreement and the agreements
set forth in Section 4.
SECTION
18. PUBLIC DISCLOSURE
No party
will make any public disclosure or issue any press releases pertaining to this
acquisition and sale between the parties without having first obtained the
consent of the other parties, and such consent shall not be unreasonably
withheld, and except for communications with employees, customers, suppliers,
governmental agencies, and other groups as may be legally required or necessary
or appropriate (i.e., any securities filings or
notices). Notwithstanding the foregoing, the Buyer, Seller or
Shareholder is allowed to make, all such press releases and 8-K
filings that are required for it to comply with the Security Exchange Act of
1934, as amended and the l rules and regulations promulgated
thereunder.
SECTION
19. MISCELLANEOUS
|
19.1
|
The
provisions of this Agreement shall be binding upon and inure to the
benefit of the heirs, personal representatives, successors, and assigns of
the parties. Any dispute arising out of or relating to this
Agreement shall be submitted by either party for arbitration to the
American Arbitration Association in Bucks County Pennsylvania and decided
in accordance with its rules and procedures. The decision of
the Arbitration Panel or Arbitrator shall be final and binding on the
parties.
|
|
19.2
|
Any
notice or other communication required or permitted to be given under this
Agreement shall be in writing and shall be mailed by certified mail,
return receipt requested, postage prepaid, addressed to the parties as
follows:
|
SELLER:
New
Nycon, Inc. and Pure Earth, Inc.
Attn:
Xxxx Xxxxxxxxx and Xxxxx Xxxxxxxxxx
Xxx
Xxxxxxxxx Xxxxxxxxx – Xxxxx 000
Xxxxxxx,
XX 00000
And
0000
X. Xxxx Xxxx
Xxxxxxxx,
XX 00000
BUYER:
Nycon
Corporation
Attn:
Xxxxx Xxxxx
000
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx
Xxxxx, XX 00000
And
Rosenn,
Xxxxxxx & Xxxxxxxxx, LLP
00
Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx-Xxxxx,
Xxxxxxxxxxxx 00000
Phone:
xxx-xxx-xxxx
Telecopier
No.: xxx-xxx-xxxx
Email:
xxxxxxxx
Attn: Xxxxxx
X. Xxxx, Esquire
LICENSOR:
Xxxx
Xxxxxxxxxxx
0
Xxxxxxx Xxxx Xxxxx
Xxxxxxx,
XX 00000
And
Xxxxx,
Xxxxxx & Bracegirdle, LLC
0000
Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
Phone:
xxx-xxx-xxxx
Fax:
xxx-xxx-xxxx
Email:
xxxxxxxx
Attn:
Xxxx X. Xxxxxxxxxxx, Esquire
All
notices and other communications shall be deemed to be given at the expiration
of seven (7) days after the date of mailing. The addresses to which
notices or other communications shall be mailed may be changed from time to time
by giving written notice to the other parties as provided above.
|
19.3
|
No
waiver of any provision of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing
by the party making the
waiver.
|
|
19.4
|
This
Agreement shall be governed by and shall be construed in accordance with
the laws of the Commonwealth of
Pennsylvania.
|
|
19.5
|
This
Agreement constitutes the entire agreement between the parties pertaining
to its subject matter and it supersedes all prior contemporaneous
agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by all parties.
Witness the signatures of the parties this the 31st
day of March, 2010.
|
|
SELLER:
|
|
|
NEW
NYCON, INC.
|
|
|
BY:
|
/s/ Xxxxx Xxxxxxxxxx,
Treasurer
|
|
SHAREHOLDER:
|
|
|
/s/ Xxxx Xxxxxxxxx,
President
|
|
|
By:
|
Xxxx
Xxxxxxxxx
|
|
BUYER:
|
|
NYCON CORPORATION, INC.
|
|
/s/ Xxxxx
Xxxxx
|
|
XXXXX
XXXXX
|
|
LICENSOR:
|
|
/s/ Xxxx
Xxxxxxxxxxx
|
|
XXXX
XXXXXXXXXXX
|
Asset Sale of New Nycon,
Inc. to Nycon Corporation
Settlement
Worksheet
March 31,
2010
|
Assets
|
||||
|
AR
(not including amounts over 90 days)
|
$ | 103,449.03 | ||
|
Inventory
(as adjusted by the parties)
|
$ | 238,377.00 | ||
|
Fixed
Assets (all RI & NJ office and plant equipment)
|
$ | 12,372.00 | ||
|
TOTAL ASSETS
|
$ | 363,198.03 | ||
|
Liabilities
|
||||
|
Net
AP (excluding amounts to be retained by Seller)
|
$ | 132,915.92 | ||
|
Accrued
expenses (sales commissions)
|
$ | 13,000.00 | ||
|
TOTAL LIABILITIES
|
$ | 145,915.92 | ||
|
Net Purchase Price (ASSETS –
LIABILITIES)
|
$ | 217,282.11 | ||
|
Premium
(minus post closing adjustments @ 90 days)
|
$
<50,000
|
|||
Post
closing adjustment will be for uncollected AR.
Post
closing assistance includes:
The
Buyer shall have full access to FACTS including one remote terminal for a fee of
$600/month and until Buyer has completed the transition. Ford Ali shall be
available to Buyer at $500 per day for 1 or 2 days per week. The Buyer and
Seller agree to conduct a once-per-week accounting reconciliation
meeting.
|
AP Retained by Seller:
|
||||
|
Global
Directions
|
$ | 19,473 | ||
|
Pitney
Xxxxx
|
$ |
300/mo
lease
|
||
EXHIBIT
A
ASSETS TO BE
ACQUIRED
ACCOUNTS
RECEIVABLE
ALL
EQUIPMENT USED IN THE OPERATION OF THE BUSINESS SUCH AS STRETCH WRAPPER, GREEN
ROOMS, FORKLIFTS, PALLET JACKS, COMPRESSORS, TUBE FILLERS, PALLETS, COMPUTERS,
BOXES, BAGS, SCALES AND HEAT SEALERS
INVENTORY
INCLUDING ALL RAW MATERIAL AND FINISHED GOODS
ASSIGNED
OR OWNED PATENTS, COPYRIGHTS, TRADEMARKS, PRODUCT NAMES
GOLDMINE
SERVER AND DATABASE
COPY
OF FACTS DATABASE
EXHIBIT
B
SELLER’S LIABILITIES TO
BE
ASSUMED BY
BUYER
ACCOUNTS
PAYABLE AND ACCRUED EXPENSES (SALES COMMISSIONS)
RHODE
ISLAND OFFICE LEASE
EXHIBIT
C
SELLER’S LIABILITIES TO
BE
RETAINED BY
SELLER
LOANS
PAYABLE INCLUDING DUE TO/FROM PURE EARTH, INC. AND SUBSIDIARIES
PITNEY
XXXXX LEASE
INFOR
MAINTENANCE AGREEMENT
EXHIBIT
D
ASSETS EXCLUDED FROM SALE
AND PURCHASE
CASH
AND CASH EQUIVALENTS
REAL
ESTATE, IMPROVEMENTS AND FIXTURES AND LEASHOLD IMPROVEMENTS THERETO
LIFE
INSURANCE POLICIES
FORD
PICK UP TRUCK
FACTS
SERVER AND FACTS SOFTWARE
EXHIBIT
E
SELLER AND
SHAREHOLDER
NON-COMPETITION
AGREEMENTS
Omitted
EXHIBIT
F
COMMERCIAL LEASE AND
OPERATING AGREEMENT
Omitted.
EXHIBIT
G
SELLER AND SHAREHOLDER
ASSIGNMENT AGREEMENTS
AND
SELLER AND SHAREHOLDER
LICENSE TERMINATION
AND EXTINGUISHING
AGREEMENT
Omitted
EXHIBIT
H
SELLER CUSTOMER
LIST
Omitted
EXHIBIT
I
SELLER P &
L,
INCOME STATEMENT AND BALANCE
SHEET
Omitted
|
|
Table of Omitted
Schedules
|
|
Schedule or Exhibit
|
Description
|
|
|
Exhibit
E
|
Shareholder
and Seller Noncompetition Agreements
|
|
|
Exhibit
F
|
Commercial
Lease and Operating Agreement
|
|
|
Exhibit
G
|
Seller
and Shareholder Assignment Agreements and Seller and Shareholder License
Termination and Extinguishment Agreement
|
|
|
Exhibit
H
|
Seller
Customer List
|
|
|
Exhibit
I
|
Seller
PL, Income Statement and Balance
Sheet
|
