ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, made and entered into as of this _____ day
of February, 1997 ("Agreement"), is by and between Arrhythmia Research
Technology, Inc., a Delaware corporation having an office and place of business
at 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 ("Purchaser"), and
Astro-Med, Inc., a Rhode Island corporation having an office and place of
business at Xxxxx-Xxx Xxxxxxxxxx Xxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxx 00000
("Seller").
W I T N E S S E T H
WHEREAS, Seller is engaged in the line of business of developing,
manufacturing, marketing and selling catheterization laboratories for the
medical marketplace (the "Business"); and
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires to
sell to Purchaser, substantially all of the assets, properties and rights of
Seller used in or constituting the Business, subject to the terms and conditions
of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, Seller and Purchaser agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 PURCHASE AND SALE. Upon the terms and subject to the conditions
of this Agreement, at the Closing (as hereinafter defined), Seller shall sell,
convey, transfer, assign and deliver to Purchaser, and Purchaser shall purchaser
from Seller, all of the following assets, properties and rights (other than the
Excluded Assets [as hereinafter defined]) (all such assets, properties and
rights being herein collectively referred to as the "Assets" and individually as
an "Asset"):
(a) all patents, trademarks, service marks, copyrights and
applications therefor, all tradenames, brand names, logos, inventions,
discoveries, improvements, processes, technology, know-how, formulae,
drawings, schematics, specifications, trade secrets, confidential
information, plans, computer software (including source and object code
thereof and other documentation, including, without limitation, copies
thereof in machine readable form), files, programs, instruction manuals,
promotional materials, notebooks and records, and all other proprietary,
technical and other information and intellectual property, technical and
other information and intellectual property and all licenses, permits and
other rights to use the foregoing, whether patentable or unpatentable, used
in or associated with the operation of the Business and all goodwill
associated with
1
the foregoing (or, to the extent Seller does not own such proprietary,
technical and other information and technical property, a current or
royalty-free license or permit to use the foregoing), including but
not limited to those listed in and more specifically described in
Exhibit 1.1(a) hereto (the "Intellectual Property Rights");
(b) all of Seller's rights under the license agreements, product
purchase and sales contracts and other agreements used in or constituting
the Business, including, without limitation, those described in Exhibit
1.1(b) hereto, but excluding the Other Arrangements (as hereinafter
defined) (the "Business Arrangements");
(c) all testing and validation equipment and supplies and other
tangible personal property used in or associated with the operation of the
Business including, without limitation, the testing and validation
equipment and supplies and other tangible personal property identified in
Exhibit 1.1(c) hereto (the "Equipment");
(d) all franchises, licenses, permits, authorizations, or other
rights granted by governmental authorities and all certificates of
convenience or necessity, immunities, privileges, licenses, easements,
consents, grants, ordinances and other rights of every character whatsoever
that are used in or associated with the operation of the Business,
including, without limitation, those listed in and more specifically
described in Exhibit 1.1(d) hereto (the "Permits");
(e) all raw materials ("Raw Materials"), in-process goods and
products ("In-Process Goods Inventories") and finished goods and products
("Finished Goods Inventories"), wherever located and whether in transit or
otherwise, used or manufactured and sold in connection with the Business,
including without limitation, those listed and more specifically described
in Exhibit 1.1(e) hereto (collectively, the "Inventories");
(f) all engineering and research and development materials and
inactive and other spare parts, wherever located and whether in transit or
otherwise, used by Seller in connection with the Business, including,
without limitation, those listed and more specifically described in Exhibit
1.1(f) hereto (collectively, the "Engineering Spare Parts");
(g) all supplier lists and supplier data relating to the Business
(the "Supplier Data");
(h) all customer records and files relating to the Business (the
"Customer Data");
(i) all rights under express or implied warranties from the sellers
of goods and services to the Business (the "Warranty Rights"); and
(j) all books, records and other documents used in or associated with
the operation of the Business (the "Books and Records").
1.2 ASSETS NOT TO BE CONVEYED. Notwithstanding any other provision of
this Agreement, or any inference to be drawn from any such provision, the Assets
to be conveyed to Purchaser shall not include the following assets of Seller
which might otherwise be considered as used in, constituting or associated with
the Business (collectively, the "Excluded Assets"):
(a) all arrangements set forth in Exhibit 1.2(a) (the "Other
Arrangements");
(b) all permits that are not transferable by law, which permits are
set forth or described in Exhibit 1.2(b) (the "Excluded Permits");
2
(c) all cash, cash-equivalents, securities and bank deposits, of
whatever description;
(d) all accounts receivable;
(e) Seller's corporate seal, certificate and articles of
incorporation, minute books, stock books, tax returns, books of account and
other records having to do with the corporate organization of Seller;
(g) the rights to any of Seller's claims for any federal, state,
local or foreign tax refunds;
(h) the rights which accrue or will accrue to Seller under this
Agreement;
(i) the rights to carry forward, carry back or otherwise utilize any
of Seller's net operating losses for federal and state income tax purposes;
and
(j) all proprietary, technical and other information and intellectual
property and licenses, permits and other rights to use the same, and all
other assets used in or constituting technologies of Seller's lines of
business outside the Business.
1.3 CONVEYANCE INSTRUMENTS AND RELATED MATTERS. At the Closing, the
Assets shall be conveyed by Seller as follows:
(a) Seller shall convey to Purchaser the Intellectual Property
Rights, Business Arrangements, Equipment, Permits, Engineering Spare Parts,
Inventories, Supplier Data, Customer Data, Warranty Rights and Books and
Records by a Xxxx of Sale, General Assignment and Conveyance in the form
set forth in Exhibit 1.3(a) hereto.
3
(b) In addition to the Xxxx of Sale, General Assignment and
Conveyance, Seller shall convey to Purchaser the United States patents and
any applications therefor included in the Intellectual Property Rights by
instrument of conveyance in the form set forth in Exhibit 1.3(b) hereto
("Patent Assignments"). At no additional cost to Purchaser, Seller shall
exercise its best efforts (short of paying additional consideration to any
third party) to either cause the appropriate third parties to grant to
Purchaser (or to any such subsidiary) licenses reasonably satisfactory to
the parties to use the Intellectual Property Rights owned by such third
parties or assign to Purchaser (or to any such subsidiary) Seller's
licenses from such third parties with respect to such Intellectual Property
Rights.
2. PURCHASE PRICE.
2.1 PRICE. The purchase price for the Acquired Assets shall be Three
Hundred Fifty Thousand and No/100 ($350,000) (the "Purchase Price").
2.2 PAYMENTS. The Purchase Price shall be payable as follows:
(a) Cash at the Closing in the amount of Fifty Thousand and No/100
Dollars ($50,000); and
(b) A Promissory Note in the principal sum of Three Hundred
Thousand and No/100 Dollars ($300,000). Such Promissory Note shall be due
and payable on or before three (3) years from date and be an interest only
note, with interest payable quarterly, during the first year. Thereafter,
principal and interest shall be payable quarterly. The Promissory Note
shall bear interest at the rate of eight percent (8%) per annum.
With respect to the Three Hundred Thousand Dollars ($300,000) in
principal, ART shall pay to Astro-Med fifty percent (50%) of the net sales
price from the sale of each of the first three K-3 systems sold by ART, up
to a total of $70,000; provided, however, that such three K-3 systems shall
be systems which ART shall have purchased out of inventory from Astro-Med
at the Closing. ART's obligation shall be limited to those systems
purchased out of inventory. Thus, if ART purchases only two systems out of
inventory and sell both systems for a total of $100,000, ART shall be
required to pay to Astro-Med only $50,000.
"Net sales price" shall mean gross sales revenue collected on a per
sale basis, less (i) sales taxes and other governmental assessments; (ii)
transportation and insurance charges; (iii) prompt payment discounts
actually allowed and credited; and (iv) allowances/and or trade discounts
allowed and credited.
4
3. THE CLOSING.
3.1 CLOSING AND CLOSING DATE. The closing (the "Closing") of the
transactions contemplated hereby shall be held on or before March 31, 1997, at
10:00 a.m. Eastern Time at the offices of Astro-Med, Inc., Xxxxx-Xxx Xxxxxxxxxx
Xxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxx 00000, provided, however, that if the
conditions precedent to the Closing as set forth in this Agreement shall not
have been satisfied or waived on said date, and unless this Agreement is
terminated as provided herein, the Closing shall take place on the fifth
business day following said satisfaction or waiver of such conditions, or on
such other date as Seller and Purchaser shall agree upon in writing, but in no
event later than April 30, 1997, unless such date is extended by mutual
agreement in writing. The time and date of closing is referred to herein as the
"Closing Date."
3.2 TITLE, POSSESSION, RISK OF LOSS. Title to, possession of and
risk of loss or destruction or damage to the Assets shall pass to Purchaser at
the Closing; provided, however that this Section 3.2 shall not diminish, limit
or otherwise impair in any manner Seller's or Purchaser's rights under the other
provisions of this Agreement or the instruments, agreements, certificates and
documents to be executed and delivered in connection herewith that apportion
liability between the parties with respect to events, occurrences, omissions or
other matters arising or occurring during specified periods.
3.3 ITEMS TO BE DELIVERED AT CLOSING BY SELLER. At Closing, and
subject to the terms and conditions herein contained, Seller shall deliver to
Purchaser the following:
(a) the Xxxx of Sale, General Assignment and Conveyance duly executed
by Seller;
(b) the Patent Assignments duly executed by Seller;
(c) such other good and sufficient instruments and documents of
conveyance and transfer, in a form reasonably satisfactory to Purchaser and
its counsel, as shall be necessary and effective to transfer and assign to,
and vest in, Purchaser all of Seller's right, title and interest in and to
the Assets; and
simultaneously with such delivery, all such steps will be taken as may be
required to put Purchaser in actual possession and operating control of the
Assets.
3.4 ITEMS TO BE DELIVERED AT CLOSING BY PURCHASER. At Closing, and
subject to the terms and conditions herein contained, Purchaser shall deliver to
Seller the following:
(a) the Assumption Agreement; and
(b) such other documents, instruments and undertakings, in a form
reasonably satisfactory to Seller and its counsel, as shall be necessary to
consummate the payment, performance or discharge, as appropriate, of the
Assumed Obligations.
5
3.5 OTHER DOCUMENTS. At or prior to Closing, the parties shall
exercise reasonable efforts to deliver to each other the other agreements,
opinions, certificates, instruments and documents referred to in Section 9
hereof.
4. CONDUCT PRIOR TO THE CLOSING AND CERTAIN OTHER MATTERS.
4.1 CONDUCT OF BUSINESS. Seller represents, warrants, covenants and
agrees that, from the date hereof until the Closing Date:
(a) the Equipment will be maintained and repaired in the usual and
ordinary course and operated in a good, workmanlike and prudent manner in
accordance with prior practice;
(b) Seller will use its best efforts to preserve for Purchaser
favorable business relations with all persons dealing with the Assets and
the Business;
(c) Seller will cooperate fully with Purchaser as to arrangements for
the transfer of the Assets to Purchaser in an orderly fashion;
(d) Seller will promptly notify Purchaser of (i) its receipt of any
notice or claim, written or oral, of default or breach by Seller under, or
of any termination or cancellation, or threat of termination or
cancellation, of any of the Business Arrangements, as a result of which the
Assets or Business shall have been or may be adversely affected,
individually or in the aggregate, in an amount in excess of $10,000, and
(ii) any loss of, damage to or disposition of any of the Assets (other than
the sale or use of Inventories in the ordinary course of business) which
shall involve an amount, individually or in the aggregate, in excess of
$10,000;
(e) Seller, without the prior written consent of Purchaser, shall not
sell, dispose of, distribute, encumber or enter into any agreement or
arrangement for the sale, disposition, distribution or encumbrance of any
of the Assets (other than the sale or use of
6
Inventories in the ordinary course of business) or make any offer or
enter into any negotiations with respect thereto, or enter into any
transaction, the effect of which would be to diminish the amount or
value of the Assets or to adversely affect the Business by an amount,
individually or in the aggregate, in excess of $10,000, and Seller
shall exercise its best efforts to cause its officers, directors,
employees, representatives, agents and stockholders to comply with this
Section 4.1(e);
(f) Seller shall not operate the Assets or conduct the Business
outside the ordinary course of business or in a manner inconsistent with
prior practice; and
4.2 ACCESS TO PROPERTIES AND RECORDS. From the date of this
Agreement until the Closing, Seller will (i) keep Purchaser advised of all
developments relevant to the consummation of this Agreement and the Business;
cooperate fully, both in permitting Purchaser and Purchaser's representatives,
advisers, consultants, auditors and other experts to make a full investigation,
at Purchaser's sole cost and expense, and at reasonable times and upon
reasonable notice, of the properties and operations of the Assets and the
Business, and in bringing about the consummation of the transactions
contemplated hereby; and (ii) afford Purchaser and Purchaser's representatives,
advisers, consultants and other experts, at Purchaser's sole cost and expense,
and at reasonable times and upon reasonable notice, reasonable access to the
machinery and equipment, inventory and supplies, records, files, books of
account, agreements and commitments including, without limitation, information
with respect to all products of and raw materials required in the operation of
the Business. Notwithstanding the above, Purchaser and Purchaser's
representatives, advisors, consultants and other experts shall incur no
liability for any of the Assets or the Business as a result of such consultation
or access, or as a result of Seller's performance (or non-performance) of the
covenants set forth in Section 4.1 above. Purchaser covenants and agrees that,
prior to the Closing, neither Purchaser nor any of Purchaser's agents,
attorneys, employees or representatives will unreasonably interfere with any of
the Business Arrangements, Other Arrangements, Permits and/or Intellectual
Property Rights. All information obtained by Purchaser through any
investigation of or access to the properties, operations and financial condition
of the Assets and the Business shall at all times prior to the Closing remain
subject to the terms and conditions of that certain Confidentiality Agreement
between Seller and Purchaser, dated March __, 1997, which is incorporated herein
by reference.
4.3 SATISFACTION OF CONDITIONS; COOPERATION. Each of Seller and Purchaser
will use its best reasonable efforts to (a) obtain, as soon as possible, all
governmental approvals required to be obtained by it and make, as soon as
possible, all filings with any governmental authority required on its part to
consummate the transactions contemplated hereby, and (b) obtain, as soon as
possible, other consents to and approvals required to be obtained by it to
consummate the transactions contemplated hereby.
4.4 TECHNICAL SUPPORT. Seller agrees to provide Purchaser with such
engineering and technical support and related services as Purchaser may
reasonably request subsequent to the Closing Date in order that Purchaser may
efficiently combine the Business with the business and operations of Purchaser
and may otherwise realize the full benefit of the consummation of the
transactions contemplated by this Agreement, all pursuant to the terms set forth
in the Consulting Agreement.
7
6. CERTAIN CONTRACTS. In the event that Seller shall not have
obtained, prior to the Closing, the consents of one or more of the other parties
to the Business Arrangements, Permits or Intellectual Property Rights, which
consents shall be required in connection with the assignment of such Business
Arrangements, Permits or Intellectual Property Rights to Purchaser: (i) Seller
shall exercise its best efforts (short of paying additional consideration to any
third party) to effect the assignment of such Business Arrangements, Permits or
Intellectual Property Rights to Purchaser as soon as possible after the Closing
at no additional cost to Purchaser; and (ii) Seller shall retain any such
Business Arrangements, Permits or Intellectual Property Rights pending any such
assignment and, at the request of Purchaser, shall enter into an agreement with
Purchaser under which Seller shall agree to provide or afford to Purchaser the
full benefit of any such Business Arrangements, Permits or Intellectual Property
Rights at no additional cost to Purchaser.
7. REPRESENTATIONS AND WARRANTIES.
7.1 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller hereby
represents and warrants to Purchaser as follows:
(a) Seller is a corporation duly organized, validly existing and,
except as set forth in Exhibit 7.1(a), in good standing under the laws of the
State of Rhode Island and is duly qualified or licensed as a foreign corporation
authorized to do business in each jurisdiction in which the character of the
properties and assets now owned or held by it requires it to be so licensed or
qualified, except where the failure to obtain such license or qualification
would not have an adverse effect on the Assets or the Business.
(b) Seller has full right, power, legal capacity and authority to
execute, deliver and perform this Agreement and all documents and instruments
referred to herein or contemplated hereby and to consummate the transactions
contemplated herein and thereby, including the full right, power, legal capacity
and authority to sell, assign and transfer the Assets. This Agreement has been
duly executed and delivered by Seller and, upon obtaining the foregoing
approvals, will constitute, and all documents and instruments referred to herein
or contemplated hereby when duly executed and delivered by Seller will
constitute, legal, valid and binding obligations of Seller enforceable in
accordance with their respective terms and conditions, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity (whether applied in a proceeding at law or
in equity).
(c) Except for the consents specified in Exhibit 7.1(c), no
approval, consent or other order or action of or filing with any court,
administrative agency, governmental authority or other third party is required
for the execution, delivery or performance by Seller of this Agreement or the
other documents and instruments referred to herein or contemplated hereby, and
no other consents or approvals of third parties are required for the
consummation of the transactions hereby, the absence of which will result in the
imposition of any additional conditions on the use or value of the Assets.
Except as disclosed on Exhibit 7.1(c), there are no prior
8
consent rights or preferential purchaser rights, rights of first refusal or
other similar rights in third parties with respect to any of the Assets.
Seller will exercise its commercially reasonable efforts (short of paying
additional consideration to any third party) to deliver the consents
specified in Exhibit 7.1(c) to Purchaser as soon as practicable prior to the
Closing Date.
(d) At the Closing, Seller shall convey to Purchaser full legal and
beneficial title to all of the Assets, free and clear of all liens, pledges,
mortgages, security interests, conditional sales contracts and encumbrances
except for the Assumed Obligations.
(e) At the time of the Closing, and subject to the satisfaction of
the conditions set forth in Section 9, below, including, without limitation, the
execution, delivery and performance of this Agreement and the other documents
and instruments referred to herein or contemplated hereby, and the consummation
of the transactions contemplated hereby and thereby and the performance by
Seller of its obligations hereunder and thereunder will not cause the imposition
of any additional conditions on the use or value of the Assets, and, except as
set forth in Exhibit 7.1(e), will not constitute a violation of, conflict with,
or result in a default under, (i) any mortgage, indenture, charter or by-law
provision, contract, agreement, commitment or other instrument of any kind to
which Seller is a party or by which Seller or any of its properties or assets
may be bound or affected or (ii) any law, rule or regulation applicable to
Seller or any court injunction, order or decree, or any valid and enforceable
order of any governmental agency having jurisdiction over Seller, which
violation, conflict or default would have or would cause a material adverse
effect on the Assets of the Business.
(f) Except as set forth in Exhibit 7.1(f) hereto, Seller has not
given to any person or party, and there is not currently existing, any power of
attorney of any type pertaining to the Assets or the Business.
(g) Except as set forth in Exhibit 7.1(g) hereto, there are no sales,
use or similar taxes payable by the Purchaser to any taxing authority in any
state arising from the transactions contemplated by this Agreement.
(h) The Intellectual Property Rights are valid and enforceable in
accordance with their respective terms and conditions, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity (whether applied in a proceeding at law or
in equity). The Intellectual Property Rights will upon Closing afford Purchaser
the right to use all technology, proprietary information, know-how or patented
ideas, designs or inventions owned by Seller or others necessary for the present
operation of the Business and the marketing, distribution, sale and use (whether
by Purchaser or Purchaser's direct or indirect customers) of the products
produced in connection with the Business, subject, however to the consents
required as set forth in Exhibit 7.1(c) hereto. None of the ownership, access
to, use or practice of the Intellectual Property Rights by Purchaser upon
Closing will infringe on the rights of any other party, subject, however, to any
consents required as set forth in Exhibit 7.1(c) hereto. Set forth on Exhibit
7.1(h) is a description of the license fees and royalties payable in connection
with the use and practice of the Intellectual Property Rights and the terms and
conditions on which and period for which such license fees and royalties are
payable. The Seller has delivered to Purchaser copies of each of the agreements
described on Exhibit 7.1(h), and such copies are true, correct and complete in
all material respects. Except as otherwise set forth in Exhibit 7.1(h), Seller
is not in default in any material respect and has not been in default in any
material respect under any agreement described in Exhibit 7.1(h) obligating it
to pay license fees or royalties, and has not received a notice of any such
default. The agreements described on Exhibit 7.1(h) have not been terminated
and will remain in full force and effect.
9
(i) Except as described in Exhibit 7.1(i) hereto, the Equipment has
been properly maintained and is in satisfactory operating condition (except for
ordinary wear and tear which in the aggregate would not have a material adverse
effect on the Business) and is capable of being used in the Business without
present need for material repair or replacement except in the ordinary course of
business.
(j) With the exception of the Excluded Assets, the Assets are all of
the assets and properties, tangible and intangible, which are necessary to the
operation of the Business as a going concern on a basis consistent with past
practice. No representation or warranty by Seller in this Agreement and no
statement respecting the Assets or the Business contained in any document
delivered by Seller to Purchaser or its representatives in connection with the
transactions contemplated hereby and no Exhibit hereto contains or will contain
any untrue statement of a material fact or omits or will omit to state any
material fact necessary in order to make the statements made herein or therein,
in light of the circumstances under which they were or will be made, not
misleading.
(k) Except for the Other Arrangements, the contracts, leases,
agreements, undertakings and commitments listed on one or more of the Exhibits
contemplated by Section 1.1 are all the material contracts, leases, agreements,
undertakings and commitments related to the operation of the Business or
constituting any of the Assets. Except as disclosed in Exhibit 7.1(k), Seller
is not (nor, to the knowledge of Seller, is any other party) in default under,
nor does any condition, event, circumstance or situation exist (i) which, with
the giving of notice of passage of time, or both, will cause a default or cause
the imposition of any material adverse burden or condition under any of the
Business Arrangements, Permits or Intellectual Property Rights or under any
judgment, order or decree of any court or any government agency or
instrumentality relating to the ownership of the Assets or the conduct of
Business, or (ii) as a result of which any person, firm, corporation or other
entity is or may be entitled to assert any rights against any of the Assets or
the Business.
(l) Except as disclosed in Exhibit 7.1(l) hereto, as of December
31, 1996 and except as may occur in the ordinary course of business of Seller
consistent with past practice since December 31, 1996, Seller has not received
any payment under any agreement or instrument for the sale, processing,
exchange, storage or transportation of products included in the Assets or
produced by the Business which requires delivery in the future to any other
party thereto of products previously paid for, in full or in part; and Seller,
as of the Closing Date, will not have delivered, under any such agreement or
instrument, more product than any other party thereto is obligated to acquire;
there exists no requirement to "make up" any deliveries of products to any third
party and there has not been delivered under any such agreement or instrument
less product than any other party thereto paid for or is obligated to purchase
or acquire.
(m) Except as disclosed in Exhibit 7.1(m), there are no bonds,
deposits, financial assurance requirements or insurance coverages required to be
submitted to regulatory authorities for the continued ownership of the Assets or
the conduct of the Business.
(n) Except as provided or disclosed in Exhibit 7.1(n) hereto, at
the Closing, Seller will have timely paid or will have made adequate
provision (according to terms set forth in writing and acceptable to
Purchaser) for the payment of all federal, state and local income, profits,
franchise, sales, use, employment and similar taxes, and all interest and
penalties thereon due and payable by it for all periods ended on or prior to
the Closing Date, the non-payment of which would result in a lien or
encumbrance on any Asset, would otherwise materially adversely affect the
Business or would result in the Purchaser becoming liable or responsible
therefor. Seller will timely pay or make adequate
10
provision (according to terms set forth in writing and acceptable to
Purchaser) for the payment of all tax liabilities, assessments, interest and
penalties that have accrued but that are not yet due and payable, the
non-payment of which would result in a lien or encumbrance on any Asset,
would otherwise materially adversely affect the Business or would result in
the Purchaser becoming liable therefor.
(o) All of the Raw Materials and In-Process Goods Inventories are
items of the quantity and quality required to produce Finished Goods Inventories
in the ordinary course of business consistent with prior practice. Except as
disclosed in Exhibit 7.1(o) hereto, all of the Finished Goods Inventories are
items of a quality and quantity that may be used and sold in the ordinary course
of business at the market prices of such products consistent with prior
practice.
(p) Except as disclosed in Exhibit 7.1(p), Seller has full power,
authority and legal right and has all licenses, permits, qualifications, and
other documentation necessary or appropriate to own the Assets and to carry on
the Business as being conducted on the date of this Agreement, and such Business
has been and is now being conducted in compliance with all applicable laws,
ordinances, rules and regulations of any governmental department, commission,
board, bureau, agency or instrumentality of the United Sates, any state or
political subdivision thereof, or any foreign jurisdiction, and all applicable
court or administrative agency decrees, awards and orders, and to Seller's
knowledge there is no condition or state of facts which would give rise to a
violation thereof or a liability or default thereunder which would have a
material adverse effect on the Assets or the Business in the hands of Purchaser
following the Closing.
(q) Except as set forth in Exhibit 7.1(q), no legal action, suit or
proceedings, judicial or administrative, or grievance, arbitration,
investigation or claim by or before any governmental agency, for which Purchaser
will be responsible or liable or to which any of the Assets will be subject on
or after Closing is pending or, to the knowledge of Seller, threatened, which
involves or may involve any Asset or the operation of the Business or the
purchase, sale, transportation or processing of raw materials or products in
connection with the Business, which, if adversely determined could have a
material adverse effect on any Asset in the hands of Purchaser after the
Closing, the operation of the Business by Purchaser after the Closing, the
purchase, sale, transportation or processing a raw materials or products in
connection with the Business, or the ability of Seller to perform its
obligations under this Agreement or any other document or instrument referred to
herein or contemplated hereby. Except to the extent disclosed on Exhibit
7.1(q), Seller is not aware of any fact which to its knowledge might result in
any action, suit, or proceeding, judicial or administrative, or grievance,
arbitration, investigation or claim which could cause a material adverse change
in the Business or the condition (financial or otherwise) of any Asset and for
which Purchaser will be responsible or liable or to which an of the Assets will
be subject in the hands of Purchaser on or after Closing.
(r) Except as disclosed on Exhibit 7.1(r), since December 31, 1996,
Seller has not operated the Assets or conducted the Business outside of the
ordinary course of business or in a manner inconsistent with prior practice.
(s) Except as disclosed on Exhibit 7.1(s), since December 31, 1996,
Seller has not received any notice or claim of the types described in clause (i)
of section 4.1(d), and no loss, damage or disposition of the types described in
clause (ii) of Section 4.1(d) has occurred.
(t) Since December 31, 1996, and except as contemplated hereby,
Seller has not sold, disposed of, distributed, encumbered or entered into any
agreement or arrangement for the sale, disposition, distribution or encumbrance
of any of the Assets (other than the sale or use of Inventories in the ordinary
course of business), or made any offer or entered into any negotiations with
respect thereto, or entered into any transaction, the effect of which would be
to diminish the amount or value of the Assets or to
11
adversely affect the Business by an amount, individually or in the aggregate,
in excess of $10,000.
(u) Except as disclosed on Exhibit 7.1(u) attached hereto, Purchaser
(nor any successors or permitted assign) shall have no liability, obligation or
other responsibility for or with respect to the payment of any federal or state
income taxes that may be assessed or imposed by the Internal Revenue Service or
any state taxing authority with respect to the sale of the Assets pursuant to
the terms of this Agreement or the consummation of the other transactions
contemplated hereby.
(v) Seller has not conducted business in any name other than
"Astro-Med, Inc." and has not conducted business at an address other than
Astro-Med Industrial Park, West Warwick, Rhode Island since
_____________________.
7.2 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser represents and
warrants to Seller as follows:
(a) Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and is duly licensed or
qualified as a foreign corporation and authorized to do business in each
jurisdiction in which the character of the properties and assets owned or held
by it requires it to be so licensed or qualified, except where the failure to
obtain such license or qualification would not have an adverse effect on the
assets, the business, operations or financial condition of the Purchaser and its
subsidiaries, taken as a whole.
(b) Purchaser has full right, power, legal capacity and authority to
execute, deliver and perform this Agreement and all documents and instruments
referred to herein or contemplated hereby and thereby, and to consummate the
transactions contemplated hereby, including the full right, power, legal
capacity and authority to purchase the Assets. This Agreement has been duly
executed and delivered by Purchaser and constitutes, and all documents and
instruments referred to herein or contemplated hereby, when duly executed and
delivered by Purchaser will constitute legal, valid and binding obligations of
Purchaser, enforceable in accordance with their respective terms and conditions,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether applied
in a proceeding at law or in equity).
(c) The execution, delivery and performance of this Agreement and the
other documents and instruments referred to herein or contemplated hereby, and
the consummation of the transactions contemplated hereby and thereby and the
performance by Purchaser of its obligations hereunder and thereunder will not
constitute a violation of, conflict with, or result in a default hereunder, (i)
any mortgage, indenture, charter or by-law provision, contract, agreement,
commitment or other instrument of any kind to which Purchaser is a party or by
which Purchaser may be bound or affected, or (ii) any law, rule or regulation
applicable to Purchaser, or any court injunction, order or decree, or any valid
and enforceable order of any governmental agency having jurisdiction over
Purchaser.
(d) No legal action, suit or proceeding, judicial or administrative,
or grievance, arbitration, investigation or claim, by or before any governmental
agency, is pending or, to the
12
knowledge of Purchaser, threatened which, if adversely determined, could have
an adverse effect on the ability of Purchaser to perform its obligations
under this Agreement or any other document or instrument referred to herein
or contemplated hereby.
(e) Except for the consents contemplated hereby or specified on
Exhibit 7.2(e), no approval, consent or other order or action of or filing with
any court, administrative agency, governmental authority or other third party is
required for the execution, delivery or performance by Purchaser of this
Agreement, or the other documents and instruments referred to herein or
contemplated hereby. Purchaser will exercise its commercially reasonable
efforts (short of paying additional consideration to any third party) to deliver
the consent specified in Exhibit 7.2(e) to Seller as soon as practicable prior
to the Closing Date.
8. SURVIVAL; INDEMNIFICATION.
8.1 SURVIVAL. The respective representations, warranties and
covenants of Seller and Purchaser herein shall survive the Closing.
8.2 INDEMNIFICATION BY SELLER. Subject to Sections 8.4, 8.6 and 8.7
herein, Seller hereby agrees, effective as of the Closing, to indemnify, save
and hold harmless Purchaser and its direct and indirect subsidiaries and its and
their successors and permitted assigns and all of their respective officers,
directors, stockholders, agents, attorneys, representatives and employees
(collectively, the "Purchaser Indemnified Parties") from and against any and all
damages, liabilities, losses, claims, deficiencies, penalties, interest,
expenses, fines, assessments, charges or costs (including attorneys' fees and
court costs) (collectively, the "Damages") arising from, out of or in any manner
connected with (a) any liability, obligation, contract, debt, lien, litigation,
dispute or commitment of Seller other than Assumed Obligations, (b) acts,
omissions, events, conditions or circumstances involving or relating to the
Assets or the Business, or the employees or contractors of Seller occurring or
existing on or prior to the Closing Date, other than the Assumed Obligations,
(c) the operation of the Assets or the Business or the sale, disposal,
transportation, storage or use of products or raw materials in connection with
the Business on or prior to the Closing Date, including, without limitation,
product liabilities for products sold by Seller on or before the Closing Date,
(d) the breach of any covenant of Seller or the failure of Seller to perform any
obligation of Seller contained herein or in the documents or instruments
required to be delivered by Seller in connection with the transactions
contemplated hereby, (e) any inaccuracy in or breach of any representation or
warranty of Seller
13
under this Agreement or any document or instrument required to be delivered
by Seller prior to or at the Closing or in connection with the transactions
contemplated hereby, (f) all tax liabilities of Seller arising from or
related to or based on events, occurrences, transactions, revenues, income,
operations or assets during any period prior to the Closing or arising from
or related to or based on the sale of the Assets as contemplated hereunder,
(g) the matters for which Seller retains liability under Sections 11 and 14,
and (h) any liability to employees or former employees of Seller or their
beneficiaries arising from the severance or discharge (or constructive
severance or discharge) of such employees by Seller or their rights to
benefits under the Company Plans or other employment related claims.
8.3 INDEMNIFICATION BY PURCHASER. Subject to Sections 8.4, 8.6, and
8.7, Purchaser hereby agrees, effective as of the Closing, to indemnify, save
and hold harmless Seller and its successors and their permitted assigns and all
of their officers, directors, stockholders, agents, attorneys, representatives
and employees (collectively the "Seller Indemnified Parties") from and against
any Damages arising from, out of or in any manner connected with (a) the Assumed
Obligations, (b) acts, omissions, events, conditions or circumstances involving
or relating to the Assets or the Business, or the employees or contractors of
Purchaser (or its subsidiary) occurring or existing after, but not on or before,
the Closing Date (other than those for which the Purchaser Indemnified Parties
are entitled to be indemnified by Seller under Section 8.2), (c) the operation
of any of the Assets, the operation of any other business in which the Purchaser
(or its subsidiary) shall engage, or the sale, disposal, transportation, storage
or use of products or raw materials in connection with the Business by Purchaser
(or its subsidiary) after, but not on or before, the Closing Date, including,
without limitation, product liabilities for products (other than the
Inventories) sold by Purchaser (or its subsidiary) after, but not on or before,
the Closing Date (other than matters for which the Purchaser Indemnified Parties
are entitled to be indemnified by Seller under Section 8.2), (d) the breach of
any covenant of Purchaser contained herein or in the documents or instruments
required to be delivered by Purchaser in connection with the transactions
contemplated hereby, (e) any inaccuracy in, or breach of any representation or
warranty of Purchaser under this Agreement or any document or instrument
required to be delivered by Purchaser in connection with the transactions
contemplated hereby, (f) the matters for which Purchaser assumes liability under
Sections 11 and 14, below, and (g) any untrue statement or alleged information
furnished by Purchaser pursuant to Section 4.12, above, and supplied in the
Disclosure Statement (or amendments or supplements thereto to which Purchaser
shall have consented in writing), or any omission or alleged omission to state
therein a material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
8.4 LIMITATIONS ON LIABILITY.
(a) NO BENEFIT TO OTHERS. The representations and warranties,
covenants and agreements contained in this Agreement are for the
sole benefit of the parties hereto and their respective heirs,
executors, administrators, legal representatives, successors and
permitted assigns, and, except as otherwise specifically
provided, they shall not be construed as conferring any rights on
any other persons.
(b) LIMITATION ON SURVIVAL. Notwithstanding any other provision
of this Agreement, no claim shall be made for misrepresentation,
breach of representation or warranty, breach of covenant, or for
indemnification hereunder unless written notice specifying the
nature of such claim, in reasonable detail, shall be given to the
party against whom such claim is asserted prior to December 31,
2002.
8.5 NOTICE AND RIGHT TO DEFEND. Seller, on the one hand and
Purchaser, on the other, agree to give prompt notice to the other of the
assertion of any claim, or the commencement of any suit, action or proceeding in
respect of which indemnity may be sought hereunder. Any failure on the part of
either party to this Agreement to give the notice described
14
in this Section 8.5 to the other party hereto shall relieve the party to whom
such notice was not provided of its obligations under this Section 8 only to
the extent that such non-notified party has been prejudiced by the lack of
timely and adequate notice. This notification requirement shall not apply to
communications that are part of or that relate to a judicial or
administrative proceeding in which the parties hereto are litigating claims
against each other. The indemnifying party shall have the right and
obligation to assume the defense or settlement of any third-party claim,
suit, action or proceeding in respect of which it has an obligation to
provide indemnity hereunder, and such indemnity may be sought hereunder by
giving prompt notice to the indemnifying party; PROVIDED, HOWEVER, that (a)
the indemnified party shall at all times have the right, at its option and
expense, to participate fully therein, and (b) if the indemnifying party does
not proceed diligently to defend the claim within ten days after receipt of
such notice, the indemnified party shall have the right, but not the
obligation, to undertake the defense of any such claim for the account of and
at the risk of the indemnifying party and the indemnifying party shall be
bound by any defense or settlement that the indemnified party may make as to
such claim. The parties shall cooperate in defending any such third-party
claim, and the defending party shall have reasonable access to the books and
records, and personnel in the possession or control of the other party which
are pertinent to the defense. The parties agree that the indemnified party
may join the indemnifying party in any action, claim or proceeding brought by
a third party, as to which any right of indemnity created by this Agreement
would or might apply, for the purpose of enforcing any right of the indemnity
granted to such indemnified party pursuant to this Agreement.
8.6 APPORTIONMENT. Consistent with the provisions of Section 8.2 and
8.3, any Damages arising from or out of or relating to acts, omissions,
conditions, events or circumstances which occur or exist both on or prior to and
after the Closing Date shall be allocated between Seller and Purchaser in
proportion to the extent to which such acts, omissions, conditions, events or
circumstances occurring or existing on or prior to the Closing Date, which will
be Seller's responsibility, and the extent to which such acts, omissions,
conditions, events or circumstances occurring or existing after (but not on or
before) the Closing Date, which will be Purchaser's responsibility, cause or
contribute to such Damages.
8.7 REDUCTION. After the Closing, the amount payable by either party
hereto (the "Indemnifying Party") to a person entitled to indemnity hereunder
(the "Indemnified Party") with respect to any claim for indemnity hereunder by
such Indemnified Party shall be reduced (but not below zero) (or, if previously
collected by a Purchaser Indemnified Party, refunded [but not in any amount in
excess of the amount collected from Seller] at the time of receipt by such
Purchaser Indemnified Party, to the Seller) by any net proceeds of insurance
actually collected (after giving effect to retroactive, future and other premium
adjustments, whether or not then payable, and any subrogation or similar claims
payable) by such Indemnified Party for the same matter which is the subject of
such claim.
9. CONDITIONS TO CLOSING.
15
9.1 CONDITIONS PRECEDENT TO OBLIGATION OF PURCHASERS. The obligation
of Purchaser to consummate the transactions contemplated by this Agreement shall
be subject to satisfaction (or the waiver in writing of Purchaser) prior to and
at the Closing of all of the following conditions:
9.1.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER.
Seller shall have complied in all material respects with all of its
agreements and covenants contained herein. All of the representations and
warranties of Seller contained herein shall be accurate in all material
respects at and as of the Closing with the same effect as though such
representations and warranties had been made at and as of the Closing and
Purchaser shall have received a certificate to such effect executed by the
President and Chief Financial Officer of Seller.
9.1.2. NO CASUALTY, LOSS OR DAMAGE. Except as disclosed in
Exhibit 7.1(i), no material casualty, loss or damage shall have occurred
prior to the Closing Date to any Assets unless Seller shall have either
repaired or replaced such lost or damaged property.
9.1.3. DOCUMENTS. All documents, instruments and agreements
required to be executed and delivered by Seller or third parties at the
Closing as contemplated hereby, and such other documents, instruments,
estoppel certificates from third parties and other certificates and
opinions as Purchaser shall reasonably request, shall have been duly
executed and delivered by Seller and any other parties required and shall
have been received.
9.1.4. CONSENTS. All consents, estoppel agreements and
approvals of third parties or any regulatory body or authority, whether
required contractually or by applicable federal, state or local law, or
otherwise necessary for the execution, delivery and performance of this
Agreement by Seller, and the transfer of the Assets to Purchaser or
otherwise required to permit the Purchaser to enjoy the use of the Assets,
without the imposition of any additional material burden on the use or
value of the Assets, except as provided in Section 6 or 12.2 and except for
approvals of governmental agencies customarily obtained subsequent to
transfer of title, shall have been delivered to Purchaser in form and
substance satisfactory to Purchaser at least two days prior to the Closing
Date and shall not have been withdrawn or revoked.
9.1.5. AD VALOREM AND OTHER TAXES. Except as otherwise
provided in Section 7.1(n), or as otherwise apportioned pursuant to Section
11.3, all ad valorem and other taxes (excluding income) assessed against
the Assets for the year 1995 and all prior years shall have been paid or
adequate provision for the payment thereof shall have been made in the Plan
of Reorganization.
9.1.6. CORPORATE AUTHORITY. On the Closing Date, Seller shall
have delivered to Purchaser, in such form as Purchaser's legal counsel may
reasonably request, evidence of Seller's corporate authority for the
execution, delivery and performance of this Agreement and the other
agreements and instruments to be executed and delivered by Seller pursuant
hereto and the transactions contemplated hereby and thereby.
9.1.7. VIOLATIONS, CONFLICTS AND DEFAULTS. Any and all
violations, conflicts and defaults described in Exhibit 7.1(e) that pertain
to (a) any material mortgage, indenture, charter, or by-law provision,
contract, agreement, commitment or other instrument of the type
described by clause (i) of Section 7.1(e), or (b) any law, rule,
16
regulation, injunction, order or decree of the type described in clause
(ii) of Section 7.1(e) shall have been cured in their entirety to the
satisfaction of Purchaser at or prior to the Closing.
Notwithstanding the foregoing, the conditions set forth in Sections 9.1.1,
9.1.2, 9.1.4, and 9.1.7 shall be deemed to be satisfied unless the aggregate
effect of (i) all inaccuracies in the representations and warranties of Seller
set forth in this Agreement, as of the date hereof, together with (ii) all
further inaccuracies in such representations and warranties as if they were made
again as of the Closing Date and irrespective of any disclosures thereof,
together with (iii) all breaches of agreements and covenants herein by Seller,
together with (iv) all casualties, losses or damages to the Assets, together
with (v) all adverse burdens or conditions imposed upon the Business, together
with (vi) all adverse changes in or adverse effects on the Assets or the
Business shall be sufficient so that there is a Material Adverse Effect. As
used in the preceding sentence, the term "Material Adverse Effect" means an
effect which is adverse in an amount in excess of $10,000. The consummation of
the Closing shall not be deemed to be a waiver by Purchaser of any of its rights
or remedies hereunder for breach of warranty, covenant or agreement herein by
Seller or for any defects in title to any of the Assets, irrespective of any
investigation made by or on behalf of Purchaser with respect thereto prior to
the Closing, and irrespective of whether Purchaser knew or should have known of
any such breach or defect. Purchaser's indemnification obligations hereunder
and Seller's other rights and remedies hereunder shall not be affected by the
existence or non-existence of a Material Adverse Effect.
9.2 CONDITIONS PRECEDENT TO OBLIGATION OF SELLER. The obligation of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to satisfaction (or the waiver in writing by Seller) at or prior to the
Closing of all of the following conditions:
9.2.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.
Purchaser shall have complied in all material respects with all of its
agreements and covenants contained herein to be performed at or prior to
the Closing. All the representations and warranties of Purchaser contained
herein shall be accurate in all material respects at and as of the Closing
with the same effect as though such representations and warranties had been
made at and as of the Closing, and Seller shall have received a certificate
to such effect executed by the President (or any Vice President) of
Purchaser.
9.2.2 CORPORATE AUTHORITY. On the Closing Date, Purchaser
shall have delivered to Seller in such form as legal counsel for Seller may
reasonably request, evidence of Purchaser's corporate authority for the
execution, delivery and performance of this Agreement and the other
agreements and instruments to be delivered pursuant hereto and the
transactions contemplated hereby and thereby.
9.2.3 DOCUMENTS. All documents, instruments and agreements
required to be executed and delivered by Purchaser or third parties at the
Closing as contemplated
17
hereby, and such other documents, instruments, certificates and opinions
as Seller shall reasonably request, shall have been duly executed and
delivered by Purchaser and any other parties required and shall have been
received.
9.2.4 CONSENTS. All consents, estoppel agreements and
approvals of third parties or any regulatory body or authority, whether
required contractually or by applicable federal, state or local law, or
otherwise necessary for the execution, delivery and performance of this
Agreement by Purchaser, and the execution, delivery and performance of the
Assumption Agreement by Purchaser, and the taking of all other actions to
be taken and the performance of all other obligations to be performed by
Purchaser at Closing, to permit Seller to obtain all of the benefits
contemplated by this Agreement, without interference or claim from any
third party, shall have been delivered to Seller in form and substance
satisfactory to Seller at least two days prior to the Closing Date and
shall not have been withdrawn or revoked.
Notwithstanding the foregoing, the conditions set froth in Sections 9.2.1,
9.2.4 shall be deemed to be satisfied unless the aggregate effect of (i) all
inaccuracies in the Agreement, as of the date hereof, together with (ii) all
further inaccuracies in such representations and warranties as if they were made
again as of the Closing Date and irrespective of any disclosures thereof,
together with (iii) all breaches of agreements and covenants herein by Purchaser
shall be sufficient so that there is a Material Adverse Effect. As used in the
preceding sentence, the term "Material Adverse Effect" means an effect which is
adverse in an amount in excess of $10,000. The consummation of the Closing
shall not be deemed to be a waiver by Seller of any of its rights or remedies
hereunder for breach of warranty, covenant or agreement herein by Purchaser,
irrespective of any investigation made by or on behalf of Seller with respect
thereto prior to the Closing, and irrespective of whether Seller knew or should
have known of any such breach. Seller's indemnification obligations hereunder
and Purchaser's other rights and remedies hereunder shall not be affected by the
existence or non-existence of a Material Adverse Effect.
10. TERMINATION.
10.1 GROUNDS FOR TERMINATION. This Agreement may be terminated at any
time prior to the Closing Date:
(a) by the written agreement of Seller and Purchaser; or
(b) by Seller or by Purchaser, by written notice to the other, if the
Closing shall not have occurred by 5:00 p.m., Eastern Times on March 31,
1997, unless such date is extended by mutual agreement in writing; or
(c) by Seller or by Purchaser, by written notice to the other, if on
the date scheduled for Closing any proceeding or action shall have been
filed seeking to restrain, enjoin or otherwise prevent the consummation of
this Agreement or the transaction contemplated hereby or any order shall
have been entered restraining or prohibiting consummation of the
transactions contemplated hereby.
18
10.2 EFFECT OF TERMINATION. If this Agreement is terminated as
permitted under Section 10.1, such termination shall be without liability to
either party, except that such termination shall be without prejudice to any and
all remedies the parties may have against each other for any breach of this
Agreement.
11. RECEIVABLES; PAYABLES; APPORTIONMENT.
11.1 RECEIVABLES. If any monies or other assets are received by
Purchaser to which Seller is entitled and that are not included in the Assets,
Purchaser shall hold such monies and assets received by Purchaser in trust for
Seller and shall account for any pay same to Seller within fifteen (15) days of
receipt. If any monies or other assets are received by Seller to which
Purchaser is entitled, and that are included in the Assets, or which represent
prepayments or deposits made by customers or others after the Closing Date with
respect to the purchase of any Inventory or under any Business Arrangements
included within the Assets, Seller shall hold such monies and assets received by
Seller in trust for Purchaser and Seller shall account for and pay same to
Purchaser within fifteen (15) days of receipt.
11.2 LIABILITIES. All liabilities of whatever kind or nature,
whether absolute or contingent, direct or indirect, or fixed or contingent of
Seller, arising from acts, omissions, events, conditions or circumstances
occurring or existing for any period of time on or prior to Closing (whether or
not known by Purchaser), other than the Assumed Obligations, shall be retained
by Seller and shall not be assumed by Purchaser, and Seller covenants and agrees
to pay the same when due or otherwise make adequate provision (according to
terms set forth in writing and acceptable to Purchaser) for the discharge of the
same.
11.3 APPORTIONMENT. Ad valorem and similar taxes imposed by any
taxing authority on the Assets and applicable to periods both prior to and after
the Closing Date with respect to the Assets shall be prorated as of the Closing
Date. Seller and Purchaser shall agree on the amounts owing to Seller by
Purchaser or to Seller resulting from such proration within sixty days after the
Closing Date, and such amounts shall be paid within thirty (30) days thereafter.
11.4 OTHER TAXES. To the extent there are any sales, use, or
similar taxes payable to any taxing authority in any state arising from this
transaction they shall be borne by Seller and Seller agrees to indemnify
Purchaser therefor, except to the extent to do so would violate law, in which
case they shall be borne by Purchaser and collected by Seller for remittance to
the taxing authority. In the event any taxing authority in any state assesses
any such taxes after the Closing, the parties shall follow the procedure set
forth in Section 8.5 with respect thereto. The party responsible for bearing
the tax shall have the right to approve all sales tax information and returns
submitted to tax authorities and to designate the amount of sales tax shown due
thereon arising from the transaction contemplated hereby.
12. CERTAIN BUSINESS AND OTHER ARRANGEMENTS.
19
12.1 ADDITIONAL ASSIGNMENTS. The parties recognize that a separate
instrument or instruments of assignment and assumption may be necessary or
proper with respect to certain Business Arrangements, Permits and Intellectual
Property Rights, and accordingly, the parties shall duly execute and deliver at
the Closing or thereafter, as required, such separate instrument or instruments
as may be reasonably required to effect the assignment by Seller and assumption
by Purchaser of all Business Arrangements, Permits and Intellectual Property
Rights.
12.2 CONSENTS TO ASSIGNMENTS. Each party shall assist the other in
attempting to obtain any consents required for the assignment of any Business
Arrangements, Permits or Intellectual Property Rights requested by Purchaser
prior to Closing to be included in the Assets. If such consents cannot be
obtained prior to Closing, Seller and Purchaser shall cooperate in any
arrangement reasonably satisfactory to the parties designed to fulfill Seller's
obligations thereunder and to afford Purchaser the benefits thereof.
12.3 NO RECISSION. Rescission of the Agreement shall not be
available as a remedy at law or in equity to either party hereto or their
successors or permitted assigns in the event of a breach of or other default
under this Agreement. Nothing herein contained shall affect any other right or
remedy of either party hereto.
12.4 BOOKS AND RECORDS. Seller may make copies of any of the Books
and Records. Following Closing, Purchaser shall give Seller access to the Books
and Records for reasonable and lawful business purposes related to post-Closing
events or occurrences affecting Seller and pertaining to the Assets, including
the right to make copies thereof, during normal business hours. Purchaser shall
keep such Books and Records safely and in good order for a reasonable period of
time and for such further periods, at Seller's expense, as Seller may reasonably
request; provided, that Purchaser may at any time deliver any such Books and
records to Seller and shall have access thereto in the same manner as set forth
below.
Seller may keep the originals of books, records and documents as may be
agreed upon in writing by Purchaser prior to Closing. With respect to any such
originals, Seller shall give Purchaser access thereto and the right to make
copies thereof during normal business hours. Seller shall keep such books,
records and documents safely and in good order for a reasonable period of time
following Closing and for such further periods, at Purchaser's expense, as
Purchaser may reasonably request; provided, that Seller may at any time deliver
such books, records and documents to Purchaser, and Seller shall have access
thereto in the same manner as set forth above.
14. MISCELLANEOUS.
14.1 NOTICE. Any notice required or permitted to be given under this
Agreement shall be in writing, and shall be mailed or delivered to the
addresses, or sent by telecopy to the telecopy numbers, as follows:
SELLER: Astro-Med, Inc.
Astro-Med Industrial Park
West Warwick, Rhode Island 02893
Attention: President
Telecopy No.: (000) 000-0000
PURCHASER Arrhythmia Research Technology, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
00
Xxxxxx, Xxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
or such other address as shall be furnished in writing by such parties, and such
notice shall be effective and be deemed to have been given as of the date
actually received.
To the extent any notice provision in any other agreement, instrument or
document required to be executed or executed by the parties in connection with
the transactions contemplated herein contains a notice provision which is
different from the notice provision contained in this Section 14.1 with respect
to matters arising under such other agreement, instrument or document, the
notice provision in such other agreement, instrument or document shall control.
14.2 AMENDMENTS AND WAIVERS. This Agreement may not be amended or
waived except by an instrument in writing signed on behalf of each of the
parties hereto.
14.3 FURTHER DOCUMENTS. Seller shall, at any time and from time to
time after the Closing, upon request by Purchaser and without further
consideration, execute and deliver such instruments of transfer or other
documents and take such further action as may be reasonably required in order to
convey, transfer, assign and deliver to Purchaser the Assets and the Business in
accordance with this Agreement or to perfect any other undertaking made by
Seller hereunder. Purchaser shall at any time and from time to time after the
Closing, upon request by Seller and without further consideration, execute and
deliver such documents and take such further action as may be reasonably
required in order to perfect any undertaking made by Purchaser hereunder.
14.4 OTHER ASSISTANCE. Purchaser shall, at the request of Seller,
provide reasonable assistance in the collection of information or documents and
make Purchaser's employees available as witnesses when reasonably requested by
Seller. Seller shall reimburse Purchaser for all reasonable out-of-pocket costs
and expenses incurred by Purchaser (including salaries or wages of Purchaser's
employees) in providing said assistance.
14.5 ASSIGNABILITY; ENFORCEABILITY. Neither party shall assign this
Agreement in whole or in part without the prior written consent of the other
party, which consent shall not be unreasonably withheld; provided, however, that
at or after Closing Purchaser may assign this Agreement and any other closing
documents, and its rights and obligations hereunder and thereunder, to any
direct or indirect wholly-owned subsidiary of Purchaser, and Purchaser (or any
such wholly-owned subsidiary) may assign its rights hereunder and under any
other such closing documents to the financial institution(s) or their affiliates
financing or refinancing the transactions contemplated hereby; and provided
further, that upon foreclosure or sale in lieu of foreclosure or deed in lieu of
foreclosure or deed of the Assets or a substantial portion thereof by or to any
such financial institutions or their affiliates, the warranties, representation,
obligations, agreements and indemnities (in Section 8, 11 and elsewhere herein)
between Purchaser and Seller herein and in other documents will inure to the
benefit of such financial institutions (or their affiliates) or any purchaser or
grantee of such Assets. Any assignments made or attempted in violation of this
Section 14.5 shall be void and of no effect.
This Agreement shall be binding on and enforceable by Seller and
Purchaser.
21
Any provision contained in this Section 14.5 to the contrary
notwithstanding, Seller shall remain liable for and with respect to the
obligations of Seller under this Agreement following any assignment by Seller of
this Agreement or its rights and obligations hereunder, the Purchaser shall
remain liable for an with respect to the obligations of Purchaser under this
Agreement following any assignment by Purchaser of this Agreement or its rights
and obligations hereunder.
Except as set forth in this Section 14.5, and except to the extent
that the Purchaser Indemnified Parties and Seller Indemnified Parties shall be
entitled to the benefits of the indemnities set forth herein, no person or
entity not a party to this Agreement shall have rights under this Agreement as a
third party beneficiary or otherwise.
14.6 EXHIBITS. The Exhibits (and any appendices thereto) inclusive,
referred to in this Agreement and all amendments thereto from the time of
agreement hereto, are and shall be incorporated herein and made a part hereof.
14.7 SECTIONS AND ARTICLES. All Sections and Articles referred to
herein are sections and articles of this Agreement and all Exhibits referred to
herein are exhibits attached to this Agreement.
14.8 ENTIRE AGREEMENT. This Agreement constitutes the full
understanding of the parties, a complete allocation of risks between them and a
complete and exclusive statement of the terms and conditions of their agreement
relating to the subject matter hereof and supersedes any and all prior
agreements, whether written or oral, that may exist between the parties with
respect thereto. Except as otherwise specifically provided in this Agreement,
no conditions, usage of trade, course of dealing or performance, understanding
or agreement purporting to modify, vary, explain or supplement the terms or
conditions of this Agreement shall be binding unless hereafter made in writing
and signed by the party to be bound, and no modification shall be effected by
the acknowledgment or acceptance of documents containing terms or conditions at
variance with or in addition to those set forth in this Agreement. No waiver by
either party with respect to any breach or default or of any right or remedy and
no course of dealing, shall be deemed to constitute a continuing waiver of any
other breach or default or of any other right or remedy, unless such waiver be
expressed in writing signed by the party to be bound. Failure of a party to
exercise any right shall not be deemed a waiver of such right or rights in the
future.
14.9 HEADINGS. Headings as to the contents of particular articles
and sections are for convenience only and are in no way to be construed as part
of this Agreement or as a limitation of the scope of the particular articles or
sections to which they refer.
14.10. CONTROLLING LAW AND JURISDICTION. THE VALIDITY,
INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT AND ANY DISPUTE CONNECTED
HEREWITH SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
22
14.11 PUBLIC ANNOUNCEMENT. Until the Closing, no press release,
public announcement, confirmation or other information regarding this Agreement
or the contents hereof shall be made by either party without the prior
consultation of the other party, except as may be necessary in the opinion of
counsel of either party to meet the requirements or regulations of any
applicable law, governmental unit or agency or stock exchange on which the
securities of such party may be listed.
14.12 FINDER'S FEES AND COMMISSIONS. Seller and Purchaser agree to
indemnify each other and hold each other harmless from any liability, cost or
expense (including, but not limited to, fees and disbursements of legal counsel)
resulting from any agreement, arrangement or understanding made by the
indemnifying party with any third party for brokerage or finder's fees or other
commissions in connection with this Agreement, the documents and instruments
referred to herein, or the transactions contemplated hereby or thereby.
14.13 CONFIDENTIALITY AGREEMENTS. At the Closing, any
confidentiality agreements among Seller and Purchaser and any
representatives, advisors, lenders and others acting on behalf of Purchaser
shall terminate to the extent they involve information or documents related
exclusively to the Business or Assets, but shall remain in full force and
effect as to other information and documents. After the Closing Date, without
the prior written consent of the other, (a) Seller shall not, directly or
indirectly, use or provide to, and shall not permit any affiliate, directly
or indirectly, to use or provide any other person any non-public information
pertaining to the Business or the Assets, and (b) Purchaser shall not,
directly or indirectly, use or provide to, and shall not permit any
affiliate, directly or indirectly, to use or provide any other person any
non-public information concerning Seller, except to the extent such
non-public information pertains to the Business or the Assets. Purchaser or
Seller, as the case may be, may disclose such non-pubic information to the
extent required by law, provided that notice of the requirement for such
disclosure is given to the other prior to making any disclosure and the party
that is being compelled to make such disclosure cooperates as the other party
may
23
reasonably request in resisting such disclosure; and further provided, that
Purchaser or Seller may disclose such non-public information to the extent
reasonably required in connection with a proceeding to enforce its rights
under this Agreement. Any provision contained herein to the contrary
notwithstanding, this Section 14.13 shall not limit the right of Purchaser
(or any successor or permitted assign) to provide any such non-public
information to its or their lenders, placement agents, underwriters or
advisors.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto on the date first hereinabove
written.
ASTRO-MED, INC.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxx, President
ARRHYTHMIA RESEARCH TECHNOLOGY, INC.
By: /s/ X. X. Xxxxxxx
-----------------------------------
X. X. Xxxxxxx, President and
Chief Executive Officer
24
