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Exhibit 10.04
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, made and entered into on the 12th day of
October, 1995, by and between Xxxxxx Group, Inc. ("Shareholder"), Xxxxxx
Containment Systems, Inc. ("Company"), (hereinafter Shareholder and Company
may be referred to collectively as "Sellers") and Xxxxxx Containment, Inc., a
Delaware corporation, (hereinafter referred to as "Purchaser"), a wholly-owned
subsidiary of Containment Solutions, Inc.;
W I T N E S S E T H
WHEREAS, the parties hereto desire that the Purchaser will acquire
substantially all of the assets of the Company in exchange for the
consideration herein described on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, the parties agree as follows:
Definitions
(a) Accounts Payable. Shall be defined as all trade accounts
payable, vouchered and unvouchered, as well as all commissions payable and
sales representative commissions and vacation time accrued to the Closing Date,
to be detailed on Schedule (a) to be provided to Purchaser in conjunction with
the Closing Date Balance Sheet. Excluded are accrued salaries/wages payable,
income tax from all jurisdictions, FICA and all other payroll taxes, all other
payroll withholdings, notes payable, sales and use taxes, unemployment taxes,
supervisor bonuses, accrued pension and 401k expenses and other employee
benefit plans, accrued interest, legal expenses incurred prior to Closing or
relating to events prior to Closing, accrued advertising expenses.
(b) Accounts Receivable. Shall be defined as those arising from
the ordinary course of business with the exception of certain accounts
identified as doubtful and listed at Exhibit 1(b) and with the exception of
royalty payments due to Company. Also excluded are accounts receivable
reserves on Company's books as of the Closing Date.
(c) Intellectual Property. Shall be defined as any and all (i)
patents (including, without limitation, design patents, industrial designs and
utility models, utility patents and plant patents) and patent applications
(including docketed patent disclosures awaiting filing, reissues, results of
reexaminations, divisions, continuations and extensions), patent disclosure
awaiting filing determination, inventions and improvements thereto; (ii)
trademarks, service marks, trade names, trade dress, logos, business and
product names, slogans and registrations and applications for registration
thereof; (iii) copyrights and registrations thereof and rights and unpublished
works to the extent such rights are not subsumed by copyright; (iv) inventions,
processes, designs, formulae, trade secrets, know-how, software, industrial
models, confidential and technical information, manufacturing, engineering and
technical drawings, product specifications and confidential business
information; and (v) intellectual property rights (including rights as a
licensee, if any) similar to any of the foregoing; in each case, that are
specific to the Subject Business.
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(d) Inventory. Shall be defined as Inventories of raw materials,
work in process, finished products, spare parts and office and other supplies,
and other items reflected as inventory in the financial statements (including
inventories of finished products held for packaging and/or shipping and all
types of Inventories with respect to the Subject Business which are in transit
to or from any of its manufacturing facilities, it being understood that any
such finished products or other inventories in respect of which customers have
made payment, or Company otherwise do not hold title as of the Closing Date, do
not constitute Company's Inventory).
(e) Liens. Shall be defined as all mortgages, deeds of trust,
liens, security interests, pledges, conditional sales contracts, claims, rights
of first refusal, options, charges, liabilities, obligations, easements,
rights-of-way, limitations, reservations, restrictions and other encumbrances
of any kind.
(f) Permitted Encumbrances. Shall mean Liens for current taxes
and assessments not yet due and payable, including, without limitation, Liens
for nondelinquent ad valorem taxes, nondelinquent statutory Liens, inchoate
liens, deposits for xxxxxxx'x compensation, unemployment and surety bonds
arising other than by reason of any default on the part of the Sellers.
(g) PP&E. Shall be defined as all tangible personal property and
fixtures located at the manufacturing facilities and corporate headquarters of
Company in Maryland and California including but not limited to, any machinery
and equipment tools, and furniture and furnishings as of the Closing Date, and
those items reflected in the financial statements dated as of the Closing Date.
(h) Working Capital. Shall be defined as Accounts Receivable,
Inventory, PP&E and other Assets, net of Accounts Payable and commissions
payable.
1. Transfer of Assets; Purchase Price; and Related Matters
(a) Transfer of Assets. In reliance upon the representations and
warranties of Purchaser contained herein, and on the terms and subject to the
conditions of this Agreement, the Sellers, at the Closing referred to in
Section 2 hereof, will sell, transfer, convey and deliver to Purchaser all of
the Assets as hereinafter defined:
(i) All tangible and intangible assets, including without
limitation, all personal property and fixtures wherever located, including
equipment, machinery, tools, Inventory, furniture and furnishings, all
drawings, plans, specifications, rights under contracts and agreements,
outstanding proposals, prospects/proposals/cost/process application data
bases, O & M manuals, sales rights for parts for past orders, and all
Intellectual Property, operating information, all customer information, sales
information and processes, Accounts Payable, Accounts Receivable, PP&E and
Inventory which are owned by Company and used by Company in its business of
design, manufacture and supply of aboveground storage tanks for the new and
used petroleum products market and any other market(the "Subject Business"),
except those assets being more particularly described on Exhibit "1(b)"
attached hereto ("Excluded Assets"); and
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(ii) The covenant not to compete as stated in Paragraph 5
(f) of this Agreement.
(iii) All right, title and interest of Company in and to
the name "Xxxxxx" as it relates to the Subject Business.
The Sellers shall transfer such Assets free and clear of all Liens,
except Permitted Encumbrances, such Liens, if any, to be released by the
Sellers at Closing (as hereinafter defined).
(b) Excluded Assets. Excluded from the Assets shall be cash and
cash equivalents on hand or on deposit, the accounts receivable listed on
Exhibit 1(b) hereto, goodwill of the Subject Business and the covenants not to
compete found in the Employment Agreements between Shareholder and Xxxxxxx
Xxxxx and Shareholder and Xxx Xxxxxxx dated February 22, 1991 and between
Company and Xxxxx XxXxxxxx dated August 31, 1994.
(c) Purchase Price.
(i) In reliance on the representations and
warranties of the Sellers herein contained, and on the terms and subject to the
conditions of this Agreement, the Purchaser, in consideration for the transfer
and delivery to it of the Assets as herein provided, will pay (1)
$5,933,395.00, subject to any adjustments as determined pursuant to (c)(iii)
below , and (2) the assumption by Purchaser of the Assumed Liabilities
(collectively, the "Purchase Price").
(ii) Allocation of Purchase Price. Purchaser shall
prepare in good faith and deliver to Sellers by January 31, 1996 an allocation
of the consideration paid by Purchaser for the Assets, which shall be prepared
in accordance with the methodology contained in Section 1060 of the Code. Each
party hereto agrees to complete jointly and to file separately Form 8594 with
its Federal Income Tax Return consistent with such allocation for the tax year
in which the Closing Date occurs, to file, or cause to be filed, all other Tax
Returns in a manner consistent with such allocation, and not take any actions
inconsistent therewith.
(iii) Closing Date Working Capital Adjustment.
(a) As promptly as practicable, but in any
event not later than 60 days after the Closing Date, Company shall cause to be
prepared and delivered to Purchaser a balance seet as of the Closing Date (the
"Closing Date Balance Sheet"), a computation (the "Closing Date Working Capital
Computation") of the Closing Date Working Capital on which agreed upon
procedures will be performed on inventory by a national independent accounting
firm selected by Purchaser (the "Accounting Firm"). The Company shall, and
shall cause the Accounting Firm to make available to Purchaser all work papers
and related data used in connection with the agreed upon procedures report.
Within 20 days after delivery to Purchaser of the Closing Date Balance Sheet,
Company (as guaranteed by Shareholder) shall pay to Purchaser in immediately
available funds the amount, if any, by which the Working Capital as reflected
on the Closing Date
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Balance Sheet of the Company is less than the Working Capital as reflected on
the September 30, 1995 balance sheet of the Company. Within 20 days after
delivery to Purchaser of the Closing Date Balance Sheet, the Purchaser shall
pay to the Company in immediately available funds the amount, if any, by which
the Working Capital as reflected on the Closing Date Balance Sheet is greater
than the Working Capital as reflected on the September 30, 1995 balance sheet
of the Company. Any costs incurred in preparing the Closing Date Balance Sheet
shall be shared by the parties equally.
(d) Instruments of Conveyance and Transfer. At the Closing, the
Sellers shall deliver to the Purchaser or its designee such bills of sale,
warranty deeds, endorsements, assignments, title certificates to motor
vehicles, and other good and sufficient instruments of transfer, conveyance and
assignment, in form reasonably satisfactory to the Purchaser's counsel, as
shall be effective to vest in the Purchaser good title to the Assets, free and
clear of all Liens, other than Permitted Encumbrances.
(e) Contracts, Records. At the Closing, the Sellers will deliver
to the Purchaser all contracts, commitments, and rights of the Company which
are part of the Assets, with assignment thereof, to assure the Purchaser of the
full benefit of such contracts, leases, commitments and rights. All consents,
except those from landlords of real property leases, shall be obtained by
Sellers post closing. All material contracts are listed on Exhibit 1(e). At
the Closing, the Sellers shall deliver to the Purchaser all records and other
data relating to the inventory and fixed assets acquired. Simultaneously with
such delivery, the Sellers shall take all such steps as may be reasonably
required to put the Purchaser in actual possession and control of the Assets.
(f) Employee Matters. Purchaser agrees to offer employment to all
of Company's employees except Xxxxxx X. Xxxxxxx. Sellers agree that they
shall be solely liable for any employee obligations arising prior to or
directly related to events occurring prior to the Closing Date. Sellers agree
to retain its relocation obligations toward Xxxxx XxXxxxxx under his Employment
Agreement with Company.
(g) Accounts Receivable. Purchaser will assume all Accounts
Receivable except those listed on Exhibit 1(b). Sellers shall reimburse
Purchaser for receivables purchased by Purchaser but not collected within 120
days from Closing Date, and Purchaser shall reconvey such receivables to
Company.
(h) Further Assurances. The Sellers shall, from time to time
after the Closing at the Purchaser's request and without further consideration,
execute and deliver such instruments of transfer, conveyance and assignment in
addition to those delivered pursuant to Paragraph 1(c), and take such other
action as the Purchaser may reasonably require to more effectively transfer,
convey and assign to and vest in the Purchaser, and to put the Purchaser in
actual possession and control of, any of the Assets. To the extent that the
assignment of any license, contract, commitment, or right subject to the
Assumption Agreement shall require the consent of the other party thereto, this
Agreement shall not constitute an agreement to assign the same if any attempted
assignment would constitute a breach thereof. If any lease, license, contract
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commitment, right or other assets or property which are part of the Assets
cannot be transferred effectively to the Purchaser without the consent of a
third party, the Sellers shall thereafter be obligated to use its best efforts
to assure the Purchaser of the benefits of such lease, license, contract,
commitment right or other asset or property.
(i) Liabilities Not Assumed by Purchaser. Except for liabilities
assumed under Exhibit 1(i), Purchaser shall not assume any of Company's
litigation, product liability obligations arising from tanks or other products
invoiced by Company or any of Company's liabilities and obligations of any and
every kind whatsoever, whether disclosed, undisclosed, direct, indirect,
absolute, contingent, secured, unsecured, accrued or otherwise, whether known
or unknown. Claims brought against Purchaser or expenses incurred by Purchaser
for these liabilities shall not be covered by Section 9(b) or 10(a); however,
with respect to warranty work provided by Purchaser under Section 6(b)(ii), the
liability limitation of Section 10(d) shall be in effect.
2. The Closing. The closing of the transactions provided for in Section
1 of this Agreement (herein called the "Closing") shall take place on
twenty-four hours prior notice on or before October 31, 1995 by mail, to be
effective at 11:59 p.m. Central Time. The date of the Closing is referred to
in this Agreement as the "Closing Date".
3. Representations and Warranties of the Sellers. The Sellers represent
and warrant to the Purchaser that:
(a) Organization and Existence. Company is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Delaware and has full power and authority to carry on its business as now
conducted. Complete and correct copies of the Certificate of Incorporation and
Bylaws of the Company as in effect on the date hereof have been delivered to
the Purchaser. The sole shareholder of the Company is the Shareholder. The
Company is qualified in Maryland, California and such other states as set forth
in Exhibit "3(a)" hereto, which states represent every jurisdiction where such
qualification is required except where failure to be so qualified would not
have a material adverse affect on the business, properties or assets of the
Company.
(b) Authority Relative to This Agreement. The transactions
contemplated by this Agreement have been duly authorized by the Board of
Directors and Shareholder of the Company, and no further corporate action is
necessary on the part of the Company to make this Agreement valid and binding
upon the Company in accordance with its terms. The execution, delivery and
performance of this Agreement by the Company will not result in a violation or
breach of any term or provision of, or constitute a default or accelerate the
performance required under the Articles and Bylaws of the Sellers, any
indenture, mortgage, deed of trust or other contract or agreement to which the
Company is a party or by which it or any of its properties is bound, or violate
any order, writ, injunction, decree of any court, administrative agency or
governmental body.
(c) Validity and Enforceability. This Agreement and all related
documents have been duly executed and delivered by Sellers and constitute
legal, valid and binding
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obligations of Sellers enforceable in accordance with their terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization,
or the laws affecting the enforcement of creditors' rights generally, and the
application of general principles of equity.
(d) Ownership of Assets. Except as set forth in Exhibit "3(d)"
hereto, the Company owns, has good and marketable title to, and is in
possession of all of the assets set forth on Exhibit 1(c), free and clear of
all liens, security interests and encumbrances, except for Permitted
Encumbrances.
(e) Financial Statements. The Company has delivered to Purchaser
the adjusted unaudited financial statements of the Company for the period
ending June 30, 1995. The financial statements fairly represent the financial
position of the company as of the date thereof and the results of operations
and changes in financial position for the periods then ended, provided that
such statements are subject to year-end adjustments in accordance with GAAP,
none of which are material.
(f) Absence of Certain Changes or Events. With respect to the
Subject Business, except as contemplated hereby and as listed on Exhibit 3(f)
hereto, and other than in the ordinary course of business, since June 30, 1995
the Sellers have not:
(i) Sold, transferred, or otherwise disposed of,
or agreed to sell, transfer or otherwise dispose of any of the Assets in the
ordinary course of the Subject Business;
(ii) Entered or agreed to enter into any agreement
or arrangement granting any preferential rights to purchase any of the Assets,
or requiring the consent of any party to the transfer and assignment of any of
such assets, property or rights;
(iii) Waived any rights of value with respect to
the Assets;
(iv) Made or permitted any amendment or
termination of any contract, agreement or license which they are a party or by
which they or any of the Assets is subject;
(v) To its knowledge, incurred or become subject
to any material claim or liability for any damages or alleged damages for any
actual or alleged negligence or other tort or breach of contract which might in
any fashion adversely affect the value of the Assets or the Subject Business;
(vi) Made any capital expenditure (or commitments
therefor), aggregating in excess of $5000.00 and relating to the Assets or the
Subject Business, except as shown on Exhibit 3(f)(vi); or
(vii) Entered into any other material transaction
of which Purchaser has not been formally notified in writing.
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(g) Prepayments and Deposits. There are no prepayments or
deposits which have been received and are being held by the Company and the
Company has made no prepayment or deposit other than those prepayments and
deposits set forth in Exhibit "3(g)".
(h) Absence of Undisclosed Liabilities. Except as disclosed to
the Purchaser on Exhibit 3(h), to Seller's knowledge after due inquiry, none of
the Assets are subject to any liabilities or obligations (accrued, absolute,
contingent or otherwise), or will be subject to any such liability or
obligation arising from the actions of the Sellers on or before the Closing
Date, whether or not such liability would normally be shown or reflected on a
balance sheet prepared in a manner consistent with generally accepted
accounting principles. Except as disclosed to the Purchaser in an exhibit
hereto, there are no facts in existence on the date hereof and known by the
Sellers which might reasonably serve as the basis for any liabilities or
obligations of the Company and which would materially adversely affect the
value of the Assets or the Subject Business.
(i) Tax Matters. To the reasonable knowledge of Sellers, after
due inquiry, all federal, state, county, local and other taxes, including,
without limitation, income taxes, corporate franchise taxes, payroll taxes,
customs fees and duties, sales taxes and ad valorem taxes, due and payable by
the Company on or before the date of this Agreement have been timely paid, and
all tax returns and reports required to be filed by the Company have been
timely filed with all such taxing authorities. No assessments or deficiencies
have been made against the Company and no extensions of time are in effect for
the assessment of deficiencies.
(j) Patents, Etc. The Sellers have delivered to the Purchaser a
true and complete Exhibit (Exhibit "3(j)") setting forth all Intellectual
Property patents, inventions, trademarks, tradenames, brand names or copyrights
owned or used by or licensed to or by the Company (if any), and relating to the
Assets or the Subject Business, together with a summary description and full
information in respect of the filing, registration or issuance and the status
thereof, except for rights to intellectual property arising under common law.
Except as disclosed in Exhibit "3(j)", the Sellers have no knowledge after
reasonable inquiry that the operations of the Subject Business infringe upon
the patent, trademark or other similar rights of any other person or entity.
Except as disclosed in Exhibit "3(j)", the Company has asserted no claim that
the operations of any other entity infringe upon the Intellectual Property of
the Company.
(k) Insurance. Attached hereto as Exhibit "3(k)" is an Exhibit
setting forth a list and brief description of all policies of insurance, held
by the Company applicable to any Assets or the Subject Business.
(l) Licenses, Permits, Etc. Attached hereto as Exhibit "3(l)" is
a list and brief description of all licenses and permits held by the Company,
copies of which licenses and permits have been furnished to the Purchaser. To
the best knowledge of the Sellers after reasonable inquiry, except as noted on
Exhibit "3(l)", such licenses and permits constitute all licenses and permits
necessary to own the Assets or conduct the Subject Business, and each is in
full force and effect. Except as set forth on Exhibit "3(l)", the
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Sellers have no knowledge of any violation that would materially adversely
affect the value of the Assets or the Subject Business; and to the best
knowledge of the Sellers after reasonable inquiry, no proceeding is pending or
threatened seeking the revocation or limitation of any such license or permit.
Except as set forth on Exhibit "3(l)", to the best knowledge of the Sellers the
licenses and permits are assignable.
(m) Litigation. Except as set forth on Exhibit "3(m)" hereto,
there are no claims, actions, suits, proceedings or investigations pending, or
to the best knowledge of the Sellers, threatened against or affecting the
Company or any of its properties, at law or in equity or before or by any court
or federal, state, municipal or other governmental department, commission,
board, agency or instrumentality. To the best knowledge of the Sellers, the
Sellers are not subject to any court or administrative order, injunction or
similar decree, the enforcement of which would materially adversely affect the
value of the Assets or the Subject Business.
(n) Compliance with Laws. Except as disclosed on Exhibit "3(n)"
hereto, the Sellers have no knowledge after reasonable inquiry that the
operations of the Subject Business, either historically or as now conducted, or
that the ownership of the Assets violate any federal, state or local law,
ordinance, rule or regulation, (including, without limitation, any laws or
regulations relating to the environment or the handling, treatment or disposal
of wastes or products of the Subject Business) the violation of which would
materially adversely affect the value of the Assets or the Subject Business.
(o) Brokers. The Sellers are not a party to or in any way
obligated under any contract or other agreement, and there are no outstanding
claims against them, for the payment of any broker's or finder's fee in
connection with the origin, negotiation, execution or performance of this
Agreement.
(p) No Default. To the Company's knowledge, the Company is not
in default in any respect of any obligation to be performed by the Company
under any material contract, lease, agreement, commitment or undertaking which
default would materially adversely affect the value of the Assets or the
Subject Business to which the Company is a party or by which the Company or the
Assets are bound, nor has Company waived any material right under any such
contract, lease, agreement, commitment or undertaking.
(q) Product Liability. Except as listed on Exhibit 3(q), the
Sellers have has no knowledge after reasonable inquiry of any state of facts or
the occurrence of any event forming the basis of any present claim against the
Company for product liability on account of any express or implied warranty.
Warranty work over the last three years has not been material to the Subject
Business.
(r) Disclosure. The representations and warranties contained in
the Articles and the Exhibits hereto, do not and shall not, when taken as a
whole, contain any untrue statement of a material fact or omit any material
fact necessary to make the statements contained therein or herein not
misleading in view of the circumstances under which they were made. To the
extent that Purchaser (or its officers or agents) has actual
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knowledge of any discrepancy, statement or statement of facts, the applicable
representation or warranty known to be untrue or misleading shall be
unenforceable to the extent of the knowledge of such discrepancy, statement or
state of facts. In all other respects, the representations and warranties of
Sellers shall remain unaffected. Disclosures made in any of the Exhibits or
exhibits to this Agreement are hereby deemed to be made for purposes of all
other schedules or exhibits.
(s) Contracts. Exhibit 1(e) lists all material contracts of the
Company.
All exhibits delivered to the Purchaser by the Sellers pursuant to
this Section shall be delivered upon the execution of this Agreement and shall
be signed for identification by Sellers.
4. Representations and Warranties of the Purchaser. Purchaser
represents and warrants to the Sellers that:
(a) Organization and Existence. The Purchaser is a corporation
duly organized validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power to enter into and
perform this Agreement.
(b) Authority Relative to This Agreement. The transactions
contemplated by this Agreement have been duly authorized by the Board of
Directors of Purchaser, and no further corporate action is necessary on the
part of the Purchaser to make this Agreement valid and binding upon the
Purchaser in accordance with its terms. The execution, delivery and
performance of this Agreement by the Purchaser will not result in a violation
or breach of any term or provision of, or constitute a default or accelerate
the performance required under, any indenture, mortgage, deed of trust or other
contract or agreement to which the Purchaser is a party or by which it or any
of its properties is bound, or violate any order, writ, injunction or decree of
any court, administrative agency or governmental body.
(c) Validity and Enforceability. This Agreement and all related
documents have been duly executed and delivered by Purchaser and constitute
legal, valid and binding obligations of Purchaser enforceable in accordance
with their terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, or other laws affecting the enforcement of
creditors' rights generally, and the application of general principles of
equity.
(d) Brokers. The Purchaser is not a party to or in any way
obligated under any contract or other agreement and there are no outstanding
claims against it for the payment of any broker's or finder's fee in connection
with the origin, negotiation, execution or performance of this Agreement.
(e) Consents. The consummation of the transactions contemplated
herein by the Purchaser shall not require the consent, approval or
authorization of any third party.
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(f) Compliance with Laws. Except as disclosed in an exhibit
hereto, the Purchaser has no knowledge after reasonable inquiry that its
operations, either historically or as now conducted violate any federal, state
or local law, ordinance, rule or regulation, the violation of which would
adversely affect its ability to perform under this Agreement.
(g) No Default. To the Purchaser's reasonable knowledge, it is
not in default in any respect of any obligation to be performed by the
Purchaser under any contract, lease, agreement, commitment or undertaking which
default would adversely affect its ability to perform under this Agreement.
(h) Absence of Certain Changes. Since June 30, 1995, there has
been no material change in the business, prospects or condition, financial or
otherwise, of the Purchaser except changes in the ordinary course of business
affecting the entire industry which in the aggregate have not been materially
adverse.
(i) Use of Equipment. Purchaser shall use the Assets in the
business of manufacturing.
5. Covenants of Sellers. The Sellers covenant with the Purchaser that:
(a) Conduct of Business. From the date of this Agreement to the
Closing Date, the business of the Company will be operated only in the ordinary
course, and in particular, without the prior written consent of the Purchaser,
the Sellers will not:
(i) Cancel or permit any insurance to lapse or terminate,
unless renewed or replaced by like coverage;
(ii) Change the Company's Articles of Incorporation or Bylaws
or the composition of Shareholder;
(iii) Be in default under any material contract, agreement,
commitment or undertaking of any kind or under any local, state or federal
permits;
(iv) Knowingly violate or fail to comply with all laws
applicable to it or its properties or business;
(v) Commit any act or permit the occurrence of any event or
the existence of any condition of the type described in Paragraph 3(f) hereof;
or
(vii) Merge, consolidate or agree to merge or consolidate
with or into any other corporation.
(b) Access. From and after the date of this Agreement, Company
and Purchaser will provide to each other and their respective counsel,
accountants, engineers and other representatives, full and free access to the
records of the Subject Business during normal business hours upon prior
reasonable notice. Expenses of providing such access shall be paid by the
party requesting such access.
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(c) Preservation of Business Organization. The Sellers will use
their best efforts to preserve the business organization of the Company and to
preserve for the Purchaser the Company's good relations with all customers and
others having business relations with the Company.
(d) Trade Secrets. From and after the Closing Date, Sellers will
not use or divulge to any competitor or unauthorized person any confidential
information, and it will use all reasonable and proper efforts to insure that
its agents do not use or divulge any confidential information, trade secrets,
processes, formulae or know-how relating to the Assets or the Subject Business.
(e) Consents of Third Parties. The Sellers will use their best
efforts to obtain, on a post-closing basis, where required, the consents of all
third parties to the assignment and transfer of all contracts, licenses,
registrations and commitments affecting the Assets which require such consents.
(f) Non Competition. SELLERS AGREE THAT DURING A THREE YEAR
PERIOD COMMENCING ON THE CLOSING DATE, THEY WILL NOT, DIRECTLY OR INDIRECTLY,
FOR THEIR OWN ACCOUNT OR FOR THE ACCOUNT OF OTHERS, WHETHER AS PRINCIPAL OR
AGENT OR THROUGH THE AGENCY OF ANY CORPORATION, PARTNERSHIP, ASSOCIATION OR
OTHER BUSINESS ENTITY, ENGAGE IN ANY ACTIVITY SIMILAR TO OR COMPETITIVE WITH
THE ACTIVITIES OF THE COMPANY AS PERFORMED BY THE COMPANY IN THE THREE YEAR
PERIOD ENDING ON THE CLOSING DATE IN THE ABOVE GROUND TANK INDUSTRY FOR
PETROLEUM AND PETROLEUM-BASED PRODUCTS IN THE UNITED STATES AND ALL OTHER
MARKETS WORLDWIDE (OTHER THAN THE SALE, LEASE OR OTHER ACTIVITIES INVOLVING
INTERMEDIATE BULK CONTAINERS) . THE FOREGOING AGREEMENT NOT TO COMPETE SHALL
NOT BE HELD INVALID OR UNENFORCEABLE BECAUSE OF THE SCOPE OF THE SAID TERRITORY
OR THE ACTIONS RESTRICTED THEREBY, OR THE PERIOD OF TIME WITHIN WHICH SUCH
AGREEMENT IS OPERATIVE; BUT ANY JUDGMENT OF A COURT OF COMPETENT JURISDICTION
MAY DEFINE THE MAXIMUM TERRITORY AND ACTIONS SUBJECT TO AND RESTRICTED BY THIS
PARAGRAPH AND THE PERIOD OF TIME DURING WHICH SUCH AGREEMENT IS ENFORCEABLE.
(g) Shareholders' Meeting. The Sellers will cause to be executed
before Closing, a consent of the Shareholder of the Company for the purpose of
approving the terms and conditions of this Agreement and authorizing the
transactions contemplated herein.
(h) Execution of Assumption Agreement. A duly authorized officer
of the Company shall have executed and delivered the Assumption Agreement to
Purchaser.
(i) Product Warranty and Liability. Subject to Section 6(b)(ii),
Sellers shall be responsible for all warranty and product liability obligations
on product invoiced by the Subject Business prior to the Closing Date.
(j) Transition Issues. Shareholder shall continue to
provide to Purchaser hardware and software for Accounts Payable , General
Ledger, PP&E and Payroll processing for
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the cost of a dedicated line to Atlanta for a period of four months after
Closing Date. Xxx Xxxxxxx will be compensated by Shareholder and made
available to Purchaser on a first priority basis for a period of 90 days from
Closing Date and on an as-needed basis for the 90 days thereafter. Purchaser
shall be responsible for payment of all of Xxxxxxx'x travel, entertainment and
other business-related expenses incurred during the course of his work on
behalf of Purchaser. Purchaser shall provide office space, telephone and fax
availability to Xxxxxxx.
(k) Confidentiality of Information Furnished by Purchaser.
Sellers and their representatives will treat all information related to these
transactions as confidential. Sellers agrees not to use any of this
information except in connection with this Agreement. Sellers will use their
best efforts to keep such information confidential. If the transactions
contemplated by this Agreement are not consummated, Sellers will return to the
Purchaser all information relating to Purchaser (and all copies thereof) then
in their possession.
(l) Name Change. Within 5 business days after Closing, the
Sellers shall amend the name of the Company to a name that is not deceptively
similar to Xxxxxx Containment, Inc.
(m) Return of Property. Sellers hereby agree that they will
promptly distribute to Purchaser all funds, mail and other items owned by
Purchaser that come into the possession of Sellers at any time after Closing.
6. Covenants of the Purchaser. The Purchaser covenants with the Sellers
that:
(a) Confidentiality of Information Furnished by Sellers. The
Purchaser and its representatives will treat all information furnished pursuant
to Paragraph 5(b) (including financial statements) as confidential; however, it
is understood that such information must be revealed to various employees and
agents of the Purchaser for analysis and evaluation. Purchaser agrees not to
use any of this information except in connection with this Agreement. The
Purchaser will use its best efforts to keep such information confidential. If
the transactions contemplated by this Agreement are not consummated, the
Purchaser will return to the Sellers all such information (and all copies
thereof) then in its possession.
(b) Product Warranty. (i) Purchaser shall assume warranty
obligations for products invoiced after the Closing Date; (ii) Purchaser
agrees to perform, in accordance with applicable warranties, all warranty
services to repair or replace defective parts or products sold or manufactured
by the Subject Business prior to the Closing Date. The price to Sellers shall
be the cost to Purchaser of such service.
(c) Notification of Creditors Purchaser will waive compliance
with any applicable bulk sales law.
(d) Return of Property. Purchaser hereby agrees that it will
promptly distribute to Sellers all funds, mail and other items owned by
Purchaser that come into the possession of Purchaser at any time after Closing.
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(e) Royalty Payments. Fourth quarter 1995 royalty payments will
be prorated as of Closing Date. Sellers shall be reimbursed on or before
2/14/96 and thereafter, within ten (10) business days of receipt of such
royalty payment.
7. Conditions to Obligations of the Purchaser. The obligations of the
Purchaser under this Agreement shall be subject to the satisfaction of the
following conditions:
(a) Representations and Warranties of Sellers True at Closing.
The Purchaser shall not have discovered any material error, misstatement or
omission in the representations and warranties made by the Sellers in Section 3
hereof; the representations and warranties made by the Sellers shall be deemed
to have been made again at and as of the time of Closing and shall then be true
in all material respects, except to the extent that such representations and
warranties shall have been made as of a specified date; the Sellers shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by them at or prior to Closing; and
Sellers shall provide Purchaser with a certificate from Sellers' Presidents,
dated as of Closing that the above conditions have been fulfilled.
(b) Approval of Counsel. All actions, proceedings, instruments
and documents reasonably required to carry out the transactions contemplated by
this Agreement or incidental thereto and all other related legal matters shall
have been approved by counsel for the Purchaser, which approval shall not be
unreasonably withheld or delayed, and such counsel shall have been furnished
with such certified copies of actions and proceedings and other such
instruments and documents as such counsel shall have reasonably requested.
(c) Opinion of Counsel for the Sellers. The Purchaser shall have
received an opinion of counsel for the Sellers, dated the Closing Date, to the
effect that:
(i) The Company is a corporation duly organized
and validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to carry on its business as
now conducted;
(ii) This Agreement has been duly authorized by
all necessary action on the part of the Sellers and has been duly executed and
delivered by Sellers and constitutes a valid and binding obligation of Sellers
enforceable in accordance with its terms (with the usual creditors' rights
exceptions);
(iii) The instruments of assignment, transfer and
conveyance delivered by Sellers to Purchaser pursuant to this Agreement have
been duly authorized by all necessary action of the Sellers, executed and
delivered by Sellers;
(iv) The consummation of the transactions
contemplated by this Agreement will not result in a breach of or constitute a
default under the Certificate of Incorporation or Bylaws of the Company; and
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(v) Such counsel does not know of any litigation
or other proceeding or governmental investigation pending or threatened against
the Company or affecting the Assets, the Subject Business or the transactions
contemplated by this Agreement which, if adversely determined would have a
materially adverse effect on the value of the Assets or the Subject Business.
Such opinion may contain such exceptions, qualifications and
explanations as shall be reasonably acceptable to Purchaser and its counsel.
(d) Changes in Business. Prior to the Closing, there shall have
been no changes in the business, properties or operations of the Sellers since
the date of this Agreement which would have a material adverse effect on the
value of the Assets or the Subject Business.
(e) Absence of Restraint. No order to restrain, enjoin or
otherwise prevent the consummation of this Agreement or transactions in
connection herewith shall have been entered and, on the Closing Date, there
shall not be any pending or threatened litigation in any court, or any
proceeding by or before any governmental commission, board or agency, seeking
to restrain or prohibit consummation of the transactions contemplated hereby or
in which divestiture, rescission or significant damages are sought in
connection with the transactions contemplated hereby, and no investigation by
any governmental agency shall be pending or threatened which might result in
any such litigation or other proceeding.
(f) Approval. The sole Shareholder of the Company shall have
approved the transactions contemplated by the Agreement and such approvals
shall not have been rescinded.
(g) Governmental Consents. Any and all necessary consents of and
filings with any governmental authority or agency relating to the consummation
of the transactions contemplated by this Agreement shall have been obtained or
accomplished, and no action, proceeding, inquiry or investigation by any
private or governmental agency shall have been brought or threatened which
questions the validity or legality of the transactions contemplated by this
Agreement.
(h) Charter; Good Standing; Incumbency. There shall have been
delivered to Purchaser (i) a certificate dated within ten (10) days of Closing
Date from the Secretary of State of Delaware with respect to the incorporation
and good standing of, and the payment of franchise taxes by Company, (ii)
copies of Articles, Bylaws and all amendments and the resolutions of the Board
of Directors of Company approving these transactions, and (iii) a certificate
dated Closing Date with respect to the incumbency and signatures of all
officers of Company signing this Agreement and any certificate, agreement or
instrument delivered on behalf of Sellers in connection with this Agreement.
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(i) Employment. Purchaser shall have entered into Employment
Agreements under terms and conditions acceptable to Purchaser, including
agreements of non-competition, with Xxxxxxx Xxxxx and Xxxxx XxXxxxxx.
8. Conditions to Obligations of the Sellers. The obligations of the
Sellers under this Agreement shall be subject to the satisfaction of the
following conditions:
(a) Representations and Warranties of Purchaser True at Closing.
The Sellers have not discovered any material error, misstatement or omission in
the representations and warranties made by Purchaser in Section 4 hereof; the
representations and warranties made by the Purchaser shall be deemed to have
been made again at and as of the time of Closing and shall then be true in all
material respects, except to the extent that such representations and
warranties shall have been made as of a specified date; and the Purchaser shall
have performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by it at or prior to Closing; and
Purchaser shall provide Sellers with a Certificate from Purchaser's President
dated as of Closing that the above conditions have been fulfilled.
(b) Approval of Counsel. All actions, proceedings, instruments
and documents required to carry out the transactions contemplated by this
Agreement or incidental thereto and all other related legal matters shall have
been approved by counsel for the Sellers, and such counsel shall have been
furnished with such certified copies of actions and proceedings and other such
instruments and documents as such counsel shall have reasonably requested.
(c) Absence of Restraint. No order to restrain, enjoin or
otherwise prevent the consummation of this Agreement or transactions in
connection herewith shall have been entered and, on the Closing Date, there
shall not be any pending or threatened litigation in any court, or any
proceeding by or before any governmental commission, board or agency, with a
view to seeking to restrain or prohibit consummation of the transactions
contemplated hereby or in which divestiture, rescission or significant damages
are sought in connection with the transactions contemplated hereby, and no
investigations by any governmental agency shall be pending or threatened which
might result in any such litigation or other proceeding.
(d) Opinion of Purchaser's Counsel. Sellers shall have received
an opinion of counsel for the Purchaser, dated the Closing Date, to the effect
that:
(i) Xxxxxx Containment, Inc. is a corporation
duly organized and validly existing and in good standing under the laws of the
State of Delaware and has all requisite power and authority to carry on its
business as now conducted.
(ii) This Agreement has been duly authorized by
all necessary action on the part of Purchaser and has been executed and
delivered by Purchaser and constitutes a valid and binding obligation of
Purchaser enforceable in accordance with its terms.
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(iii) The consummation of these transactions will
not result in a breach of or constitute a default under the Articles of
Incorporation or Bylaws of Purchaser.
(e) Changes in Business. Prior to Closing, there shall have been
no changes in the business, properties or operation of Purchaser since the date
of this Agreement which would have a material affect on Purchaser's ability to
perform under this Agreement.
(f) Government Consents. Any and all necessary consents of and
filings with any governmental authority or agency relating to the consummation
of the transactions contemplated by this Agreement shall have been obtained or
accomplished, and no action, proceeding, inquiry or investigation by any
private or governmental agency shall have been brought or threatened which
questions the validity or legality of the transactions contemplated by this
Agreement.
(g) Execution of Employment Agreement. Purchaser shall have
executed the agreements described at Section 7(i).
9. Nature and Survival of Representations and Warranties.
(a) Nature of Statements. All statements contained in any
exhibit hereto or in any certificate delivered by or on behalf of any of the
Sellers or the Purchaser pursuant to this Agreement shall be deemed
representations and warranties by any of the Sellers or the Purchaser, as the
case may be.
(b) Survival of Representations and Warranties. Regardless of
any investigation at any time made by or on behalf of any party hereto or of
any information any party may have in respect thereof, but subject to the
provisions of Section 10 hereof, all covenants, agreements, representations and
warranties made hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall survive the Closing and remain effective
for a period for two years from the Closing Date; provided, however, that any
bona fide claim shall continue in effect until such time as such claim has been
resolved or settled and the covenants in Paragraph 10(a) shall survive in
accordance with their term.
10. Indemnification.
(a) Indemnification by Sellers. Subject to the conditions
hereinafter set forth, for a 2 year period, the Sellers jointly and severally
shall indemnify and hold harmless the Purchaser against any loss, damage or
expense (including reasonable attorney's fees) incurred by the Purchaser and
caused by or arising out of (i) any claim made against the Purchaser by a third
party in respect of any liabilities or obligations of the Company not assumed
by the Purchaser; (ii) any breach or default in the performance by any of the
Sellers of any covenant or agreement of any of the Sellers contained in this
Agreement; (iii) any breach of a warranty or representation made by any of the
Sellers pursuant to Section 3 or Paragraph 7(a) hereof, or in any certificate
required to be delivered pursuant to this Agreement, or any material
misstatement or omission in any exhibit attached or to be delivered pursuant to
this Agreement; (iv) to the extent not reflected on the
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Closing Date Balance Sheet, any claim made against the Purchaser by a creditor
of the Company pursuant to the Bulk Sales Laws of the States of Maryland or
California and such other jurisdictions applicable to Company's operations; or
(v) all costs associated with the cleanup of any contaminated soil or materials
spilled, disposed of or buried by Company or located on the property operated
by Company prior to the Closing Date. If any third party shall assert any
claim or bring any action against the Purchaser which, if successful, might
result in a right of indemnification hereunder, the Sellers shall be given
written notice thereof in accordance with the provisions of Paragraph 10(b) of
this Agreement. Thereafter, the Purchaser shall have the option to defend such
claim or action at its own expense. The Purchaser agrees, however, that if it
chooses to defend the claim, it will not compromise or settle such claim
without the consent of the Sellers, if the election of such settlement or
compromise would require indemnification by the Sellers for all or any part of
the amount of such compromise or settlement, which consent the Sellers shall
not unreasonably withhold; provided, that if the Sellers withhold approval of
settlement or compromise for any reason, the Purchaser shall have the option of
settling or compromising the action at its own expense, or of turning over the
defense, in its entirety, to the Sellers under this Paragraph, in which case
the Sellers shall indemnify and hold the Purchaser harmless against the amount
of any loss in excess of such settlement or compromise as well as any amount
the Sellers would have owed the Purchaser pursuant to this Paragraph if such
settlement or compromise had been consummated.
(b) Procedure for Making Claims. If and when the Purchaser
desires to claim indemnification by the Sellers pursuant to the provisions of
this Section, the Purchaser shall deliver to each of the Sellers within 30 days
of its receipt of a claim, a certificate signed by the President or any Vice
President of the Purchaser (the "Notice of Claim") (i) stating that the
Purchaser has paid or properly accrued or anticipated that it may be required
to accrue losses, damages or expenses to which the Purchaser is entitled to
indemnification pursuant to this Section, and (ii) specifying the individual
items of loss, damage or expense included in the amount so stated, the date
each such item was paid or properly accrued, if any, and the nature of the
misrepresentation, breach or warranty or claim to which such item is related.
If any Seller objects to such claim or needs more information, he may deliver
written notice of objection (the "Notice of Objection") to the Purchaser within
thirty (30) days after the Purchaser's delivery of the Notice of Claim to each
Seller. The Notice of Objection shall set forth the grounds upon which the
objection is based. If no Notice of Objection shall have been so delivered
within such thirty (30) day period, the Sellers shall be deemed to have
acknowledged the correctness of the claim or claims specified in the Notice of
Claim for the full amount thereof, and shall thereupon pay to the Purchaser, on
demand, in cash, an amount equal to the amount of such claim or claims.
(c) Indemnification by Purchaser. The Purchaser agrees to
indemnify and hold the Sellers harmless against and in respect of (i) any
damage, claim, liability, deficiency, loss, cost or expense (including
reasonable attorney's fees) sustained by the Sellers arising out of or
resulting from (a) any misrepresentation by the Purchaser contained in this
Agreement (or any collateral documents), in any exhibits attached hereto or
thereto or in a certificate to be delivered at the Closing, or (b) the breach
of or default under any
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warranty or representation, or the nonfulfillment of or default under any
agreement or covenant, of the Purchaser contained in this Agreement (or
collateral documents), exhibits or certificates hereto, (c) post-closing
activities of Purchaser which involve the use by Purchaser of those assets
purchased hereby to the extent not materially caused or contributed to by
pre-closing actions or omissions of Sellers and (ii) all reasonable costs and
expenses (including reasonable attorneys' fees) incurred by the Sellers in
connection with any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section; (iii) to
the extent reflected on the Closing Date Balance Sheet, any claim made against
Sellers by a creditor of the Company pursuant to the Bulk Sales Laws of the
States of Maryland or California and such other jurisdictions applicable to
Company's operations. If Purchaser fails to meet its obligations of indemnity
hereunder, Containment Solutions, Inc. shall fulfill this obligation. The
procedure for making a claim under this Paragraph shall be the same as that
set forth in Paragraph 10(b) of this Agreement.
(d) Liability Limitation. Purchaser shall have no right to make
any claim under this Agreement except for the amount by which the aggregate of
all unreimbursed claims hereunder that Purchaser would have been entitled to
assert against Sellers absent this Section 10(d) exceeds $100,000.00, and then
only to the extent that such unreimbursed claims are presented to Sellers
within the applicable time periods prescribed in this Section 10, other than
warranty claims as provided under Section 1(i); provided however, that such
limitations shall not apply with respect to (a) liability or obligation of
Sellers to perform any covenants contained herein or (b) liabilities and
obligations of Sellers set forth at Section 1(g).
11. Termination.
(a) Best Efforts to Satisfy Conditions. The Sellers agree to use
all reasonable and proper efforts to bring about the satisfaction of the
conditions specified in Section 7 hereof and the Purchaser agrees to use its
best efforts to bring about the satisfaction of the conditions specified in
Section 8 hereof.
(b) Termination. This Agreement may be terminated by:
(i) The mutual consent of the Sellers and the
Purchaser;
(ii) The Purchaser if a material default shall be
made by the Sellers in the observance of or in the due and timely performance
by the Sellers of any of the covenants of the Sellers herein contained, or if
there shall have been a material breach by the Sellers of any of the warranties
and representations of the Sellers herein contained, or if the conditions of
this Agreement to be complied with or performed by the Sellers at or before the
Closing shall not have been complied with or performed at the time required for
such compliance or performance and such noncompliance or nonperformance shall
not have been waived by the Purchaser; or
(iii) The Sellers if a material default shall be
made by the Purchaser in the observance of or in the due and timely performance
by the Purchaser of any of the
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covenants of the Purchaser herein contained, or if there shall have been a
material breach by the Purchaser of any of the warranties and representations
of the Purchaser herein contained, or if the conditions of this Agreement to be
complied with or performed by the Purchaser at or before the Closing shall not
have been complied with or performed at the time required for such compliance
or performance and such noncompliance or nonperformance shall not have been
waived by the Sellers.
In the event of termination of this Agreement as provided above, written
notice thereof shall be given to the other party within five (5) business days.
No termination pursuant to paragraphs (ii) and (iii) hereunder shall relieve
any party hereto from any liability in respect of such party's breach or
indemnification obligations hereunder.
12. Exhibits. If any exhibit recited to be attached hereto is not so
attached at the time of the execution hereof, the same may be prepared after
execution of this Agreement and, upon approval by notation of said exhibit by a
representative of the Sellers and a representative of the Purchaser, shall
become a part of this Agreement.
13. Miscellaneous.
(a) Expenses. Whether or not the transactions contemplated
hereby shall be consummated, each of the parties will pay all costs and
expenses (including Closing costs) of its performance of and compliance with
this Agreement.
(b) Notices. All notices, requests and other communications
hereunder shall be in writing and shall be deemed to have been given if
personally delivered or mailed, first class, registered or certified mail,
postage prepaid:
If to Sellers: Xxxxxxx X. Xxxxx
Xxxxxx Group, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX. 00000
With a copy to: Xxxx X. Xxxx
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 X Xxxxxx X.X.
Xxxxx 000, Xxxx Xxxxx
Xxxxxxxxxx, X.X. 00000
If to Purchaser: Xxxxxxx X. Xxxxxxx
Xxxxxx Containment, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
With a copy to: Xxxxx X. Xxxxx, Esq.
X.X. Xxx 0000
Xxxx Xxxx, XX 00000
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Or at such other address as shall be given in writing by any person
identified above to each of the other such persons.
(c) Assignment. This Agreement may not be assigned by any party
hereto without the prior written consent of the other parties.
(d) Successors Bound. Subject to the provisions of Paragraph
13(c), this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
(e) Section and Paragraph Headings. The section and paragraph
headings in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
(f) Amendment. This Agreement may be amended only by an
instrument in writing executed by the parties hereto.
(g) Entire Agreement. This Agreement, the exhibits hereto, and
the documents specifically referred to herein constitute the entire agreement,
understanding, representations and warranties of the parties hereto.
(h) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one of the same instrument.
(i) Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first above written.
AGREED TO BY SELLERS:
Xxxxxx Group, Inc.
/S/ XXXXXXX X. XXXXX
------------------------------
By: XXXXXXX X. XXXXX
Title: VP & CFO
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Xxxxxx Containment Systems, Inc.
/s/ XXXXXX X. XXXXXXX
------------------------------
By: Xxxxxx X. Xxxxxxx
Title: President
AGREED TO BY PURCHASER:
Xxxxxx Containment, Inc.
/s/ XXXXXXX X. XXXXXXX
------------------------------
By: Xxxxxxx X. Xxxxxxx
Title: President
AGREED TO BY CONTAINMENT SOLUTIONS, INC.
for the obligation set forth in Section 10(c) only
/s/ XXXXXXX X. XXXXXXX
------------------------------
By: Xxxxxxx X. Xxxxxxx
Title: President
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