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Exhibit 3
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ASSET PURCHASE AGREEMENT
dated as of December 18, 1998
by and among
▇▇▇▇▇▇▇ INC.,
WOC INC.
and
WAXMAN INDUSTRIES, INC.
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ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT ("AGREEMENT") is made and entered into as of
December 18, 1998, by and among ▇▇▇▇▇▇▇ Inc., a Delaware corporation (the
"PURCHASER"), WOC Inc., a Delaware corporation (the "SELLER"), and Waxman
Industries, Inc., a Delaware corporation (the "STOCKHOLDER") and the indirect
parent of the Seller.
WHEREAS, the U.S. Lock division ("U.S. LOCK") of the Seller is a full line
marketer and supplier of security hardware products throughout the United States
(the "BUSINESS");
WHEREAS, the Purchaser desires to purchase (the "ASSET PURCHASE"), and the
Seller and the Stockholder desire to sell, all of the assets of the Seller
relating to the Business, as more particularly described herein, except those
assets specifically excluded herein and the Seller desires to assign, and the
Purchaser desires to assume, certain of the obligations and liabilities of the
Seller with respect to the Business, subject, in each case, to the exceptions,
terms and conditions set forth herein; and
WHEREAS, the respective Boards of Directors of the Purchaser, the Seller and
the Stockholder have duly approved the Asset Purchase.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, each intending to be legally bound, hereby agree as follows:
1. DEFINITIONS.
1.1 DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
ACQUIRED ASSETS: Defined in Section 2.1.
ASSET PURCHASE: Defined in the prologue of this Agreement.
ASSUMED LIABILITIES: Defined in Section 2.3.
BANKAMERICA: Defined in this Section 1.1.
▇▇▇▇▇▇▇ CREDIT FACILITY: Revolving Credit Agreement, dated as of April
3, 1996, between the Purchaser and First Union National Bank.
BRENTWOOD FACILITY: Seller's facility located in Brentwood, New York.
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BUSINESS: Defined in the prologue of this Agreement.
CLOSING: Defined in Section 2.5.
CLOSING DATE: 12:01 a.m. on January 1, 1999.
CODE: The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
COMMISSION: The Securities and Exchange Commission.
COMMISSION FILINGS: Defined in Section 4.5.
CONSENTS: All governmental and third party consents, permits, approvals,
orders, authorizations, qualifications, and waivers required to be received by a
Person for the consummation of the transactions contemplated by this Agreement.
CONTRACT: Any contract, agreement, commitment, mortgage, deed of trust,
bond, indenture, lease, license, note, franchise, certificate, option, warrant,
right, instrument (including insurance policies or benefit plans) or other
similar document or agreement, whether written or oral.
DOLLARS or "$": The legal currency of the United States of America.
EMPLOYEES: Means all persons employed in the Business on the day
immediately prior to the Closing Date, including any persons on disability, sick
leave, layoff or leave of absence from the Business.
ENVIRONMENTAL LAWS: The Comprehensive Environmental Response,
Compensation and Liability Act, 42 USC Section 9601, et seq., the Solid Waste
Disposal Act as amended by the Resource Conversation and Recovery Act, 42 USC
Section 6901, et seq., the Federal Water Pollution Control Act, 33 USC Section
1251 et seq., any similar federal laws relating to contaminants, pollutants,
hazardous substances or pollution of the environment, the Clear Air Act, 42
U.S.C. Section 7401 et seq., the Toxic Substances Control Act, 15 USC Section
2601, et seq., and applicable laws of the State of Ohio and Florida.
Environmental Laws pursuant to the preceding sentence shall mean such laws
defined as Environmental Laws pursuant to the preceding sentence, together with
any amendments to the same adopted, enacted or promulgated after the Closing.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
EXCLUDED ASSETS: Defined in Section 2.2.
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FACILITIES: Defined in Section 2.1(a)
GAAP: Generally accepted accounting principles set forth in the opinions
and pronouncements of the Financial Accounting Standards Board, applied on a
consistent basis and consistent with past practices.
GOVERNMENTAL AUTHORITY: Any United States or foreign governmental
authority, including all agencies, bureaus, commissions, authorities or bodies
of the federal government or any state, county, municipal or local government,
including any court, judge, justice or magistrate.
HSR ACT. The ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 and
the rules and regulations promulgated thereunder.
HAZARDOUS MATERIALS: Asbestos, asbestos-containing materials,
polychlorinated biphenyls, oil and other petroleum hydrocarbons or other
substances which, as of the Closing, shall be listed or defined as hazardous
substances, pollutants, contaminants or hazardous wastes pursuant to
Environmental Laws.
INTELLECTUAL PROPERTY: Defined in Section 2.1(g).
INVENTORY: Defined in Section 2.1(a).
IRS: Internal Revenue Service.
JUDGMENT: Any judgment, writ, order, injunction, determination, award or
decree of or by any Governmental Authority.
JUNE 30, 1998 FINANCIAL STATEMENTS: As defined in Section 3.9.
LAW: Any statute, ordinance, code, rule, regulation, order or other law
enacted, adopted, promulgated, applied or followed by any Governmental
Authority.
LIEN: Any charge, encumbrance, security agreement, financing statement
(whether or not filed), security or other like interest, conditional sale or
other title retention agreement, lease or consignment or bailment given for
security purposes, mortgage, deed of trust, indenture, pledge, constructive or
other trust or attachment.
MATERIAL ADVERSE EFFECT: An adverse effect of $100,000 or more, in the
aggregate, on the business, assets, operations, condition (financial or
otherwise), cash flows or prospects of (i) with respect to the Purchaser, the
Purchaser, (ii) with respect to the Seller, the Seller, (iii) with respect to
the Stockholder, the Stockholder and (iv) with respect to the Business, the
Business.
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NONCOMPETE PERIOD: Defined in Section 10.1.
OCTOBER 31 BALANCE SHEET: Defined in Section 3.9(a).
PERMITTED LIENS: With respect to any Person, any Lien (i) to be released
on or prior to the Closing or (ii) arising by operation of law which would not
have an adverse economic effect on such Person, or materially affect the use of
the asset subject thereto.
PERSON: Any individual, trustee, corporation, general or limited
partnership, limited liability partnership, limited liability company, joint
venture, joint stock company, bank, firm, Governmental Authority, trust,
association, organization or unincorporated entity of any kind or nature
whatsoever.
PURCHASE PRICE: Defined in Section 2.5.
PURCHASER: Defined in the prologue of this Agreement.
PURCHASER BOARD: The Board of Directors of the Purchaser.
REAL PROPERTY: All realty fixtures, easements, rights of way and other
interests in real property, buildings, improvements and
construction-in-progress.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
SELLER: Defined in the prologue of this Agreement.
STOCKHOLDER: Defined in the prologue of this Agreement.
TAXES: All foreign, U.S. federal, state, county, local, municipal and
other taxes, levies, impositions, deductions, charges and withholdings,
including income, alcohol, beverage, sales and use, payroll, ad valorem, excise,
gross receipts and other taxes, and shall include any interest, penalties or
additions thereto.
TAX RETURNS: All returns, declarations and reports filed with a taxing
authority and all information returns and statements of any kind or nature
whatsoever filed with a taxing authority with respect to any Taxes.
TRANSFERRED EMPLOYEES: All Employees who accept offers of employment
from the Purchaser on or after the Closing Date.
TRANSITION PERIOD: Defined in Section 2.4(b)
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WAXMAN CREDIT FACILITY: Loan and Security Agreement, dated as of June
28, 1996, among the Financial Institutions named therein, BankAmerica Business
Credit, Inc. ("BankAmerica"), Waxman Consumer Products Group Inc., the Seller,
WAMI Sales, Inc. and Western American Manufacturing, Inc. as amended.
1.2 USE OF DEFINED TERMS. Any defined term used in the plural shall refer to
all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class. The use of
any gender shall be applicable to all genders.
1.3 ACCOUNTING TERMS. All United States accounting terms not otherwise
defined in this Agreement shall be construed in conformity with GAAP.
1.4 SECTIONS, EXHIBITS AND SCHEDULES. References in this Agreement to
Sections, Exhibits and Schedules are to Sections, Exhibits and Schedules of and
to this Agreement. The Exhibits and Schedules to this Agreement are hereby
incorporated herein by this reference as if fully set forth herein.
1.5 MISCELLANEOUS TERMS. The term "or" shall not be exclusive. The terms
"herein," "hereof," "hereto," "hereunder" and other terms similar to such terms
shall refer to this Agreement as a whole and not merely to the specific article,
section, paragraph or clause where such terms may appear. The term "including"
shall mean "including, but not limited to."
2. PURCHASE AND SALE OF ASSETS.
2.1 ASSETS. Subject to the terms and conditions set forth in this Agreement,
on the Closing Date the Seller and the Stockholder only with respect to (o)
below shall and the Stockholder shall cause the Seller to sell, convey,
transfer, assign and deliver to the Purchaser (or upon the Purchaser's request,
to one or more wholly-owned subsidiaries of Purchaser as designated by the
Purchaser), and the Purchaser hereby purchases from the Seller, the following
assets, property, claims, rights and business of the Seller pertaining to the
Business and from the Stockholder to the Real Property set forth in Section
2.1(o) below (the "ACQUIRED ASSETS"), but excluding the assets set forth in
Section 2.2 hereto:
(a) all inventory, including finished products, work-in-progress,
packaging, supplies and raw materials, of the Seller relating to the Business on
the Closing Date (the "INVENTORY"), including without limitation, all Inventory
located at, or in transit to or from, the locations set forth on SCHEDULE 2.1(A)
(the "FACILITIES");
(b) all accounts receivable, notes receivable, loans receivable, prepaid
expenses, security and other deposits, advance payments for charges and
services, and other current assets of the Seller relating to the Business;
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(c) all furniture, fixtures and leasehold improvements of the Seller
relating to the Business located at the Facilities;
(d) all equipment, machinery, tools, personal property and other
physical assets of any nature or kind of the Seller relating to the Business
(including without limitation all spare parts) located at the Facilities
including, without limitation, the items set forth on SCHEDULE 2.1(d);
(e) all rights of the Seller with respect to leasehold interests
relating to the personal property used in the Business including, without
limitation, the leasehold interests set forth on SCHEDULE 2.1(e);
(f) all rights of the Seller under all licenses, approvals, consents and
franchises used or necessary in connection with the operation of the Business or
any pending applications relating to any of the foregoing;
(g) all patents, patent rights, inventions, processes, designs and
applications for patents used or useful in connection with the Business, all
trademarks, trademark applications, service marks, service ▇▇▇▇ applications,
copyrights, copyright applications, trade names, registered designs and
unregistered design rights used or useful in the operation of the Business and
all rights to ▇▇▇ for past infringement of any of the foregoing ("INTELLECTUAL
PROPERTY") as set forth on SCHEDULE 2.1(g);
(h) all trade secrets, processes, know-how, procedures, inventions,
drawings, designs, formulae and confidential information used or useful in the
operation of the Business and all employee covenants and agreements pertaining
to the Business respecting intellectual property and non-competition and
confidentiality;
(i) all rights of the Seller under any licenses for Intellectual
Property used or necessary in the operation of the Business;
(j) all customer, supplier and mailing lists and related records, files
and similar information relating to the Business;
(k) all rights of the Seller under the Seller's Contracts with respect
to the Business, including, without limitation, the contracts set forth on
SCHEDULE 2.1(k);
(l) all books and records of the Seller with respect to the Business,
including, without limitation, all correspondence, employment records,
production records, accounting records, equipment repair, maintenance or service
records relating to the Acquired Assets or necessary or material to the
continued operation of the Business (but not including the corporate records of
the Seller, such as the corporate minute book, stock register, articles of
incorporation, bylaws and similar
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items; provided, however, that the Purchaser agrees that the Seller and the
Stockholder shall have reasonable access to such books and records subsequent to
the Closing Date);
(m) all unfilled customer orders as of the Closing Date;
(n) all right, title and interest of the Seller in and to the Acquired
Assets as a going concern, goodwill with respect to the Business, the names
"U.S. Lock," "Rx," "Rx Dealer Only" and any derivatives or constructions
thereof;
(o) all right title and interest of the Seller in any Real Property
relating to the Business listed on SCHEDULE 2.1(o);
(p) all rights of the Seller relating to or arising out of or under
express or implied warranties for supplies with respect to the Acquired Assets;
and
(q) all other assets and interests of the Seller of every kind and
description, tangible or intangible, used or necessary for the operation of the
Business as currently conducted (other than the Excluded Assets).
To the extent that the conveyance, transfer or assignment of any
Contract shall require the Consent of any Person other than the Purchaser or the
Seller, this Agreement shall not constitute any such conveyance, transfer or
assignment, or any agreement to convey, transfer or assign the same, if such
action would constitute a breach thereof unless and until such Consent shall
have been obtained, provided that the Seller shall, to the extent not prohibited
by the relevant Contract, license the Purchaser at the Closing to use in the
Business the Acquired Assets which are the subject thereof, or otherwise arrange
to provide Purchaser with the benefits of such Contract at the Closing.
Notwithstanding the foregoing, the Seller delegates to the Purchaser and the
Purchaser undertakes to pay, perform and discharge in a timely manner all
Contracts under which the Seller is bound with respect to the Business, whether
or not any Consent to the assignment thereof is required. The Seller shall use
all reasonable efforts to obtain all such Consents which have not been obtained
as of the Closing Date.
2.2 EXCLUDED ASSETS. Excluded from the Assets being sold and transferred to
the Purchaser are the following (the "EXCLUDED ASSETS"): (a) the Seller's
corporate seal, articles of incorporation, minute books and stock certificate
books, (b) income and other tax records of the Seller, but the Seller will
retain these records for a period of not less than five years after the Closing
and make them available to the Purchaser upon the Purchaser's request, and (c)
cash and bank accounts of the Seller in connection with the Business, except for
any "▇▇▇▇▇ cash" located at the Facilities.
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2.3 ASSUMPTION OF LIABILITIES.
(a) LIABILITIES TO BE ASSUMED. Subject to the terms and conditions of
this Agreement, on the Closing Date, Purchaser shall assume and shall agree to
pay, perform and discharge the following, and only the following liabilities and
obligations of the Seller (collectively, the "Assumed Liabilities"):
(i) DECEMBER 31, 1998 BALANCE SHEET LIABILITIES. All liabilities of
the Business, or of the Stockholder or the Seller with respect to the
Business, reflected or reserved against on the December 31, 1998
Financial Statements, but only in the amount so reflected or reserved;
(ii) BUSINESS PAYABLE DUE VENDORS AND OTHERS IN EXCESS OF THE
BALANCE SHEET AMOUNTS. Accounts payable due to vendors, suppliers and
all other service providers arising from providing goods or services to
or for the benefit of the Business prior to the Closing Date in the
ordinary course of business consistent with past practices (including,
by way of illustration, manufacturers shipping inventory for the
Business, and utilities provided to Business locations and landlords of
locations for the Business) which are not accrued or reserved against on
the December 31, 1998 Financial Statements or which are incurred
thereafter;
(iii) CERTAIN OTHER BUSINESS RELATED EXPENSES IN EXCESS OF BALANCE
SHEET AMOUNTS. Liabilities of the Business, or of the Stockholder or the
Seller with respect to the Business, arising (x) in the ordinary course
of business consistent with past practices (excluding items covered in
subsection (ii) above), which are not accrued or reserved against on the
December 31, 1998 Financial Statements and which, in the aggregate, do
not exceed a maximum of $300,000 and (y) subsequent to the Closing Date;
(iv) TERMINATION OBLIGATIONS. Liabilities with respect to all
payments that may be required to be made to any Employee under any
termination, severance or similar plan, policy or arrangement of the
Seller as a result of the transactions contemplated herein; and
(v) OTHER LIABILITIES. All liabilities and obligations with respect
to Contracts referenced in Section 2.1(k) hereof and other liabilities
and obligations specifically assumed by Purchaser pursuant to this
Agreement.
(b) LIABILITIES NOT ASSUMED. Except as and to the extent specifically
set forth in Sections 2.3(a) and this Section 2.3(b), Purchaser is not assuming
any liabilities of Seller with respect to the Business that accrued prior to the
Closing Date and all such liabilities shall remain the
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responsibility of Seller. Purchaser is not assuming and Seller shall not be
deemed to have transferred to Purchaser the following liabilities (except as
otherwise indicated below).
(i) INCOME TAXES. Any liability of Seller for federal or state
income taxes (and any penalties or interest due on account thereof),
other than state income taxes with respect to which and to the extent
that reserves have been established therefor by the Seller with respect
to the Business; and
(ii) PRODUCT LIABILITY. Any product liability claim with respect to
the Business made prior to the Closing Date (including any liability for
claims made for injury to person, damage to property, or other damage,
whether made in product liability, tort, breach of warranty or
otherwise); and
(iii) LITIGATION MATTERS. Any liability with respect to any action,
suit, proceeding, arbitration, investigation or inquiry, whether civil,
criminal or administrative, pertaining to events occurring prior to the
Closing Date, except for litigation to collect liabilities covered by
subsections (a)(i) and (ii) above; and
(iv) TRANSACTION EXPENSES. All liabilities incurred by Seller in
connection with this Agreement and the transactions contemplated herein,
except as otherwise set forth herein; and
(v) LIABILITIES TO AFFILIATES. All liabilities to Seller's present
or former Affiliates. (For purposes of this provision, the term
"Affiliate" shall mean (i) the Stockholder and any entity controlling,
controlled by or under common control with Seller or the Stockholder
(ii) all directors of Seller, and (iii) directors and officers of the
Stockholder or any entity controlling, controlled by, or under common
control with the Stockholder (except the Seller and ▇▇▇▇ ▇▇▇▇▇▇).
2.4 PURCHASE PRICE; ALLOCATION.
(a) In consideration of the sale of the Acquired Assets hereunder, the
Purchaser shall pay to the Seller, at the Closing, an aggregate of $33.0
million, less $362,500 (which represents rent prepaid by the Purchaser to the
Seller with respect to the Purchaser's use of a portion of the Brentwood
Facility for periods after the Closing Date and ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ filing fees),
payable in cash by wire transfer of immediately available funds.
(b) The aggregate Purchase Price (including the assumption by Purchaser
of the Assumed Liabilities) shall be allocated among the Acquired Assets for tax
purposes in accordance with SCHEDULE 2.4(B) hereto. Seller, Stockholder and
Purchaser will follow and use such allocation in all tax returns, filings or
other related reports made by them to any governmental agencies. To the extent
that disclosures of this allocation are required to be made by the parties to
the IRS under
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the provisions of Section 1060 of the Code or any regulations thereunder,
Seller, Stockholder and Purchaser will disclose such reports to the other prior
to filing with the IRS.
2.5 THE CLOSING.
(a) Subject to the terms and conditions of this Agreement, the sale and
the purchase of the Assets contemplated hereby shall take place at a closing
(the "Closing") to be effective as of 12:01 a.m. on January 1, 1999 at the
offices of ▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP at 10:00 a.m., local time, on
December 31, 1998 or at such other time and place as the Seller and the
Purchaser shall mutually agree upon.
(b) Deliveries by the Purchaser at Closing. At the Closing, the
Purchaser shall have delivered to the Seller the following:
(i) immediately available funds in the amount of the Purchase Price, by
wire transfer no later than 2:00 p.m. (New York City time) to the accounts
designated by the Seller;
(ii) resolutions duly adopted by the Purchaser Board authorizing the
transactions which are the subject of this Agreement, certified by the Secretary
of the Purchaser;
(iii) certificate executed by the Chief Executive Officer of the
Purchaser certifying that the representations and warranties contained in
Section 4 hereof are true and correct in all material respects on and as of the
Closing Date and that the Purchaser has performed and complied, in all material
respects, with all other obligations to be performed by it under this Agreement;
(iv) certificates issued by appropriate Governmental Authorities
evidencing, as of a recent date, the good standing of the Purchaser in Delaware;
(v) copies of the applicable charter documents and all amendments
thereto of the Purchaser, certified by the appropriate Governmental Authorities;
(vi) opinion of counsel to the Purchaser in form and substance
reasonably satisfactory to the Seller, substantially in the form attached hereto
to as EXHIBIT A; and
(vii) Assignment and Assumption Agreement for the assumed Contracts in
form and substance reasonably satisfactory to the Seller, substantially in the
form attached hereto as EXHIBIT B; and
(viii) evidence that the Letters of Credit have been replaced with new
letters of credit containing substantially similar terms as the Letters of
Credit or that the Purchaser has assumed the Letters of Credit.
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(c) Deliveries by the Seller at Closing. At the Closing, the Seller and
Stockholder shall deliver to the Purchaser the following:
(i) executed and acknowledged (if appropriate) warranty deeds,
assignments, trademark assignments, bills of sale and/or certificates of title,
dated the Closing Date, transferring to the Purchaser all of the Acquired Assets
free and clear of all Liens, each reasonably satisfactory to the Purchaser in
form and substance;
(ii) resolutions adopted by the Board of Directors of each of the Seller
and the Stockholder authorizing the transactions contemplated hereby, certified
by the Secretary of each of the Seller and the Stockholder;
(iii) certificates of each of the Seller and the Stockholder executed by
the Vice Chairman of the Board and Vice President of the Seller and the
President and Co-Chief Executive Officer of the Stockholder certifying that the
representations and warranties contained in Section 3 hereof are true and
correct on and as of the Closing Date and that Seller and Stockholder have
performed and complied, in all material respects, with all of their obligations
under this Agreement;
(iv) certificates issued by appropriate Governmental Authorities
evidencing, as of a recent date, the good standing and tax status of the Seller
and the Stockholder in Delaware and in those jurisdictions in which the Seller,
with respect to the Business, is qualified to do business;
(v) copies of the applicable charter instruments and all amendments
thereto of the Seller and the Stockholder, certified by the applicable
Governmental Authorities;
(vi) all books and records relating to the Business (other than the
minute books, stock books, stock ledger and corporate seals), including
trademark filings and bank and checking account records;
(vii) UCC-3 Termination Statements terminating the security interests
created pursuant to the Waxman Credit Facility in and to the Acquired Assets;
(viii) UCC lien searches, tax lien searches and judgment searches and
sales tax clearance letters (or similar certification to the extent available)
for all jurisdictions in which the Facilities are located, all of which
indicating that the Acquired Assets are, at the Closing Date, free and clear of
all Liens and encumbrances, the perfection of which is effected by the filing of
UCC-1 Financing Statements;
(ix) opinion of counsel to the Seller and the Stockholder in form and
substance reasonably satisfactory to the Purchaser, substantially in the form
attached hereto as EXHIBIT C; and
(x) all other certificates and documents reasonably requested by the
Purchaser.
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2.6 CASH RECEIPTS AND EXPENSES ADJUSTMENT. It is recognized that, although
the Closing is effective as of the Closing Date, all conditions and precedent
set forth in Sections 6 and 7 may not be satisfied on or prior to the Closing
Date. During the intervening period, the Seller will be operating the Business
and will be collecting accounts receivable and paying expenses related to the
operation of the Business. At the Closing, the Seller shall provide the
Purchaser with a reconciliation (and all necessary supporting documentation) of
its collections and disbursements related to the operation of the Business from
January 1, 1999 through the business day prior to the date on which the Closing
occurs (the "Estimated Reconciliation Date"). To the extent that, subsequent to
December 31, 1998, the net cash used by (including outstanding checks issued on
or after 1/1/99), or generated by, the Business requires a transfer of cash from
or to the Seller for obligations incurred by or assets of the Business, the net
cash will reduce or increase the Purchase Price. The estimated amount of such
net cash change is referred to as the "Estimated Reconciliation." Within 5 days
after the Closing, the Seller and the Purchaser shall recalculate the Estimated
Reconciliation using the date of the Closing instead of the Estimated
Reconciliation Date based upon additional supporting documentation provided by
the Seller as to collections and disbursements during the period from the
Estimated Reconciliation and the date of the Closing (the "Reconciliation"). If
the Reconciliation is greater than the Estimated Reconciliation, the Seller
shall pay to the Purchaser the amount thereof on or before the 10th day after
the date of the Closing, without interest, and if the Estimated Reconciliation
is greater than the Reconciliation, the Purchaser shall pay to the Seller the
amount thereof on or before the 10th day after the date of the Closing, without
interest.
2.7 FURTHER ASSURANCES. With respect to any Acquired Assets which cannot be
physically delivered to the Purchaser because they are in the possession of
third parties, the Seller will give all necessary instructions to the party in
possession thereof and any other person that the Purchaser reasonably shall
designate, with copies to the Purchaser, that all of the Seller's right, title
and interest in and to the same have been vested in the Purchaser and that the
same are to be held for the Purchaser's exclusive use and benefit.
2.8 RISK OF LOSS. The Seller shall bear the risk of loss for the Acquired
Assets until the Acquired Assets are transferred to the Purchaser as of the
Closing Date, and the Seller shall be entitled to retain any insurance proceeds
received, or any other rights, as a result of any such loss. In the event that
the Purchaser elects to proceed, however, the Purchaser shall receive any such
insurance proceeds.
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3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE STOCKHOLDER.
The Seller and the Stockholder, jointly and severally, hereby make the
following representations and warranties to the Purchaser, each of which is true
and correct on the date hereof, and shall remain true and correct to and
including the Closing Date:
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3.1 ORGANIZATION AND QUALIFICATION. Each of the Seller and the Stockholder
is a corporation duly incorporated, organized, validly existing and in good
standing under the Laws of the State of Delaware, and each of the Seller and the
Stockholder has the requisite corporate power and authority to carry on the
Business as it is now being conducted and to own the Acquired Assets in
connection therewith. Each of the Seller and the Stockholder is duly qualified
or licensed as a foreign corporation, and is in good standing, to do business in
every jurisdiction in which the character of the properties owned or held under
lease or the nature of its activities, in each case with respect to the
Business, makes such qualification necessary, except to the extent that any such
failure so as to qualify would not, individually or in the aggregate, have a
Material Adverse Effect.
3.2 AUTHORITY. Each of the Seller and the Stockholder has all requisite
corporate power and authority to enter into this Agreement and to perform all of
its obligations hereunder. The execution, delivery and performance of this
Agreement and the other documents and instruments to be executed by Seller and
Stockholder pursuant hereto and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate and
stockholder action on the part of each of the Seller and the Stockholder. This
Agreement has been duly executed and delivered by each of the Seller and the
Stockholder and, assuming due authorization, execution and delivery by the
Purchaser, this Agreement constitutes the valid and binding agreement of each of
the Seller and the Stockholder, enforceable against each of them in accordance
with its terms, except as may be limited by bankruptcy, moratorium and
insolvency Laws and other Laws affecting the rights of creditors' generally and
except as may be limited by the availability of equitable remedies.
3.3 COMPLIANCE. None of the execution and delivery of this Agreement or the
other instruments and documents to be executed and delivered by the Seller or
the Stockholder, the consummation by the Seller or the Stockholder of the
transactions contemplated hereby, or compliance by the Seller or the Stockholder
with any of the provisions hereof, will (i) violate, conflict with, or result in
a breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of any
Lien upon any of the Acquired Assets under, any of the terms, conditions or
provisions of (x) the organizational documents of the Seller or the Stockholder,
or (y) any Contracts to which either the Seller or the Stockholder is a party or
to which any of the Acquired Assets or Business may be subject; or (ii) violate
any Judgment or Law applicable to either the Seller or the Stockholder or to
which any of the Acquired Assets or Business may be subject, except for, in the
case of each of clauses (i)(y) and (ii) above, such violations, conflicts,
breaches, defaults, terminations, accelerations or creations of Liens which
would not, individually, or in the aggregate, have a Material Adverse Effect.
3.4 TITLE TO ASSETS. The Seller owns and has good and marketable title to
or, in the case of leased properties, a valid leasehold interest in, all of the
Acquired Assets. The Seller holds title to each Acquired Asset free and clear of
all Liens, except for Permitted Liens and Liens created under the Waxman Credit
Facility, with respect to the Acquired Assets, the latter of which will be
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terminated at the Closing. None of the Acquired Assets are subject to any
restrictions with respect to transferability thereof other than any restrictions
set forth in the Waxman Credit Facility. At Closing, the Purchaser will receive
good and marketable title to all the Acquired Assets, free and clear of all
Liens of any nature other than Permitted Liens.
3.5 CONTRACTS. SCHEDULE 2.1(k) hereto contains a true and correct list of
all the Contracts with respect to the Acquired Assets or the Business to which
the Seller is a party or to which the Acquired Assets or the Business is
subject. The Seller is not, nor, to the knowledge of the Seller, is any other
party, in default under any of the Contracts, which default would have a
Material Adverse Effect.
3.6 INVENTORY. All Inventory reflected on the October 31 Balance Sheet has
been, and on the Closing will be, valued in accordance with GAAP consistently
applied, stated, on an aggregate basis, at the lower of cost (based on the
first-in, first-out method) or market value and consists of a quality and
quantity of merchandise usable or salable in the ordinary course of business at
not materially less (which for this purpose shall mean an aggregate amount of
$100,000) than the value thereof reflected on such balance sheets. The Inventory
conforms to customary trade standards for marketable goods. Since the date of
the October 31 Balance Sheet, there have been no changes in the Inventory
reflected on such October 31 Balance Sheet except in the ordinary course of
business. The quantities of each type of Inventory (whether raw materials,
work-in-progress, or finished goods) reflected in the October 31 Balance Sheet
are not excessive, but are reasonable and warranted in the present circumstances
of the Business and all work-in-progress and finished goods inventory are free
of any defect or other deficiency.
3.7 ACCOUNTS RECEIVABLE. Each account receivable reflected on the October 31
Balance Sheet and as incurred in the normal course of business since that date
constitutes and as may exist at Closing will constitute a bona fide receivable
resulting from a bona fide sale or other transaction with a customer in the
ordinary course of business, the amount of which was actually due on the date of
such October 31 Balance Sheet or on the Closing Date, as the case may be, and
has been or, to the knowledge of the Seller, will be collected in the ordinary
course of business, subject, in each case, to allowances for doubtful accounts,
all of which allowances are, or will be, set forth on SCHEDULE 3.7. The books
and records of the Seller state correctly the facts with respect to each account
receivable of the Seller, with respect to the Business, and the balance due
thereon. Each payment reflected on such books and records as having been made on
each such account receivable was made by the respective account debtor and not
directly or indirectly by any director, officer, employee or agent of the
Seller. Each document and instrument evidencing, securing or relating to each
account receivable, including, with limitation, each insurance policy,
certificate, ▇▇▇▇ or statement, is correct and complete in all material
respects, is genuine and valid and is enforceable in accordance with its terms.
To the knowledge of the Seller and the Stockholder, there are no disputes,
defenses, claims of disability, counterclaims, offsets, refusals to pay or other
right of set-off against any accounts receivable reflected in the October 31
Balance Sheet and, to the knowledge of the Seller, there is no threatened,
intended or proposed defense, claim of disability, counterclaim,
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offset, refusal to pay or other right of set-off with respect thereto. Each
account receivable, each document and instrument and each transaction underlying
or relating thereto conforms in all material respects, including, without
limitation, in respect of interest rate charges, notices given and disclosures
made, to the requirements and provisions of each applicable law, rule,
regulation or order relating to credit, consumer credit, credit practices,
credit advertising, credit reporting, retail installment sales, credit cards,
collections, usury, interest rates and truth-in-lending, including, without
limitation, the Federal Truth in Lending Act, as amended and Regulation Z issued
by the Board of Governors of the Federal Reserve System thereunder.
3.8 CONSENTS. Except as set forth on SCHEDULE 3.8 and for compliance with
the applicable requirements of the HSR Act, no notice to, filing with, or
Consent of, any Governmental Authority or other Person is necessary for the
consummation by the Seller or the Stockholder of the transactions contemplated
by this Agreement.
3.9 FINANCIAL STATEMENTS.
(a) Included as Schedule 3.9 are true and correct copies of the balance
sheet of the Seller, with respect to the Business as of October 31, 1998, and
the related statements of income and cash flows for the four-month period then
ended (the "OCTOBER 31 BALANCE SHEET").
(b) Included as Schedule 3.9 are true and correct copies of the
unaudited balance sheets and statements of income and cash flows of the Seller,
with respect to the Business for the four-month period ending October 31, 1998,
including, without limitation, the October 31, 1998 Balance Sheet which is
included in the financial statements of the Seller.
(c) Within thirty (30) days of the Closing, the Seller shall provide to
the Purchaser, an audited balance sheet of Seller as of June 30, 1998 and
related statements of income and cash flows for the fiscal year then ended (the
"JUNE 30, 1998 FINANCIAL STATEMENT").
(d) Within thirty (30) days of Closing, the Purchaser shall provide to
Seller, at Purchaser's expense, a balance sheet, and related statements of
income and cash flows of Seller with respect to the Business for the period
ended December 31, 1998 (the "December 31, 1998 Financial Statements"). The
Seller shall have a period of thirty (30) days after receipt of the December 31,
1998 Financial Statements to present in writing to the Purchaser any objections
thereto, which writing shall set forth each specific item to which each such
objection relates and the specific basis for each such objection. The December
31, 1998 Financial Statements shall be deemed to be acceptable to the Seller and
shall become final and binding on the parties, except to the extent that the
Seller shall have made a specific written objection thereto within such thirty
(30) day period. If the Purchaser shall raise any such objection within such
thirty (30) day period, then the Purchaser and the Seller shall attempt in good
faith to resolve any dispute concerning the item(s) subject to such objection.
Upon failure to resolve any such dispute, within forty five (45) days of the
Purchaser's receipt of the Seller's objections, such dispute shall be submitted
to a nationally
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recognized firm of independent public accountants, as shall be mutually
acceptable to the Seller and the Purchaser (the "ACCOUNTING FIRM"). The
Accounting Firm shall be instructed to use its best efforts to render a decision
as to all items in dispute within thirty (30) days of submission, and the
parties agree to cooperate with each other and each other's authorized
representatives and with the Accounting Firm in order that any and all items in
dispute shall be resolved as soon as practicable. The determination of the
Accounting Firm concerning any item in dispute shall be final and binding on the
parties without further right of appeal. The fees and expenses of the Accounting
Firm incurred in the resolution of such dispute shall be shared equally between
the Seller and the Purchaser.
(e) All the foregoing financial statements (including all notes and
schedules therein or annexed thereto) of the Seller, with respect to the
Business, have been prepared, or in the case of the June 30, 1998 Financial
Statements and the December 31, 1998 Financial Statements will be prepared, in
accordance with GAAP applied on a consistent basis for the periods indicated and
present, or in the case of the June 30, 1998 Financial Statements and the
December 31, 1998 Financial Statements will present, fairly, in all material
respects, the financial condition of the Seller, with respect to the Business,
at the respective dates thereof and the results of the operations of the
Business for the periods covered thereby, subject in the case of the balance
sheet as of October 31, 1998, December 31, 1998 and other interim unaudited
financial statements to normal year-end audit adjustments and to the addition of
footnotes.
3.10 ABSENCE OF LIABILITIES. The Seller, with respect to the Business, does
not have any indebtedness, duties, responsibilities, liabilities, claims or
obligations of any nature, whether absolute, accrued, contingent or otherwise,
whether as principal, agent, partner, co-venturer, guarantor or in any capacity
whatsoever, related to or arising from the operation of the Business or other
ownership, possession or use of its assets, including, without limitation, the
Acquired Assets except for (x) those liabilities shown in the financial
statements of the Seller with respect to the Business referred to in Section 3.9
hereof, (y) liabilities and obligations incurred in the ordinary course of the
Business between October 31, 1998 and the Closing Date and (z) those which would
not, individually or in the aggregate, have a Material Adverse Effect.
3.11 TAXES.
(a) Except as set forth on SCHEDULE 3.11 hereto, the Seller has duly
filed all Tax Returns required to have been filed by it to the date hereof. Each
such Tax Return is true, correct and complete and the Seller has paid, or caused
to be paid, all Taxes due to any foreign, Federal, state, county, local or other
taxing authority with respect to all periods prior to the date hereof required
to have been paid by it and created sufficient reserves or made provision for
all Taxes accrued but not yet due and payable by it. Other than with respect to
liabilities for Taxes which are not yet due and payable and for which adequate
reserves are reflected on the October 31 Balance Sheet with respect to the
period as of October 31, 1998, or will be reflected on the December 31, 1998
Financial Statements with respect to the period as of December 31, 1998 or
except as set forth
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on SCHEDULE 3.11, the Seller does not have any liability for any Taxes of any
nature whatsoever and there is no basis for any additional claim or assessment.
The Seller has paid to the proper authorities all customs, duties and similar or
related charges required to be paid by it with respect to the importation of
goods into the United States. No government or governmental authority is now
asserting or threatening to assert any deficiency or assessment for additional
taxes or any interest, penalties or fines with respect to the Seller or the
Business.
(b) The Seller and the Stockholder shall be responsible for filing
all Tax Returns required to be filed, and paying all Taxes accruing on or prior
to the Closing Date.
3.12 INTELLECTUAL PROPERTY. To the knowledge of the Seller and the
Stockholder, the use of the Intellectual Property by the Seller does not
infringe upon or otherwise violate the rights of any third party and no claim
has been asserted with respect thereto. Neither the Seller nor the Stockholder
is aware of any claim which can be asserted by any Person against the Seller
with respect to the use of any item of Intellectual Property or challenging or
questioning the validity or effectiveness of such use of any such item. The
Seller does not pay a royalty or similar payment, or has any other monetary
rights, in respect of any item of Intellectual Property. Schedule 3.12 sets
forth all registered trademarks, tradenames and patents of Seller which are used
in the Business. The Seller has not granted any license or made any assignment
of any Intellectual Property and no Person has any right to use any Intellectual
Property owned or held by Seller.
3.13 EMPLOYEES. Set forth on SCHEDULE 3.13 hereto is a complete and correct
list of the names and current annual salary, bonus, commission and perquisite
arrangements, written and unwritten, for each Employee. Except as set forth on
SCHEDULE 3.13, to the knowledge of the Seller, no employee listed thereon
intends to terminate his or her employment relationship with the Seller and the
Seller does not have any contract for the future employment of any employee
listed on SCHEDULE 3.13 which is not listed on SCHEDULE 3.13. Schedule 3.13 also
sets forth all pension, profit sharing, retirement, health insurance, employee
welfare and other employee benefit plans, programs and arrangements of Seller
with respect to the Business, including without limitation, all "Employee
Benefit Plans" as defined in Section 3(3) of the Employee Retirement Act of
1974, as amended ("ERISA"), and all union contracts, collective bargaining
agreements, employment agreements and severance or change of control agreements.
3.14 COMPLIANCE WITH LAWS. Each of the Seller and the Stockholder is in
compliance with all Laws applicable to the Business, except for such
noncompliance which is not reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect.
3.15 ENVIRONMENTAL MATTERS.
Except as disclosed on SCHEDULE 3.15 hereto, to the knowledge of the
Seller or the Stockholder (such "knowledge" qualification to be applicable
solely with respect to representations and warranties made by the Seller and the
Stockholder in this Section 3.15 with respect to the
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Business, the Acquired Assets and the Facilities other than the Brentwood
Facility with respect to which the foregoing "knowledge" qualification shall not
apply):
(a) The Seller, with respect to the Business, does not generate,
manufacture, use, store, transport or have transported or dispose of, and has
not in the past generated, manufactured, used, stored, transported or had
transported or disposed of, Hazardous Materials, except in compliance with
Environmental Laws;
(b) there are no past or present events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere with or
prevent continued compliance with Environmental Laws, or which may give rise to
any common or legal liability or penalty, or otherwise form the basis of any
claim, action, event, proceeding, hearing or investigation under or pursuant to
Environmental Laws, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, handling, release or
threatened release by the Seller during the conduct of the Business of any
Hazardous Materials;
(c) no underground storage tank exists or has existed on or about the
Facilities or the Acquired Assets; and
(d) the Seller, with respect to the Business, is, and at all times has
been, in compliance with all Environmental Laws and no notice, request,
investigation, administrative order, consent order, agreement, litigation or
settlement is proposed, anticipated or in existence, or, to the knowledge of
Seller and Stockholder, threatened, with respect to the violation of any
federal, state, or local environmental law or regulation, the presence,
suspected presence or potential presence of any Hazardous Material on or about
the Facilities or the Acquired Assets from any source, except where the failure
to so comply would not have a Material Adverse Effect.
3.16 REAL PROPERTY. (a) SCHEDULE 2.1(O) annexed hereto sets forth an
accurate, correct and complete list of all Real Property owned, leased or
subleased by the Seller with respect to the Business. Except as set forth on
SCHEDULE 2.1(o) annexed hereto, all Real Property with respect to the Business
is in good operating condition and repair (reasonable wear and tear excepted),
is suitable for the purposes for which it is presently being used and is
adequate to meet all present and reasonably anticipated future requirements of
the Business, as currently conducted by the Seller and as proposed to be
conducted in the future. The Seller has good and marketable title in fee simple
to all Real Property owned by it and such Real Property is free and clear of any
Liens. There are no pending or threatened condemnation or similar proceedings
(including foreclosure) which could affect such Real Property. The Seller has
been in peaceable possession of the premises covered by each of the Real
Property leases since the commencement of the original term of each of such Real
Property leases.
(b) Each of the Real Property leases (and leases and subleases
underlying such Real Property leases) is in full force and effect and contains
no terms other than the terms contained
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in the copies heretofore delivered to the Purchaser. The Seller has complied
with all commitments and obligations on its part to be performed or observed
under each of the Real Property leases. Each party to each of the Real Property
leases (and leases and subleases underlying such Real Property leases) other
than the Seller has complied with all commitments and obligations on its part to
be performed or observed thereunder, except for such noncompliance which is not
reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect. The Seller has not received any notice of a default, offset or
counterclaim under any of the Real Property leases (or leases and subleases
underlying such Real Property leases) and no event or condition has happened or
presently exists which constitutes a default or, after notice or lapse of time
or both, would constitute a default under any of the Real Property leases (or
leases and subleases underlying such Real Property leases). There is no Lien
upon any leasehold interest of the Seller under any of the Real Property leases.
(c) There are no pending or threatened actions or proceedings
(including condemnation and foreclosure) which could affect the Real Property
against the Seller and to the Seller's knowledge, there are no such actions or
proceedings against other parties. To the Seller's knowledge, there are no
violations of any Law affecting the Real Property leased or subleased by the
Seller. To the Seller's knowledge, there are no patent or latent defects in the
design or construction of the buildings located on the Real Property.
(d) There are no defaults by the landlords under any of the Real
Property leases (or leases and subleases underlying such Real Property leases)
and such landlords have performed all of their obligations thereunder to the
extent that such performance was to be completed heretofore. The Seller has not
waived any obligation of any such landlord or any right under any of the Real
Property leases (or leases and subleases underlying such Real Property leases).
There are no pending or, to the knowledge of the Seller, threatened actions or
proceedings which are reasonably likely to affect adversely or materially
disrupt the use by the Seller of any of the Real Property leases against the
Seller and, to the knowledge of the Seller, there are no such actions or
proceedings against other parties.
(e) To the knowledge of Seller, the Brentwood Facility is structurally
sound with no material defects and is in good operating condition and repair and
is adequate to meet all present and reasonably anticipated future requirements
of the operations of the Business, as currently conducted; and, to the knowledge
of such Seller, is not in need of maintenance or repairs except for ordinary,
routine maintenance and repairs which are not material in nature or cost. Except
as set forth on SCHEDULE 3.16(e), Seller is not aware that the Brentwood
Facility, the buildings, fixtures and improvements thereon, and the present use
thereof, do not comply in all material respects with all restrictive covenants,
deeds and other restrictions and all Laws with regard to the operation of the
Brentwood Facility, including provisions relating to permissible nonconforming
uses; and Seller is not aware of any such premises which are presently affected
or threatened by any condemnation or eminent domain proceeding or any proceeding
by a mortgagee.
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3.17 LEGAL PROCEEDINGS. There is no action, suit, proceeding, complaint,
charge, Tax or other audit, investigation or arbitration or other method of
settling disputes or disagreements by or before any Governmental Authority
pending or, to the knowledge of the Seller and the Stockholder, threatened
against or affecting the Business or the Acquired Assets or which questions the
validity of this Agreement or any action taken or to be taken by the Seller or
the Stockholder in connection with the transactions contemplated hereby. There
are no Judgments applicable to the Seller or the Stockholder which would affect
the Business or the Acquired Assets.
3.18 NO BROKERS. Neither the Seller nor the Stockholder has entered into any
Contract, arrangement or understanding with any Person or incurred any liability
which could result in the obligation of any Person to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with this
Agreement or the transactions contemplated hereby.
3.19 COMPUTER SYSTEM. As the Purchaser is aware, the Seller is in the
process of installing a new computer system for the Business. When Seller
completes the installation of such computer system, such system will be fit for
the purpose for which it is intended and will be Year 2000 compliant. The
parties hereto agree that if the aggregate costs payable for installing such
computer system (in accordance with the system specifications existing as of the
date hereof) in compliance with the preceding sentence exceed $700,000, then
Seller shall reimburse Purchaser for all out-of-pocket costs actually incurred
by Purchaser in completing such computer installation in compliance with the
preceding sentence that are in excess of $875,000 (i.e., $175,000 in excess of
the $700,000 budget).
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents and warrants to the Seller and the
Stockholder as follows:
4.1 ORGANIZATION AND QUALIFICATION. The Purchaser is a corporation duly
incorporated, organized, validly existing and in good standing under the Laws of
the State of Delaware, and the Purchaser has the requisite corporate power and
authority to own its properties and carry on its business as it is now being
conducted. The Purchaser is duly qualified as a foreign corporation to do
business, and is in good standing, in each other jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except to the extent that any
such failure so to qualify would not, individually or in the aggregate, have a
Material Adverse Effect.
4.2 AUTHORITY. The Purchaser has all requisite corporate power and authority
to enter into this Agreement and to perform all of its obligations hereunder.
The execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Purchaser. This Agreement has been duly executed and
delivered by the Purchaser and, assuming due authorization, execution and
delivery by the Seller and the Stockholder, this Agreement constitutes the valid
and binding agreement of the
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Purchaser, enforceable against the Purchaser in accordance with its terms,
except as may be limited by bankruptcy, moratorium and insolvency Laws and other
Laws affecting the rights of creditors' generally and except as may be limited
by the availability of equitable remedies.
4.3 COMPLIANCE. None the execution and delivery of this Agreement by the
Purchaser, the consummation by the Purchaser of the transactions contemplated
hereby, or compliance by the Purchaser with any of the provisions hereof, will
(i) violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration under, or result in the creation of any Lien upon any of the assets
of the Purchaser under, any of the terms, conditions or provisions of (x) the
organizational documents of the Purchaser; or (y) any Contracts to which the
Purchaser is a party or (ii) violate any Judgment applicable to the Purchaser.
4.4 CONSENTS. Except as set forth on SCHEDULE 4.4 and for compliance with
the applicable requirements of the HSR Act, no notice to, filing with, or
Consent of, any Person is necessary for the consummation by the Purchaser of the
transactions contemplated by this Agreement.
4.5 NO BROKERS. The Purchaser has not entered into any Contract, arrangement
or understanding with any Person which could result in the obligation of any
Person to pay any finder's fees, brokerage or agent's commissions or other like
payments in connection with this Agreement or the transactions contemplated
hereby.
5. COVENANTS RELATING TO EMPLOYMENT AND EMPLOYEE MATTERS AND INSURANCE.
5.1 OFFER OF EMPLOYMENT.
(a) The Purchaser shall offer employment as of the Closing Date to each
Employee in a substantially similar position and at a rate of pay substantially
similar to such Employee's rate of pay in effect, and with such benefits as
shall be substantially similar to such Employee's benefits in effect, on the
business day immediately preceding the Closing Date; provided that Purchaser
shall not be required to provide benefits at a greater level than Purchaser
provides generally to Purchaser's employees in similar positions. The Purchaser
shall be solely responsible for all compensation accruing or to be paid on or
after the effective time of the Closing respect to the Employees.
(b) The Seller shall provide to the Purchaser prior to the Closing a
statement as of the Closing Date of all accrued entitlements for Employees,
including but not limited to vacation days and other benefits, the payment of
which shall be the responsibility of the Purchaser.
5.2 CONTINUATION OF INSURANCE.
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(a) The Seller shall continue to provide group health and medical
coverage to the Transferred Employees identical to the group health and medical
coverage currently provided to such employees by the Seller until March 31,
1999. The Purchaser agrees to reimburse the Seller for all premiums, deductibles
and any and all other expenses associated with such coverage.
(b) The Seller shall continue to maintain property and casualty
insurance with respect to, and continue to insure, the Acquired Assets until
March 31, 1999. The Purchaser agrees to reimburse the Seller for all premiums,
deductibles and any and all other expenses associated with such coverage.
6. CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS. The obligation of the
Purchaser to purchase the Acquired Assets as contemplated hereby shall be
subject to the satisfaction, at or before the Closing Date, of the following
conditions (any of which may be waived, in whole or in part, by the Purchaser):
6.1 BANK CONSENTS. The Purchaser shall have received a consent from First
Union National Bank to the transactions contemplated by this Agreement pursuant
to the ▇▇▇▇▇▇▇ Credit Facility and commitment to provide financing for the
transaction on terms and conditions reasonably acceptable to Purchaser.
6.2 DELIVERY OF DOCUMENTS. The Purchaser shall have received from the Seller
all of the items listed in Section 2.5(b) hereof.
6.3 ACCURACY OF SELLER'S AND STOCKHOLDER'S REPRESENTATIONS. All of the
Seller's and the Stockholder's representations and warranties in this Agreement
shall have been accurate in all material respects as of the date of this
Agreement and as of the Closing Date.
6.4 SELLER'S AND STOCKHOLDER'S PERFORMANCE. The Seller and the Stockholder
shall have complied in all material respects with all of their covenants and
obligations contained in this Agreement.
6.5 NO PROCEEDINGS. No action, suit or proceeding shall have been commenced
or threatened, and no investigation by an Governmental Authority shall have been
commenced, against Purchaser, Seller, Stockholder or any of the affiliates,
officers or directors of any of them, with respect to the transactions
contemplated hereby.
6.6 EMPLOYMENT AGREEMENT. ▇▇▇▇ ▇▇▇▇▇▇ and the employees listed on SCHEDULE
6.8 hereto shall have executed and delivered employment agreements with
Purchaser in form and substance reasonably acceptable to the Purchaser.
6.7 BANK ACCOUNTS AND LOCK BOXES. Not less than ten (10) days prior to
Closing, the Seller shall have directed each Bank in which the Seller has an
account in which funds related to the
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Business are deposited, that all funds deposited in such account after the
Closing shall be for the benefit of the Purchaser until such time as the
Purchaser shall have opened a new bank account in that location. The Seller's
and the Stockholder's lender under the Waxman Credit Facility shall have
assigned to the Purchaser effective on the Closing Date all rights to and
interests in lock boxes maintained by the Seller in connection with the Business
and shall have arranged for all checks deposited in such lock boxes after the
Closing to be transferred to the Purchaser in accordance with wire instructions
supplied by the Purchaser.
6.8 DUE DILIGENCE. The Purchaser, shall be satisfied with its "due
diligence" investigation of the Acquired Assets and the Business; provided,
however, that the Purchaser shall be deemed to have been satisfied with its "due
diligence" investigation if the Purchaser does not notify the Seller in writing
within ten (10) business days after the date on which all of the material due
diligence information requested by Purchaser with respect to the Business has
been delivered to it in accordance with Section 11.4 hereof that the Purchaser
is not satisfied with its "due diligence" investigation.
6.9 CONSENTS. All approvals, consents and waivers that are required to
effect the transactions contemplated hereby shall have been received, and
executed counterparts thereof shall have been delivered to Purchaser.
6.10 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been terminated.
6.11 LETTERS OF CREDIT. The Purchaser shall have assumed or replaced the
letters of credit set forth on SCHEDULE 6.11 that are outstanding as of the
Closing Date (the "LETTERS OF CREDIT"). In the event that the Letters of Credit
are replaced by the Purchaser with new letters of credit, such new letters of
credit shall contain terms substantially similar to those set forth in the
Letters of Credit.
7. CONDITIONS PRECEDENT TO THE SELLER'S AND THE STOCKHOLDER'S OBLIGATIONS. The
obligation of the Seller and the Stockholder to sell, convey, transfer and
assign the Acquired Assets as contemplated hereby shall be subject to the
satisfaction, at or before the Closing Date, of the following conditions (any of
which may be waived, in whole or in part, by the Seller and the Stockholder):
7.1 BANK CONSENTS. The Seller shall have received a consent from BankAmerica
to the transactions contemplated by this Agreement pursuant to the Waxman Credit
Facility.
7.2 DELIVERY OF DOCUMENTS. The Seller and the Stockholder shall have
received the items set forth in Section 2.5(c) hereof.
7.3 ACCURACY OF PURCHASER'S REPRESENTATIONS. All of the Purchaser's
representations and warranties in this Agreement shall have been accurate in all
material respects as of the date of this Agreement and as of the Closing Date.
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7.4 PURCHASER'S PERFORMANCE. The Purchaser shall have complied in all
material respects with all of its covenants and obligations contained in this
Agreement.
7.5 NO PROCEEDINGS. No action, suit or proceeding shall have been commenced
or threatened, and no investigation by an Governmental Authority shall have been
commenced, against the Purchaser, the Seller, the Stockholder or any of the
affiliates, officers or directors of any of them, with respect to the
transactions contemplated hereby.
7.6 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been terminated.
8. CONDUCT OF BUSINESS PRIOR TO THE CLOSING AND OTHER AGREEMENTS.
The parties hereto covenant and agree as follows:
8.1 CONDUCT OF BUSINESS.
(a) Except as otherwise expressly contemplated by this Agreement or as
specifically consented to in writing by the Purchaser, from and after the date
of this Agreement until the Closing, the Seller will use its best efforts to:
(i) preserve its present business organization intact, (ii) keep available the
services of the present employees of the Business, (iii) preserve its present
relationships with Persons having business dealings with the Seller with respect
to the Business, (iv) operate the Business in the ordinary and regular course
consistent with its prior practices, (v) maintain its books and records in
accordance with good business practices, on a basis consistent with its prior
practices and in accordance with GAAP, (vi) maintain the Acquired Assets in
their current condition, normal wear and tear excepted, (vii) conduct the
Business in accordance with all applicable Laws, (ix) maintain its corporate
existence, good standing, and qualifications to do business, (x) perform in all
material respects all of its obligations under its Contracts with respect to the
Business and not take any action to terminate or modify the terms thereof except
in the ordinary course of business and (xi) maintain all insurance, certificates
and licenses and permits necessary for the conduct of the Business as currently
conducted.
(b) In addition, during such period, except as otherwise expressly
provided in this Agreement or as otherwise consented to by the Purchaser in
writing, the Seller will not: (i) make any capital expenditure or dispose of any
of the Acquired Assets other than in the ordinary course of business, (ii) make
any material change in the Business, (iii) enter into, amend in any respect or
terminate any Contract with respect to the Business, (v) waive any right with
respect to the Business of substantial value other than for fair consideration,
(vi) change the accounting principles, methods or practices, except for such
changes as are necessary to conform with GAAP and are disclosed to the
Purchaser, or (vii) agree or commit orally or in writing to do any of the
foregoing.
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8.2 ACCESS TO INFORMATION. From the date hereof, the Purchaser and its
counsel, accountants, representatives and agents shall have full access, upon
reasonable notice and during normal business hours, to the employees and the
financial, legal and other representatives of the Seller with knowledge of the
business of the Seller, offices, properties, books and records of the Seller
and, upon reasonable notice, shall be furnished all relevant documents, records
and other information concerning the business, finances and properties of the
Seller that they may reasonably request.
8.3 CONSENTS. Each of the parties hereto will use its best efforts and shall
fully cooperate with each other party to make promptly all registrations,
filings and applications, give all notices and obtain all governmental and third
party consents, permits, approvals, orders, authorities, qualifications, and
waivers necessary for the consummation of the sale and purchase of the Acquired
Assets contemplated by this Agreement.
8.4 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. As soon as practicable after the date hereof, the
Purchaser and the Seller will prepare and file all documents with the Federal
Trade Commission and the United States Department of Justice that are required
to comply with the HSR Act. The Seller and the Purchaser will promptly respond
to any "second request" made in connection with such filings and will promptly
furnish all materials requested by any of the regulatory agencies having
jurisdiction over such filings. The Seller and the Purchaser will request early
termination of the waiting period under the HSR Act.
8.5 BULK TRANSFER LAWS. Purchaser hereby waives compliance by Seller with
the provisions of any so-called "bulk transfer" Law of any jurisdiction in
connection with the sale of the Acquired Assets to Purchaser.
8.6 FURTHER ASSURANCES. Subject to the terms and conditions hereof, the
Seller agrees that after the Closing its will execute and deliver such documents
to the Purchaser as the Purchaser may reasonably request in order to vest good
title to the Acquired Assets in the Purchaser and to consummate the transactions
contemplated hereby.
8.7 NOTIFICATION OF CERTAIN MATTERS. The parties hereto each agree to give
prompt notice to the other of (i) the occurrence, or failure to occur, of any
event which occurrence or failure to occur is reasonably likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Closing, and (ii) any material failure on its part to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder.
8.8 SUPPLEMENTS TO SCHEDULES. Prior to the Closing, the parties hereto will
supplement or amend the Schedules hereto with respect to any matter hereafter
arising which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in such Schedules. No supplement
or amendment of the Schedules made pursuant to this Section 8.8 shall
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be deemed to cure any breach of any representation or warranty made in this
Agreement unless the other parties hereto specifically agree thereto in writing.
8.9 CERTAIN VENDOR MATTERS. If, within six (6) months of the Closing Date,
certain vendors of the Business identified in writing to Purchaser by Seller
prior to the date hereof, terminate their relationship with the Business as a
result of the consummation of the transactions contemplated hereby, then the
Seller shall pay to Purchaser the incremental costs actually incurred by the
Purchaser during the twelve (12) month period after the termination of such
vendor relationships as a result of having to obtain alternative sources of
supply during such period; provided that the Seller shall not be responsible for
payments in excess of $300,000. Purchaser shall supply to Seller all
documentation that relates to the calculation of additional costs.
9. NONCOMPETITION.
9.1 PROHIBITED ACTIVITIES. The Seller and the Stockholder agree that for a
period of five years following the Closing Date (the "NONCOMPETE PERIOD"),
neither the Seller nor the Stockholder will, and they shall each cause its
subsidiaries to not,:
(a) establish, enter into, be employed by, advise, consult with, become
an owner in or a part of or in any way participate in, any company, partnership,
corporation or other entity or venture (other than the Purchaser) that competes
with, or in any way engages in any business or venture (for itself or himself or
others and whether as an officer, director, stockholder, owner, partner, joint
venturer, employee, independent contractor, consultant, advisor or
representative) that competes with, (i) the Business as currently conducted and
(ii) the current business of Purchaser;
(b) solicit for hire any Employee or present or future employee of the
Purchaser other than Employees terminated by the Purchaser or any of its
subsidiaries; or
(c) directly or indirectly solicit, in competition with the Business or
the current business of the Purchaser, any customer of (i) the Business or (ii)
the Purchaser;
(d) directly or indirectly solicit, or offer employment to, any
employees of Purchaser, including the Employees acquired pursuant to this
transaction, without the prior written consent of Purchaser.
Ownership of not more than one percent of the voting stock of a corporation
whose stock is traded on a national securities exchange or over-the-counter
shall not of itself constitute a violation of this Section 9.1.
9.2 REASONABLE RESTRAINT. The parties agree that the covenants contained in
this Section 9 are an integral element of the transactions contemplated by this
Agreement, impose a reasonable restraint on the Seller and the Stockholder in
light of the activities and business of the Business and
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the future plans of the Purchaser with respect to the Business and do not
unfairly hinder or restrain the Seller's or the Stockholder's current or
anticipated business operations.
9.3 SEVERABILITY; REFORMATION. The covenants in this Section 9 are
severable, and in the event that any one or more of such covenants are deemed
illegal or unenforceable, the remaining covenants shall remain in full force and
effect, and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. In the event any court of competent
jurisdiction shall determine that the scope, time or territorial restrictions
set forth in this Section 9 are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the court
deems reasonable, and the provision of this Section 9 shall thereby be reformed.
9.4 REMEDY. The parties understand and agree that the remedies at law for
breach of this covenant not to compete would be inadequate and that any
attempted breach of Section 9.1 would cause the Purchaser irreparable damage as
would be impossible to determine. Accordingly, the Seller and the Stockholder
each agree and consent that, in the event of any breach or threatened breach of
Section 9.1 by either of them or their subsidiaries, in addition to all other
legal and equitable remedies available to the Purchaser for such threatened
breach, including a recovery of damages, the Purchaser shall be entitled to
obtain preliminary or permanent injunctive relief without the necessity of
proving actual damage by reason of such breach.
10. INDEMNIFICATION.
10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS. All
representations, warranties, covenants and agreements of the parties hereto
included or provided for herein shall survive for a period of eighteen (18)
months from the Closing Date (provided that such period shall be extended with
respect to any breach or claim, written notice of which, in reasonable detail,
is delivered to the other party within such eighteen (18) month period);
PROVIDED, HOWEVER, that all representations, warranties, covenants or agreements
set forth in Section 3.9 and 3.11 shall survive until the expiration of the
applicable statute of limitations relating to such Taxes, taking into account
any extensions of the statute of limitations pursuant to the Code or other
applicable Laws relating to Taxes or pursuant to any Contract; PROVIDED FURTHER,
HOWEVER, that the representations and warranties of the (i) Seller and the
Stockholder set forth in Sections 3.2, 3.3, 3.4 and 3.17 and (ii) Purchaser set
forth in Sections 4.2 and 4.3 shall survive indefinitely.
10.2 GENERAL INDEMNITY.
(a) The Seller and the Stockholder, jointly and severally, agree to
indemnify, defend and hold harmless the Purchaser, and all directors, officers,
employees and representatives of the Purchaser, against (i) (A) any and all
damage, loss, claim, expense, deficiency or cost in connection with the breach
or threatened breach of any representation or warranty made by the Seller or the
Stockholder hereunder, (B) the failure to comply or threatened failure to comply
by the Seller
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or the Stockholder with any (x) covenant made by the Seller or the Stockholder
hereunder and (y) bulk transfer laws applicable to the transaction contemplated
hereunder and (C) the Retained Liabilities, and (ii) any and all actions, suits,
proceedings, demands, assessments, Judgments, costs, costs of collection and
legal and other expenses (including, without limitation, reasonable legal fees
and expenses, whether incurred prior to arbitration or litigation, during
arbitration or litigation, on appeal or in any bankruptcy or insolvency
proceeding) incident to any of the foregoing.
(b) The Purchaser agrees to indemnify and hold harmless the Seller or
the Stockholder, and all directors, officers, employees and representatives of
the Seller and the Stockholder, against (i) any and all damage, loss, claim,
expense, deficiency or cost in connection with (A) the breach or threatened
breach of any representation or warranty made by the Purchaser hereunder, (B)
the failure to comply or threatened failure to comply by the Purchaser with any
covenant contained herein, and (C) the Assumed Liabilities and (ii) any and all
actions, suits, proceedings, demands, assessments, Judgments, costs, costs of
collection and legal and other expenses (including, without limitation,
reasonable legal fees and expenses, whether incurred prior to arbitration or
litigation, during arbitration or litigation, on appeal or in any bankruptcy or
insolvency proceeding) incident to any of the foregoing.
(c) The Seller and the Stockholder shall not be required to make any
indemnification payment to the Purchaser pursuant to Section 10.2(a)(i)(A)
hereof unless, and only to the extent, that the aggregate amount of such
Purchaser's damages from all such claims exceeds $600,000 and after taking into
account insurance proceeds or any other recovery actually received by the
Purchaser or any affiliate thereof; provided, however, that the foregoing
limitation on indemnification shall not apply to a breach of the representation
and warranty contained in section 3.19 hereof.
(d) The Purchaser shall not be required to make any indemnification
payment to the Seller or the Stockholder pursuant to Section 10.2(b)(i)(A)
hereof unless and only to the extent that the aggregate amount of such
Purchaser's damages in the aggregate from all such claims exceeds $600,000 after
taking into account insurance proceeds or any other recovery actually received
by the Seller or any affiliate thereof.
10.3 REIMBURSEMENT.
(a) Subject to Section 10.4, the Seller and the Stockholder, jointly
and severally, agree to reimburse the Purchaser on demand for any payment made
by the Purchaser or any loss, damage, cost or expense suffered by the Purchaser
at any time after the date hereof in respect of any matter to which the
indemnity referred to in Section 10.2(a) relates, to the extent that the
Purchaser has not previously been reimbursed, or otherwise been made whole.
(b) Subject to Section 10.4 hereof, the Purchaser agrees to
reimburse the Seller and the Stockholder on demand for any payment made by the
Seller or the Stockholder or any loss,
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damage, cost or expense suffered by the Seller or the Stockholder at any time
after the date hereof in respect of any matter to which the indemnity referred
to in Section 10.2(b) relates, to the extent that the Seller and the Stockholder
have not previously been reimbursed, or otherwise been made whole.
10.4 CLAIMS.
(a) In the event that at any time a claim is made by any Person not a
party to this Agreement with respect to any matter to which the indemnity
provided for by Sections 10.2(a) and 10.3 relates, the Purchaser, on not less
than twenty (20) days' notice to the Seller and the Stockholder, may make
settlement of such claim and such settlement shall be binding upon the Seller
and the Stockholder; PROVIDED, HOWEVER, that the Seller and the Stockholder
shall have the option, to be exercised by notice to the Purchaser within fifteen
(15) days after such first mentioned notice shall have been given, irrevocably
and unconditionally, to assume responsibility for the contest and defense of
such claim; PROVIDED FURTHER, HOWEVER, that if Seller and Stockholder by such
written notice unconditionally and irrevocably assume responsibility for the
claim and defense thereof, none of the Seller or the Stockholder shall be liable
for any settlement of any such claim effected by the Purchaser without the
Seller's and the Stockholder's written consent (which consent shall not be
withheld unreasonably or in bad faith) but, if settled with the Seller's and the
Stockholder's written consent, the Seller and the Stockholder agree to indemnify
and hold harmless the Purchaser from and against any loss, liability, damage or
expense by reason of such settlement. If the Seller and the Stockholder shall
exercise such option, they shall have control over such contest and defense and
over the payment, settlement or compromise of such claim, and the Purchaser
agrees to cooperate fully with the Seller and the Stockholder and their
attorneys with respect to such contest and defense. If Seller and Stockholder do
not exercise such option, Purchaser shall control the litigation. Any payment or
settlement resulting from such contest, together with the total expenses
thereof, including reasonable attorneys' fees, shall be binding upon the Seller
and the Stockholder. Notwithstanding the foregoing, the Seller and the
Stockholder agree that, without the Purchaser's prior written consent, such
Seller and the Stockholder will not settle, compromise or consent to the entry
of any Judgment in any pending or threatened claim in respect of which
indemnification could be sought under the indemnification provisions of this
Section 10 (whether or not the Purchaser or any other Person who may be
indemnified hereunder is an actual or potential party to such claim) unless such
settlement compromise or consent includes an unconditional release of the
Purchaser and each other Person who may be indemnified hereunder from all loss,
liability, damage or expense arising out of such claim.
(b) In the event that at any time a claim is made by any Person not a
party to this Agreement with respect to any matter to which the indemnity
provided for by Section 10.2(b) relates, the Seller and the Stockholder, on not
less than twenty (20) days' notice to the Purchaser, may make settlement of,
such claim and such settlement shall be binding upon the Purchaser; PROVIDED,
HOWEVER, that the Purchaser shall have the option, to be exercised by notice to
the Seller and the Stockholder within fifteen (15) days after such first
mentioned notice shall have been given,
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irrevocably and unconditionally, to assume responsibility for the contest and
defense of such claim; PROVIDED FURTHER, HOWEVER, that if Purchaser by written
notice unconditionally and irrevocably assumes responsibility for the claim and
defense thereof, the Purchaser shall not be liable for any settlement of any
such claim effected by the Seller and the Stockholder without its written
consent (which consent shall not be withheld unreasonably or in bad faith) but
if settled with its written consent, the Purchaser agrees to indemnify and hold
harmless the Seller and the Stockholder from and against any loss, liability,
damage or expense by reason of such settlement. If the Purchaser shall exercise
such option, it shall have control over such contest and defense and over the
payment, settlement or compromise of such claim, and the Seller and the
Stockholder agree to cooperate fully with the Purchaser and its attorneys with
respect to such contest and defense. If the Purchaser does not exercise such
options, the Seller and the Stockholder shall control the litigation. Any
payment or settlement resulting from such contest, together with the total
expenses thereof, including but not limited to reasonable attorneys' fees, shall
be binding upon the Purchaser, the Seller and the Stockholder. Notwithstanding
the foregoing, the Purchaser agrees that, without the prior written consent of
the Seller and the Stockholder, the Purchaser will not settle, compromise or
consent to the entry of any Judgment in any pending or threatened claim in
respect of which indemnification could be sought under the indemnification
provisions of this Section 10 (whether or not the Seller, the Stockholder or any
other Person who may be indemnified hereunder is an actual or potential party to
such claim) unless such settlement compromise or consent includes an
unconditional release of the Seller and the Stockholder and each other Person
who may be indemnified hereunder from all loss, liability, damage or expense
arising out of such claim.
10.5 DISPUTES.
(a) If the Purchaser claims that the Seller or the Stockholder is
liable with respect to any matter to which the foregoing indemnity relates, the
Purchaser shall give written notice to the Seller or the Stockholder, which
notice shall specify the amount claimed and the facts upon which the claim is
based. Each claim shall be deemed approved by the Seller or the Stockholder
unless the Seller or the Stockholder gives the Purchaser written notice of
disapproval within twenty (20) days of receipt of such claim. The parties shall
undertake, in good faith, to adjust any such claim which is so disapproved.
(b) If the Seller or the Stockholder claims that the Purchaser is
liable with respect to any matter to which the foregoing indemnity relates, the
Seller or the Stockholder shall give written notice to the Purchaser, which
notice shall specify the amount claimed and the facts upon which the claim is
based. Each claim shall be deemed approved by the Purchaser, unless the
Purchaser gives the Seller and the Stockholder written notice of disapproval
within twenty (20) days of receipt of such claim. The parties shall undertake,
in good faith, to adjust any such claim which is so disapproved.
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11. MISCELLANEOUS.
11.1 LEGAL AND ACCOUNTING EXPENSES. The Seller, the Stockholder and the
Purchaser shall each bear its own expenses in connection with this transaction.
The Seller and Purchaser shall each pay one-half of the HSR Act filing fees and
fees and costs associated with the audit of the June 30, 1998 Financial
Statements.
11.2 PUBLICITY. At all times from the date hereof to the Closing, the
parties shall agree with each other as to timing and content prior to issuing
any announcement, press release, public statement or other information to the
press or any third party with respect to this Agreement or the transactions
contemplated hereby; PROVIDED, HOWEVER, that nothing herein shall prohibit any
party to this Agreement from making any public disclosure regarding this
Agreement and the transactions contemplated hereby if, in the opinion of counsel
to such party, such disclosure is required by Law or by valid judicial process.
11.3 HEADINGS. Section headings contained in this Agreement are included for
convenience only and shall not affect the interpretation of any provisions of
this Agreement.
11.4 NOTICES. Any notice, demand, request, waiver, or other communication
under this Agreement shall be in writing (including facsimile or similar
writing) and shall be deemed to have been duly given (i) on the date of service
if personally served, (ii) on the third day after mailing if mailed to the party
to whom notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid or (iii) on the date sent if sent by facsimile, to
the parties at the following addresses or facsimile numbers with a copy sent by
mail as aforesaid on the same date (or at such other address or facsimile number
for a party as shall be specified by like notice):
If to the Purchaser, to: ▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇▇
The ▇▇▇▇▇▇▇▇▇ Building
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Seller
or the Stockholder: WOC Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
11.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. Neither of the parties hereto shall assign any rights or delegate any
duties hereunder without the prior written consent of the Purchaser, the Seller
and the Stockholder, and any assignment made without such consent shall be void
and constitute a default hereunder.
11.6 GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed by, the internal laws of the State of Florida, without giving
effect to the principles of conflict of laws thereof. The parties agree that any
dispute arising out of or relating to this Agreement shall be resolved by
binding arbitration in the City of New York, State of New York, under the
Commercial Arbitration Rules of the American Arbitration Association. Each of
the parties hereto consents, for itself and in respect of its property, to the
jurisdiction and venue of the City of New York, State of New York for purposes
of this Section 11.6 and hereby irrevocably waives any objection, including any
objection to the laying of venue or based on the grounds of FORUM NON CONVENIENS
which it may now or hereafter have to the bringing of any dispute in the City of
New York, State of New York, under the Commercial Arbitration Rules of the
American Arbitration Association, in respect of this Agreement or any documents
related thereto. Each of the parties hereto waives personal service of any
summons, complaint or other process, which may be made by any other means
permitted under Florida law. Notwithstanding the foregoing, the parties shall be
entitled to limited discovery, including without limitation, ten (10) hours of
deposition, twenty (20) interrogatories and request for production of documents.
11.7 ENTIRE AGREEMENT. This Agreement, including the Exhibits and Schedules,
sets forth the entire understanding and agreement of the parties with respect to
its subject matter and supersedes any and all prior understandings, negotiations
or agreements among the parties hereto, both written and oral, with respect to
such subject matter.
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11.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which,
when taken together, shall constitute one and the same agreement.
11.9 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, in whole or in part, the validity of the
remaining provisions shall not be affected and the remaining portion of any
provision held to be invalid, illegal or unenforceable shall in no way be
affected, prejudiced or disturbed thereby.
11.10 NO PREJUDICE. This Agreement has been jointly prepared and negotiated
by the parties hereto and the terms hereof shall not be construed in favor of or
against any party on account of its participation in such preparation.
11.11 NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the parties hereto and their
respective successors and permitted assigns.
11.12 AMENDMENT AND MODIFICATION. This Agreement may be amended or modified
only by written agreement executed by all parties hereto.
11.13 WAIVER. Each of the parties hereto may (i) extend the time for the
performance of any of the obligations or other acts of any other party hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, or (iii) waive compliance
with any of the covenants, agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed by the party granting
such waiver. Such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or future failure.
11.14 ATTORNEY'S FEES. In the event of any litigation or arbitration arising
out of or relating to this Agreement or the transactions contemplated hereby,
the party which prevails on predominately all of its claims and counterclaims as
determined by the arbitrator or court of competent jurisdiction, as the case may
be, shall recover from the other party the prevailing parties' reasonable
attorneys' fees and expenses.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
▇▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive Officer
WOC INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Vice Chairman of the
Board
WAXMAN INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and Co-Chief Executive Officer
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