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Exhibit 2.4
AMENDED AND RESTATED ASSET SALE AGREEMENT
THIS AMENDED AND RESTATED ASSET SALE AGREEMENT (the "Agreement") is
made and entered into this 15th day of July, 1994 by and between ▇▇▇▇▇▇▇▇
Industries, Inc., a Maryland corporation having its principal office at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇▇") and C Associates, a Maryland
General Partnership ("C Associates", ▇▇▇▇▇▇▇▇ and C Associates jointly, as the
context requires, being referred to herein as the "Sellers") and GEO Specialty
Chemicals, Inc., an Ohio Corporation having its principal office at ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇ ("Purchaser").
W I T N E S S E T H
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WHEREAS, Sellers are engaged in the business of, among other things,
the manufacturing and marketing specialty chemicals used primarily in water
treatment applications, and in the owning and leasing of real property used in
such business (all of the businesses in which the Sellers are engaged shall be
referred to collectively as the "Business"); and
WHEREAS, Purchaser desires to purchase, and Sellers desire to sell,
certain assets of Sellers, including the goodwill and all assets necessary for
the operation of the Business, on the terms and conditions set forth in this
Agreement; and
NOW, THEREFORE, in consideration of the premises, and of the promises,
agreements, representations and warranties hereinafter set forth, Sellers, and
Purchaser hereby agree as follows:
ARTICLE 1
PURCHASE OF ASSETS
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Section 1.01. CLOSING DATE. Subject to the terms and conditions hereof,
the consummation of the transactions described herein (the "Closing") will take
place on or before 10:00 a.m., July 15, 1994 at the offices of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other time and date as the parties mutually may determine (the "Closing Date").
Regardless of the actual Closing Date, the transactions contemplated by this
Agreement are deemed by the parties hereto to be effective as of 11:59 p.m. the
day prior to closing, and all calculations, determinations, and adjustments,
including adjustments to the purchase price as contemplated by Section 1.04
hereof, will be made as of that date.
Section 1.02. PURCHASE AND SALE OF ASSETS. Subject to Section 1.03, at
the Closing, Sellers will sell, convey, transfer and deliver to Purchaser, and
Purchaser will purchase and receive from Sellers, all of the assets, rights, and
tangible and intangible property of Sellers owned by Sellers and used in the
Business on the Closing Date (the "Purchased Assets"). Subject to Section 1.03,
the Purchased Assets shall include all property and assets owned by Sellers and
used in the Business, of every kind and description, wherever located,
including,
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without limitation, all Working Capital, as hereinafter defined (but excluding
cash), property, tangible or intangible, real, personal or mixed, accounts
receivable, securities, deposits on contractual obligations or otherwise,
claims and rights under contracts, Sellers' right to use the names "▇▇▇▇▇▇▇▇
Industries", C Associates" and any derivatives or combinations thereof,
Sellers' right to use any trade names now or previously used by Sellers, any
logo or ▇▇▇▇ used by Sellers, and all books and records of Sellers relating to
the Business, all as the same shall exist on the Closing Date, including,
without limitation, the assets and property listed or described in the Schedule
of Purchased Assets attached hereto as Schedule 1.02. Sellers, or any of
shareholders or general partners who have been shareholders or partners for any
part of the five (5) year period prior to the Closing Date, shall, however,
upon reasonable notice to Purchaser, have the right at any time for a period of
five (5) years following the Closing Date to review any or all of the books and
records of the Sellers, and to secure originals or copies thereof if, in the
reasonable opinion of Sellers or any of their shareholders or partners, such
records are required for the purpose of responding to inquiries from state,
federal or local tax or other regulatory authorities, or in order to defend or
prosecute any claim which will or may result in an order directing the Sellers
or their shareholders or partners to make any payment or take or cease taking
any action against the will of the Sellers, their shareholders or their
partners.
Section 1.03. EXCLUDED ASSETS. The Purchased Assets shall not include
those assets of Sellers listed or described on Schedule 1.03 (the "Excluded
Assets").
Section 1.04. PURCHASE PRICE. The purchase price (the "Purchase Price")
for the Purchased Assets, and for the benefits and rights conferred upon
Purchaser hereunder, shall be an amount equal to:
(a) Five Million Three Hundred Fifty Thousand Dollars
($5,350,000.00) (the "Cash Purchase Price") adjusted in accordance with
the provisions of Section 1.05; plus
(b) Assumption by Purchaser of the Assumed Liabilities, as
hereinafter defined; plus
(c) The Performance Payments as defined in Schedule 1.04(c),
the calculation of which shall be made by the independent accountants
for Purchaser (subject to review and approval by Sellers' accountants)
utilizing generally accepted accounting principles, consistently
applied.
Section 1.05. PAYMENT OF PURCHASE PRICE. The Purchase Price described
in Section 1.04 shall be paid as follows:
(a) The Cash Purchase Price shall be paid as follows:
(i) Three Million Six Hundred Thousand Dollars
($3,600,000.00) shall be paid by certified check, or by another other
manner acceptable to Sellers, at closing.
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(ii) One Hundred Fifty Thousand Dollars ($150,000.00) (the
"Hold Back Amount") shall be paid by certified check, or by any other
manner acceptable to Sellers, on or before August 20, 1994.
(iii) One Million Six Hundred Thousand Dollars
($1,600,000.00) shall be paid by the delivery, on the Closing Date of a
Subordinated Promissory Note of the Purchaser (the "Note") in the form
attached hereto as Schedule 1.05 bearing interest at a rate equal to
the prime rate of interest charged by Mercantile Safe-Deposit and Trust
Company (the "Prime Rate") as it may be from time to time during the
term of the Note, plus two percent (2.0%), with the principal sum to be
paid, absent any prepayment by Purchaser, in four equal, annual
installments, the first to be paid one year after the Closing, and with
accumulated interest to be paid on the due date of each annual
installment.
(b) The Performance Payments shall be paid by Purchaser to
Sellers in accordance with Schedule 1.04(c).
(c) The Cash Purchase Price shall be subject to the
following adjustments:
(i) NET WORKING CAPITAL ADJUSTMENT. The Cash Purchase Price
shall be adjusted upward to account for any increase or downward to
account for any decrease in Sellers' Net Working Capital as of the
Closing Date as compared to Sellers' Net Working Capital as reflected
on Sellers' unaudited February 28, 1994 financial statements. Sellers'
Net Working Capital as of the Closing Date shall be calculated and
agreed to by Purchaser and Sellers no later than August 15, 1994. To
the extent Sellers' New Working Capital increased, Purchaser shall pay
such amount to Sellers by certified check or by such other manner
acceptable to Sellers on or before August 20, 1994 together with
interest thereon at the Prime Rate provided in Section 1.05(a)(iii)
hereof. To the extent Sellers' Net Working Capital decreased, Purchaser
shall reduce the Hold Back Amount by the amount of that decrease and
pay the net amount of the Hold Back Amount to Sellers on or before
August 20, 1994. In the event that the decrease in the Sellers' Net
Working Capital exceeds the amount of the Hold Back Amount, the entire
Hold Back Amount shall be retained by Purchaser and the principal
amount of the Note shall be reduced (retroactive to the Closing) by the
amount by which said decrease exceeds the Hold Back Amount. Sellers'
Net Working Capital as of February 28, 1994 and as of May 31, 1994 is
set forth in Schedule 1.05(c)(i). Sellers' Net Working Capital as of
the Closing shall be calculated accordingly.
(ii) LOSS OF KEY CUSTOMER ADJUSTMENT. The Cash
Purchase Price shall be adjusted downward in the event that Purchaser,
at its option, declares a Key Customer Loss as that term is defined in
Schedule 1.05(c)(ii). The amount of the Key Customer Loss shall be
calculated in accordance with Schedule 1.05(c)(ii) and the principal
amount of the Note shall be reduced (retroactive to the Closing) by the
amount of said Key Customer Loss.
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(iii) UNCOLLECTED RECEIVABLE ADJUSTMENT. In the event
that any account receivable included within the Purchased Assets
remains uncollected for ninety (90) days following the Closing (an
"Uncollectible Receivable"), Purchaser, at its option, may declare the
Uncollectible Receivable to be an Excluded Asset in which case, (1)
Purchaser shall assign the Uncollectible Receivable to Sellers without
recourse, (2) the Sellers' Net Working Capital as of the Closing shall
be reduced by the face amount of the Uncollectible Receivable, and (3)
the principal amount of the Note shall be reduced (retroactive to the
Closing) by the face amount of the Uncollectible Receivable.
Section 1.06. LIABILITIES ASSUMED. Subject to the conditions herein set
forth, on the Closing Date, Purchaser shall deliver to Sellers an Assignment and
Assumption Agreement in the form attached hereto as Schedule 1.06, pursuant to
which Purchaser shall assume certain debts, obligations, contracts, leases and
liabilities of Sellers, as expressly set forth in said Assignment and Assumption
Agreement (the "Assumed Liabilities"). Purchaser shall assume no debts,
obligations, contracts, leases or liabilities of the Sellers other than the
Assumed Liabilities and such other incidental liabilities (e.g. repair parts,
office supplies, maintenance costs and current, unbilled utility charges) of
Sellers that have been incurred in the ordinary course of Sellers' business
prior to the Closing Date (the debts, obligations, contracts, leases and
liabilities not expressly assumed by Purchaser shall be referred to herein as
the "Excluded Liabilities").
Section 1.07. ALLOCATION OF PURCHASE PRICE. After due negotiation, the
parties agree that the consideration described in Section 1.04 shall be
allocated among the Purchased Assets in the manner set forth in Schedule 1.07
hereof. To the extent not otherwise required by Generally Accepted Accounting
Principles, the Note, and any adjustments thereto, shall be deemed a portion of
the consideration paid for goodwill.
Section 1.08. CHANGE AND USE OF NAME. Concurrently with the Closing,
Sellers shall take all actions required (including filing appropriate charter
amendments with the Maryland State Department of Assessments and Taxation) to
enable Purchaser to use the names "▇▇▇▇▇▇▇▇ Industries, Inc." and "C Associates"
and any derivative or combination thereof that it may elect, and Seller shall
make no further use of any of such names.
Section 1.09. PHYSICAL INVENTORY. Immediately prior to Closing, the
parties shall take a physical inventory count of all inventory included in the
Purchased Assets. The raw material inventory shall be valued at the lower of
cost or market. The finished goods inventory shall be valued using the unit
values described on Schedule 1.09 hereto. Any work-in-progress shall be valued
as if 50% of the work-in-progress is raw material and 50% is finished goods.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLERS
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As a material inducement to Purchaser to enter into and perform its
obligations under this Agreement, Sellers, jointly and severally, hereby
represent and warrant to Purchaser as follows:
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Section 2.01. ORGANIZATION AND QUALIFICATION, ETC. ▇▇▇▇▇▇▇▇ is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Maryland and C Associates is a general partnership duly
organized and validly existing pursuant to the laws of the State of Maryland.
Sellers each have the power and authority to own, lease or operate all of their
properties and assets and to carry on their businesses as and where it is now
being conducted, and Sellers are qualified to do business in each jurisdiction
wherein the nature and extent of their activities require such qualification.
Section 2.02. OWNERSHIP; SUBSIDIARIES. (a) The authorized, issued and
outstanding capital stock of ▇▇▇▇▇▇▇▇ is as set forth on Schedule 2.02. Except
as disclosed on Schedule 2.02, all of the issued and outstanding shares of
▇▇▇▇▇▇▇▇ are owned of record by its stockholders, free and clear of all liens,
security interests, options, claims and encumbrances or other restrictions or
rights in others of any kind, and no shares are held in the treasury of
▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ has no outstanding stock or securities convertible or
exchangeable for any shares of its capital stock, nor does it have outstanding
any rights or options to subscribe for or to purchase any capital stock, or any
capital stock or securities convertible into or exchangeable for any capital
stock. Except as disclosed on Schedule 2.02, ▇▇▇▇▇▇▇▇ is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock. Schedule 2.02 further sets out the
percentage interest of each of the general partners of C Associates. As to each
partner their interest in the partnership is free and clear of all liens,
security interests, charging orders, claims or encumbrances of any kind, and no
interest or portion thereof is subject to any obligation to sell or be assigned
to any person.
(b) ▇▇▇▇▇▇▇▇ has no subsidiaries and neither ▇▇▇▇▇▇▇▇ nor C
Associates has any commitment to purchase or acquire any interest in any other
corporation, partnership, firm or other business enterprise.
Section 2.03. AUTHORITY RELATIVE TO AGREEMENT. ▇▇▇▇▇▇▇▇ has the
corporate power and authority and C Associates, by its general partner, has the
authority, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Sellers and the consummation of the transactions contemplated on their
part have been authorized by, as to ▇▇▇▇▇▇▇▇, its Board of Directors and
stockholders, and as to C Associates by all of its general partners. No other
proceedings on the part of ▇▇▇▇▇▇▇▇ or C Associates are necessary to authorize
the execution and delivery of this Agreement by either of them or the
consummation by either of them of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Sellers and is a valid and
binding agreement of Sellers, enforceable in accordance with its terms.
Section 2.04. NO BREACH; CONSENTS. The negotiation, execution, delivery
and performance of this Agreement by Sellers and the consummation of the
transactions contemplated hereby, (a) do not and will not conflict with or
result in any breach of any of the provisions of, constitute a default under,
result in a violation of, result in the creation of any lien, security interest,
charge, encumbrance or other restriction upon the Purchased Assets under, or
require any authorization, consent, approval, exemption or other action by or
notice to any third
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party, under the provisions of the Charter or By-Laws of ▇▇▇▇▇▇▇▇ or the
partnership agreement of C Associates or any license, permit, contract,
franchise, indenture, mortgage, lease, loan agreement or other agreement (oral
or written) or instrument to which either is a party or under which the
properties of the Sellers, or either of them is bound, and (b) does not require
any authorization, consent, approval, exemption or other action by or notice to
any court or governmental body under any law, statute, rule, regulation or
decree to which Sellers are subject.
Section 2.05. FINANCIAL STATEMENTS. (a) Each of the Sellers has
previously delivered to Purchaser copies of (i) the balance sheets of Sellers as
of December 31, 1990, 1991, 1992, and 1993 and the related statements of income,
retained earnings and changes in financial position for the respective
twelve-month periods then ended, and (ii) as to ▇▇▇▇▇▇▇▇ a copy of the unaudited
balance sheet of ▇▇▇▇▇▇▇▇ Industries, Inc. as of February 28, 1994 and the
related statements of income, retained earnings, and changes in position for the
two (2) month period then ended, (collectively, the "Financial Statements"). All
of such Financial Statements are attached hereto as Schedule 2.05. Such
Financial Statements (including in all cases the notes thereto) fairly present
the financial condition and results of operations of Sellers in conformity with
G.A.A.P. applied on a consistent basis throughout the periods presented.
(b) The Sellers have previously delivered to the Purchaser a
reconciliation in the form attached hereto as Schedule 2.05(b) which, to the
best of Sellers' knowledge, information and belief, is based on reasonable
assumptions and, based upon such assumptions, accurately reconciles Sellers'
EBITDA as set forth in the descriptive memorandum to the EBITDA set forth in
Sellers' audited financial statement for the period ended on December 31, 1993.
Section 2.06. ACCOUNTS RECEIVABLE AND PROMISSORY NOTES. Sellers'
accounts receivable, as shown on the Financial Statements and on their books and
records as of the date of this Agreement and as of the Closing Date, arose out
of transactions in the ordinary course of business and represent valid rights to
receive payments for bona fide services rendered or goods sold, and are not
subject to discounts, rebates or off-sets of any kind. The accounts receivable
and promissory notes (the "Accounts Receivable") shown on Sellers' Financial
Statements and books and records are, to the best of Sellers' knowledge,
information and belief, fully collectible and not subject to claims or offsets
of any kind except with respect to those matters identified on Schedule 2.06 as
currently subject to litigation claims.
Section 2.07. ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth
on Schedule 2.07, Sellers have, as of the respective dates thereof, no
obligation or liability (whether accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due and whether or not insured), except
liabilities reflected on Sellers' balance sheets as of the respective dates
thereof. Without limiting the generality of the foregoing, except as set forth
on Schedule 2.07, Seller has no liability under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, or under any other federal or
state environmental legislation, rule or regulation.
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Section 2.08. NO MATERIAL ADVERSE CHANGE. Except as set forth in
Schedule 2.08, since December 31, 1993, there has been no material adverse
change in the financial condition, properties, operating results, employee
relations, customer relations, vendor relations, or business prospects of
Sellers.
Section 2.09. INVENTORIES. The inventories of ▇▇▇▇▇▇▇▇ reflected on the
Financial Statements, and the inventories thereafter produced or acquired, (a)
consist of items of a quality and quantity usable or salable as first quality
goods in the ordinary course of its business, at prevailing market prices not
less than the book values thereof, (b) none of such items is damaged or
generally unsalable in the ordinary course of business, or below standard
quality, and (c) the values at which such inventories are carried reflect an
inventory valuation policy stating inventory based on actual physical count. The
Purchased Assets will include a sufficient (but not excessive) quantity and mix
of inventory necessary to meet the normal requirements of the operations of
▇▇▇▇▇▇▇▇ as of the Closing. The value ascribed to the inventory stored in
Building D on Courtney's unaudited balance sheet as of February 28, 1994 was not
greater than $5,000.00.
Section 2.10. ABSENCE OF CERTAIN DEVELOPMENTS. Except as disclosed on
Schedule 2.10, since December 31, 1993:
(a) ▇▇▇▇▇▇▇▇ has not redeemed or repurchased, or committed to
redeem or repurchase directly or indirectly, any shares of its capital
stock or declared or paid any dividends or distribution with respect to
any shares of its capital stock;
(b) ▇▇▇▇▇▇▇▇ has not issued, or committed to issue, any
equity securities, securities convertible into equity securities, or
warrants, options or other rights to acquire equity securities, or
bonds or other securities;
(c) neither of the Sellers has borrowed, or committed to
borrow, any amount or incurred or become subject to any material
liabilities, except current liabilities incurred in the ordinary course
of business and liabilities under contracts entered into in the
ordinary course of business;
(d) neither of the Sellers has discharged or satisfied any
material lien or encumbrance or paid any material obligation or
liability other than current liabilities paid in the ordinary course of
business;
(e) neither of the Sellers has mortgaged, pledged or
subjected to any lien, charge or any other encumbrance, any of its
properties or assets, except liens for current property taxes not yet
due and payable;
(f) neither of the Sellers has sold, assigned, transferred or
otherwise disposed of or committed to sell, assign, transfer or
otherwise dispose of any of its tangible or
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intangible assets (including books and records), except in the
ordinary course of business, or canceled any material debts or
claims;
(g) neither of the Sellers has waived any rights of material
value, whether or not in the ordinary course of business or consistent
with past practice;
(h) neither of the Sellers has made capital expenditures
except as planned or committed to prior to the date of the execution
hereof, and in any event only in reasonable amounts required for the
efficient operations of its business in the future;
(i) neither of the Sellers has paid or committed to pay any
bonuses or similar payments, except in the ordinary course of business;
(j) neither of the Sellers has made, or committed to make,
any loans or advances to, guarantees for the benefit of, or any
investments in, any person or entity;
(k) neither of the Sellers has made or committed to any
charitable or political contributions or pledges in excess of an
aggregate of One Thousand Dollars ($1,000.00);
(l) neither of the Sellers has suffered any material damage,
destruction or casualty loss, whether or not covered by insurance; or,
(m) neither of the Sellers has made any amendment to any
collective bargaining agreement or pension benefit plan to which it is
a party.
Section 2.11. TITLE TO PURCHASED ASSETS. (a) Except as disclosed in
Schedule 2.11.(a) or as disclosed or which would with the exercise of reasonable
diligence have been disclosed by a title examination of the premises being
purchased from C Associates, Sellers own good and marketable title to the
Purchased Assets, free and clear of all liens security interests, easements,
rights of way or other encumbrances (collectively, "Liens") and upon
consummation of the transactions contemplated by this Agreement, Purchaser will
acquire title to the Purchased Assets free and clear of any liens created by or
permitted by Sellers except those disclosed or which would with the exercise of
reasonable diligence have been disclosed by a title examination of the C
Associates premises and further excepting liens for real estate taxes not yet
due and payable and except for such imperfections of title and encumbrances, if
any, which, in the reasonable opinion of Purchaser, are not substantial in
character, amount or extent and do not detract from the value, or interfere with
the present use, of the property subject thereto, or otherwise impair its
business operations.
(b) Except as disclosed in Schedule 2.11(b), (i) Sellers are
not in violation of any applicable zoning ordinance or other law, regulation or
requirement relating to the operation of owned or leased properties, including
those promulgated by the Environmental Protection Agency and the Occupational
Safety and Health Administration, conformance to which would require a material
expenditure or would materially interfere with its operations, and (ii) except
as
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noted on Schedule 2.11(b) Sellers have not received any notice of any such
violations within the three years prior to the date hereof. Sellers have not
received written notice of a pending or threatened expropriation, condemnation,
or similar proceeding affecting all or any portion of the Purchased Assets and
Sellers have not received any written notice of any pending or proposed land use
or zoning changes or restrictions applicable to or affecting the Business of the
Sellers, or either of them or all or any portion of the Purchased Assets.
(c) Sellers lease, license or own all of the properties and assets
used in the Business.
(d) The Purchased Assets constitute all of the assets, tangible and
intangible, that are used or held for use by Sellers in connection with the
Business and include all assets the use of which is reasonably necessary for the
continued conduct of the Business in substantially the same manner as presently
conducted by Sellers.
(e) Sellers own and have a valid, binding and enforceable right to
use all of the intellectual property included in the Purchased Assets and have
received no written notice from any third party alleging the Sellers' use of
said intellectual property is infringing on the property rights of such third
party. Sellers have made no claim of any violation or infringement by others of
their infringement by others of their rights to said intellectual property and
Sellers know of no basis for the making of any such claim.
Section 2.12. TAX MATTERS. Except as disclosed on Section 2.12, all tax
returns and related information required to be filed by or on behalf of the
Sellers prior to the date hereof have been prepared and filed in accordance with
applicable law, and all taxes, interest, penalties, assessments or deficiencies
that have become due pursuant to such returns or any assessments or otherwise
have been paid in full. Except as disclosed on Schedule 2.12, all such returns
are true and correct in all material respects. Except as disclosed on Schedule
2.12, there is no unresolved claim concerning Sellers' federal, state and local
tax liabilities. There are no pending or, to the best of Sellers' knowledge,
threatened actions or proceedings, assessments or collections of taxes of any
kind with respect to the Business that would subject Purchaser to any liability
for such taxes for the period prior to the Closing Date or which would impair
any of the Purchased Assets.
Section 2.13. CONTRACTS AND COMMITMENTS. (a) Except as disclosed on
Schedule 2.13, neither of the Sellers is a party to any of the following
(collectively, the "Material Contracts"):
(i) contract, agreement, purchase order or other commitment for the
purchase, sale or provision to or by Seller of goods, property or
services in any one instance for an amount in excess of Twenty-Five
Thousand Dollars $25,000.00;
(ii) pension, profit sharing, stock option, employee stock purchase
or other plan providing for deferred compensation or other employee
benefit plan, or any contract with any labor union (collectively, the
"Benefit Plans");
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(iii) oral or written contract for the employment of any
officer, individual employee, or other person or entity on a full-time,
part-time, consulting or other basis, or agreement relating to loans to
officers, directors or affiliates, other than advances in the ordinary
course of business;
(iv) agreement or indenture relating to the borrowing of
money or to the mortgaging, pledging or otherwise placing a lien on any
material asset or material group of assets of Sellers, or either of
them;
(v) oral or written direct or indirect guarantee of any
obligation;
(vi) lease, license or agreement under which it is lessee
of, licensee of or holds or operates any property, real or personal,
tangible or intangible, owned by any other party, except for any lease
of personal property the existence of which was disclosed on December
31, 1993 Financial Statements;
(vii) lease, license or agreement under which it is lessor
of, licensor of or permits any third party to hold or operate any
property, real or personal, tangible or intangible, owned or controlled
by it (except as disclosed in the land records pertaining to C
Associates' ownership of the business premises);
(viii) contract or agreement restricting the ability of the
Sellers to conduct any type of lawful business or activity anywhere in
the world.
(b) Except as set forth on Schedule 2.13(b), (i) Sellers have
performed in all material respects all obligations required to be performed by
them and are not in default under or in breach of nor in receipt of any claim
of default or breach under any agreement referred to in Section 2.13(a), (ii)
no event has occurred which with the passage of time or the giving of notice or
both would result in a default, breach or event of noncompliance under any such
agreement, (iii) the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby will not, with the passage
of time or the giving of notice, or both, result in a default, breach, or event
of noncompliance under any such agreement, (iv) Sellers do not have any
knowledge of any breach or anticipated breach by any other party to such
agreements, and (v) Sellers are not a party to any material contract or
commitment for the purchase of goods or services at a rate currently above
market prices.
(c) Purchaser shall, prior to the Closing Date, be provided with an
opportunity to review a true and correct copy of each of the written contracts
which are referred to in Section 2.13(a), together with all amendments, waivers
or other changes thereto.
(d) Schedule 2.13(d) contains a true and complete list of the five (5)
largest suppliers to ▇▇▇▇▇▇▇▇ and a list of the fifteen (15) largest customers
of ▇▇▇▇▇▇▇▇, each during calendar year 1993. ▇▇▇▇▇▇▇▇ shall also set out on such
schedule (i) the names of customers and/or suppliers included on such list who,
or which, in the reasonable opinion of ▇▇▇▇▇▇▇▇, have
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determined to discontinue all future business relationships with ▇▇▇▇▇▇▇▇ or
(ii) the occurrence of any other event which would have a material adverse
effect on its business relationship with the Sellers.
Section 2.14. LITIGATION, ETC. Except as set forth on Schedule 2.14,
there are no actions, suits, proceedings, orders, investigations or claims
pending or threatened against the Sellers, or to which Sellers, or either of
them, is a party, at law or in equity, or before or by any court, tribunal,
governmental department, commission, board, bureau, agency or instrumentality,
or any arbitration proceedings pending under collective bargaining agreements or
otherwise.
Section 2.15. BROKERAGE. Except with respect to commissions due at
closing upon the transactions contemplated hereby to Peers & Co. to be paid by
Sellers, there are no claims for brokerage commissions, finders' fees or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement or agreement (oral or written) binding upon Seller.
Section 2.16. INSURANCE. Schedule 2.16 contains an abstract or summary
of each outstanding insurance policy maintained by Sellers. Sellers have given
to Purchaser a copy of each such insurance policy maintained with respect to
Sellers' properties, assets and the Business, and each such policy is in full
force and effect. Heretofore ▇▇▇▇▇▇▇▇ has maintained a term life insurance
policy on the life of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, which policy shall be an Excluded Asset
and shall be transferred to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ within sixty (60) days following
the Closing Date.
Section 2.17. COMPLIANCE WITH LAWS. Except as set forth on Schedule
2.17, Sellers are in compliance with all laws, rules, regulations, ordinances,
orders, judgments, and decrees applicable to the Business or the Purchased
Assets, and are not in violation of any law or any regulation or requirement
which might have a material adverse effect upon the Sellers' financial condition
or operating results of, or the prospects of the Business, and Sellers have not
received notice of any such violation.
Section 2.18. EMPLOYEES. ▇▇▇▇▇▇▇▇ shall advise each of its current
employees of the date on which each employee will be terminated from employment
with ▇▇▇▇▇▇▇▇ and of the intention of the Purchaser to interview and employ
those from among the employees as are, in Purchaser's sole discretion, suitable
as future employees of the Purchaser. Purchaser covenants and agrees to use its
best efforts to engage all of Courtney's current employees with the exception of
those employees Purchaser has identified to Sellers prior to the Closing Date.
While it is the intention of the Purchaser to engage substantially all such
employees of ▇▇▇▇▇▇▇▇, it is understood and agreed that Purchaser can not assure
that all will be hired and that ▇▇▇▇▇▇▇▇ can not provide assurances that all
offered positions will accept employment. Sellers are not aware of any
circumstances which would lead them to the conclusion that all, or substantially
all of those offered employment by the Purchaser would not accept a position
providing wages and benefits equal to those offered by ▇▇▇▇▇▇▇▇ to its current
employees. To the best knowledge, information and belief of the ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ has complied with all laws relating to the employment of labor,
including provisions thereof relating to wages, hours, equal opportunity,
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collective bargaining and the payment of social security and other employment
tax obligations and the Sellers are not aware of any material labor relations
problems of ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ is a party to a collective bargaining agreement,
a copy of which has heretofore been made available to the Purchaser and is
included in Schedule 2.18.
Section 2.19. LICENSES AND PERMITS. Schedule 2.19 lists all of Sellers'
licenses, franchises and permits material to the operation of the Business.
Sellers have all licenses, franchises and permits, the absence of which would
have a material adverse effect on the Business. Sellers shall cooperate in
assisting Purchaser in securing the assignment of all assignable permits,
licenses and franchises held by Sellers, or by their officers, employees or
agents, with respect to the Business or the Business premises.
Section 2.20. BUSINESS RECORDS. Sellers' personnel files, accounting
records, and customer correspondence files are complete and correct in all
material respects, and accurately reflect Sellers' business operations for a
period of not less than five (5) years prior to closing.
Section 2.21. TRANSACTIONS WITH CERTAIN PERSONS. Except as set forth on
Schedule 2.21, (a) during the past three (3) years, Sellers have not, directly
or indirectly, purchased, leased or otherwise acquired any goods, services or
property from any stockholder or general partner of the Sellers or from any
person, firm, corporation or other entity directly or indirectly controlled by
(or under common control with) any stockholder or general partner of the
Sellers, and (b) Sellers do not owe any amount to, nor is any amount owed to
Sellers by, any stockholder or general partner of the Sellers or any person,
firm, corporation or other entity directly or indirectly controlled by (or under
common control with) the Sellers.
Section 2.22. ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither Sellers
nor any officer, employee or agent acting on their behalf, has within the past
five (5) years given (or agreed to give) any gift, or similar benefit to any
customer, supplier, governmental employee or other person in a position to help
or hinder Sellers' Business except in the ordinary course of business and as
permitted by applicable law and regulations.
Section 2.23. ENVIRONMENTAL MATTERS. (a) Sellers have previously
provided to Purchaser (i) copies of all environmental reports, surveys and test
results (collectively, "Environmental Reports") performed by or on behalf of
Sellers or otherwise in Sellers' possession relating to the Business, all or any
of the Purchased Assets, or any real estate previously used in connection with
the Business or previously owned by Sellers, (ii) a summary of all corrective or
remedial actions taken by Sellers with respect to any of the findings or
recommendations contained in any Environmental Report, (iii) a list of all
on-site and off-site locations where the business has stored, disposed of
(including spilled or abandoned) or arranged for the disposal of any materials
or substances that are listed either in the United States Department of
Transportation Hazardous Materials Table (49 C.F.R. 172.01), any "hazardous
waste" as defined by the Resource Conservation and Recovery Act of 1976, as
amended, and regulations promulgated thereunder,
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any "hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, and regulations
promulgated thereunder, any "hazardous substance" as defined by Maryland
Environmental Code ▇▇▇., Title 7, Subtitle 2, as amended, and regulations
promulgated thereunder any other materials described in the "Toxic Substances
Control Act", Title 15, Chapter 53 of the United States Code (collectively,
"Hazardous Materials"), (iv) copies of all reports, applications, registrations
or other filings made by Sellers with any federal, state, county, municipality
or other governmental unit or regulatory body responsible for the administration
or enforcement of any environmental laws or regulations (collectively, the
"Environmental Regulations"), and (v) copies of all notices, demands, pleadings
or other correspondence received by Sellers from any Environmental Regulator or
its legal counsel.
(b) There is no condition, circumstance, or set of facts
(including without limitation the presence, either past or present, of any
underground storage tanks) that constitutes a significant hazard to health,
safety, property, or the environment relating to the Business or any real
property owned or leased by Sellers for which the Business, Sellers or the owner
or operator of such real property would be responsible except as may be
disclosed on Schedule 2.23(b) hereof. Without limiting the foregoing, and except
as disclosed in Schedule 2.23(b), to the best of Sellers' knowledge, the
Purchased Assets contain no quantities of asbestos, PCB's, lead, or other
Hazardous Materials which, absent remediation, would render the premises unsafe
for use in the Business.
Section 2.24. MATERIAL MISSTATEMENTS OR OMISSIONS. Sellers have not
made any material misstatements of fact or omitted to state any material fact
necessary or desirable to make complete, accurate, and not misleading every
representation, warranty, schedule, and agreement set forth, described or
referred to herein. Sellers have disclosed to Purchaser all material adverse
facts relating to the condition or operation, whether past, present or future,
financial or otherwise, of the Purchased Assets and of the Business.
Section 2.25. EFFECTIVE DATE OF WARRANTIES, REPRESENTATIONS AND
COVENANTS. Each warranty, representation, and covenant set forth in this Article
2 shall be deemed to be made on and as of and speak on and as of the date hereof
and as of the Closing (except as otherwise specifically provided herein). Prior
to the Closing, Sellers will notify Purchaser of any change since the date
hereof in any fact, condition or circumstance which would require a modification
of the foregoing representations and warranties (including any schedule thereto)
to make such representation or warranty (or schedule thereto) complete, accurate
and not misleading in all respects.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
As a material inducement to Sellers to enter into and perform its
obligations under this Agreement, Purchaser represents and warrants to Seller as
follows:
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Section 3.01. ORGANIZATION, ETC. Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Ohio.
Section 3.02. AUTHORITY RELATIVE TO AGREEMENT. Purchaser has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated on its part hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by the Board of Directors of Purchaser. No
other corporate proceedings on its part or the part of the stockholders of
Purchaser are necessary to authorize the execution and delivery of this
Agreement by it or the consummation by it of the transactions contemplated on
its part hereby. This Agreement has been duly executed and delivered by
Purchaser and is the valid and binding agreement of Purchaser.
Section 3.03. NO BREACH; CONSENTS. Except as disclosed on Schedule
3.03, the execution, delivery and performance of this Agreement by Purchaser and
the consummation of the transactions contemplated hereby (a) do not and will not
conflict with or result in any breach of any of the provisions of, constitute a
default under, result in a violation of, result in the creation of any lien,
security interest, charge or encumbrance upon the assets of the Purchaser under,
or require any authorization, consent, approval, exemption or other action by or
notice to any third party under the provisions of the Charter or By-Laws of
Purchaser or any license, indenture, mortgage, lease, loan agreement or other
agreement (oral or written) or instrument to which Purchaser is a party, and (b)
do not require any authorization consent, approval, exemption or other action by
or notice to any court or governmental body under any law, statute, rule,
regulation or decree to which Purchaser is subject.
Section 3.04. LITIGATION. There is no claim, action, suit or proceeding
pending or, to the knowledge of Purchaser, threatened against Purchaser or any
of its properties which seeks to prohibit, restrict or delay consummation of the
transactions contemplated hereby or to limit in any manner the right of
Purchaser to acquire Sellers' assets or control any material aspect of the
Business of Sellers after the Closing Date, and there is no judgment, decree,
injunction, ruling or order of any court, governmental department, commission,
agency or instrumentality or arbitrator outstanding against Purchaser having, or
which Purchaser believes may in the future have, any such effect.
Section 3.05. BROKERAGE. Except with respect to a finder's fee to be
paid by Purchaser to ▇▇▇▇▇ & Co., there are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of Purchaser.
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ARTICLE 4
CLOSING CONDITIONS
------------------
Section 4.01. CLOSING CONDITIONS RELATING TO PURCHASER. The obligation
of Purchaser to consummate the purchase of the Purchased Assets will be subject
to the satisfaction of the following conditions:
(a) DELIVERIES. At or prior to the Closing, Sellers shall
deliver, or cause to be delivered to Purchaser, the following items:
(i) ▇▇▇▇ OF SALE/DEED. Sellers shall execute and deliver to
Purchaser a ▇▇▇▇ of Sale, a FIRPTA Affidavit and a special warranty
deed, each in form reasonably satisfactory to Purchaser.
(ii) ASSIGNMENT AND ASSUMPTION AGREEMENT. Sellers shall
execute and deliver to Purchaser an Assignment and Assumption Agreement
in the form of Schedule 1.06 attached hereto pursuant to which Sellers
will assign to Purchaser certain contracts and rights of Sellers, and
Purchaser will accept and assume certain liabilities and obligations of
the Sellers.
(iii) CONSULTING AND EMPLOYMENT AGREEMENTS. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
shall execute and deliver to Purchaser a Consulting Agreement providing
for a term of at least six (6) months, and with an option on the part
of Purchaser to extend the term for a period of up to eighteen (18)
months and giving ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ the right to retain for his use the
leased Lincoln automobile currently used by him. During the term of the
Consulting Agreement ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall be paid for his services
at the rate of Six Hundred Dollars ($600.00) per day, shall be
available for as many as five (5) days per week, shall provide services
on those days reasonably requested by the Purchaser and will,
regardless of actual days worked, be paid for a minimum of three (3)
days per week. During each six month period ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall be
permitted three (3) weeks of vacation, which shall include the first
two (2) weeks of July, during which he shall not be required to provide
consulting services but shall nevertheless be paid. Vacations shall be
scheduled in advance with the consent of Purchaser, which consent shall
not be unreasonably withheld.
(iv) CERTIFICATES. Sellers shall execute and deliver to
Purchaser a Certificate, in the form of Exhibit 4.01(a) (iv) attached
hereto, certifying that all the representations and warranties of
Sellers contained in this Agreement are true and correct in all
material respects as of the Closing Date.
(v) CORPORATE RESOLUTIONS. Sellers shall deliver to
Purchaser certified copies of the resolutions of its Board of Directors
and certified copies of the resolutions of its stockholders, or as to C
Associates, of its general partners, authorizing the transactions
contemplated herein.
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(vi) CONSENTS. Sellers shall deliver to Purchaser copies of
all necessary third party and governmental consents, in a form
satisfactory to Purchaser, that Sellers are required to obtain in order
to consummate the transactions contemplated by this Agreement.
(vii) NON-COMPETE. Sellers, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ shall execute and deliver to the Purchaser a Non-Compete
Agreement in the form attached hereto as Schedule 4.01(a)(vii).
(viii) LIEN RELEASES. Sellers shall cause all parties holding
a security interest, lien or deed of trust on any of the Purchased
Assets to execute and deliver to Purchaser releases in form and
substance satisfactory to the Purchaser.
(b) DUE DILIGENCE RESULTS. Nothing shall have come to the
attention of Purchaser, in the course of its due diligence investigation
pursuant to Section 5.02 or otherwise, which demonstrates that (i) any of the
representations or warranties of Sellers, when first made were, or have become
materially inaccurate or incomplete, or (ii) the Financial statements of Sellers
do not accurately reflect its financial condition as at the dates indicated and
the results of operations for the periods covered thereby.
(c) FINANCING. Purchaser, using its best efforts so to do,
shall have obtained, at commercially reasonable rates and terms acceptable to
Purchaser and Sellers, financing adequate to close the transaction, and shall
have provided Sellers with a copy of its commitment letter evidencing the
availability of such financing.
(d) NO INJUNCTION. The consummation of the transactions
contemplated hereby shall not have been enjoined by any court of competent
jurisdiction and no proceeding seeking such an injunction shall be pending.
(e) MAINTENANCE OF RELATIONSHIPS. Sellers, from the date
of this Agreement to the date of Closing, shall have operated the Business in
the ordinary course and except as disclosed herein or in Schedules attached
hereto have continued to maintain its existing relationships with significant
suppliers and wholesale customers, and with key employees identified by
Purchaser.
(f) OPINION OF COUNSEL. Purchaser shall have been provided
with an opinion of counsel to Seller, dated as of the Closing Date, in the form
of Schedule 4.01(f) attached hereto.
Section 4.02. CLOSING CONDITIONS RELATING TO SELLERS. The obligation of
Sellers to consummate the sale of the Purchased Assets will be subject to the
satisfaction of the following conditions:
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(a) DELIVERIES. At or prior to the Closing, Purchaser shall
deliver, or cause to be delivered to Sellers, the following items:
(i) PURCHASER'S CHECK. Purchaser shall deliver to Sellers a
check in full payment of the portion of the Purchase Price described in
Section 1.05(a)(i).
(ii) ASSIGNMENT AND ASSUMPTION AGREEMENT. Purchaser shall
execute and deliver to Seller an Assignment and Assumption Agreement in
the form of Schedule 1.06 attached hereto pursuant to which Purchaser
will accept and assume certain liabilities and obligations of Sellers,
and Sellers will assign to Purchaser certain contracts and rights of
Sellers.
(iii) CORPORATE RESOLUTIONS. Purchaser shall deliver to
Sellers certified copies of the Resolutions of Purchaser's Board of
Directors authorizing the transactions contemplated herein.
(iv) THE NOTE. Purchaser shall execute and deliver to Seller
the Note.
(b) NO INJUNCTION. The consummation of the transactions
contemplated hereby shall not be enjoined by any court of competent jurisdiction
and no proceeding seeking such an injunction shall be pending.
(c) OPINION OF COUNSEL. Sellers shall have been provided
with an opinion of counsel to Purchaser, dated as of the Closing Date, in the
form attached hereto as Schedule 4.02.
ARTICLE 5
PRE-CLOSING AGREEMENTS
----------------------
Section 5.01. EMPLOYEES. Sellers will use best efforts to preserve the
management team and work force of Seller and to preserve employee morale
generally.
Section 5.02. DUE DILIGENCE. Sellers shall grant to Purchaser, and its
employees, counsel, accountants and other representatives, full and complete
access to Sellers' facilities, management, employees and records and its outside
accountants and counsel for purposes of a due diligence investigation in
connection with the transactions contemplated hereby.
Section 5.03. OPERATION OF BUSINESS. Sellers shall continue to operate
the Business in the ordinary course, without substantial change, and Sellers
shall take no action of a nature contemplated by Section 2.10 (except for those
actions specifically noted on Schedule 2.10), without the prior written consent
of Purchaser. Sellers shall promptly notify Purchaser in writing of the
occurrence of any event which may result in a material adverse change to the
business, financial condition, operation or prospects of Sellers. Without
limiting the foregoing, Sellers' shall maintain in full force and effect through
the Closing Date all policies of insurance
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consistent with past practices, which policies shall include a workers'
compensation insurance policy that shall insure against all workers'
compensation claims that relate to events that occurred prior to the Closing
regardless of when said claims are asserted.
Section 5.04. BEST EFFORTS. The parties hereto agree to use their best
efforts to cause all conditions to Closing to be satisfied and to cause the
transactions contemplated hereby to be consummated.
Section 5.05. CONFIDENTIALITY. Purchaser and Sellers agree that they,
and their respective officers, directors and other representatives, will hold in
strict confidence the negotiations relating to the transactions contemplated by
this Agreement, and all information exchanged pursuant thereto. If, for any
reason, Closing does not occur, all information exchanged by Purchaser and
Sellers shall promptly be returned to the other party.
Section 5.06 EXCLUSIVITY. Sellers shall comply with the provisions
contained in the Letter of Intent dated April 6, 1994 (the "Letter of Intent")
and the Escrow Agreement, dated June 3, 1994 (the "Escrow Agreement"), regarding
exclusivity.
ARTICLE 6
POST-CLOSING AGREEMENTS
-----------------------
Section 6.01. INDEMNIFICATION BY SELLER. To the extent of the Purchase
Price actually received by the Sellers, and except as otherwise limited by this
Article 6, Purchaser and its officers, directors, employees, agents, successors
and assigns shall be indemnified and held harmless by Sellers for any and all
liabilities, losses, damages, claims, costs and expenses, interest, awards,
judgments and penalties (including, without limitation, reasonable legal costs
and expenses) actually suffered or incurred by it (hereinafter a "Purchaser
Loss"), and actually arising out of or resulting from:
(a) the breach of any representation or warranty by Sellers
contained herein or in any document delivered hereunder at the Closing;
or
(b) the breach of any covenant or agreement by Sellers
contained herein; or
(c) the Excluded Assets or Excluded Liabilities.
Section 6.02. INDEMNIFICATION BY PURCHASER. To the extent of the
Purchase Price actually received by the Sellers, and except as otherwise limited
by this Article 6, Sellers, and their officers, directors, partners, employees,
agents, successors and assigns shall be indemnified and held harmless by
Purchaser from any and all liabilities, losses, damages, claims, costs and
expenses, interest, awards, judgment and penalties (including, without
limitation, reasonable legal costs and expenses) actually suffered or incurred
by Sellers (hereinafter a "Seller Loss") actually arising out of or resulting
from:
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(a) the breach of any representation or warranty by
Purchaser contained herein or in any document delivered hereunder; or
(b) the breach of any covenant or agreement by Purchaser
contained herein or in any document delivered hereunder; or
(c) the Assumed Liabilities.
Section 6.03. COBRA COVERAGE. Any present or former employee of Sellers
(an "Electing Employee") who properly elects to receive continuation coverage
("COBRA") shall be permitted to receive COBRA under Purchaser's medical/dental
plan provided that the Electing Employee pays to Purchaser 102% of Purchaser's
cost of providing such medical/dental coverage.
Section 6.04. GENERAL INDEMNIFICATION PROVISIONS. (a) For the purposes
of this Section 6.03, the term "Indemnitee" shall refer to the person or persons
indemnified, or entitled, or claiming to be entitled to be indemnified, pursuant
to the provisions of Section 6.01 or 6.02, as the case may be; the term
"Indemnitor" shall refer to the person having the obligation to indemnify
pursuant to such provisions; and "Losses" shall refer to the "Seller Losses" or
the "Purchaser Losses", as the case may be.
(b) An Indemnitee shall promptly give the Indemnitor notice
of any matter which an Indemnitee has determined has given or could give rise to
a right of indemnification under this Agreement, stating the amount of the Loss,
if known, and method of computation thereof, all with reasonable particularity
and containing a reference to the provisions of this Agreement in respect of
which such right to indemnification is claimed or arises. The obligations and
liabilities of an Indemnitor under this Article 6, with respect to Losses
arising from claims of any third party that are subject to the indemnification
provided for in this Article 6 ("Third Party Claims"), shall be governed by and
contingent upon the following additional terms and conditions: if an indemnitee
shall receive notice of any Third Party claim, the Indemnitee shall give the
Indemnitor prompt notice of such Third Party Claim and shall permit the
Indemnitor, at its option, to assume and control the defense of such Third Party
Claim at its expense and through counsel of its choice if it gives prompt notice
of intention to do so to the Indemnitee. In the event the Indemnitor exercises
its right to undertake the defense against any such Third Party claim as
provided above, the Indemnitee shall cooperate with the Indemnitor in such
defense and make available to the Indemnitor all witnesses, pertinent records,
materials and information in its possession or under its control relating
thereto as is reasonably required by the Indemnitor. Similarly, in the event the
Indemnitee is, directly or indirectly, conducting the defense against any such
Third Party Claim, the Indemnitor shall cooperate with the Indemnitee in such
defense and make available to it all such witnesses, records, materials and
information in its possession or under its control relating thereto as is
reasonably required by the Indemnitee. Except the settlement of a Third Party
Claim which involves the payment of money only and for which the Indemnitee is
totally indemnified by the Indemnitor, no Third Party Claim may be settled by
the Indemnitor without the written consent of the Indemnitee.
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Similarly, no Third Party Claim may be settled by the Indemnitee without the
written consent of the Indemnitor.
Section 6.05. LIMITS ON INDEMNIFICATION. (a) No claim may be made
against Sellers for indemnification pursuant to Section 6.01 unless and only to
the extent the aggregate of all Purchaser Losses exceed $25,000.
(b) No claim may be made against Purchaser for indemnification
pursuant to Section 6.02 unless and only to the extent the aggregate of all
Seller Losses exceed $25,000.
Section 6.06. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Sellers in Article 2 and Purchaser in Article
3 shall survive the Closing until the second anniversary thereof, and thereafter
no claim may be brought in respect of any misrepresentation or breach of
warranty; provided, however, that the indemnity obligations of Sellers with
respect to the representations and warranties contained in Section 2.12 shall
survive until expiration of the applicable statute of limitations and the
representations and warranties contained in Section 2.11 shall survive
indefinitely. If written notice of a claim has been given prior to the
expiration of the applicable representations and warranties have been made to
the party that made such representations and warranties, then the relevant
representations and warranties shall survive as to such claim until the claim
has been finally resolved.
Section 6.07. ADJUSTMENT OF LIABILITY. The amount which an Indemnitee
shall be entitled to receive from an Indemnitor with respect to any
indemnifiable loss hereunder shall be net of any insurance recovery and tax
benefit (if realizable prior to the end of the first full tax year following the
date of indemnification) accruing to the Indemnitee on account of such loss.
Section 6.08. FURTHER ASSURANCES. Sellers shall, at any time and from
time to time on and after the Closing Date, upon request by Purchaser and
without further consideration, take such actions or cause others to do so, and
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, all transfers, conveyances, powers of attorney and assurances, as may
be required or desirable for the better conveying, transferring, assigning,
delivering, assuring and confirming to Purchaser, or its respective successors
and assigns, or for aiding and assisting in collecting or reducing to
possession, the Purchased Assets.
ARTICLE 7
MISCELLANEOUS
-------------
Section 7.01. TERMINATION. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and abandoned at any time
prior to consummation of the transactions contemplated hereby:
(a) By the mutual consent of Purchaser and Sellers;
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(b) By Purchaser if all of the conditions to Closing
described in Section 4.01 have not been satisfied by July 15, 1994;
(c) By Purchaser if the transactions shall not, despite the
exercise of its best efforts, been consummated by July 15, 1994 or such
later date as may be agreed upon by the parties;
(d) By Purchaser if Sellers have materially breached any
representation or warranty herein or failed to perform any material
obligation or condition hereof and such breach or failure shall not
have been cured in manner, form and substance reasonably satisfactory
to Purchaser; and
(e) By Sellers if Purchaser has materially breached any
representation or warranty herein or failed to perform any material
obligation or condition hereof and such breach or failure has not been
cured in manner, form and substance reasonably satisfactory to Sellers.
Section 7.02. EXPENSES. Each party will pay all of its expenses in
connection with the negotiation of this Agreement, the performance of its
obligations hereunder, and the consummation of the transactions contemplated by
this Agreement. Without limiting the foregoing, Sellers shall pay one-half (1/2)
of the real estate transfer taxes payable in connection with the transfer of the
Purchased Assets, which payment shall not exceed Twelve Thousand Five Hundred
Dollars ($12,500.00).
Section 7.03. AMENDMENTS AND WAIVERS. The parties hereto, by mutual
agreement in writing, may amend, modify and supplement this Agreement. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
Section 7.04. NOTICES. All notices or other communications required or
permitted hereunder shall be in writing and shall be given by hand or by
registered mail, return receipt requested, addressed as follows:
If to Purchaser:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
GEO Specialty Chemicals, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
If to Sellers:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
▇▇▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇, III, Esq.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any party hereto may specify in writing a different address for such purpose by
notice to the other parties.
Section 7.05. ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, except that neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any party without the prior written consent of the other parties
hereto, which consent shall not be unreasonably withheld.
Section 7.06. SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provision of this Agreement unless the
consummation of the transaction contemplated hereby is adversely affected
thereby.
Section 7.07. COMPLETE AGREEMENT. This document and the documents
referred to herein contain, save and except consistent provisions of the Letter
of Intent and the Escrow Agreement, copies of which are attached hereto as
Schedule 7.07 and provisions of which, to the extent they are not inconsistent
herewith, survive, the complete agreement between the parties and supersede any
prior understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof in any way.
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Section 7.08. NO THIRD-PARTY BENEFICIARIES. This Agreement shall be for
the benefit only of the parties hereto, and their respective successors and
assigns.
Section 7.09. WAIVER OF BULK SALES ACT. In consideration of, and in
reliance upon, the representations and warranties made by Sellers in Article 2,
and Purchaser's assumption of Sellers' obligations, the parties hereto waive
compliance with the provisions of any applicable bulk transfer laws.
Section 7.10. SINGULAR AND PLURAL; GENDER. The singular shall include
the plural and vice versa, and the use of one gender shall be deemed to include
all other genders whenever appropriate. The meaning of the term "Sellers" shall
include the Sellers, or either of them.
Section 7.11. GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement and the performance of the
obligations imposed by this Agreement will be governed by the laws of the State
of Maryland without reference to any conflict of laws rules.
Section 7.12. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof. Any arbitration shall
be conducted in Washington, D.C.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
under seal, on the day and year first above written, intending to be legally
bound hereby.
WITNESS: C ASSOCIATES
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------- ------------------------------------
General Partner
ATTEST: ▇▇▇▇▇▇▇▇ INDUSTRIES, INC.
/s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------- ------------------------------------
Asst. Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
ATTEST: GEO SPECIALTY CHEMICALS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ------------------------------------------
Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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