ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("AGREEMENT") is made as of January 27, 2005, by
and between Delta Xxxxx, Inc., a Delaware corporation ("SELLER"), and Xxxxx
International, Inc., a South Carolina corporation ("BUYER").
RECITALS. Seller desires to sell, and Buyer or its assignee desire to buy,
certain land, improvements, equipment, machinery and related assets from Seller
on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the recitals, the mutual promises in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which the parties acknowledge, the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following meanings in this
Agreement:
a. "ASSIGNEE" means any Person that is a wholly-owned subsidiary of Buyer or
is wholly-owned by Xxxxx X. Xxxxx.
b. "XXXXXXX PLANT" means Seller's plant located at 000 Xxxxx Xxxxx Xxxxx,
Xxxxxxxx Xxx, Xxxxx Xxxxxxxx 00000.
c. "EASEMENT" means any recorded or unrecorded easement, right of way,
servitude, encroachment, covenant or condition with respect to the
particular real property.
d. "EFFECTIVE DATE" means January 12, 2005.
e. "ENCUMBRANCE" means any charge, claim, community or other marital property
interest, equitable interest, lien, option, pledge, security interest,
mortgage, deed of trust, right of first option, right of first refusal or
similar restriction.
f. "ENVIRONMENT" means soil, land surface or subsurface strata, surface
waters, groundwaters, drinking water supply, stream sediments, ambient air,
buildings, plant and animal life and any other environmental medium or
natural resource.
g. "ENVIRONMENTAL LAW" means any federal, state or local statute, law, rule,
regulation or order that relates to the protection of human health or the
Environment or that regulates, requires remediation of or requires notices
with respect to any Hazardous Material or the Release or threatened Release
of any Hazardous Material.
h. "ESCROW AGENT" means the law firm of Xxxxx Xxxxxxx Xxxxxxx & Xxxxxx, P.A.
that is serving as the escrow agent in connection with the transactions
described in this Agreement in accordance with the escrow agreement between
the parties dated January 11, 2005 ("ESCROW AGREEMENT").
i. "HAZARDOUS MATERIAL" means any substance, material or waste which is
regulated in any way by any federal, state or local governmental body,
including any material, substance or waste that is defined as a "hazardous
waste," "hazardous material," "hazardous substance," "extremely hazardous
waste," "restricted hazardous waste," "contaminant," "toxic waste" or
"toxic substance" under any Environmental Law, and including petroleum,
petroleum products, asbestos, presumed asbestos-containing material or
asbestos-containing material, lead based paint, urea formaldehyde,
polychlorinated biphenyls, mold and any biological agent.
j. "LIABILITY" means any liability or obligation of any kind, character or
description, whether known or unknown, absolute or contingent, accrued or
unaccrued, disputed or undisputed, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise, and whether or not the
same is required to be accrued on any financial statements.
k. "PERSON" means an individual, partnership, corporation, business trust,
limited liability company, limited partnership, joint stock company,
unincorporated association, joint venture, governmental agency or other
entity.
l. "RELEASE" means any release, spill, emission, leaking, pumping, pouring,
dumping, emptying, injection, deposit, disposal, discharge, dispersal,
leaching or migration on or into the Environment or into or out of any
property, including the presence of any Hazardous Material at any location.
2. PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of this
Agreement, at the applicable Closing, Seller will sell and assign to Buyer,
and Buyer or its Assignee will purchase from Seller, the following assets
(collectively, the "ASSETS"):
a. REAL PROPERTY. The real property consisting of the following three
plants free and clear of all Encumbrances and Easements, except
recorded general utility Easements of non-specific width and location
that do not adversely affect the use or value of the plants
(collectively, the "PLANTS"):
i. The Xxxxx Plant located at 000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxx
Xxxxxxxx 00000, consisting of approximately 119 acres, and all
associated land, buildings, fixtures, improvements, as-built and
other plans and drawings and maintenance logs ("XXXXX PLANT");
ii. The Xxxxxx Plant located at 000 Xxxxx Xxxxx Xxxxx, Xxxxxxxx Xxx,
Xxxxx Xxxxxxxx 00000, consisting of approximately 15 acres, and
all associated land, buildings, fixtures, improvements, as-built
and other plans and drawings and maintenance logs (excluding,
however, Lot B shown on the Survey for Delta Xxxxx, Inc. dated
September 7, 2004, a copy of which has been provided by Seller to
Buyer, which shall not be conveyed by Seller to Buyer) ("XXXXXX
PLANT"); and
iii. The Catawba Plant located at 0000 Xxxx Xxxxxx Xxxxxx Xxxxxxxxx,
Xxxxxx, Xxxxx Xxxxxxxx 00000, consisting of approximately 33
acres, and all associated land, buildings, fixtures,
improvements, as-built and other plans and drawings and
maintenance logs ("CATAWBA PLANT").
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b. EQUIPMENT. The machinery, equipment and parts described on SCHEDULE 1
attached to this Agreement and all associated operations and other
manuals, layouts, plans, drawings and maintenance and operating logs
("EQUIPMENT"). Buyer shall have the right to abandon in place some or
all of the Equipment located at the Xxxxxxx Plant and described on
SCHEDULE 3 attached to this Agreement, and all such abandoned
Equipment shall remain the property of Seller. If Buyer or its
Assignee does not purchase the Xxxxx Plant or the Catawba Plant, Buyer
shall have the right to abandon in place some or all of the Equipment
located at such Plant and described on SCHEDULE 3, and all such
abandoned Equipment shall remain the property of Seller.
c. AS IS SALE. Except as expressly provided otherwise in this Agreement,
Seller's sale of the Assets to Buyer shall be AS IS, WHERE IS. WITH
RESPECT TO THE EQUIPMENT, EXCEPT FOR THE WARRANTIES EXPRESSLY PROVIDED
IN THIS AGREEMENT, SELLER HEREBY DISCLAIMS ALL WARRANTIES, WHETHER
EXPRESS OR IMPLIED, WHETHER CREATED BY CONTRACT OR BY OPERATION OF
LAW, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE.
3. EXCLUDED ASSETS. Buyer is not purchasing the machinery and equipment
described on SCHEDULE 2 attached to this Agreement ("EXCLUDED ASSETS").
4. PURCHASE PRICE.
a. Subject to the potential reductions described in this SECTION 4, the
total purchase price for all of the Assets ("PURCHASE PRICE") shall be
$7,000,000.00. Seller has already deposited $700,000.00 with Escrow
Agent pursuant to the Escrow Agreement.
b. If Buyer gives Seller notice pursuant to SECTION 5.B. OR SECTION 7.F.
below that Buyer will not purchase one or more of the Plants, the
Purchase Price shall be reduced by the amount listed below for each
such Plant:
x. Xxxxx Plant, $1,000,000.00;
ii. Xxxxxx Plant, $1,900,000.00; and
iii. Catawba Plant, $400,000.00.
c. If Buyer gives Seller notice pursuant to SECTION 7.F. below that Buyer
will not purchase the Equipment, the Purchase Price shall be reduced
by $3,700,000.00.
d. Seller shall pay and be responsible for all ad valorem property taxes
with respect to the Assets for all periods before the applicable
Closing; PROVIDED that Buyer and Seller shall pro rate the 2005 ad
valorem property taxes for the Plants Buyer purchases as of the date
of the applicable Closing. Seller shall pay its pro rated amount to
Buyer at the applicable Plant Closing.
e. Buyer shall be entitled to determine the allocation of the Purchase
Price to the Assets, and Seller and Buyer shall use that allocation
for all tax purposes, including the filing of IRS form 8594.
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f. Seller shall pay and shall be responsible for all recording fees, deed
stamps and other transfer taxes with respect to the sale of the
Plants.
g. Buyer is not assuming any Liabilities.
5. REVIEW PERIOD.
a. Buyer shall have a period of 90 days ("REVIEW PERIOD") after the
Effective Date to conduct its investigation and due diligence with
respect to the Plants and to close in accordance with SECTION 5.B.
below. During the Review Period, Seller shall provide to Buyer and its
contractors and agents at no charge reasonable access to all of the
Plants, including all buildings and other improvements, in order to
allow them to conduct, at Buyer's expense, surveys, environmental
studies and tests (including Phase I, and possible subsequent Phase
II, borings, reviews and reports) and other due diligence with respect
to the Plants. Promptly after the date hereof, Seller shall deliver to
Buyer all (i) surveys (to the extent in the possession of Seller or
its agents), (ii) environmental reports and other documents and
records evidencing, mentioning or relating to any environmental
condition, investigation, proceeding or any non-compliance with any
applicable Environmental Law, (iii) title commitments and policies (to
the extent in the possession of Seller or its agents), deeds vesting
title to the Plants in Seller (to the extent in the possession of
Seller or its agents), and ad valorem property tax notices with
respect to any of the Assets, and (iv) building plans and drawings
relating to the Plants (collectively, "DUE DILIGENCE DOCUMENTS");
PROVIDED that Buyer shall return to Seller all such documents relating
to any Plant Buyer does not purchase. Additionally, promptly after the
date hereof, Seller shall disclose to Buyer in writing all
environmental conditions, investigations, proceedings and
non-compliance with any applicable Environmental Law relating to the
Assets and not expressly disclosed in the Due Diligence Documents, to
the best of the knowledge of Seller's Director of Engineering, Xxxx
Xxxx ("SELLER'S CERTIFICATION").
b. Notwithstanding any other provision of this Agreement, Buyer may give
written notice to Seller during the Review Period that it will not
purchase one or more of the Plants based on an environmental matter, a
title matter or a survey-related matter that Buyer determines in its
reasonable judgment adversely affects the particular Plant, including
(i) any failure of a Plant to comply with applicable Environmental
Laws, (ii) any failure of Seller to remove in compliance with
applicable Environmental Law any barrel or other container of any
Hazardous Material, (iii) the existence of any Easement that adversely
affects the value or use of the particular Plant, and (iv) the
commencement of any condemnation proceedings, or the giving of any
notice of proposed condemnation proceedings, with respect to a Plant
or part of a Plant; PROVIDED that the existence of asbestos within the
buildings at a Plant shall not constitute a basis for Buyer to give
that notice; PROVIDED further that the absence of a "no further
action" letter from the applicable government agency with respect to
the remediation in connection with the oil tank leak at the Xxxxxx
Plant shall be a failure of the Xxxxxx Plant to comply with applicable
environmental law under SUBPART B.I. above and shall constitute a
basis for Buyer to give that notice. No such exclusion shall apply to
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any Equipment located at such Plant. If Buyer gives Seller such a
notice, the parties shall negotiate in good faith for at least 14 days
regarding a mutually satisfactory resolution of the matters set forth
in that notice.
c. Seller discloses to Buyer that the Xxxxx Plant and the Xxxxxx Plant
are currently subject to fee-in lieu of property taxes ("FILOT")
transactions and that legal title to each of the Xxxxx Plant and the
Xxxxxx Plant is currently held in the name of the county in which such
Plant is located. Notwithstanding anything to the contrary set forth
in this Agreement, Seller's obligations under this Agreement are
contingent upon Seller's obtaining the approval of the applicable
county to release the applicable Plant from the existing FILOT
arrangements by quitclaiming the Plant to Seller. Seller shall use its
reasonable efforts to obtain those quitclaim deeds. If, despite
Seller's reasonable efforts, Seller is unable to obtain any such
quitclaim deed, Seller shall not be required to transfer the
particular Plant to Buyer, and Seller shall have no liability under
this Agreement with respect to that failure.
d. If Buyer gives Seller written notice under SECTION 5.B. above that
Buyer will not purchase one or more of the Plants based on a title
matter or a survey related matter (and that title matter or survey
related matter is "material" as defined below), or if Seller does not
obtain a quitclaim deed from the applicable county for one or more
Plants as provided in SECTION 5.C. above, Seller shall promptly
reimburse Buyer for all of Buyer's reasonable, documented,
out-of-pocket due diligence expenses with respect to the Plant or
Plants described in the notice, including the costs of environmental
tests and reports, title searches and surveys, up to a total of
$17,000.00 with respect to the Xxxxx Plant, $10,000.00 with respect to
the Catawba Plant, and $10,000.00 with respect to the Xxxxxx Plant.
Notwithstanding the foregoing, if (i) Buyer's notice under SECTION
5.B. is based solely on Seller's failure to obtain one or both of the
quitclaim deeds, (ii) Seller delivers to Buyer a written request for
an extension of time to obtain one or both of the quitclaim deeds
within five days after Buyer gives the written notice under SECTION
5.B., and (iii) Buyer does not agree to delay the effectiveness of its
written notice under SECTION 5.B. for 90 days while Seller continues
to seek to obtain one or both of the quitclaim deeds, Seller shall not
be required to reimburse Buyer for any due diligence expenses with
respect to the Xxxxx Plant or the Xxxxxx Plant. If Seller reimburses
Buyer for expenses under this SECTION 5.D., if requested by Seller,
Buyer shall deliver to Seller all environmental reports, title search
results and surveys covered by that reimbursement.
e. For purposes of SECTION 5.D., a title matter or survey related matter
shall be deemed to be "MATERIAL" if (i) it materially adversely
affects the use or value of the applicable Plant, (ii) it is Seller's
not having or not being able to transfer to Buyer in accordance with
this Agreement exclusive, good and marketable fee simple title to the
Plant, (iii) it is the existence of a condemnation or eminent domain
proceeding, (iv) it is the existence of any Encumbrance, or (v) it is
the existence of any Easement other than recorded general utility
Easements of non-specific width and location that do not adversely
affect the use or value of the Plant.
6. ACCESS.
a. During the period between the Effective Date and the applicable Plant
Closing with respect to the Xxxxx, Xxxxxx and Catawba Plants, Seller
shall provide to Buyer and its potential customers, contractors and
agents at no charge reasonable access to the Plants and the Equipment
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in those Plants and adequate lighting and electricity to allow Buyer
to evaluate, show, market, disassemble and remove that Equipment and
to evaluate, show and market the Plants. With respect to any Plant
that Buyer does not purchase, at Buyer's request, Seller shall extend
the period described in the preceding sentence for up to 240 days
after the Equipment Closing Date, as determined by Buyer; PROVIDED
that as long as Seller continues to own one or more Plants, starting
180 days after the Equipment Closing Date, Buyer shall pay Seller in
advance each week an amount equal to the product of $1.00 and the
number of square feet in each such Plant that the Equipment continues
to occupy; PROVIDED further that if Buyer agrees to delay the
effectiveness of its written notice pursuant to SECTION 5.D. above,
Buyer's obligation to pay Seller the amounts specified in this
sentence shall not start until 270 days after the Equipment Closing
Date. Buyer shall not disassemble or remove any of the Equipment until
the Equipment Closing occurs.
b. From and after the Effective Date up to a period of 180 days after the
Equipment Closing Date, Seller shall provide to Buyer and its
potential customers, contractors and agents at no charge reasonable
access to the Equipment at the Xxxxxxx Plant and adequate lighting and
electricity to allow Buyer to evaluate, show, market, disassemble and
remove that Equipment. At Buyer's request, Seller shall extend that
180-day period for up to another 60 days, as determined by Buyer;
PROVIDED that Buyer shall pay Seller in advance each week during that
extension period an amount equal to the product of $1.00 and the
number of square feet in the Xxxxxxx Plant that the Equipment
continues to occupy. Buyer shall not disassemble or remove any of the
Equipment until the Equipment Closing occurs.
c. After the Plant Closing for the Xxxxx Plant, if any, and for a period
of up to 90 days after the Effective Date, Buyer shall provide to
Seller or the purchasers of the Excluded Assets reasonable access to
the Excluded Assets and adequate lighting and electricity to allow
Seller or the purchasers to disassemble and remove the Excluded
Assets. At Seller's request, Buyer shall extend that 90-day period for
up to another 90 days, as determined by Seller; PROVIDED that Seller
shall pay Buyer in advance each week during that extension period an
amount equal to the product of $1.00 and the number of square feet in
the Xxxxx Plant that the Excluded Assets continue to occupy.
d. Seller shall provide and be responsible for adequate security,
lighting and electricity at each Plant and the Xxxxxxx Plant until the
earlier of the Plant Closing for that Plant or the expiration of the
periods set forth in SECTIONS 6.A. and 6.B. above, including any
extensions.
e. For purposes of this Agreement, reasonable access times shall include
Monday through Friday, 8 am through 5 pm Eastern Time.
f. Buyer shall defend, indemnify and hold Seller and its directors,
officers, employees and agents harmless from and against any and all
liabilities, losses, damages, claims and expenses arising out of any
personal injury, death, property damage or violation of Environmental
Law at a Plant before the applicable Plant Closing caused by Buyer's
or Buyer's agents', representatives', riggers' or invitees'
dismantling, removing, storing, shipping, delivering, assembling,
disassembling, installing or de-installing the Equipment at the Plant.
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g. Seller shall defend, indemnify and hold Buyer and its directors,
officers, employees and agents harmless from and against any and all
liabilities, losses, damages, claims and expenses arising out of any
personal injury, death, property damage or violation of Environmental
Law at a Plant caused by Seller's or Seller's agents',
representatives', riggers' or invitees' dismantling, removing,
storing, shipping, delivering, assembling, disassembling, installing
or de-installing the Excluded Assets at the Plant.
h. During the period from the date of the Equipment Closing through the
date that Buyer completes the removal of all Equipment from Plants
Buyer or its Assignee does not purchase from Seller, Buyer shall
maintain in full force and effect (a) a commercial general liability
insurance policy, an automobile liability insurance policy and an
employers liability policy, each issued by a reputable national
insurance carrier reasonably satisfactory to Seller, and having
aggregate coverage and per occurrence coverage of at least
$2,000,000.00 in the case of the commercial general liability and
automobile liability policies and $1,000,000.00 in the case of the
employers liability policy, and (b) workers compensation insurance
required by applicable law. Buyer shall cause Seller to be named as an
additional insured on the foregoing liability policies, shall ensure
all of the foregoing policies contain a waiver of subrogation in favor
of Seller, and shall deliver certificates of insurance evidencing that
coverage to Seller within five days after the date of this Agreement.
i. During the period from the date of the first Plant Closing to occur
through the date that Seller completes the removal of all Excluded
Assets from the Plants Buyer or its Assignee purchases from Seller,
Seller shall maintain in full force and effect (a) a commercial
general liability insurance policy, an automobile liability insurance
policy and an employers liability policy, each issued by a reputable
national insurance carrier reasonably satisfactory to Buyer, and
having aggregate coverage and per occurrence coverage of at least
$2,000,000.00 in the case of the commercial general liability and
automobile liability policies and $1,000,000.00 in the case of the
employers liability policy, and (b) workers compensation insurance
required by applicable law. Seller shall cause Buyer to be named as an
additional insured on the foregoing liability policies, shall ensure
all of the foregoing policies contain a waiver of subrogation in favor
of Buyer, and shall deliver certificates of insurance evidencing that
coverage to Buyer within five days after the date of this Agreement.
j. When removing the Equipment from a Plant for which the applicable
Plant Closing has not occurred, Buyer shall (i) disconnect the
utilities, ductwork and related supplies to the Equipment to the
lowest of 12 feet off the floor, above the lighting fixtures, above
the nearest pipe chase or above the nearest utility header, (ii) leave
the Plant in which the Equipment was located in "broom clean"
condition, and (c) not damage the Plant when removing any of the
Equipment from the Plant, normal wear and tear and holes and other
physical deficiencies remaining as a result of the installation and
operation of the Equipment excluded.
k. When removing the Excluded Assets from a Plant for which Buyer has not
given a notice pursuant to SECTION 5.B. above or SECTION 7.F. below,
Seller shall (i) disconnect the utilities, ductwork and related
supplies to the Excluded Assets to the lowest of 12 feet off the
floor, above the lighting fixtures, above the nearest pipe chase or
above the nearest utility header, (ii) leave the Plant in which the
Excluded Assets were located in "broom clean" condition, and (c) not
damage the Plant when removing any of the Excluded Assets from the
Plant, normal wear and tear and holes and other physical deficiencies
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remaining as a result of the installation and operation of the
Excluded Assets excluded.
l. At the Equipment Closing, Buyer and Seller will execute and deliver an
access agreement in recordable form with respect to each Plant and the
Xxxxxxx Plant incorporating the provisions of SECTIONS 6.A. through
6.E. above and such other provisions on which the parties agree
("ACCESS AGREEMENTS"). The parties shall file the applicable Access
Agreement in the office of the Register of Deeds in the county in
which the applicable Plant is located.
7. CLOSINGS. Subject to the terms and conditions of this Agreement, the
closings of the purchase and sale of the Assets (the "CLOSINGS") shall
occur as follows:
a. The closing of Buyer's purchase of the Equipment shall occur in the
offices of Escrow Agent in Greenville, South Carolina within 30 days
after the Effective Date at a time on which the parties agree
("EQUIPMENT CLOSING"). At the Equipment Closing, Escrow Agent shall
wire transfer to Seller $370,000.00 of the Escrow Funds (defined in
Escrow Agreement), and Buyer shall wire transfer to Seller an
additional $3,330,000.00.
b. Buyer may close on the purchase of the Plants individually or
together. Each closing of Buyer's purchase of a Plant (other than any
Plant Buyer elects not to purchase in accordance with SECTION 5.B.
above or SECTION 7.F. below) shall occur in the offices of Escrow
Agent in Greenville, South Carolina within 90 days after the Effective
Date at a time on which the parties agree ("PLANT CLOSING"); PROVIDED
that if Buyer agrees to delay the effectiveness of its written notice
pursuant to SECTION 5.D. above, the applicable Plant Closing shall
occur within 180 days after the Effective Date. At each Plant Closing,
Escrow Agent shall wire transfer to Seller the balance of the Escrow
Funds, and Buyer shall wire transfer to Seller the balance of the
Purchase Price, as reduced in accordance with SECTION 4 above;
PROVIDED that if Buyer gives notice pursuant to SECTION 5.B. above or
SECTION 7.F. below that it will not purchase one or more of the Xxxxx
Plant, the Xxxxxx Plant or the Catawba Plant, after the expiration of
the 14-day period described in SECTION 5.B. (with respect to a notice
given pursuant to SECTION 5.B.) or promptly in the case of a notice
given pursuant to SECTION 7.F., unless Escrow Agent receives a written
notice to the contrary signed by Seller and Buyer, Escrow Agent shall
promptly disburse the following amounts of the Escrow Funds to Buyer
with respect to each such Plant (collectively, the "PLANT DEPOSITS")
and Buyer shall not pay any further amount to Seller with respect to
any such Plant: (a) Xxxxx Plant, $100,000.00; (b) Xxxxxx Plant,
$190,000.00; and (c) Catawba Plant, $40,000.00. If Buyer does not give
notice pursuant to SECTION 5.B. or SECTION 7.F. that it will not
purchase a particular Plant and Seller has performed its covenants and
agreements under this Agreement, but Buyer does not consummate the
Plant Closing with respect to that Plant, then Seller shall be
entitled to receive from Escrow Agent the Plant Deposit with respect
to that Plant as liquidated damages, and Seller shall not be entitled
to recover any other amount from Buyer or have any other remedy with
respect to such Plant.
c. At the Plant Closing, Seller shall grant to Duke Energy Corporation
("DUKE"), and if necessary to Buyer, and their respective successors
and assigns, rights of way and easements appurtenant to and benefiting
the Xxxxxx Plant and running with the Xxxxxx Plant land, in form and
substance reasonably acceptable to Duke and Buyer, to use the existing
substation and other electric lines and facilities located on the
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Xxxxxxx Plant to enable Duke to furnish electric power to the Xxxxxx
Plant meeting the power supply needs of the Xxxxxx Plant.
d. At the Plant Closing, Seller shall grant to Buyer, and if necessary
any governmental units providing sewage services, and their respective
successors and assigns, rights of way, easements and other agreements
appurtenant to and benefiting the Xxxxxx Plant and running with the
Xxxxxx Plant land, in form and substance reasonably acceptable to
Buyer and such governmental units, to use the existing sewage
collection facilities, pumping stations and other sewage lines and
facilities located on the Xxxxxxx Plant land (collectively, the
"SYSTEM") to permit the continued discharge and transportation of
sewage effluent from the Xxxxxx Plant meeting the needs of the Xxxxxx
Plant up to 25,000 gallons of effluent per day plus such other
additional gallons of effluent as the capacity of the System not then
used by the Xxxxxxx Plant can accommodate, through and across the
System on the Xxxxxxx Plant to discharge such effluent in publicly
maintained sewage lines and public sewage treatment facilities.
e. Subject to SECTION 6.F. above, Seller shall bear (i) all risk of loss
with respect to the Excluded Assets and (ii) all risk of loss with
respect to particular Assets until the Closing for those Assets has
been completed.
f. Seller shall give Buyer immediate written notice if any Asset is
damaged or destroyed by fire, storm or other casualty before the
Closing with respect to that Asset. If the damage reduces the value of
the Equipment or a particular Plant by more than 2%, Buyer shall have
the right (i) to require Seller to assign to Buyer at the applicable
Closing all insurance proceeds payable in connection with the casualty
or (ii) to elect not to purchase the damaged or destroyed Equipment or
Plant and to receive a corresponding reduction in the total Purchase
Price in accordance with SECTION 4 above.
8. ADDITIONAL COVENANTS.
a. At the Equipment Closing and at each Plant Closing, Seller shall
deliver to Buyer (i) certificates of existence from the Secretaries of
State of Delaware, North Carolina and South Carolina for Seller and
(ii) certified resolutions of the board of directors of Seller in form
and substance satisfactory to Buyer establishing that the board has
authorized the transactions described in this Agreement and Seller's
sale of the Equipment and the Plants, respectively, to Buyer on the
terms and conditions of this Agreement.
b. From and after each Closing, each of Seller and Buyer shall execute
and deliver all assignments and assurances reasonably requested by the
other party to carry out the purposes of this Agreement.
c. Between the Effective Date and the applicable Closing, Seller shall
only operate the Assets in the ordinary course of business and shall
not remove any of the Equipment from the Plants.
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d. The parties shall read all utility meters and pro-rate the applicable
utility bills as of the applicable Closing.
e. Seller shall provide to Buyer and its title insurance company all
affidavits and other documents as Buyer or its title insurance company
may reasonably request in order to enable Buyer to obtain title to the
Plants as provided in this Agreement and to acquire title insurance
policies on the Plants insuring title consistent with terms of this
Agreement.
f. At the Equipment Closing, Seller shall execute and deliver to Buyer a
xxxx of sale transferring to Buyer good, exclusive and marketable
title to the Equipment, free and clear of all Encumbrances (the "XXXX
OF Sale").
g. At the applicable Plant Closing, Seller shall execute and deliver to
Buyer in recordable form a general warranty deed for the applicable
Plant transferring to Buyer good and marketable fee simple title to
the Plant, free and clear of all Encumbrances and Easements, other
than recorded general utility Easements of non-specific width and
location that do not adversely affect the use or value of the Plant
(each, a "DEED").
h. Each party shall ensure that its representations and warranties in
this Agreement shall be accurate on and as of each Closing.
i. If for any reason Seller does not grant the rights of way and
easements described in SECTIONS 7.C. and 7.D. above at the Plant
Closing for the Xxxxxx Plant, Seller shall have a continuing
obligation to grant those rights of way and easements as requested by
Buyer after the Plant Closing for the Xxxxxx Plant. Nothing in this
SECTION 8.I. shall reduce Seller's obligations under SECTIONS 7.C. and
7.D. above.
j. Seller shall deliver to Buyer at each Closing to occur a Tax
Compliance Affidavit Concerning Transfer of Majority of Assets of a
Business Under South Carolina Code Section 00-00-000, completed to
reflect accurately Seller's status on and as of that Closing Date, or
in lieu of that affidavit, a Tax Compliance Certificate from the South
Carolina Department of Revenue dated on or after the Effective Date.
9. SELLER'S REPRESENTATIONS AND WARRANTIES. As of the date hereof and as of
the date of each Closing, Seller represents and warrants to Buyer as
follows:
a. Seller is a corporation validly existing and in good standing under
the laws of the State of Delaware and qualified to do business in the
States of North Carolina and South Carolina. Seller has the requisite
corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by Seller has been duly
authorized by all necessary corporate actions of Seller. This
Agreement is a valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms.
b. Seller is not and shall not be liable for any brokerage fees,
commissions or finder's fees in connection with the transactions
contemplated by this Agreement.
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c. Seller has in full force property damage insurance policies having
extended coverage, replacement value coverage and all risk coverage,
covering the Assets for, among other things, loss or damage by fire,
storm or other casualty, vandalism and malicious mischief, and loss of
rents.
d. Except as otherwise disclosed in SECTION 5.C., Seller is the sole
owner of good, marketable and insurable fee simple title to all of the
Assets that are real property, and Seller is the sole owner of good
and marketable title to all other Assets,
e. There are no condemnation or eminent domain proceedings pending or
threatened against any of the Plants or any part of the Plants, and
Seller has not received any written or oral notice of the desire of
any public authority or other entity to take or use the Plants or any
part of the Plants for any purpose.
f. There are no outstanding options, leases or other contracts that give
any Person any right with respect to any of the Assets, including any
right to occupy or to purchase any interest in any Plant or any part
of a Plant.
g. Seller does not have any knowledge or notice of any actual or
threatened claim, litigation or proceeding that could have a material
adverse effect on the use or value of the Plants.
h. Seller does not have any knowledge or notice of any actual or alleged
failure of Seller or any Asset to comply with any applicable law,
statute, ordinance, rule, regulation, order, permit or judgment.
10. BUYER'S REPRESENTATIONS AND WARRANTIES. As of the date hereof and as of the
date of each Closing, Buyer represents and warrants to Seller as follows:
a. Buyer is a corporation validly existing and in good standing under the
laws of the State of South Carolina. Buyer has the requisite corporate
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement. The
execution of this Agreement by Buyer has been duly authorized by all
necessary corporate actions of Buyer. This Agreement is a valid and
binding obligation of Buyer, enforceable against Buyer in accordance
with its terms.
b. Buyer is not and shall not be liable for any brokerage fees,
commissions or finder's fees in connection with the transactions
contemplated by this Agreement.
11. CONDITIONS TO SELLER'S OBLIGATIONS. The obligation of Seller to sell the
Assets to Buyer is subject to the satisfaction, at or before the applicable
Closing, of the following conditions, any of which Seller may elect to
waive by delivering a signed written waiver to Buyer:
a. Buyer shall have paid the applicable portion of the Purchase Price as
required in SECTION 4 above.
b. Buyer shall have performed all of its covenants in this Agreement.
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c. Buyer's representations and warranties in this Agreement shall be
accurate in all material respects on and as of the date of the
applicable Closing.
12. CONDITIONS TO BUYER'S OBLIGATIONS. The obligation of Buyer to purchase the
Assets (or, in the case of SECTION 12.E., the applicable Asset) from Seller
is subject to the satisfaction, at or before the applicable Closing, of the
following conditions, any of which Buyer may elect to waive by delivering a
signed written waiver to Buyer:
a. Seller shall have executed and delivered to Buyer at the applicable
Closing the Xxxx of Sale and the applicable Deed.
b. Seller shall have performed all of its covenants in this Agreement.
c. Seller's representations and warranties in this Agreement shall be
accurate in all material respects on and as of the date of the
applicable Closing.
d. Seller shall have executed and delivered to Buyer a certificate in
form and substance reasonable satisfactory to Buyer stating that
Seller has provided to Buyer all Due Diligence Documents and that
Seller's Certificate is accurate and complete.
e. There shall not have been any material adverse change in the condition
or value of any Asset, including any reduction in the value of any
Asset by more than 2% resulting from fire, storm or other casualty.
13. DEFAULT AND TERMINATION.
a. If Buyer commits a material breach of this Agreement and fails to cure
that breach within 30 days after Seller gives Buyer written notice of
the breach, Seller may terminate this Agreement by giving Buyer
written notice of termination and, subject to the liquidated damages
provision in SECTION 7.B. above, may pursue its other rights and
remedies under this Agreement and applicable law.
b. If Seller commits a material breach of this Agreement and fails to
cure that breach within 30 days after Buyer gives Seller written
notice of the breach, Buyer may terminate this Agreement by giving
Seller written notice of termination, shall be entitled to a prompt
refund of the Escrow Funds and may pursue its other rights and
remedies under this Agreement and applicable law.
14. NOTICES. All notices and other communications required or permitted under
this Agreement shall be in writing and shall be delivered by certified
mail, return receipt requested, by FedEx or other national overnight
delivery service, or by facsimile or email followed by a confirmation copy
in first class mail, to the following addresses of the parties or such
subsequent addresses of which either party gives the other party written
notice in accordance with this SECTION 14:
Delta Xxxxx, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xx. Xxx Xxxxxx
Facsimile: 000-000-0000
Email: xxx.xxxxxx@xxxxxxxxx.xxx
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With a copy to: Xxxxx X. Xxxxxx, Esquire
Wyche, Burgess, Xxxxxxx, & Xxxxxx, P. A.
00 X. Xxxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: 000-000-0000
Email: xxxxxxx@xxxxx.xxx
Xxxxx International, Inc.
0000 Xxxxxx X. Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
Facsimile: 000-000-0000
Email: xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
With copies to: Xxxxxxx X. Hunting, Esquire
Parker, Poe, Xxxxx & Xxxxxxxxx LLP
Three Wachovia center, Suite 3000
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: 000-000-0000
Email: xxxxxxxxxxxx@xxxxxxxxx.xxx
and F. Xxxxxxx X. Xxxxx, Esquire
Xxxxx, Massey, Evans, XxXxxx & Xxxxxxxxxx, P.A.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Email: xxxxxxxxx@xxxxxxxx.xxx
15. CONFIDENTIALITY. Except as otherwise provided in this Agreement, each party
shall keep the terms and conditions of this Agreement confidential;
PROVIDED that each party may disclose the existence of the Agreement and
the sale of the Assets described in this Agreement. Any public announcement
relating to the execution of this Agreement or the Purchase Agreement shall
be reasonably acceptable to both parties; PROVIDED that either party may
make any disclosure required by applicable law, including applicable
securities laws.
16. GENERAL.
a. This Agreement may modified only by a written amendment signed by both
parties. Any waiver under this Agreement must be in writing and signed
by the waiving party to be effective. No failure or delay by any party
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in exercising any right, power or privilege under this Agreement shall
operate as a waiver.
b. Except as expressly provided otherwise in this Agreement, each party
shall bear its own costs and expenses incurred in connection with this
Agreement.
c. Buyer shall not assign its rights under this Agreement without the
prior written consent of Seller, and any attempted assignment without
that consent shall be void; PROVIDED that Buyer may assign some or all
of its rights under this Agreement to an Assignee without Seller's
consent. The provisions of this Agreement shall be binding on, and
shall inure to the benefit of, the parties to this Agreement and their
respective successors and permitted assigns. There are no third party
beneficiaries of this Agreement.
d. This Agreement shall be governed by the laws of the State of South
Carolina, excluding its conflict of laws principles. Buyer and Seller
hereby consent and submit to the jurisdiction of the courts of the
State of South Carolina and the federal district court for the
District of South Carolina for the purposes of this Agreement or a
breach of this Agreement and expressly waive all objections to the
venue of those courts.
e. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement. Signatures
transmitted by facsimile or in a .pdf file by email shall be
effective.
f. If any term or condition of this Agreement is determined to be
invalid, void or unenforceable, the remaining terms and conditions of
this Agreement will remain in full force and effect. Schedules 1
through 4 attached to this Agreement are incorporated by reference.
The term "including" shall not be construed to be limiting.
g. This Agreement constitutes the entire agreement of the parties with
respect to the subject matter and supersedes all prior agreements and
undertakings, written and oral, with respect to the subject matter;
PROVIDED that the Escrow Agreement is not superseded and shall remain
in effect. In particular, this Agreement supersedes the letter of
intent between the parties relating to the Assets and dated as of
January 11, 2005 ("LOI"), and the LOI shall be of no further force or
effect.
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the date
first written above.
Delta Xxxxx, Inc. Xxxxx International, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx. By: /s/ Xxxx Xxxxxx
-------------------------------- -----------------------
Xxxx Xxxxxx, Vice President
Title: Chief Financial Officer
LIST OF ATTACHED SCHEDULES
Schedule 1 Assets
Schedule 2 Excluded Assets
Schedule 3 Equipment Buyer May Abandon
