EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
FOR THE ACQUISITION BY
ASAHI/AMERICA, INC.
OF
CERTAIN ASSETS OF
UNIVERSAL FLOW MONITORS, INC. and
THE ROSAEN COMPANY
April 30, 1997
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS 1
ARTICLE 2 PURCHASE AND SALE OF ASSETS 5
Section 2.1 Acquired Assets 5
Section 2.1.1 Contracts 5
Section 2.1.2 Trademarks and Copyrights 6
Section 2.1.3 Customer Information 7
Section 2.1.4 Patents and Technology 7
Section 2.1.5 Inventory 7
Section 2.1.6 Equipment and Personal Property 7
Section 2.1.7 Miscellaneous Records 7
Section 2.1.8 Training and Consulting Services 7
Section 2.1.9 Shipping and Insurance Costs 8
Section 2.2 Excluded Assets 8
ARTICLE 3 ASSUMPTION OF LIABILITIES BY BUYER 8
Section 3.1 Assumed Liabilities 8
Section 3.1.1 Contract Obligations 8
Section 3.1.2 Warranty Obligations 8
Section 3.1.3 Conduct of Business After Closing 8
Section 3.2 Excluded Liabilities 9
Section 3.2.1 SELLER's Product Warranties 9
Section 3.2.2 SELLER's Distributor Agreements 9
Section 3.2.3 SELLER's Ownership and Operation
of Business 9
Section 3.2.4 SELLER's Other Businesses 9
Section 3.2.5 Employment Matters 9
Section 3.2.6 Tax Matters 10
Section 3.2.7 Intercompany 10
Section 3.2.8 Employee Plans 10
ARTICLE 4 CONSENTS TO ASSIGNMENT 10
Section 4.1 Efforts to Obtain Consents 10
Section 4.2 No Assignment 10
ARTICLE 5 PURCHASE PRICE 11
Section 5.1 Purchase Price 11
Section 5.2 Payment of Purchase Price 11
Section 5.3 Royalties 11
ARTICLE 6 CONDITIONS TO CLOSING 11
Section 6.1 Conditions Precedent to
Obligations of BUYER 11
Section 6.1.1 BUYER's Investigation 11
Section 6.1.2 Delivery of Opinion of Counsel 11
Section 6.1.3 SELLER's Representations and
Warranties 12
Section 6.1.4 Delivery of Closing Documents 12
Section 6.1.5 Compliance with Agreement 12
Section 6.1.6 Litigation 12
Section 6.1.7 Governmental Objections,
Approvals 12
Section 6.1.8 Bulk Sale/Fraudulent Conveyance
Compliance 12
Section 6.1.9 Insurance 12
Section 6.1.10 Employment Agreement 13
Section 6.1.11 Intentionally omitted 13
Section 6.1.12 Intentionally omitted 13
Section 6.1.13 Termination of Prior Licenses 13
Section 6.1.14 Termination of Royalties 13
Section 6.1.15 Royalty Agreement 13
Section 6.2 Conditions Precedent to
Obligations of SELLER 13
Section 6.2.1 BUYER's Representations and
Warranties 13
Section 6.2.2 Delivery of Opinion of Counsel 13
Section 6.2.3 Delivery of Closing Documents 13
Section 6.2.4 Compliance with Agreement 14
Section 6.2.5 Purchase Price 14
Section 6.2.6 Litigation 14
Section 6.2.7 Royalty Agreement 14
ARTICLE 7 CLOSING 14
Section 7.1 The Closing 14
Section 7.2 SELLER's Obligations at Closing 14
Section 7.3 BUYER's Obligations at Closing 15
ARTICLE 8 REPRESENTATIONS AND WARRANTIES 15
Section 8.1 Representations and Warranties
By SELLER 15
Section 8.1.1 Corporate Data and Authority 15
Section 8.1.2 Title to Acquired Assets 16
Section 8.1.3 Litigation and Related Matters 17
Section 8.1.4 Licenses and Permits 17
Section 8.1.5 Patents, Trademarks, Etc. 17
Section 8.1.6 No Broker 18
Section 8.1.7 Employees 18
Section 8.1.8 Absence of Changes or Events 19
Section 8.1.9 Compliance with Laws and Other
Instruments 20
Section 8.1.10 Material Contracts 21
(ii)
Section 8.1.11 Absence of Certain Business
Practices 21
Section 8.1.12 Environmental Matters 22
Section 8.1.13 Largest Suppliers and Customers 23
Section 8.1.14 Marketing Restrictions 24
Section 8.1.15 Product Warranties and Warranty
Rights 24
Section 8.1.16 Product Liability 24
Section 8.1.17 Contracts 24
Section 8.1.18 Financial Data 25
Section 8.1.19 Disclosure 25
Section 8.2 Representations and Warranties
of BUYER 25
Section 8.2.1 Corporate Data and Authority 25
Section 8.2.2 Litigation Concerning Agreement 26
Section 8.2.3 Broker 26
Section 8.3 Survival 26
ARTICLE 9 PARTICULAR COVENANTS OF SELLER
AND BUYER 27
Section 9.1 Covenants of SELLER 27
Section 9.1.1 Interim Conduct of the Business 27
Section 9.1.2 Further Assurances 27
Section 9.1.3 Noncompetition,
Nonsolicitation 27
Section 9.2 Covenants of SELLER and BUYER 28
Section 9.2.1 Efforts and Cooperation 28
Section 9.2.2 Confidentiality 28
Section 9.2.3 Injunctions 29
Section 9.2.4 Communications 29
Section 9.2.5 Training of BUYER, Access to
Records and Employees
Subsequent to Closing 29
Section 9.2.6 Satisfaction of Conditions 33
Section 9.2.7 Tax Matters; Purchase Price
Allocation 34
Section 9.3 Covenants of BUYER 36
Section 9.3.1 Consulting Services of BUYER 36
Section 9.3.2 Warranty Services of BUYER 37
Section 9.3.3 Distributor Agreements 37
Section 9.3.4 Noncompetition 38
ARTICLE 10 EMPLOYEES AND EMPLOYEE MATTERS 39
Section 10.1 Employment of Personnel 39
ARTICLE 11 INDEMNIFICATION 40
Section 11.1 Indemnification by BUYER 40
Section 11.2 Indemnification by SELLER 40
Section 11.3 Conditions of Indemnification 41
Section 11.4 Limitation on Indemnification 42
(iii)
ARTICLE 12 MISCELLANEOUS 43
Section 12.1 Expenses 43
Section 12.2 Notices 43
Section 12.3 Captions 44
Section 12.4 Successors and Assigns; Other
Parties 44
Section 12.5 Entire Agreement 44
Section 12.6 Waiver 44
Section 12.7 Partial Invalidity 45
Section 12.8 Counterparts 45
Section 12.9 Amendment 45
Section 12.10 Governing Law and Venue 45
Section 12.11 Schedules; Disclosure Schedule 45
ANNEX, SCHEDULES AND EXHIBIT
Annex A Disclosure Schedule and description
of Vortex Shedding Product Line
Annex B ▇▇▇▇▇ Noncompetition Agreement
Schedules
Schedule 2.1.1 Purchase Orders
Schedule 2.1.1(b) Noncompetition & Confidentiality
Agreements
Schedule 2.1.2(a) Trademarks and Copyrights
Schedule 2.1.2(b) SELLER's "Universal" trademark rights
Schedule 2.1.4 Patents and Technology
Schedule 2.1.5 Inventory
Schedule 2.1.6 Equipment and Personal Property
Schedule 5.3 Ultrasonic Vortex Product
Schedule 8.1.1 Exceptions to SELLER's
Representations and Warranties
Schedule 8.1.4 Licenses and Permits
Schedule 8.1.10 Material Contracts
Schedule 8.1.13 Largest Suppliers and Customers
Schedule 8.1.15(a) Product Warranties; Warranty Rights
Schedule 8.1.15(b) Unresolved Material Claims
Schedule 8.1.17 Distributor Agreements
Schedule 8.1.18 Financial Data
Schedule 9.2.7(e)(i) Allocation of Purchase Price
Schedule 9.3.4(a) Restricted Flow Meters
Exhibits
Exhibit 5.3 Royalty Agreement
Exhibit 6.1.11 ▇▇▇▇▇ ▇▇▇▇▇ Employment Agreement
(iv)
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made and entered
into as of the 30th day of April, 1997, by and between ASAHI/AMERICA, INC., a
Massachusetts corporation (the "BUYER"), UNIVERSAL FLOW MONITORS, INC., ("UFM"),
a Michigan corporation, THE ROSAEN COMPANY, a Michigan corporation ("TRC", and
together with UFM sometimes hereinafter referred to as the "SELLER").
WHEREAS, SELLER has conducted and presently conducts a business which
designs, develops, manufactures, markets and services a line of plastic vortex
flow sensor products known as the "Vortex Shedding Product Line" which includes
the products described on Annex A hereto which are based on piezoelectric
technology and is also developing a new line of vortex products using ultrasonic
sensing technology, also further described on Annex A (the "Business");
WHEREAS, SELLER desires to sell and BUYER desires to purchase certain
rights, properties and assets of the SELLER pertaining to the Business as
described in this Agreement in consideration of the payment of the Purchase
Price (as defined herein), all on the terms and subject to the conditions
contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, SELLER and BUYER hereby agree as
follows:
ARTICLE 1. DEFINITIONS
In addition to the other terms defined herein, as used in this
Agreement, the following terms shall have the following meanings:
Acquired Assets As defined in Section 2.1.
affiliate As to any person, a person or entity
who or which controls, is controlled
by, or is under common control with,
such person.
this Agreement This Purchase and Sale Agreement made
and entered into as of April 30, 1997,
by and between SELLER and BUYER.
Assumed Liabilities As defined in Section 3.1.
the Business As defined in the Preamble to this Agreement.
business day A day which is not a federal,
state or local holiday and on which
banks generally are open in Boston,
Massachusetts for the conduct of
their business.
BUYER As defined in the Preamble to this Agreement.
CERCLA As defined in Section 8.1.12(e).
Closing As defined in Section 7.1.
Closing Date As defined in Section 7.1.
COBRA As defined in Section 3.2.7.
Code The Internal Revenue Code of 1986,
as amended, and regulations
promulgated thereunder.
Confidentiality
Agreement As defined in Section 9.2.2.
Contracts As defined in Section 2.1.1.
Disclosure Schedule The document prepared by
SELLER and delivered to BUYER which
is annexed hereto and which, among
other things, contains the
exceptions to SELLER's
representations and warranties
contained in Section 8.1 hereof.
Distributor Agreements As defined in Section 8.1.17.
DOL As defined in Section 3.2.7.
Enforceable An agreement, a document or other obligation is
Enforceable if it can be enforced in accordance with its
terms (subject to (a) applicable bankruptcy,
reorganization, insolvency and moratorium laws and other
laws applicable generally to creditors' rights from time
to time in effect and (b) judicial limitations on the
remedy of specific performance, injunctive relief or
other equitable remedies).
Excluded Assets As defined in Section 2.2.
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Excluded Liabilities As defined in Section 3.2.
Financial Statements As defined in Section 8.1.18.
Government The government of the United States
of America, the government of any
other nation, any political
subdivision of the United States of
America or any such other nation
(including without limitation, any
state, commonwealth, province,
territory, federal district,
municipality or possession) and any
department, agency or
instrumentality thereof.
Governmental Of, by, or pertaining to, any Government.
Indemnitee As defined in Section 11.3.
Indemnitor As defined in Section 11.3.
Lien Any lien (including without
limitation, inchoate artisans',
mechanics', carriers', workers',
repairmen's, judgment, tax or other
like inchoate liens), encroachment,
easement, encumbrance, mortgage,
hypothecation, equity, charge,
restriction, possibility of
reversion or any other similar or
dissimilar conflicting ownership or
security interest.
Material Contracts As defined in Section 8.1.10.
MPPAA As defined in Section 3.2.7.
No Default There is No Default under a document or other
obligation if no occurrence or circumstance exists which
constitutes a breach or default (or which, by the lapse
of time or giving of notice, would constitute a breach
or default) with respect thereto or thereunder. The
phrase "Any Default," when used in negative sentences,
has the same meaning as "No Default."
PBGC As defined in Section 3.2.6.
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Permitted Liens Minor encumbrances and not
having in the aggregate any material
adverse effect on the value of the
Acquired Assets, which liens are
specifically disclosed to BUYER in
writing on the Schedules hereto and
waived by BUYER in writing.
Personal Property
Taxes As defined in Section 9.2.7(f).
Products The products described on Annex A hereto.
Proprietary
Information Confidential and proprietary information including, but
not limited to, information that a party would not
ordinarily reveal to third parties, documentation,
devices, manufacturing processes and techniques,
formulae, trade secrets, plans, sales, marketing and
pricing, know-how, customer lists, either currently
existing or hereafter developed, whether or not directly
relating to the development, manufacture, marketing, use
and application of the Products. The foregoing
notwithstanding, "Proprietary Information" shall not
include any information that is in the public domain
through no act of or omission by the other party hereto;
however, in the event that any party claims that any
such information is in the public domain, the party
making such claim shall bear the burden of proving
through pre-existing documentary evidence, that such
information is in the public domain and that it entered
the public domain through no act of or omission by that
party.
Purchase Price As defined in Section 5.1.
RCRA As defined in Section 8.1.12.
SELLER As defined in the Preamble to this Agreement.
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Taxes All federal, state, county, local and foreign, national,
provincial and local incomes,
withholding, franchise, payroll,
excise, property, sales, use,
value-added or other taxes or
levies, imposts, duties, license and
registration fees, charges,
assessments or withholdings of any
nature whatsoever.
Technology As defined in Section 2.1.4.
TRC As defined in the Preamble to this Agreement
UFM As defined in the Preamble to this Agreement.
ARTICLE 2. PURCHASE AND SALE OF ASSETS
2.1. Acquired Assets. Subject to and upon the terms and conditions
hereof, and in reliance by each upon the agreements, representations and
warranties made by the other and contained herein, SELLER agrees to sell,
convey, transfer, assign and deliver to BUYER and BUYER agrees to purchase and
acquire from SELLER, at the Closing, all rights, properties, interests, title
and claims of SELLER in and to the assets used in connection with the Business
described in Sections 2.1.1 through 2.1.9 (collectively, the "Acquired Assets").
The Acquired Assets shall include:
2.1.1. Contracts. All (a)(i) open purchase orders for the sale
of Products against which deliveries have not been completed as of the Closing
Date and which were entered into in the ordinary course of business, subject
only to credit approval by BUYER unless such order is on a "COD" basis, as of
the Closing (as set forth in Schedule 2.1.1)), (ii) any other open purchase
orders for the sale of other Products against which deliveries have not been
completed as of the Closing Date which are accepted by BUYER (all of such
transferred purchase orders are hereinafter referred to as the "Purchase
Orders") and (iii) any advances or deposits received by SELLER with respect to
same, (b) all non-competition and confidentiality agreements, relating to the
Business, to which SELLER is a party or of which SELLER is a beneficiary)
including, without limitation, those listed on Schedule 2.1.1(b) and (c)
contracts or agreements giving SELLER express or implied warranty rights from
third party vendors relating to any of the Acquired Assets, documents with
respect to all of which will be disclosed and made available to BUYER for its
inspection prior to Closing, the originals
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of which to be supplied to BUYER at Closing (the "Contracts"), all of which are
also set forth on the Schedule 2.1.1 hereto; and
2.1.2. Trademarks and Copyrights, Etc.
Trademarks, copyrights, symbols, service marks, trademark
applications, copyright applications, service ▇▇▇▇ applications, styles, and
trade names listed in Schedule 2.1.2(a), together with the goodwill associated
therewith, the right to ▇▇▇ for past infringement of any thereof, and all
renewals, modifications and extensions thereof, and file records on the
trademarks, copyrights and applications referred to in Schedule 2.1.2. The
foregoing shall also include a royalty-free, non-exclusive trademark license to
BUYER to market vortex shedding flow meters under the names "Asahi/Universal
Vortex Shedding Flow Meter" and/or "Asahi/America Universal Vortex Shedding Flow
Meter" (collectively, the "Product Names") for a period of twelve (12) months
following the Closing, if BUYER so chooses, as well as BUYER's unlimited right,
but not the obligation, to refer to UFM as the entity which formerly owned
and/or manufactured the vortex shedding flow meter in BUYER's trade literature
and in other publications, provided, however, that if BUYER does use or refer to
UFM by name in such trade literature, BUYER shall clearly indicate that UFM is
the former, and not the current, manufacturer of the Universal Vortex Shedding
Flow Meter. Notwithstanding the twelve (12) month limitation on the use of the
Product Names, BUYER's right to use the Product Names shall only be limited to
the extent that SELLER has any rights in and to the name "Universal Vortex
Shedding Flow Meter" and/or in the name "Universal" which are not being
transferred with the Acquired Assets, the nature of which rights, if any, are
set forth on Schedule 2.1.2(b) hereto. If, after the twelve (12) month period
following the Closing, BUYER uses the word "universal", either alone or with
other words, in advertising or marketing the Product, in a way which does not
otherwise infringe upon the word "universal" as it is protected by UFM, then
BUYER must also clearly identify UFM as being the former, and not the current
manufacturer of the Universal Vortex Shedding Flow Meter. All Products
manufactured and sold under the licensed Product Names shall be of the quality
and shall meet standards equivalent to those adhered to by SELLER with respect
to the Products as hereinbefore manufactured and sold by SELLER. This
requirement shall be deemed satisfied by BUYER so long as BUYER maintains its
ISO 9000 manufacturer's status. In the event that BUYER ceases to maintain it's
ISO 9000 manufacturer's status, the sole recourse of SELLER in respect of any
claim by it that such quality standard is not met shall be the termination of
the license to use the Product Names.
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2.1.3. Customer Information. All customer and prospective
customer books, records, lists and data, including, but not limited to, customer
credit data relative to the Business, including but not limited to a list of
names, addresses, telephone numbers, "fax" numbers and contacts of all
customers, prospective customers identified by SELLER, distributors, sales
agents or sales representatives of the Products.
2.1.4. Patents and Technology. All rights and incidents of
interest in and to the patents and patent applications listed on Schedule 2.1.4
(the "Patents") and all other technology and intellectual property used in the
Business in sufficient documented form so as to inform BUYER how to manufacture
all Products in the manner manufactured by SELLER, including without limitation,
all know-how, discoveries, formulae, production outlines (including notebooks
with set-up parameters as well as transitional and operational conditions and
outlined methods of adjustment during operation and cleaning of equipment,
Product designs, drawings (including without limitation, specification control
drawings), blue prints, technical data, material specifications, purchasing
specifications, research records, manufacturing information, processes and
techniques, testing, inspection and quality control processes and techniques;
and copies of the invention file records on the patents referred to in Schedule
2.1.4 and (such documentation and copies of records being collectively referred
to herein as the "Technology"). The information and specifications to be
provided by SELLER comprising the Technology shall be sufficient if it would
enable a manufacturer reasonably proficient in interpreting such documented
information, to manufacture the Products.
2.1.5. Inventory. The finished goods, raw materials and work
in process inventory described on Schedule 2.1.5 hereto.
2.1.6. Equipment and Personal Property. All molds, tooling,
test stands and other personal property and equipment listed on Schedule 2.1.6
hereto.
2.1.7. Miscellaneous Records. All existing price and cost data
for outstanding or in process sales proposals and Purchase Orders as of the
Closing, all service and parts records and warranty records relative to the
equipment included in the Acquired Assets, all written instructions, manuals and
procedures relating to the Acquired Assets and all vendor lists and copies of
confidentiality and/or noncompetition agreements relative to the Acquired
Assets.
2.1.8. Training, Transition and Consulting Services. The
services of SELLER during the Training Period,
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Transition Period and the Consulting Period as set forth in Sections 9.2.5(a),
(b) and (c) hereof.
2.1.9. Shipping and Insurance Costs. In addition, fifty
percent (50%) of the shipping costs for all the Acquired Assets to BUYER's
Massachusetts facility following the Closing shall be the responsibility of
SELLER, with the remaining fifty percent (50%) to be the responsibility of
BUYER. Prior to shipment, SELLER shall maintain adequate fire and extended
coverage insurance on all Acquired Assets.
2.2. Excluded Assets. The "Excluded Assets" shall include all assets of
SELLER not specifically included in the Acquired Assets.
ARTICLE 3. ASSUMPTION OF LIABILITIES BY BUYER
3.1. Assumed Liabilities. Subject to the terms and conditions set forth
herein, effective as of the Closing, BUYER hereby fully assumes and agrees to
pay, perform and discharge when due only those debts, obligations,
responsibilities, contracts and liabilities of SELLER which are specifically
described in this Section 3.1 (collectively, the "Assumed Liabilities"). The
Assumed Liabilities shall include only the following liabilities,
responsibilities and obligations, and the undertakings of BUYER under this
Section 3.1 shall in no way limit BUYER's right to be indemnified and held
harmless by SELLER for any breach by SELLER of any representation or warranty
given by SELLER concerning the subject matter of this Section 3.1:
3.1.1. Contract Obligations. All liabilities, responsibilities
and obligations of SELLER arising after the Closing Date under the Purchase
Orders.
3.1.2. Warranty Obligations. All liabilities, responsibilities
and obligations, whether now existing or hereafter arising, with respect to
claims made against SELLER or BUYER by or on behalf of third parties, including
without limitation, claims seeking the recall, return, replacement, retrofitting
or repair of Products, and any costs, damages or expenses associated with any
such claims including without limitation, labor, freight, consequential, special
and incidental costs and damages, if any, and attorneys' and other
professionals' fees and expenses, pursuant to any express Product warranties or
warranties or responsibilities imposed or implied by statute, governmental
regulation or otherwise, with respect to Products which are manufactured or sold
by BUYER subsequent to the Closing Date.
3.1.3. Conduct of Business After Closing. All other
liabilities, responsibilities and obligations arising out of, resulting from, or
relating to any violation of any
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statute, ordinance, regulation, or other governmental requirement in connection
with the use and ownership of the Acquired Assets by BUYER after the Closing or
the conduct of the Business by BUYER after the Closing.
3.2. Excluded Liabilities. With the exception of those liabilities and
obligations specifically agreed to be assumed by BUYER pursuant to Section 3.1,
BUYER shall not assume, be obligated for, or suffer any liability for any, and
SELLER shall solely retain, pay, perform, defend and discharge all of the
liabilities and obligations of SELLER of any and every kind whatsoever, direct
or indirect, known or unknown, absolute or contingent, mature or unmatured,
whether or not incurred in connection with, whether related to the Business or
otherwise (the "Excluded Liabilities"), which Excluded Liabilities shall
include, without limitation, the following liabilities and obligations:
3.2.1. SELLER's Product Warranties. Any claims under
warranties of the types described in Section 3.1.2 or otherwise relative to
Products sold prior to the Closing.
3.2.2. SELLER's Distributor Agreements. Any claims made by
distributors or representatives of the Products under the Distributor Agreements
or resulting from the termination of the Distributor Agreements.
3.2.3. SELLER's Ownership and Operation of Business. All
liabilities, responsibilities and obligations, excepting only the Assumed
Liabilities, incurred by SELLER in connection with the conduct of the Business
or the ownership and/or use of the Acquired Assets prior to the Closing
including, but not limited to, claims of distributors and sales representatives.
SELLER agrees that for a period of three years following the Closing Date, it
will maintain product liability insurance coverage with reputable insurers of no
less than $2,000,000 per occurrence, and will provide BUYER with proof of same
from time to time upon request.
3.2.4. SELLER's Other Businesses. All liabilities,
responsibilities and obligations incurred by SELLER solely in connection with
the conduct of its businesses other than the Business.
3.2.5. Employment Matters. All liabilities and obligations
(including, but not limited to, back wages, sick pay, vacation pay, severance
claims, claims for unfair labor practices or employment discrimination) of
SELLER to its employees arising, accruing or relating to employment prior to the
Closing, whether or not such employees are retained by BUYER subsequent to the
Closing.
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3.2.6. Tax Matters. All liabilities and obligations for Taxes
(including any interest or penalties thereon) attributable to the use and
ownership of the Acquired Assets by SELLER, the conduct of the Business by
SELLER before the Closing or the transactions contemplated by this Agreement.
3.2.7. Intercompany. All indebtedness owing from the SELLER to
its affiliates.
3.2.8. Employee Plans. Any and all liabilities in connection
with every "employee pension benefit plan" and "employee welfare benefit plan",
as such terms are defined in Section 3 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), maintained at any time by SELLER or
to which SELLER contributes or is required to contribute, including any
multi-employer employee pension benefit plans and employee welfare benefit plans
and covering employees (all such employee pension benefit plans being referred
to as "Pension Plans" and all such employee welfare benefit plans being referred
to as "Welfare Plans" and the Pension Plans and Welfare Plans being sometimes
referred to together as "Employee Benefit Plans"), including liabilities in
connection with SELLER's failure to administer same in compliance with their
terms and in compliance with ERISA and the Code or in compliance with proposed
regulations and pronouncements under the Consolidated Omnibus Budget
Reconciliation Act of 1986 ("COBRA") and the requirements of the Multi-Employer
Pension Plan Amendments Act of 1980, as amended ("MPPAA"), ERISA, Department of
Labor ("DOL") regulations, Pension Benefit Guaranty Corporation ("PBGC") rules
and regulations, the Code and the rules and regulations thereunder or any
applicable state law.
ARTICLE 4. CONSENTS TO ASSIGNMENT
4.1. Efforts to Obtain Consents. SELLER shall promptly notify all third
parties whose approval, waiver or consent (including, but not limited to, in
connection with the discharge of security interests with respect to the Acquired
Assets) is required in connection with the transfer of any of the Acquired
Assets and assumption by BUYER of the Assumed Liabilities. BUYER and SELLER
shall cooperate and use their respective commercially reasonable efforts to
obtain all such consents, waivers and approvals.
4.2. No Assignment. To the extent that the assignment by SELLER and the
assumption by BUYER of any Contract, license, permit or approval included within
the Acquired Assets shall require the consent or approval of any third party,
this Agreement shall not constitute an assignment,
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sublease, subcontract or assumption thereof if such attempted assignment,
sublease or assumption would constitute a breach thereof.
ARTICLE 5. PURCHASE PRICE; ADJUSTMENTS; ROYALTIES
5.1. Purchase Price. The aggregate purchase price for the Acquired
Assets (the "Purchase Price") shall be Three Million Dollars ($3,000,000).
5.2. Payment of Purchase Price. BUYER shall pay the Purchase Price to
SELLER at the Closing by wire transfer pursuant to instructions set forth in a
notice by SELLER to BUYER, to be given no later than the business day
immediately preceding the Closing Date or by a certified or bank cashier's check
for immediately available funds payable to or upon the order of SELLER.
5.3. Royalties. In addition to the Purchase Price, BUYER shall pay to
TRC a royalty ("Royalty" or "Royalties") of five percent (5%) on all sales of
the ultrasonic vortex product (as more fully described on Schedule 5.3 hereto)
by BUYER. The Royalty shall be payable in accordance with the terms of the
Royalty Agreement between TRC and BUYER attached hereto as Exhibit 5.3.
ARTICLE 6. CONDITIONS TO CLOSING
6.1. Conditions Precedent to Obligations of BUYER. The obligations of
BUYER to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing of each of the following
conditions, any one or more of which may be waived in whole or in part by BUYER:
6.1.1. BUYER's Investigation; Schedules. Nothing shall have
come to BUYER's attention during its investigation conducted prior to the
Closing Date which could constitute, or with the passage of time could in the
future constitute, a material adverse change to the Acquired Assets or Business
from that disclosed in this Agreement and the Exhibits and Schedules hereto and
that all Schedules to this Agreement prepared by SELLER or provided to BUYER by
SELLER at or before the time that this Agreement is executed which BUYER
subsequently determines have not been properly completed, be amended or
completed and delivered by SELLER and be in form and substance satisfactory to
BUYER in its sole discretion.
6.1.2. Delivery of Opinion of Counsel. SELLER shall have
delivered or caused to be delivered to BUYER the
-▇▇-
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, counsel to SELLER, in form and substance
satisfactory to BUYER.
6.1.3. SELLER's Representations and Warranties. The
representations and warranties made by SELLER hereunder (including the Schedules
hereto, as applicable) or in any certificate or document called for in this
Agreement shall be deemed to have been made again at and as of the Closing
(unless specifically limited to some other period or date), and such
representations and warranties shall be true and accurate. SELLER shall deliver
to BUYER a certificate or certificates, signed by their duly authorized officers
and dated as of the Closing, regarding the foregoing.
6.1.4. Delivery of Closing Documents. SELLER shall have
delivered or caused to be delivered to BUYER the documents which SELLER is
required to deliver to BUYER at the Closing pursuant to this Agreement.
6.1.5. Compliance with Agreement. All agreements and
transactions contemplated hereby to be performed by SELLER at or before the
Closing shall have been duly performed.
6.1.6. Litigation. There shall not have been issued and in
effect any preliminary or permanent injunction prohibiting BUYER from acquiring
any of the Acquired Assets and assuming the Assumed Liabilities.
6.1.7. Governmental Objections, Approvals. To the extent that
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall require the consents or waivers of third
parties prior to the Closing, there shall have been procured all such consents
and waivers in this regard.
6.1.8. Bulk Sales/Fraudulent Conveyance Compliance. SELLER
shall ensure compliance with the provisions of the Michigan Uniform Fraudulent
Conveyance Act (Mich. Comp. ▇▇▇▇ ▇▇▇ ss.566.11 et seq.; Mich. Stat. ▇▇▇.
ss.26.881 et seq.). SELLER shall also take all reasonable steps to ensure that
the transfer of the Acquired Assets to BUYER shall not be subject to challenge
by third parties due to SELLER's failure to comply with the Bulk Sales
provisions of the Michigan Uniform Commercial Code (Mich. Comp. ▇▇▇▇ ▇▇▇
ss.440.6101-.6111; Mich. Stat. ▇▇▇ ss.19.6101-.6111) (the "Bulk Sales Act").
6.1.9. Insurance. SELLER shall have provided BUYER with
evidence of the insurance coverage required by Section 3.2.1. hereof.
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6.1.10. Employment Agreement. ▇▇▇▇▇ ▇▇▇▇▇ shall have executed
and delivered to BUYER an Employment Agreement in the form of Exhibit 6.1.11
hereto.
6.1.11. Intentionally omitted.
6.1.12. Intentionally omitted.
6.1.13. Termination of Prior Licenses. SELLER shall have
provided BUYER with evidence of its termination of all licenses relating to the
Acquired Assets.
6.1.14. Termination of Royalty Obligations. SELLER shall have
provided BUYER with evidence of the termination of all obligations to pay
royalties to third parties on the sale or use of any process or technology
included with the Acquired Assets, including, but not limited to, any and all
royalties payable to ▇▇▇▇▇ in respect of the Products.
6.1.15. Royalty Agreement. SELLER shall have delivered to
BUYER a Royalty Agreement in the form of Exhibit 5.3 hereto, duly executed by
SELLER.
6.2. Conditions Precedent to Obligations of SELLER. The obligations of
SELLER to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing of the following
conditions, any one or more of which may be waived in whole or in part by
SELLER:
6.2.1. BUYER's Representations and Warranties. The
representations and warranties made by BUYER hereunder or in any certificate or
document called for in this Agreement shall be deemed to have been made again at
and as of the Closing (unless specifically limited to some other period or
date), and such representations and warranties shall, when taken as a whole, be
true and correct in all material respects. BUYER shall deliver to SELLER a
certificate, signed by a duly authorized officer of BUYER and dated as of the
Closing, regarding the foregoing.
6.2.2. Delivery of Opinion of Counsel. BUYER shall have
delivered or caused to be delivered to SELLER the opinion of ▇▇▇▇▇▇ & Hannah
LLP, counsel to BUYER, in form and substance satisfactory to SELLER.
6.2.3. Delivery of Closing Documents. BUYER shall have
delivered or caused to be delivered to SELLER the documents which BUYER is
required to deliver to SELLER at the Closing pursuant to this Agreement.
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6.2.4. Compliance with Agreement. All agreements and
transactions contemplated hereby and to be performed by BUYER at or before the
Closing shall have been duly performed.
6.2.5. Purchase Price. There shall have been delivered to
SELLER by BUYER the Purchase Price as required in Section 5.2.
6.2.6. Litigation. There shall not have been issued and be in
effect any preliminary or permanent injunction prohibiting SELLER from selling
the Business and the Acquired Assets and assigning the Assumed Liabilities.
6.2.7. Royalty Agreement. BUYER shall have delivered to SELLER
a Royalty Agreement in the form of Exhibit 5.3 hereto, duly executed by SELLER.
ARTICLE 7. CLOSING
7.1. The Closing. The closing hereunder ("Closing") shall take place at
the offices of ▇▇▇▇▇▇ & Hannah LLP, Boston, Massachusetts, or at such other
place as may be agreed upon by the parties, at 10:00 a.m. local time, on April
30, 1997 unless a different date or time for the Closing is provided for herein
or is agreed upon by the parties. The date set forth in this paragraph or, if a
different date for the Closing is provided for herein or is agreed upon, such
different date, is referred to herein as the "Closing Date."
7.2. SELLER's Obligations at Closing. At the Closing, SELLER shall
deliver to BUYER the following, at the expense of SELLER, duly executed and
acknowledged by SELLER in the proper form for recording by BUYER as appropriate
and in form and substance satisfactory to BUYER:
(a) Assignments which may be contained in one document
(subject to the receipt of any Post-Closing Consents) of the Contracts to be
acquired by BUYER pursuant to Article 2.
(b) Trademark, copyright and patent assignment or assignments,
assignments of Technology, miscellaneous records, (subject to any assignments of
foreign trademarks and patents to be obtained subsequent to the Closing pursuant
to Article 4), in accordance with Sections 2.1.2 through 2.1.7.
(c) All other appropriate bills of sale, assignments, and
other good and sufficient instruments of transfer deemed necessary by BUYER to
transfer to BUYER such
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title to the Acquired Assets as is warranted by SELLER herein.
(d) A receipt for the Purchase Price due under Section 5.2.
(e) An appropriate certificate dated the Closing and signed by
an authorized officer of SELLER which certifies that the conditions set forth in
Sections 6.1.3 and 6.1.5 have been fulfilled.
(f) All other documents and papers required by Section 6.1 to
be delivered by SELLER as conditions to Closing.
(g) All approvals, waivers and consents required to transfer
the Acquired Assets and to release of any and all liens, encumbrances, and
claims against the Acquired Assets and UCC-3 termination statements with respect
to same.
7.3. BUYER's Obligations at Closing. At the Closing, BUYER shall
deliver to SELLER the following, at the expense of BUYER, duly executed and
acknowledged by BUYER as appropriate:
(a) Payment of the Purchase Price required pursuant to Section
5.2.
(b) Instruments of assumption of the Assumed Liabilities as
SELLER may reasonably request.
(c) An appropriate certificate dated the Closing Date and
signed by an authorized officer of BUYER which certifies that the conditions set
forth in Sections 6.2.1 and 6.2.4 have been fulfilled.
(d) All other documents and papers required by Section 6.2
hereof to be delivered by BUYER as conditions to Closing.
ARTICLE 8. REPRESENTATIONS AND WARRANTIES
8.1. Representations and Warranties By SELLER. UFM and TRC jointly and
severally represent and warrant to BUYER as follows, in each case except as set
forth on Schedule 8.1:
8.1.1. Corporate Data and Authority.
(a) Each of UFM and TRC is a corporation duly organized,
validly existing and in good standing under the laws of the State of Michigan.
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(b) Each of UFM and TRC has corporate power and authority to
carry on its operations which relate to the Business as it is now conducted and
to own or hold under lease the properties it purports to own or hold under lease
which relate to the Business.
(c) Each of UFM and TRC has corporate power under its Articles
of Incorporation and Bylaws, as amended, and under the laws of the State of
Michigan and other applicable laws to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate action on the part of each of UFM and
TRC, and no stockholder approval or other approval of the board of directors of
SELLER (or any committee thereof) is necessary for the consummation of the
transactions contemplated hereby, which approval has not already been obtained.
(d) The execution and delivery of this Agreement by UFM and
TRC and consummation by UFM and TRC of the transactions contemplated hereby are
not prohibited by and do not violate any provision of the Articles of
Incorporation or Bylaws, as amended, of UFM or TRC, or violate, or with or
without the giving of notice or the passage of time, or both, will violate,
conflict with or result in a default, right to accelerate or loss of rights
under, any term of any contract, agreement, indenture, mortgage, note, bond,
commitment, license or other instrument to which UFM or TRC is a party and by
which any of the Acquired Assets is bound, and has not resulted and will not
result in the creation or imposition of any Lien in favor of any third party
created by, through or under UFM or TRC on any of the Acquired Assets.
(e) This Agreement has been duly executed by each of UFM and
TRC and constitutes a valid, legally binding, and Enforceable obligation of UFM
and TRC.
(f) SELLER has not filed, or had filed against it, a petition
in bankruptcy or a petition to take advantage of any other insolvency act;
admitted in writing its inability to pay its debts generally; made an assignment
for the benefit of creditors; consented to the appointment of a receiver for
itself or any substantial part of its property; or generally committed any act
of insolvency (including the failure to pay obligations as they become due) or
bankruptcy.
8.1.2. Title to Acquired Assets. SELLER has good and
marketable title to the Acquired Assets. All Acquired Assets at the Closing are
free and clear of restrictions on, or conditions to, transfer or assignment, and
free and clear of all mortgages, liens (including, but not limited to, tax
liens, inchoate or otherwise), claims, liabilities, charges, pledges,
encumbrances, conditions or restrictions (other than
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Permitted Liens), and SELLER has the right to transfer, the Acquired Assets
required to be transferred by it to BUYER pursuant to this Agreement. There are
no claims pending or, to the best of SELLER's knowledge, threatened against
SELLER for past due Taxes.
8.1.3. Litigation and Related Matters. As of the date hereof,
(a) there are no actions, suits or proceedings pending or, to
the best knowledge of SELLER, threatened against SELLER which involve
transactions of or otherwise relate to the Business or the Acquired Assets or
the transactions contemplated by this Agreement, at law or in equity, or before
any arbitrator of any kind, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or other
instrumentality, domestic or foreign,
(b) SELLER is not subject to any outstanding orders, writs,
injunctions, decrees, judgments, awards, determinations or directions, which
involve transactions of or otherwise relate to the Business or the Acquired
Assets, of any courts or arbitrators or under any outstanding order, regulation
or demand of any federal, state, municipal or other governmental
instrumentality, domestic or foreign, and
(c) SELLER is not party to any outstanding order of any court
or any governmental commission, agency or other instrumentality, domestic or
foreign, arising out of any action, suit or proceeding under any laws respecting
antitrust, monopoly, restraint of trade, unfair competition or similar matters
which involve transactions of or otherwise relate to the Business or the
Acquired Assets.
8.1.4. Licenses and Permits. Schedule 8.1.4 lists all
governmental licenses, permits and approvals issued to SELLER and currently used
in the Business and/or relating to the Acquired Assets.
8.1.5. Patents, Trademarks, Etc.
(a) Schedule 2.1.4 lists and identifies all unexpired patents
and pending applications for grant of patents, unexpired design patents and
pending applications for grant of design patents and reissues, continuations and
continuations-in-part thereof on inventions and discoveries originating at or
acquired by SELLER for the Business or developed by SELLER for the Business,
owned by SELLER as of the Closing Date and then used in the Business including
for each the serial or patent number, country, filing or issue
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date and, in the case of the United States, title and inventor.
(b) Schedule 2.1.2 lists and identifies all trademarks,
symbols, slogans, service marks, trademark and service ▇▇▇▇ registrations,
styles, trade names, and applications therefor currently used in the Business,
including for each the application or registration number, country, filing or
registration date, expiration date, ▇▇▇▇ and class, and the copyright
registrations and applications, in each case currently used in the Business.
(c) There are no licenses granted by SELLER presently in
effect relating to the trademarks referred to in Section 2.1.2. There are no
licenses presently in effect granted by SELLER relating to the patent properties
included in the Acquired Assets or to the Technology referred to in Section
2.1.4. There is No Default by SELLER, or, to the best knowledge of SELLER, by
any other party thereto, of the licenses referred to in this Section 8.1.5(c).
(d)(i) The rights of SELLER to the trademark properties listed
in Schedule 2.1.2 are free and clear of interests of others therein;
(ii) all trademark registrations in the U.S. listed in
Schedule 2.1.2 are valid and subsisting and free and clear of any Liens; and
(e) To the best of SELLER's knowledge there have been no
challenges to any of the patents included in the Acquired Assets. SELLER has not
challenged any patent of a third party relevant to the patents included in the
Acquired Assets.
8.1.6. No Broker. SELLER has not retained a broker or finder
in connection with the transactions contemplated herein so as to give rise to
any valid claim against either SELLER or BUYER for a finder's fee, brokerage
commission or similar payment.
8.1.7. Employees.
(a) Neither UFM nor TRC is subject to any collective
bargaining agreement or any other contract or arrangement with any labor
organization relating to the Business. There have been no strikes, work
stoppages or labor union organizational campaigns involving the Business since
January 1, 1994, and SELLER is not aware of any threat of any such strikes, work
stoppages or organizational campaigns.
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8.1.8. Absence of Changes or Events. Since January 1, 1996,
SELLER has conducted the Business only in the ordinary course and has not, on
behalf of, in connection with, or relating to, the Business or the Acquired
Assets:
(a) sold, transferred, leased or licensed to others or
otherwise disposed of any of the Acquired Assets, except for inventory sold in
the ordinary course of business, or waived or released any right of substantial
value;
(b) received any notice of termination of, or intent to
terminate, any contract, lease or other agreement or suffered any damage,
destruction or loss (whether or not covered by insurance) which, in any case or
in the aggregate, could, or with the passage of time could in the future, have a
material and adverse effect on the assets, operations or, in the exercise of
SELLER's reasonable judgment, prospects of the Business;
(c) had any material and adverse change in its relations with
its suppliers;
(d) transferred or granted any rights under, or entered into
any settlement regarding the breach or infringement of, any United States or
foreign license, patent, copyright, trademark, trade name, invention or similar
rights, or modified any existing rights with respect thereto;
(e) instituted, settled or agreed to settle any litigation,
action or proceeding before any court or governmental body relating to the
Business or the Acquired Assets;
(f) failed to replenish the Business's inventories and
supplies in a normal and customary manner consistent with its prior practice and
prudent business practices prevailing in the industry, or made any purchase
commitment in excess of the normal, ordinary and usual requirements of the
Business or at any price materially in excess of the then current market price
or upon terms and conditions more onerous than those usual and customary in the
industry, or made any change in its selling, pricing, advertising or personnel
practices inconsistent with its prior practice and prudent business practices
prevailing in the industry;
(g) suffered any change, event or condition which, in any case
or in the aggregate, has had or may have a material and adverse effect on its
condition (financial or otherwise), properties, assets, liabilities or
operations including, without limitation, any change in its revenues, costs,
backlog or relations with its employees, agents, customers or suppliers;
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(h) entered into any transaction, contract or commitment other
than in the ordinary course of business other than this Agreement; or
(i) entered into any agreement or made any commitment to take
any of the types of action described in subparagraphs (a) through (h) above
other than this Agreement.
8.1.9. Compliance with Laws and Other Instruments.
(a) SELLER has complied with, and is not conducting its
business or affairs relating to the Business in violation of, any applicable
federal, state, provincial, local or foreign law, ordinance, rule, regulation,
court or administrative order, decree or process, or any requirement of any of
its insurance carriers the failure with which to comply could result in a
decrease or reduction in the defense or coverage obligations of such carrier,
including without limitation, any that relates to securities, health and safety
in plants or work areas, pricing, sales and distribution of products and
services, participation and cooperation in trade boycotts, collective bargaining
rights of employees, equal opportunity in employment, political contributions or
improper payments but excluding environmental matters which are intended to be
covered by Section 8.1.12. SELLER has not received any notice that SELLER is
conducting its business or affairs relating to the Business in violation of any
applicable federal, state, provincial, local or foreign law, ordinance, rule,
regulation, court or administrative order, decree or process or any requirements
of insurance carriers.
(b) SELLER has all rights, permits, certificates, licenses,
approvals and other authorizations as are necessary to conduct the Business and
to own, lease, use and operate the Acquired Assets at the places and in the
manner now conducted and operated (the "Permits") each of which is in full force
and effect. Schedule 8.1.4 hereto contains a complete and accurate list of all
Permits. SELLER has complied with the terms and conditions of all the Permits
and SELLER has not received any notice pertaining to any violation of or failure
to obtain any permit, certificate, license, approval or other authorization
required by any federal, state or local agency or other regulatory body incident
to the current operation of the Business, and SELLER is not aware of any basis
for a claim of such violation or failure or of any reason why any Permit will
not be renewed. SELLER is not aware of any action by SELLER or BUYER which will
be required to be taken as of and immediately after the Closing, in order that
all the Permits will remain in effect with respect to the continued conduct of
the Business.
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(c) SELLER is not in violation of any term of their Articles
of Incorporation, Bylaws or other organizational documents, as amended and
currently in effect.
8.1.10. Material Contracts.
(a) Schedule 8.1.10 contains a complete and accurate list of
all agreements, contracts and commitments (collectively, the "Material
Contracts") of the following types, either by which any of the Acquired Assets
are bound or to which either SELLER is a party or by which either of them are
bound and which relate to the Business or the Acquired Assets, true and complete
copies of which have been provided to BUYER:
(i) sales agency, manufacturer's representative,
distributorship or marketing agreements, whether currently in existence or
terminated within the two years prior to the date hereof;
(ii) agreements, orders or commitments for the purchase of raw
materials, supplies or finished products;
(iii) contracts or commitments to sell, lease or otherwise
dispose of any Acquired Asset other than in the ordinary course of business;
(iv) contracts or commitments, including without limitation,
non-competition, patent rights and royalty agreements, with any employee
assigned to the Business (present or terminated within the three-year period
preceding the Closing Date), director, officer or affiliate of SELLER; and
(v) contracts or commitments limiting the freedom of SELLER to
compete in any line of business or in any geographic area or with any person.
(b)(i) SELLER has made available to BUYER complete and
accurate copies or originals of all written Material Contracts, together with
all amendments thereto.
(ii) The Material Contracts are in full force and effect
(except as denoted as having been terminated or expired on the Disclosure
Schedule) and there is No Default thereunder by SELLER and SELLER is not aware
of Any Default thereunder by any other party thereto.
8.1.11. Absence of Certain Business Practices. Neither SELLER
nor any officer, employee of SELLER, nor, to the best of SELLER's knowledge any
agent or other person acting on their behalf, has, directly or indirectly,
within the past three years given or agreed to give any gift or
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similar benefit to any customer, supplier, governmental employee or other person
who is or may be in a position to help or hinder the Business (or assist SELLER
in connection with any actual or proposed transaction relating to the Business)
(i) which might subject SELLER to any damage or penalty in any civil, criminal
or governmental litigation or proceeding, (ii) for any of the purposes described
in Section 162(c) of the Code, or (iii) for establishment or maintenance of any
concealed fund or concealed bank account.
8.1.12. Environmental Matters. (a) No Hazardous Materials (as
that term is defined below), have been generated, treated, stored, used,
transported, released, disposed of or deposited in connection with the operation
of the Acquired Assets or activities relating to the Acquired Assets by SELLER,
or to SELLER's knowledge, by any third party in, on or under real estate or
related improvements upon which any of the Acquired Assets or any related
activities have been operated (all such real estate and improvements are
hereinafter referred to as "Real Property"), in violation of any Governmental
Requirements.
(b) To the best of SELLER's knowledge, all activities and operations of
the Business conducted on the Real Property by SELLER have at all times complied
with all applicable Governmental Requirements. To the best of SELLER's
knowledge, no equipment or machinery used or operated in connection with the
Business has ever been used or operated as an instrumentality of violation of
any Governmental Requirement. To the best of SELLER's knowledge, all Hazardous
Materials identified in the Disclosure Schedule have been stored, manufactured,
handled, transported, disposed of, and otherwise used in accordance with all
applicable Governmental Requirements, except as specifically indicated in the
Disclosure Schedule.
(c) Neither SELLER nor, to SELLER's best knowledge, any predecessor in
interest with respect to the Real Property has received or given a summons,
citation, directive, notice, complaint, letter or other communication, written
or oral, concerning (1) any alleged or suspected violations of any Governmental
Requirement relating to or concerning the Business (as operated at the Real
Property or at any other facility where the Business is or has been conducted);
or (2) any proposed or continuing investigation or request for information
(including claims, suits or investigations by any person or entity, whether
Governmental or not) relating to the handling, packaging, transportation,
treatment, storage or disposal of Hazardous Material relating to or concerning
the Business (as operated at the Real Property or at any other facility where
the Business is or has been conducted) or when transported off-site from the
Real Property or at any other facility where the Business is or has been
conducted.
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(d) All oil burners, incinerators and other fuel burning devices
utilized in the Business comply with all applicable federal, state and local air
pollution control laws, rules and regulations, if any.
(e) SELLER has all permits, licenses, registrations and authorizations
relating to or required by all applicable Governmental Requirements in
connection with any activities or operations conducted by SELLER in the conduct
of the Business and all of the terms and conditions thereof are being complied
with in all respects.
For purposes of this Section 8.1.12, "Hazardous Material"
shall mean anything (i) deemed to be a "Hazardous Substance" within the meaning
of Section 101(14) of CERCLA, 42 U.S.C. ss.9601(14), (ii) deemed to be a
"Hazardous Waste" within the meaning of the Resource Conservation and Recovery
Act, 42 U.S.C. ss.6901, et seq., and regulations promulgated thereunder, 40
C.F.R. Part 261, (iii) deemed to be a hazardous material within the meaning of
the environmental protection and pollution control laws enacted and currently in
effect in Michigan, or any other state of the United States to which waste
products or other materials of SELLER have been shipped for disposal, or (iv)
which contain radioactive substances, flammable explosives, petroleum
hydrocarbons, polychlorinated biphenyls or asbestos; and "Governmental
Requirement" means any Federal, state or local statute, regulation, rule,
ordinance, license, permit, action, policy or authorization, and any judicial,
administrative or regulatory decree, judgment or order relating to environmental
protection or pollution control; "CERCLA" means the Comprehensive Environmental
Response and Liability Act 42 U.S.C. ss.9601, et seq., and the regulations
promulgated thereunder; and "RCRA" means the Resource Conservation and Recovery
Act, 42 U.S.C. ss.6901, et seq., and the regulations promulgated thereunder.
8.1.13. Largest Suppliers and Customers. Except as set forth
on Schedule 8.1.13, there is no supplier to SELLER which accounts for five
percent or more of its purchases in the Business's fiscal year ending October
31, 1996 relating to the Business and no customer of SELLER which accounts for
five percent or more of its gross sales in the Business's for the twelve (12)
months ending October 31, 1996 relating to the Business. The relationships of
SELLER with suppliers, customers and creditors relating to the Business are
good, and SELLER is not aware of any expression of any intention by any such
supplier, customer or creditor to terminate or modify any of such relationships,
and during the six months immediately prior to the date hereof, SELLER has not
ceased doing business with any supplier or customer which accounts for five
percent or more of the purchases or gross
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sales of SELLER relating to the Business. SELLER currently has no material
problem in obtaining in a timely manner and at market prices any raw, finished
or other materials used or necessary to be used in the Business.
8.1.14. Marketing Restrictions. SELLER is not restricted from
carrying out its business and affairs relating to the Business in a manner
consistent with the manner such business and affairs have been conducted by
SELLER prior to the date hereof anywhere in the world by any agreement or
administrative or judicial order, decree or process in any action or proceeding
in which SELLER or any of its predecessors is a party.
8.1.15. Product Warranties and Warranty Rights. (a) Set forth
on Schedule 8.1.15(a) is the text of SELLER's standard product warranty relating
to Products distributed or sold by SELLER and a list of all variances from this
standard products warranty.
(b) SELLER has no knowledge of any unresolved warranty, claims
against any vendor or third party relating to the Acquired Assets. Set forth in
the Schedule 8.1.15(b) is a description of any resolved material claims against
any vendor or third party relating to the Acquired Assets.
8.1.16. Product Liability. There have been no claims made or,
to the best of SELLER's knowledge, threatened or any actions or omissions to act
by SELLER which might reasonably be anticipated to result in any claim, with
respect to any product liability (other than to the extent covered by the
product warranties described in Section 8.1.15 hereof) of SELLER relating to the
Products. Since January 1, 1992, neither SELLER nor its suppliers has made or
been required to make any recall of a Product sold by SELLER nor has any such
recall been considered by SELLER, or to SELLER's knowledge by SELLER's
suppliers, but rejected, nor is any such recall now being contemplated by SELLER
and, to the best of SELLER's knowledge, there is no need or reasonable basis for
any product recall of, or for any assertion of any defect in, any Product sold
by SELLER. SELLER has no knowledge of any defects in the manufacture of any
Products made, distributed or sold by SELLER which would render such Products
inoperable, unmarketable or unsaleable.
8.1.17. Contracts. SELLER has provided BUYER with true and
complete copies of all agreements with all distributors and representatives of
the Products (the "Distributor Agreements"), which are in full force and effect,
all of which are listed on Schedule 8.1.17 hereto. SELLER has no knowledge of
any outstanding claims by any parties to the Distributor Agreements.
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8.1.18. Financial Data. There have been delivered to BUYER
SELLER's unaudited financial statements attached hereto as Schedule 8.1.18
consisting of profit and loss statements for the Business for the fiscal years
ended October 31, 1994, October 31, 1995 and October 31, 1996 (collectively, the
"Financial Statements"). The Financial Statements (a) have been derived from
SELLER's accounting records and (b) fairly present management's judgment of the
results of operations of Business by SELLER for the respective periods covered
thereby, including accounting for normal recurring expenses for those periods
and all costs and expenses related to the Business, including a reasonable
allocable overhead cost. There has been no material adverse change to SELLER's
financial condition with respect to the Business between October 31, 1996 and
the Closing Date.
8.1.19. Disclosure. No representation or warranty by SELLER
contained in this Agreement nor any statement or certificate furnished or to be
furnished by SELLER to BUYER or its representatives in connection herewith or
pursuant hereto contains or will contain any untrue statement of a material fact
or omits or will omit to state any material exception to the representations
specifically made herein. The representations and warranties contained in this
Article 8 or elsewhere in this Agreement or any document delivered pursuant
hereto shall not be affected or deemed waived by reason of the fact that BUYER
or its representatives knew or should have known that any such representation or
warranty is or might be inaccurate in any respect.
8.2. Representations and Warranties of BUYER. BUYER represents and
warrants to SELLER as follows:
8.2.1. Corporate Data and Authority.
(a) BUYER is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts.
(b) BUYER has corporate power and authority to own, hold or
lease the rights, properties and assets it will acquire, hold or lease under the
transactions contemplated by this Agreement and to carry on the operations
contemplated by this Agreement and to assume, pay, perform and discharge the
Assumed Liabilities.
(c) BUYER has corporate power under its Amended and Restated
Articles of Organization and Bylaws and under the laws of Massachusetts and
other applicable laws to execute, deliver and perform this Agreement. The
execution, delivery and performance of this Agreement have been duly authorized
by all necessary corporate action on the part of
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BUYER, and no other approval of the board of directors or stockholders of BUYER
(or any committee thereof) is necessary for the consummation of the transactions
contemplated hereby.
(d) The execution and delivery of this Agreement by BUYER and
consummation by BUYER of the transactions contemplated hereby are not prohibited
by, and do not violate any provision of the Amended and Restated Articles of
Organization or Bylaws, as amended, of BUYER or violate, or with or without the
giving of notice or the passage of time, or both, will violate, conflict with or
result in a default, right to accelerate or loss of rights under, any term of
any contract, agreement, indenture, mortgage, note, bond, commitment, license,
or other instrument to which BUYER is a party or bound or by which any of
BUYER's properties are bound.
(e) This Agreement has been duly executed by BUYER and
constitutes a valid, legally binding and Enforceable obligation of BUYER.
(f) BUYER has not filed, or had filed against it, a petition
in bankruptcy or a petition to take advantage of any other insolvency act;
admitted in writing its inability to pay its debts generally; made an assignment
for the benefit of creditors; consented to the appointment of a receiver for
itself or any substantial part of its property; or generally committed any act
of insolvency (including the failure to pay obligations as they become due) or
bankruptcy.
8.2.2. Litigation Concerning Agreement. There are no actions,
suits or proceedings pending or threatened against BUYER, or to BUYER's
knowledge against SELLER, which could directly affect the transactions
contemplated by this Agreement, at law or in equity, or before any arbitrator of
any kind, or before or by any federal, state, municipal or other Governmental
department, commission, board, bureau, agency or other instrumentality, domestic
or foreign.
8.2.3. Broker. BUYER has retained Fechtor, ▇▇▇▇▇▇▇▇ & Co.,
Inc., a broker (the "Broker"), to assist BUYER in connection with the
transactions contemplated herein. BUYER shall be solely responsible for the
payment of Broker's fee. Other than Broker, BUYER has not retained any other
broker or finder so as to give rise to any valid claim against SELLER or its
affiliates for a finder's fee, brokerage commission or similar payment.
8.3. Survival. The representations and warranties contained in this
Article 8 shall survive the Closing for a period of two (2) years, except for
the representations and warranties contained in Sections 8.1.2 and 8.1.5 hereof,
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which shall each survive the Closing for a period of five (5) years.
ARTICLE 9. PARTICULAR COVENANTS OF SELLER AND BUYER
9.1. Covenants of SELLER. SELLER hereby covenants and agrees:
9.1.1. Interim Conduct of the Business. SELLER shall at all
times from the date of this Agreement to the Closing and through the Transition
Period (except as otherwise instructed by BUYER) operate the Business in a
manner consistent with SELLER's past practice.
9.1.2. Further Assurances. After the Closing, SELLER will
furnish to BUYER such other instruments and information as BUYER may reasonably
request in order effectively to convey to and vest in BUYER title to the
Acquired Assets and to consummate the transactions contemplated hereby, to be
delivered from time to time upon BUYER's request.
9.1.3. Noncompetition, Nonsolicitation.
(a) For a period of ten (10) years following the Closing Date
neither SELLER nor any of their affiliates will directly or indirectly:
(i) compete with BUYER in the development, manufacture,
marketing or sale of Products; provided, however, that this covenant does not
apply to the ownership by SELLER or any of its affiliates of equity in any
company which competes with the Business which ownership of equity is an equity
investment in any public company not to exceed one percent of the total equity
investment in such public company;
(ii) solicit or encourage (A) any employee of BUYER to
discontinue his or her employment relationship with BUYER nor (B) any customer
or supplier of BUYER to alter its relationship or commitments with BUYER; or
(iii) engage the services of ▇▇▇▇▇, either as an employee or
as an independent contractor, and whether or not ▇▇▇▇▇ is still in the employ of
BUYER (SELLER shall not, however, be in breach of this covenant for engaging the
services of ▇▇▇▇▇ through BUYER as contemplated by Section 9.3.1 hereof.)
(b) The noncompetition and nonsolicitation covenants set forth
in Section 9.1.3(a) shall also be applicable against the principals of SELLER,
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇.
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(c) Should any portion of the covenants set forth in this
Section 9.1.3 be unenforceable because of the scope thereof or the period
covered thereby, or otherwise, such covenants shall be deemed to be reduced and
limited to enable them to be enforced to the extent permissible under the laws
and public policies applied in the jurisdiction in which enforcement is sought.
(d) Notwithstanding the covenants set forth in Section
9.1.3(a) hereof, the covenants shall not apply to any third party (i) which
acquires all or a substantial part of the business or assets of SELLER or (ii)
into which SELLER is merged in an acquisition or merger, provided, however, that
the business reason for SELLER's entering into such third party transaction is
not to defeat the covenants by SELLER.
9.2. Covenants of SELLER and BUYER. SELLER and BUYER hereby covenant
and agree:
9.2.1. Efforts and Cooperation. SELLER and BUYER shall
cooperate fully with each other and use their respective commercially reasonable
efforts acting in good faith to cause the conditions set forth in Article 6 to
be satisfied on or before the Closing Date and to take promptly any and all
other actions appropriate to the consummation of the transactions contemplated
by this Agreement.
9.2.2. Confidentiality. Subject to the terms of this
Agreement, the Proprietary Information of each party hereto, which information
may have been disclosed to or learned of by any other party hereto, shall at all
times remain the property of and be vested with the party furnishing such
information (the "Vested Party"). The party which receives or has disclosed to
it the Proprietary Information of the Vested Party shall use such Proprietary
Information only in connection with the performance of its obligations under
this Agreement. No non-Vested Party shall disclose the Proprietary Information
of a Vested Party to any third parties other than those who have a "need to
know", in which latter event the identity(ies) of such "need to know" parties
shall first be revealed to the Vested Party in writing and then such third
parties shall execute confidentiality and non-use agreements running in favor of
and satisfactory to the Vested Party in advance of such disclosure(s). Upon the
earlier of (i) Closing or (ii) the request of a Vested Party, the non-Vested
Party shall promptly return to the Vested Party or its designees all of the
Vested Party's Proprietary Information and any related materials, including all
copies thereof. Upon Closing, the "Proprietary Information" of SELLER which
constitutes a part of the Acquired Assets shall be deemed to be the Proprietary
Information of BUYER. If any party to this Agreement becomes legally compelled
through legal process to
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provide information constituting part of any Proprietary Information of a Vested
Party, then that party so compelled shall provide the Vested Party with prompt
written notice of such legal process so as to enable the Vested Party to attempt
seek a protective order or other appropriate remedy to keep such Proprietary
Information Confidential.
9.2.3. Injunctions. If any United States or state court having
jurisdiction over BUYER, SELLER or any of the Acquired Assets, issues or
otherwise promulgates any injunction, decree or similar order which prohibits
the consummation of the transactions contemplated hereby, BUYER and SELLER shall
use their reasonable best efforts to have such injunction, decree or order
dissolved or otherwise eliminated as promptly as possible and to pursue the
underlying litigation in good faith; provided, however, that nothing herein
shall affect BUYER's or SELLER's respective rights under Article 6 hereof.
9.2.4. Communications. BUYER may, but shall not be obligated
to, make a public announcement of the fact that this Agreement has been entered
into with SELLER. Such public announcement by BUYER may be in the form of press
releases, public announcements or any other form of publicity; provided,
however, that prior to making such public announcement, BUYER shall consult with
SELLER regarding the text of such announcements and SELLER agrees to cooperate
with BUYER in making such announcement(s). SELLER shall not make any public
announcement of the fact that this Agreement has been entered into without the
prior written consent of BUYER. Notwithstanding the foregoing, neither party
shall be prohibited from making any disclosure required by applicable law or
regulation within a time which acts to preclude such consultation or approval.
9.2.5. Training of BUYER, Transition and Consulting Services
of SELLER, Access to Records and Employees Subsequent to Closing.
(a) Following the Closing SELLER shall train BUYER's employees
at SELLER's facility in Hazel Park, Michigan in the start-up and operation of
the equipment and shall also allow BUYER's employees to observe the disassembly
of such equipment for shipment to BUYER's facilities (the "Training Period").
During the Training Period, SELLER shall make arrangements to train up to four
(4) of BUYER's employees for a period of one (1) week each. Seller shall also
make arrangements to train either two (2) employees of BUYER for one (1)
additional week or one (1) employee for up to an additional two (2) weeks. BUYER
may elect to send its employees to SELLER's facility or to require SELLER's
employees to travel to BUYER's Massachusetts facility during the Training Period
or both. In the event that BUYER elects
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to have SELLER's employees perform training services at BUYER's Massachusetts
facility, BUYER shall be responsible for arranging travel, accommodations and
meals (or for providing a reasonable stipend in lieu of making such
arrangements), and for the payroll costs of SELLER for SELLER's employees whose
services are provided to BUYER at its Massachusetts facility for that period of
time during which those services are requested and provided. If any
transportation, accommodations or board of SELLER's employees is to be provided
by BUYER during the Training Period, they shall be coach class transportation or
tourist class accommodations and board. BUYER has notified SELLER that BUYER
desires the services of SELLER's employee, ▇▇▇▇▇▇ ▇▇▇▇▇▇, at BUYER's facility
for a four (4) week period following the transfer of the Acquired Assets to
BUYER's Massachusetts facility to provide training services to BUYER and SELLER
has agreed to provide such services. ▇▇. ▇▇▇▇▇▇'▇ services are in addition to
SELLER's training responsibilities set forth above.
(b) During the period beginning with the first business day
following the Closing and for a period ending no later than six weeks thereafter
(the "Transition Period"), SELLER shall perform certain services to BUYER in
order to facilitate the transition of the Acquired Assets to BUYER's
Massachusetts facility while minimizing any disruption to customers and
prospective customers of the Products or Business. Such services of SELLER shall
include the delivering to customers and prospective customers that inquire with
SELLER for products or services related to the Business information supplied by
BUYER on BUYER's acquisition of the Business. Such services shall also include
providing services to customers in the ordinary course. It is currently
anticipated that SELLER would initially field customer inquires during the first
three weeks of the Transition Period. In addition, during the Transition Period,
SELLER shall continue to provide manufacturing, machining and other technical
services associated with ensuring that reasonably adequate inventory and parts
are maintained to allow the Business to operate as it had been operated by
SELLER prior to Closing, all to minimize any disruption to customers and
services that would otherwise have been made available by SELLER to its
customers had the Acquired Assets not be sold. All such services shall be
provided to BUYER by SELLER on a subcontractor basis, and in addition to
expenses incurred in providing such services, SELLER shall be compensated by
BUYER for labor costs related to sales orders and inventory maintenance at a
rate of forty dollars ($40) per man hour. All services provided by SELLER during
the Transition Period shall be provided by SELLER in full consultation with
BUYER.
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(c) In addition to the Training Period services to be made
available to BUYER as set forth in Section 9.2.5(a) and the Transition Period
services set forth in Section 9.2.5(b), following the Closing, SELLER shall make
available to BUYER the services of ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("Couillais"), an employee
of SELLER, to consult with BUYER. Couillais's services shall be available to
BUYER for the first six (6) months following the Closing (the "Consulting
Period"), for four (4) business days per week during the Consulting Period.
Couillais's services shall be made available to BUYER on a non-exclusive, but
first-priority basis. During the Consulting Period SELLER shall continue to be
responsible to pay all compensation and other benefits to Couillais and
Couillais shall remain an employee of SELLER. Couillais's services shall be
available to BUYER during the Consulting Term at such times and places as BUYER
shall determine. Notwithstanding SELLER's obligation to continue to pay
Couillais's compensation, if BUYER requires Couillais to travel more than fifty
(50) miles away from his home in Livonia, Michigan, to provide services to
BUYER, then BUYER shall reimburse SELLER for all reasonable costs incurred by
SELLER in connection with such travel and expenses. SELLER hereby authorizes
BUYER to reimburse Couillais directly for approved expenses that may be incurred
by Couillais. Notwithstanding any of the foregoing, BUYER shall not be required
to use the services of Couillais during the Consulting Period. SELLER shall
cause Couillais to appropriately acknowledge this obligation of SELLER to
provide his services during the Consulting Period and to provide assurances that
Couillais will continue to look to SELLER to discharge all the obligations of an
employer toward Couillais during the Consulting Period. As used herein, a
business day is any Monday through Friday on which first class U.S. mail is
delivered. SELLER shall not be responsible for any failure to provide
Couillais's services in the event that Couillais (i) discontinues his employment
with SELLER during the first six month period following the Closing for any
reason or (ii) fails or refuses to provide such services to BUYER upon the
request of SELLER, unless such failure is due to SELLER's failure to allocate
sufficient time in Couillais's work schedule to allow the services to be
provided to BUYER.
(d) In addition to the other services to be made available by
SELLER to BUYER outlined in subsections 9.2.5(a), (b) and (c) hereof, for a
period of twelve (12) months following the end of the Transition Period (the
"Post Transition Period"), upon the request of BUYER, SELLER shall make the
consulting services of its employees familiar with the manufacturing process of
the Products available to BUYER (the "Post Transition Period Services"). SELLER
shall make the Post Transition Period Services available to BUYER for up to two
(2) business days per month during the Post Transition
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Period. The Post Transition Period Services shall be made available to BUYER by
SELLER at times and rates that are to be mutually agreed upon and upon
reasonable advance notice to SELLER by BUYER, and so as not to conflict with
SELLER's employees other commitments and responsibilities to SELLER. In
addition, if SELLER's employees are required to travel to perform any of the
Post Transition Period Services, then BUYER shall be responsible for providing
all transportation, accommodations and board (coach or tourist class) in
connection with such services. SELLER shall not be responsible for any failure
to provide Post Transition Period Services in the event that all employees who
have the knowledge to provide such services (i) discontinue their employment
with SELLER during the Post Transition Period for any reason or (ii) fail or
refuse to provide such services to BUYER upon the request of SELLER, unless such
failure is due to SELLER's failure to allocate sufficient time in such
employees' work schedules to allow the Post Transition Period Services to be
provided to BUYER.
(e) SELLER shall retain all records currently located at the
facilities where the Acquired Assets are located that either (i) pertain solely
to the internal corporate or intra-company affairs of SELLER or to other
Businesses or operations of SELLER for an eight year period or (ii) are
integrated or non-separable from the records related to any of the businesses of
SELLER other than the Business for an eight year period.
(f) Following the Closing, BUYER will retain all business
records constituting part of the Acquired Assets, including all records required
to be retained pursuant to obligations imposed by any Governmental statute, rule
or regulation for an eight year period. Such records may nevertheless be
destroyed by BUYER prior to the expiration of said eight year period if BUYER
sends to SELLER written notice of its intent to destroy records, specifying with
particularity the contents of the records to be destroyed. Such records may then
be destroyed at any time after the ninetieth day after such notice is given
unless, prior to the expiration of such ninety-day period, SELLER objects to the
destruction in which case BUYER shall make available such records to SELLER,
provided, however, that the obligation to continue to make such records
available shall be subject to SELLER making arrangements, at SELLER's sole cost,
to take delivery of such records within sixty days following the date its
objection is made.
(g) BUYER and SELLER shall each provide duly authorized
representatives of the other party displaying appropriate credentials full and
free access to all records relating to the Business as operated prior to the
Closing Date for bona fide business reasons at any time during
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regular business hours for a period of eight years after the Closing Date, and
such other party may make abstracts from, or make copies of, any such records as
it may deem desirable, at its own expense; provided, however, that the foregoing
right of access shall not be exercisable in such a manner as to interfere
unreasonably with the normal operations and business of the party to which such
request is made; and provided further, however, that as to so much of such
information as constitutes trade secrets or confidential business information of
the party, the requesting party and its officers, directors and representatives
will be obligated not to disclose such information, to the extent that such
information is then confidential, except (i) as required by law or (ii) with the
prior written consent of the party to which such request is made. In connection
with any review of records relating to the Business as set forth in the
preceding sentence, BUYER and SELLER shall each provide to such duly authorized
representatives of the other party (x) access to employees of SELLER or BUYER,
as the case may be, who are familiar with such records and who can assist such
representatives of the other party, at the other party's own expense, in
locating, explaining or otherwise reviewing such records; and (y) permission to
use SELLER's or BUYER's copying facilities, clerical services and telephones at
the other party's own expense.
(h) If, in connection with legal proceedings, BUYER shall
require the assistance of employees (including officers) of SELLER, SELLER and
BUYER shall cooperate to establish a schedule reasonably acceptable to both
parties whereby SELLER shall provide to BUYER access to such employees of SELLER
as is reasonably required by BUYER; provided, however, SELLER shall have no
obligation to provide such assistance if to do so would, in SELLER's reasonable
judgment, unreasonably interfere with the conduct of SELLER's business. BUYER
shall pay out-of-pocket costs incurred in connection with such use of SELLER's
employees and shall reimburse SELLER for the number of whole business days spent
by each such employee in providing such services at the rate equal to one and
one-half times the average daily gross pay per day (excluding the value of
employee benefits) of such employee during the calendar month in which such
services are performed, provided, however, that BUYER shall not be required to
make the foregoing payments if the legal proceeding arises out of a matter as to
which SELLER is required to indemnify BUYER in accordance with Article 11.
9.2.6. Satisfaction of Conditions; Extension of Closing Date.
In the event that BUYER shall at any time prior to the Closing Date determine
that any representation or warranty of SELLER contained in this Agreement is not
true or accurate, that any information provided by SELLER is incomplete, or that
a condition precedent to BUYER's
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obligation to close as set forth in this Agreement has not been satisfied, then
BUYER shall promptly give SELLER written notice thereof, including a description
of such untrue or inaccurate representation or warranty, incomplete information
or unmet condition precedent. If such representation or warranty, incomplete
information or unmet condition precedent can thereafter be made true and
accurate, complete or can be met by (a) the ministerial act of filing or
recording a document or documents, (b) the payment of money, or (c) any other
act, SELLER shall have the obligation within twenty business days after receipt
of such notice to make such filing or recording, pay such money or take such
act, and upon such filing, recording, payment or act, such condition shall be
deemed timely satisfied, and the Closing Date shall to the extent needed be
extended to the date of such satisfaction. The foregoing notwithstanding,
neither BUYER nor SELLER shall be required to proceed with Closing if the
Closing has not occurred by June 1, 1997.
9.2.7. Tax Matters; Purchase Price Allocation.
(a)(i) As between SELLER (and its affiliates) and BUYER (and
its affiliates), SELLER shall be liable for any and all Taxes with respect to
the Business for all taxable years, and any "stub" period, ending on or before
the Closing.
(ii) As between SELLER (and its affiliates) and BUYER (and its
affiliates), BUYER shall be liable for any and all Taxes with respect to the
operation of the Business by BUYER or its affiliates after the Closing.
(b) SELLER shall include the results of operations of the
Business through the Closing in SELLER's consolidated or other appropriate
federal income tax return or returns for the tax period covering the periods of
such operations. BUYER shall include the results of operations of the Business
as conducted by BUYER or its affiliates following the Closing in consolidated or
other appropriate federal income tax return or returns for the tax periods
covering the periods of such operations.
(c) Refunds or credits of Taxes relating to the operations of
the Business before the Closing shall be for the account of SELLER. Refunds or
credits of Taxes relating to the operations of the Business by BUYER or its
affiliates from and after the Closing shall be for the account of BUYER. BUYER
shall promptly forward to or reimburse SELLER for any refunds or credits due
SELLER after receipt thereof, and SELLER shall promptly forward to or reimburse
BUYER for any refunds or credits due BUYER after receipt thereof.
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(d) As soon as practicable, but in any event within twenty
days after SELLER's request, from time to time from and after the Closing Date,
BUYER shall make available to SELLER, at such times and in such manner as to not
interfere unreasonably with BUYER's conduct of its business, such information
and data concerning the pre-Closing operations of the Business, including
without limitation, providing the information and data required by SELLER's
customary tax and accounting questionnaires, and make available such
knowledgeable employees of BUYER as SELLER may reasonably request, in order to
enable SELLER to complete and file all returns, forms and reports which it may
be required to file with respect to the operations and business of the Business
conducted prior to the Closing or to respond to audits by any taxing authorities
with respect to such operations and otherwise to enable SELLER to satisfy its
internal accounting, tax and other legitimate requirements, for which BUYER is
to be paid out-of-pocket costs incurred in connection with same and BUYER is to
be reimbursed by SELLER for the number of whole business days spent by each such
employee in providing such services equal to one and one-half times the average
daily gross pay per day (excluding the value of employee benefits of such
employee) during the calendar month in which such services were performed.
(e)(i) The allocation of the Purchase Price set forth in
Schedule 9.2.7(e)(i) hereto shall be adhered to by SELLER and BUYER.
(ii) Neither SELLER nor BUYER shall take a position in any tax
proceedings, tax audit or otherwise inconsistent with the allocation of the
Purchase Price established pursuant to subsection (e)(i), above; provided,
however, that nothing contained herein shall require SELLER or BUYER to contest
any challenge to such determinations beyond, or otherwise than by the exhaustion
of, administrative remedies before any taxing authority or agency, and neither
SELLER nor BUYER shall be required to litigate before any court any proposed
deficiency or adjustment by any taxing authority or agency which challenges such
determinations of fair market value. In the event that any claim shall be made
by any taxing authority against either BUYER or SELLER that, if successful,
would have the effect of altering such allocations, then the party that is the
subject of such claim (the "Involved Party") shall give notice thereof to the
other party (the "Other Party") in writing within ten business days following
the day on which such claim is made. Thereafter, the Involved Party shall have
control of any contest relating thereto, but the Involved Party shall consider
in good faith any request or suggestion by the Other Party concerning such
contest, shall notify the Other Party of any conference, hearing or proceeding
relating to such contest, shall (to the extent it
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is feasible to do so) permit the Other Party to participate therein at such
Other Party's expense and shall not object to such Other Party's submission of
briefs and memoranda of law relating thereto, and shall provide the Other Party
on a timely basis with any relevant information reasonably requested by such
Other Party.
(f) The provisions of subsection (a), above, notwithstanding,
ad valorem taxes imposed upon consigned inventories shall be remitted and borne
in their entirety by BUYER and ad valorem taxes upon Acquired Assets ("Personal
Property Taxes") which relate to periods of time during which the Closing Date
occurs ("Proration Periods") shall be apportioned between SELLER and BUYER as of
the Closing Date with BUYER bearing only the expense of that portion of such
Personal Property Taxes that the number of days on or subsequent to the Closing
Date bears to the total number of days covered by such Proration Period. The
parties shall cooperate fully to avoid, to the extent legally possible, the
payment of duplicate Personal Property Taxes, and each party shall furnish, at
the request of the other, proof of payment of any Personal Property Taxes or
other documentation which is a prerequisite to avoiding payment of a duplicate
tax.
(g) SELLER shall pay all sales taxes owed to governmental
authorities in respect of the sale of the Acquired Assets. BUYER shall supply
SELLER with a resale certificate regarding the resale of the inventories to be
purchased from SELLER.
9.3. Covenants of BUYER. BUYER hereby covenants and agrees:
9.3.1. Consulting Services of BUYER. For the first twelve (12)
months following the Closing, BUYER shall make the services of Mr. ▇▇▇▇▇ ▇▇▇▇▇
("▇▇▇▇▇") available to SELLER for the purpose of consulting with SELLER on
matters which pertain to SELLER's business other than on matters relating to the
Business or to the Acquired Assets. During that period, ▇▇▇▇▇ shall be made
available to consult with SELLER for up to two (2) business days per month (the
"▇▇▇▇▇ Services"). The ▇▇▇▇▇ Services shall be made available to SELLER by BUYER
at times that are mutually agreed upon and upon reasonable advance notice to
BUYER by SELLER, and so as not to conflict with ▇▇▇▇▇'▇ other professional
commitments and responsibilities to BUYER, including, but not limited to, any
previously scheduled engagements of ▇▇▇▇▇. If SELLER, in its sole discretion,
elects to use the ▇▇▇▇▇ Services, then SELLER shall reimburse BUYER for that
portion of ▇▇▇▇▇'▇ salary payable by BUYER to ▇▇▇▇▇, pro rata for each day or
portion thereof that the ▇▇▇▇▇ Services are provided to SELLER by BUYER. In
addition, if ▇▇▇▇▇ is required to travel to perform any of the ▇▇▇▇▇ Services,
then SELLER shall be
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responsible for providing all transportation, accommodations and board in
connection with such the ▇▇▇▇▇ Services. BUYER shall not be responsible for any
failure to provide ▇▇▇▇▇ Services in the event that ▇▇▇▇▇ (i) discontinues his
employment with BUYER during the first twelve month period for any reason or
(ii) fails or refuses to provide such services to SELLER upon the request of
BUYER, unless such failure is due to BUYER's failure to allocate sufficient time
in ▇▇▇▇▇'▇ work schedule to allow the ▇▇▇▇▇ Services to be provided to SELLER.
9.3.2 Warranty Services. SELLER has requested that BUYER
perform warranty services in connection with Products sold by SELLER prior to
Closing in order that SELLER can meet its obligations under its customer
warranty agreements. SELLER warrants and represents to BUYER that none of
SELLER's warranty agreements exceed one (1) year from the date of the sale
("SELLER's Warranty Period"). BUYER has agreed to make itself reasonably
available to provide its services to SELLER during SELLER's Warranty Period on a
non-exclusive basis, at a rate of forty dollars ($40) per man hour, plus
expenses, and upon such other terms and conditions to be negotiated by the
parties. Parts and materials used by BUYER in providing such services shall be
charged to SELLER at BUYER's cost. In no event shall BUYER be required to
provide services to SELLER during SELLER's Warranty Period without what BUYER
deems to be adequate assurance of payment for such services, nor shall BUYER be
required to provide such services if BUYER has claimed any default by SELLER of
the terms of this Agreement, BUYER shall not provide services to any customer of
SELLER beyond such customer's warranty period. In no event shall the foregoing
agreement of BUYER be construed to be an assumption by BUYER of SELLER's
warranty obligations.
9.3.3 Distributor Agreements. The Distributor Agreements shall
remain in full force and effect for a period of sixty days following the Closing
(the "Distributor Review Period"). BUYER shall review the contractual
relationships that SELLER has with the representatives and distributors under
the Distribution Agreements (the "Distributors") with respect to the Products
and shall unilaterally determine which relationships, if any, BUYER may desire
to continue (a "Continuing Relationship") and which relationships, if any, BUYER
desires not to continue (a "Terminating Relationship") with respect to the
Products. Within five business days prior to the end of the Distributor Review
Period, BUYER shall provide SELLER with written notification specifying the
Continuing Relationships and the Terminating Relationships. SELLER and BUYER
shall then send a joint notification to those Distributors that BUYER designates
as Continuing Relationships. Upon acceptance by a Distributor of a Continuing
Relationship with BUYER and the entering into by
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BUYER and such Distributor of an agreement to such effect (a "Novation
Agreement"), SELLER's obligations with respect to such Distributor shall cease
with respect to the Products for any occurrences from and after the acceptance
by such Distributor (but not for any acts of omissions which occurred prior to
Closing). Immediately following the Closing, SELLER and BUYER will jointly
notify each party to a Distributor Agreement of the transfer of the Acquired
Assets to BUYER and advise them that BUYER will act on behalf of SELLER to
provide Products to the Distributor under the terms of its agreement during the
Distributor Review Period and any relevant termination notice period should the
Agreement be terminated, and that BUYER will contact the Distributor to discuss
whether to maintain the Distribution Agreement as to the Products (in the form
of a Novation Agreement).
On the last day of the Distributor Review Period, SELLER shall send to
the Terminating Relationship Distributors and any Distributor who has rejected a
Continuing Relationship a notice of its termination of the distribution rights
with respect to the Products. Upon rejection of a Continuing Relationship by a
Distributor or upon BUYER's determination that a relationship with a Distributor
should be a Terminating Relationship, SELLER shall continue to be responsible
for all obligations under the Distributor Agreement. BUYER has agreed, at the
request of SELLER to perform certain of SELLER's obligations with respect to the
Products under SELLER's Terminating Relationship Distributor Agreements in order
that SELLER can meet its obligations under the Distributor Agreements through
the termination notice period set forth in the respective agreements. (If no
time period is set forth, BUYER's obligations shall extend for 30 days.)
During the Distributor Review Period, BUYER shall use reasonable
efforts to provide Products to the Distributors on the same terms and conditions
as SELLER is required to provide those Products under the Distributor
Agreements. Such Products shall be provided by BUYER as a subcontractor of
SELLER on credit terms acceptable solely to BUYER and in no event shall the
foregoing agreement of BUYER be construed to be an assumption by BUYER of
SELLER's obligations under the Distributor Agreements. Such Products shall be
provided upon such other terms and conditions to be negotiated by SELLER and
BUYER.
9.3.4. Noncompetition.
(a) For a period of ten (10) years following the Closing Date
neither BUYER nor any of its affiliates will directly or indirectly compete with
SELLER in the development, manufacture, marketing or sale of flow meters which
employ either (i) "swing vane variable area" (ii)
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"laminar flow elements" or (iii) "FlowPoint" products (collectively, "Restricted
Flow Meters"), as those terms are more fully defined on Schedule 9.3.4(a)
hereto; provided, however, that this covenant does not apply to the ownership by
BUYER or any of its affiliates of equity in any company which develops,
manufactures, markets or sells Restricted Flow Meters, which ownership of equity
is an equity investment in any public company not to exceed one percent of the
total equity investment in such public company. Should any portion of this
covenant by BUYER not to compete be unenforceable because of its scope or the
period covered, or otherwise, then this covenant shall be deemed to be reduced
and limited to enable it to be enforced to the extent permissible under the laws
and public policies applied in the jurisdiction in which enforcement is sought.
(b) Notwithstanding the covenant set forth in Section 9.3.4(a)
hereof, the covenant not to compete shall not apply to any third party (i) which
acquires all or a substantial part of the business or assets of BUYER or (ii)
into which BUYER is merged in an acquisition or merger, provided, however, that
the business reason for BUYER's entering into such third party transaction is
not to defeat this covenant by BUYER not to compete.
(c) Reference is made to that certain Noncompetition and
Confidentiality Agreement between UFM and ▇▇▇▇▇ ▇▇▇▇▇ dated April 30, 1997 (the
"▇▇▇▇▇ NC Agreement") a copy of which is appended hereto as Annex B. SELLER
expressly agrees that the terms of the ▇▇▇▇▇ NC Agreement notwithstanding,
neither BUYER, nor ▇▇▇▇▇ ▇▇▇▇▇ shall be in breach of this Agreement or the ▇▇▇▇▇
NC Agreement as the case may be, per se as a result of BUYER's, its affiliate's
or its successor's ("BUYER Related Parties") employment of ▇▇▇▇▇ ▇▇▇▇▇ as
employee or consultant. Furthermore, the provisions of Sections 1 and 3 of the
▇▇▇▇▇ NC Agreement are hereby waived by SELLER in respect of such employment,
except solely insofar as such provisions apply to Restricted Flow Meters. SELLER
further agrees that Section 2 of the ▇▇▇▇▇ NC Agreement is hereby waived in part
to allow ▇▇▇▇▇ to (i) make known to BUYER Related Parties the information
referenced in the third sentence thereof insofar as it relates to the Products,
and (ii) provide Covered Property (as defined in the ▇▇▇▇▇ NC Agreement) insofar
as it relates to the Products to BUYER Related Parties (and SELLER acknowledges
that such property is the property of BUYER).
ARTICLE 10. EMPLOYEES AND EMPLOYEE MATTERS
10.1. Employment of Personnel. BUYER shall have no obligation, except
as specifically set forth in this Agreement, to make offers of employment, or
offers of
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employment on any specific terms to any of SELLER's employees in the Business.
ARTICLE 11. INDEMNIFICATION
11.1. Indemnification by BUYER. BUYER shall defend, indemnify and hold
harmless SELLER, its employees, officers, directors, agents and affiliates from
and against any and all claims, demands, causes of action, suits, judgments,
debts, liabilities and expenses (including without limitation, court costs and
attorneys' fees) resulting from, and shall reimburse SELLER upon demand for:
(a) Any and all loss, liability or damage suffered or incurred
by SELLER or its affiliates by reason of any untrue representation, breach of
warranty or non-fulfillment of any covenant or agreement by BUYER contained
herein or in any certificate, document or instrument delivered to SELLER
pursuant to or in connection herewith;
(b) any and all debts, obligations, responsibilities,
contracts and liabilities suffered or incurred by SELLER or its affiliates with
respect to or in connection with any liabilities of SELLER expressly assumed by
BUYER pursuant to this Agreement;
(c) any and all loss, liability or damage suffered or incurred
by SELLER or its affiliates by reason of or in connection with any claim for
finder's fee or brokerage or other commission arising by reason of any services
alleged to have been rendered to or at the instance of BUYER with respect to
this Agreement or any of the transactions contemplated hereby;
(d) any and all loss, liability or damage suffered or incurred
by SELLER or its affiliates by reason of the use of, and all actions or
omissions with respect to, the Acquired Assets after the Closing, except for any
acts of gross negligence by SELLER during the course of SELLER's providing of
services to BUYER during the Transition Period; and
(e) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including without limitation,
reasonable legal fees and expenses incurred in enforcing this indemnity.
11.2. Indemnification by SELLER. SELLER shall defend, indemnify and
hold harmless BUYER, its employees, officers, directors and agents from and
against any and all claims, demands, causes of action, suits, judgments, debts,
liabilities and expenses (including but not limited to court
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costs and reasonable attorneys' fees) resulting from, and shall reimburse BUYER
upon demand for:
(a) Any and all loss, liability or damage suffered or incurred
by BUYER by reason of any untrue representation, breach of warranty or
non-fulfillment of any covenant by SELLER contained herein or in any
certificate, document or instrument delivered to BUYER pursuant hereto or in
connection herewith;
(b) any and all debts, obligations, responsibilities,
contracts and liabilities suffered or incurred by BUYER with respect to or in
connection with any liabilities of SELLER not expressly assumed by BUYER
pursuant to this Agreement including, but not limited to, the Excluded
Liabilities;
(c) any and all loss, liability and damage suffered or
incurred by BUYER (except for those services of Fechtor, ▇▇▇▇▇▇▇▇ & Co., Inc.,
which have been contracted for by BUYER) by reason of or in connection with any
claim for finder's fee or brokerage or other commission arising by reason of any
services alleged to have been rendered to or at the instance of SELLER with
respect to this Agreement or any of the transactions contemplated hereby;
(d) any and all loss, liability or damage suffered or incurred
by BUYER by reason of any claim by employees of SELLER for severance pay,
pension or other benefits;
(e) any and all loss, liability or damage suffered or incurred
by BUYER or its affiliates by reason of the use of, and all actions or omissions
with respect to, the Acquired Assets and operation of the Business prior to the
Closing, including, but not limited to, any loss, liability or damage arising
out of the matters described in Section 8.1.9 or 8.1.12(b), whether or not known
to SELLER; and
(f) any and all loss, liability or damage suffered or incurred
by BUYER or its affiliates by reason of SELLER's failure to comply with the
provisions of the Bulk Sales Act in its transfer of the Acquired Assets to
BUYER.
(g) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including, without limitation,
reasonable legal fees and expenses incurred in enforcing this indemnity.
11.3. Conditions of Indemnification. The party seeking indemnification
hereunder (the "Indemnitee") shall give to the party from which indemnification
is sought hereunder (the "Indemnitor") written notice of any claim which is
subject to the indemnity obligations set forth in Section 11.1 or 11.2,
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as applicable, with sufficient promptness so as not to prejudice the other
party's interests in respect of such claim and any obligation of indemnity
arising therefrom. Such notice shall set forth all facts and other information
which the party giving the notice has as to the claim. The failure to give
prompt notice shall not affect the rights of the Indemnitee to indemnity
hereunder except to the extent that such failure either shall have materially
prejudiced the Indemnitor in the defense of such claim or shall have increased
the amount of the obligation of the Indemnitor. The Indemnitor receiving such
notice shall, within thirty days of receipt of such notice, (a) deny in writing
the claim, (b) pay the amount of the claim if a monetary amount is involved, or
(c) if a claim of a third party is involved, have the right to assume the
defense of such claim. The Indemnitor shall have the exclusive right to conduct
and control, through counsel of its own choosing, the defense of any such claim
or any action arising therefrom, provided, that in conducting the defense of any
such claim or action, the Indemnitor shall, and shall cause its counsel to,
consult with the Indemnitee and counsel, if any, selected by it, and shall keep
such counsel, if any, and the Indemnitee fully advised of the progress thereof.
If the Indemnitor fails or refuses to assume the conduct and control of the
defense of any such claim or action, then the Indemnitee may conduct and control
such defense. No settlement of any claim for which indemnification is sought
hereunder shall be made without either (x) the prior written consent of both the
Indemnitor and the Indemnitee, which consent shall not be unreasonably withheld
or delayed, or (y) the release of the Indemnitee from all liability relating to
such claim, in form and substance reasonable satisfactory to the Indemnitee and
its counsel.
11.4. Limitation on Indemnification. Notwithstanding the preceding
paragraphs, the parties shall have no obligation to provide indemnification
unless the aggregate amount of indemnification as to which it is obligated shall
exceed $30,000 in which case the indemnity shall include such first $30,000 and
shall be limited to $3 million in the aggregate in respect of claims for
indemnification made by an Indemnitor prior to the second anniversary of the
Closing ("Initial Claims") and $1,500,000 (less the amount of indemnification
amounts paid in respect of Initial Claims) in respect of claims for
indemnification made after said second anniversary; provided, however, that this
limitation shall not apply to BUYER's obligations regarding the Assumed
Liabilities, SELLER's obligations regarding the Excluded Liabilities, SELLER's
and BUYER's fees owed to any broker or finder and SELLER's obligations regarding
claims by its employees, distributors, creditors, representatives and customers,
nor to SELLER's obligation to
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provide the Acquired Assets to BUYER in accordance with the terms of this
Agreement.
ARTICLE 12. MISCELLANEOUS
12.1. Expenses. Except as otherwise provided in this Agreement, BUYER
and SELLER shall each pay its own expenses incidental to the negotiation,
preparation and performance of this Agreement and the transactions contemplated
hereby, whether or not the Closing occurs, except if failure to close is a
breach of this Agreement.
12.2. Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and such notice shall be given, all
with charges prepaid, by delivery in hand; by telecopy with original posted
first class mail, postage prepaid, within two business days thereafter; by
certified mail, postage prepaid, return receipt requested; or by private courier
requesting evidence of receipt as a part of its service, addressed as follows:
If to BUYER: Asahi/America, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
With copies to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & Hannah LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to SELLER: Universal Flow Monitors, Inc.
The Rosaen Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as may be designated in writing by any party from time
to time in accordance herewith, and shall be deemed delivered upon the earliest
to occur of delivery by hand, when so telecopied, when so placed in the mails or
when delivered to such delivery service as aforesaid.
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12.3. Captions. Article titles and headings to Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. The references
herein to Sections, Exhibits and Schedules, unless otherwise indicated, are
references to Sections of and Exhibits and Schedules to this Agreement. The
Schedules and Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein. The language used in this Agreement will be deemed to be the
language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction will be applied against any party.
12.4. Successors and Assigns; Other Parties. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that this Agreement may not be assigned by
either party without the prior written consent of the other party. No such
assignment shall relieve a party of any of its obligations hereunder without the
prior written consent of the other party. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person or entity,
other than the parties hereto and their respective permitted successors and
assigns, any rights or remedies under or by reason of this Agreement.
12.5. Entire Agreement. This Agreement (together with the Schedules and
Exhibits hereto) supersedes any other agreement, whether written or oral, that
may have been made or entered into by any of the parties hereto (or by any
director, officer or representative of such parties) relating to the matters
contemplated hereby. This Agreement (together with the Schedules and Exhibits
hereto) sets forth the entire agreement by and between the parties hereto with
respect to the subject matter hereof, and there are no agreements or commitments
with respect to the subject matter hereof that are not expressly set forth
herein.
12.6. Waiver. Except as otherwise expressly provided in this Agreement,
neither the failure nor any delay on the part of SELLER or BUYER to exercise any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or privilege preclude
any other or further exercise thereof, or the exercise of any other right, power
or privilege available to SELLER or BUYER at law or in equity. Unless otherwise
expressly provided in this Agreement, either party may at any time waive
compliance by the other with any covenants or conditions contained in this
Agreement, but only by written instrument executed by the party waiving such
compliance.
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12.7. Partial Invalidity. Whenever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.
12.8. Counterparts. This Agreement may be executed in two or more
counterparts, any or all of which shall constitute one and the same instrument.
12.9. Amendment. This Agreement may not be amended orally, but only by
an instrument in writing duly executed by the parties hereto.
12.10. Governing Law and Venue. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts applicable to contracts made and to be performed therein, without
giving effect to any principle of conflict-of-laws that would require the
application of the law of any other jurisdiction. BUYER or SELLER may choose to
bring suit in either Michigan or Massachusetts and the other party agrees to
submit to the jurisdiction of such state wherein the other party brings suit.
12.11. Schedules; Disclosure Schedule. The Disclosure Schedule, and all
other Schedules referred to in this Agreement and attached hereto, are hereby
incorporated herein and made a part hereof by this reference, as if fully
rewritten herein. The information disclosed under the Disclosure Schedule, or
any other Schedule, is disclosed for all purposes under this Agreement, and
SELLER shall have no liability in the event information required to be disclosed
in the Disclosure Schedule, or any other Schedule, is not disclosed therein but
is disclosed on another Schedule or elsewhere in the Agreement. As used herein,
the phrase "disclosed in the Disclosure Schedule" or words of similar import
shall include all matters referred to in any section or segment of SELLER's
Disclosure Schedule and all matters referred to in any document described in the
Disclosure Schedule.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
UNIVERSAL FLOW MONITORS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Its: President
-------------------------------------
thereunto duly authorized
THE ROSAEN COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Its: President
-------------------------------------
thereunto duly authorized
ASAHI/AMERICA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Its: President
-------------------------------------
thereunto duly authorized
We, the undersigned principals and majority shareholders of SELLER, for
valuable consideration paid, the receipt and sufficiency of which are hereby
acknowledged, hereby agree to be bound by the noncompetition and nonsolicitation
covenants set forth in Section 9.1.3 hereof.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
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