AGREEMENT FOR PURCHASE AND SALE OF ASSETS
THIS AGREEMENT, made as of the ______ day of April, 1994, by and
between Earth Care Products of America, Inc., a Florida corporation ("Buyer"),
Xxxxxxx Sales Corp., a Tennessee corporation ("Seller"), and Xxxx and Xxxxxx
X. Xxxxx (collectively, the "Brocks").
W I T N E S S E T H:
WHEREAS, Buyer desires to purchase from the Seller, and the Seller
desires to sell to the Buyer, all of the Assets (as hereinafter defined); and
WHEREAS, as a material inducement to Buyer to purchase the Assets
of Seller, Brocks, the sole shareholders of Seller, desire to make certain
representations and warranties and agrees to be bound by certain covenants and
obligations as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, representations and warranties contained in this Agreement, and
for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the parties agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Transfer of Assets. Subject to the terms and conditions set
forth in this Agreement, Seller does hereby sell, convey, transfer, assign and
deliver to Buyer, and Buyer does hereby purchase from Seller, all of the
assets, properties and businesses of Seller, tangible or intangible, as the
same shall exist on the date hereof (exclusive of real estate property) (the
assets being transferred hereunder are collectively referred to as the
"Assets"), including without limitation, the following:
(a) All machinery, tools, furniture, equipment, leasehold
improvements and other tangible personalty owned by Seller, including without
limitation those items described on Schedule 1.1(a) attached hereto and
incorporated herein (collectively, the "Equipment");
(b) All of Seller's inventory of merchandise, raw
materials, plastics, work in process and finished goods, including without
limitation those items described on Schedule 1.1(b) attached hereto and
incorporated herein (collectively, the "Inventory");
(c) All of Seller's other recyclable goods, including
without limitation, any scrap aluminum and copper metals;
(d) All licenses, consents and permits issued by any
governmental authority which are assignable and which relate to the Seller or
its business;
(e) All warranties which the Seller may have received from
manufacturers or suppliers as to any of the Assets which are transferable;
(f) All of Seller's customer lists, profile cards,
telephone lists and mailing lists;
(g) All formulae, mixes, secret processes and know how
with respect to the manufacture and production of Seller's products, including
without limitation, plastic lumber and reinforced plastic lumber; and
(h) All rights to the Seller's telephone numbers and Post
Office Boxes, if any, and, in order to eliminate potential confusion with past
customers of Seller, the name "Xxxxxxx Sales", including any trademarks,
servicemarks or copyrights related thereto.
1.2 Purchase Price.
(a) Subject to adjustment as provided in paragraph (b)
hereof, the purchase price for the Assets shall be Two Hundred Seventy
Thousand Dollars ($270,000) (the "Purchase Price") plus the assumption of the
liabilities set forth in Section 1.4. The Purchase Price shall be payable by
the Buyer as follows: (i) Fifty Thousand Dollars ($50,000) shall be paid to
Seller by cashier's check or other immediately available funds on the date
hereof and shall be evidenced by a promissory note in the form attached hereto
as Exhibit 1.2(a) (the "Note"), which Note shall be guaranteed by the Brocks
pursuant to a Guaranty in the form attached hereto as Exhibit 1.2(a)-2 (the
"Guaranty"); and (ii) the balance of Two Hundred Twenty Thousand Dollars
($220,000) (the "Remaining Balance") shall be paid by cashier's check or other
immediately available funds on the Closing Date (as defined in Section 7.1
hereof). Simultaneous with the execution of this Agreement, Seller shall
execute and deliver to Buyer the Note and Brocks shall execute and deliver the
Guaranty.
(b) The Purchase Price shall be subject to downward
adjustment by an amount equal to any payments received by Seller prior to the
Closing Date for Work-in-process (as defined in Section 1.4 hereof)(the
"Prepayments"). A list of Prepayments as of April 14, 1994 is attached hereto
as Schedule 1.2(b) and shall be updated as of the Closing Date.
1.3 Allocation of Purchase Price. Buyer and Seller and Brocks
agree that they each will take the same position, as determined by Buyer in
its reasonable discretion, with regard to the allocation of the purchase price
(which may include allocations to the Employment Agreements, including the
covenants not to compete contained therein, as provided by Sections 6.10 and
6.12 hereof) for tax purposes and will use such allocation in any and all tax
returns or financial statements.
1.4 Assumption of Certain Designated Liabilities. At the
Closing and as part of the consideration for this transaction, the Seller
shall assign to the Buyer all of its rights, title and interests, and the
Buyer shall assume as of the Closing Date and agree to pay when due and
otherwise perform thereunder, all of Seller's obligations and liabilities
which arise or relate to the period commencing on and after the Closing Date
under those unfilled orders, contracts and other commitments for sale of
Seller's products and services, as set forth in Schedule 1.4 attached hereto
and incorporated herein (collectively, the "Work-in-process").
1.5 No General Assumption of Liabilities. Except as
specifically set forth on Schedule 1.4 hereof, the Buyer does not and shall
not assume any debts, obligations or liabilities of any nature whatsoever of
the Seller or Brocks arising before or after the date hereof or in connection
with any of the Assets or the business of Seller.
1.6 Payment of Certain Fees and Taxes. Seller agrees to pay
recording costs and all sales, transfer and license taxes and fees payable
upon the transfer to Buyer of the Assets to be conveyed pursuant to this
Agreement. In addition, Seller shall be responsible for: (a) any business,
occupation, withholding, or similar tax, (b) any taxes of any kind related to
any period before the Closing Date, or, if the transactions contemplated by
this Agreement are not consummated for any reason, any taxes for any period,
or (c) all income tax liabilities imposed on Seller (including, without
limitation, because of the sale of the Assets contemplated hereby).
2. REPRESENTATIONS AND WARRANTIES BY SELLER AND BROCKS. Seller and
Brocks jointly and severally represent and warrant to Buyer that:
2.1 Organization and Good Standing. Seller is a corporation
duly organized, validly existing and in good standing under the laws of
Tennessee, and has all necessary corporate powers to own its properties and
carry on its business as now owned and operated by it.
2.2 Taxes. Except as provided on Schedule 2.2 (the "Outstanding
Taxes"), within the times and in the manner prescribed by law, Seller has
filed all foreign, federal, state, county and local tax returns required by
law and has paid all taxes, assessments, and penalties (collectively, "Taxes")
due and payable. There are presently no disputes as to taxes of any nature
payable by Seller. There are no present or, to the best of Seller's knowledge
and belief, potential disputes as to Taxes payable by Seller, that could
themselves have or result in any material adverse effect on Seller, its
business, or the Assets.
2.3 Inventory. The Inventory consists of items of a quality and
quantity usable and saleable in the ordinary course of Seller's business. All
items included in the Inventory are the property of Seller. No items included
in the Inventory have been pledged as collateral or are held by Seller on
consignment from others.
2.4 Equipment. Schedule 1.1(a) to this Agreement is a complete
and accurate schedule describing all the Equipment. The Equipment constitutes
all tangible personal property necessary for the conduct by Seller of its
business as now conducted. The Equipment is in good and operable condition,
reasonable wear and tear excepted.
2.5 Title and Interests in Property. Seller has possession and
good title to all the Assets and interest in Assets being purchased hereunder,
whether personal, mixed, tangible or intangible, which constitute all the
assets and interests in assets that are required in the businesses of Seller
as now conducted. Except for the lien of the Bank of Xxxxxx, which lien shall
be released on or before the Closing Date, all of the Assets are free and
clear of restrictions on or conditions to transfer or assignment, and free and
clear of mortgages, liens, pledges, options, charges, encumbrances, claims or
security agreements. There are no outstanding agreements or commitments of
any nature obligating Seller to transfer the Assets to any other party. Upon
the sale, transfer and assignment of the Assets hereunder, there shall be
vested in Buyer good and valid title to all of the Assets free and clear of
any lien, security interest, encumbrance or restrictions.
2.6 Legal Compliance. Seller has complied with, and is not in
violation of, applicable federal, state and local statutes, laws and
regulations (including, without limitation, any applicable environmental,
safety and health, building, zoning, or other law, ordinance, or regulation)
affecting its employees, the operation of its business or the Assets
(collectively, "Laws"). Seller has not received notice of any violation of
any Laws and there are no such violations.
2.7 Litigation. There is no suit, claim, audit, action,
arbitration, or legal, administrative, or other proceeding, or non-insured
workmen's compensation claim, or governmental investigation pending or
threatened against or to the best of Seller's knowledge affecting (including
those involving Seller as plaintiff) Seller's business or the Assets. Seller
is not a party or subject to any judgment or decree or order entered in any
suit or proceeding brought by any governmental agency or by any other person
enjoining it in respect of any aspect of its business. Seller is not in
default with respect to any order, writ, injunction or decree of any federal,
state, local, or foreign court, department, agency or instrumentality.
2.8 Violations. The consummation of the transactions
contemplated by this Agreement and the other documents and instruments
required to be delivered herein will not result in or constitute any of the
following: (a) a violation of any provision of the articles of incorporation,
bylaws or other governing documents of Seller; (b) to the best of Seller's
knowledge, a violation of any provisions of any Law or of any writ or decree
of any court or governmental instrumentality; (c) a default or an event that,
with notice or lapse of time or both, would be a default, breach, or violation
of a lease, license, promissory note, conditional sales contract, commitment,
indenture, mortgage, deed of trust, or other agreement, instrument, or
arrangement to which Seller or Brocks are a party or by which any of them or
the property of any of them is bound, except as otherwise provided herein or
in any Exhibits hereto; (d) an event that would permit any party to terminate
any agreement or to accelerate the maturity of any indebtedness or other
obligation of Seller, except as otherwise provided herein or in any exhibits
hereto; or (e) the creation or imposition of any lien, pledge, option,
security agreement, equity, claim, charge, encumbrance or other restriction or
limitation on the capital stock or on any of the properties or assets of
Seller.
2.9 Legal Authority. Seller and Brocks have the right, power,
legal capacity, and authority to enter into and perform its or their
obligations under this Agreement and all documents delivered in connection
herewith, and this Agreement constitutes, and each document or instrument to
be executed by Seller or Brocks pursuant to the terms hereof upon its
execution and delivery will have been duly executed and delivered and will
constitute, the valid and legally binding obligation of Seller or Brocks, as
the case may be, enforceable in accordance with its terms. The execution and
delivery of this Agreement and of each document or instrument to be executed
by Seller pursuant to the terms hereof, has been duly authorized by Seller's
Board of Directors and stockholders.
2.10 Licenses and Permits. Schedule 2.10 is a schedule of all
licenses, consents and permits issued by any governmental authority used in
connection with the operation of Seller's business. All such licenses,
consents and permits have been duly and validly issued and are in full force
and effect.
2.11 Consents. Except as set forth on Schedule 2.11, to the best
of Seller's and Brocks' knowledge, no consent, approval or authority of any
nature, or other formal action, by any person, firm or corporation, or any
agency, bureau or department of any government or any subdivision thereof, not
already obtained, is required in connection with the execution and delivery of
this Agreement by Seller or Brocks, and the consummation by Seller and Brocks
of the transactions provided for herein.
2.12 Prepaid Work-in-Process. Schedule 1.2(b) to this Agreement
is a complete and accurate listing of all payments received on account of or
relating to Work-in-process.
3. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and
warrants that:
3.1 Organization and Good Standing. Buyer is a Florida
corporation, duly organized, validly existing, and in good standing under the
laws of Florida. Buyer has all necessary powers to own its properties and
carry on its business as now owned and operated by it.
3.2 Legal Authority. Buyer has the right, power, legal
capacity, and authority to enter into and perform its obligations under this
Agreement and this Agreement constitutes, and each document or instrument to
be executed by Buyer pursuant to the terms hereof upon its execution and
delivery will have been duly executed and delivered and will constitute, the
valid and legally binding obligation of Buyer, enforceable in accordance with
its terms. The execution and delivery of this Agreement by Buyer has been,
and the execution and delivery of each document or instrument to be executed
by Buyer pursuant to the terms hereof will be, duly authorized by all
necessary action.
4. OBLIGATIONS OF THE PARTIES BEFORE CLOSING.
4.1 Rights of Access.
(a) Buyer and its counsel, employees, accountants, and
other representatives shall have full access to all properties, books,
accounts, records, contracts, files, correspondence, tax records and documents
of or relating to Seller or the Assets. Seller shall at its sole cost and
expense promptly furnish or cause to be furnished to Buyer and its
representatives all data and information concerning such businesses, assets,
finances, and properties of Seller that may be requested. Buyer, at its cost,
shall have the right to cause its agents to conduct such reviews and
investigations as Buyer deems necessary or advisable. Buyer shall have the
right to consult with the certified public accountants for Seller and said
accountants are hereby authorized to disclose all information in their
possession to Buyer with respect to Seller and the assets and businesses being
purchased hereunder.
(b) Buyer agrees that, unless and until the Closing has
been consummated, Buyer and its officers, directors, and other representatives
will hold in strict confidence all data and information obtained in connection
with this transaction or Agreement, with respect to the businesses of Seller;
and if the transactions contemplated by this Agreement are not consummated,
Buyer will return to Seller all data and information made available to Buyer
in connection with this transaction.
4.2 Continuation of Business. Seller will carry on its
businesses and activities diligently and in the same manner as they previously
have been carried out, and shall not make or institute any unusual or novel
methods of purchase, sale, lease, management, accounting, or operation that
will vary from those methods used by Seller as of the date of this Agreement.
4.3 Specific Acts. Seller and Brocks will use their respective
best efforts, without making any commitments on behalf of Buyer, to preserve
Seller's business intact, including, without limiting the generality of the
foregoing:
(a) do or cause to be done all things necessary to
preserve and keep in full force and effect Seller's corporate existence as
described in Section 2.1 and all franchises, rights and privileges, goodwill,
assets, real and personal property, operations, licenses, permits, approvals,
businesses and prospects, and comply with the requirements of all Laws and all
rules, regulations and orders of all regulatory agencies and authorities
having jurisdiction over Seller, its business, assets or its properties;
(b) prior to the date upon which penalties attach thereto,
pay and discharge, or cause to be paid and discharged, all lawful taxes,
assessments and governmental charges or levies imposed upon Seller or upon
Seller's income or property except those for which a dispute exists or the
claim for which may be questionable provided that such matters are contested
in good faith by appropriate proceedings, and are disclosed to Buyer;
(c) promptly notify Buyer in writing of any actual or
threatened investigation, claim, action, suit or proceeding, and any
administrative or governmental actions, suits or claims which are commenced
against, by or relating to Seller the Assets or this Agreement before any
court or any governmental department, commission, board, bureau, agency or
instrumentality;
(d) refrain from knowingly doing any act or omitting to do
any act, or knowingly permit any act or omission to act, which will cause a
breach of any agreement to which Seller is bound or a failure of performance
of any obligation of Seller;
(e) continue to employ the employees of Seller, and
promptly notify Buyer if Seller has reason to know that any employee does not
plan to continue in his respective position of employment at any time after
the date of this Agreement;
(f) preserve each of Seller's existing relationships with
suppliers, customers and others having material business relationships with
any of them; and
(g) to keep the Assets in good working order and repair,
reasonable wear and tear excepted, and perform all necessary repairs,
maintenance, and replacements.
4.4 Insurance. With respect to the Assets and until 12:01 a.m.
on the day immediately following the Closing Date Seller will keep in full
force and effect insurance comparable in amount and scope of coverage to that
now maintained by it.
4.5 Prohibited Acts. Seller shall not, without Buyer's prior
written consent, do, or agree to do, any of the following acts:
(a) transfer, sell, assign or otherwise dispose of any of
its assets other than in the ordinary course of its business, provided Seller
shall dispose of none of the Assets in such manner other than Inventory;
(b) assume, guarantee, endorse or become liable on, or
agree to repurchase the obligation of any person, firm or corporation, or
suffer to exist any such assumption, guarantee, endorsement, liability or
repurchase agreement except for the endorsement of negotiable instruments for
deposit or collection in the ordinary course of business; or
(c) make any loan or advance to, or make any investment
in, any person, firm or corporation whether by acquisition of stock or
indebtedness, by loan, guarantee or otherwise, or create any Account
Receivable, except in the ordinary course of business.
4.6 Business Documentation. At the request of Buyer, Seller
will document and describe any of its business procedures specified by Buyer,
in form and content satisfactory to Buyer in Buyer's sole and absolute
discretion.
4.7 Discussions with Others. Neither Seller nor Brocks will nor
will permit or authorize any officer, director, employee or representative of
Seller to solicit or encourage inquiries (including by way of furnishing
information) or the making of any proposal which is reasonably expected to
lead to any acquisition or purchase of any portion of the Assets or any merger
or consolidation of Seller with any third party.
4.8 Pursuit of Consents. Commencing on the date hereof and
continuing to the Closing, Seller and Brocks shall use their best efforts and
due diligence to obtain all consents and approvals necessary for the lawful
consummation of the transactions contemplated hereby, including the release of
the Bank of Sharon's lien on the Assets. Buyer shall cooperate in all
reasonable respects to enable Seller to obtain the necessary consents.
4.9 Resolution of Tax Liens. Commencing on the date hereof and
continuing to the Closing, Seller and Brocks shall use their best efforts and
due diligence to obtain payoff letters from the Internal Revenue Service as to
the amount owing of Outstanding Taxes (including penalties and interest),
together with a commitment to release any and all federal tax liens, including
without limitation, that certain Notice of Federal Tax Lien dated June 24,
1992 in the amount of $26,985.28, upon the payment of same (collectively, the
"Tax Payoff Documents").
4.10 Update of Schedules. Seller shall update all schedules and
exhibits referred to in Section 2 hereof, including the prepaid Work-in-
process schedule provided in Section 2.12, through and as of the Closing Date,
and shall deliver such updated schedules and exhibits to Buyer.
5. BULK TRANSFER. Seller shall not be required to comply with any
applicable Bulk Transfer Law in respect to the transactions contemplated by
this Agreement. The Seller and Brocks shall, jointly and severally,
indemnify, defend, and hold harmless the Buyer against any and all claims,
demands, losses, costs, expenses, obligations, liabilities, damages,
recoveries, and deficiencies, including, but not limited to, interest,
penalties, and attorneys' and paraprofessional fees and disbursements
(including, but not limited to, any attorneys' and paraprofessional fees and
disbursements incident to any appeals), that it shall incur or suffer, which
arise, result from, or relate to failure by the Seller to comply with any such
applicable Bulk Transfer Law. Seller reserves the right to contest in good
faith any claims made pursuant to such laws.
6. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE.
6.1 General. The obligations of Buyer to purchase the Assets
under this Agreement are subject to the satisfaction, at or before the
Closing, of all the conditions set out below in this Section 6. Buyer may
waive in writing any or all of these conditions in whole or in part without
prior notice; provided, however, that no such waiver of a condition shall
constitute a waiver by Buyer of any of its other rights or remedies, at law or
in equity, if Seller or Brocks shall be in default of any of their
representations, warranties, or covenants under this Agreement. Written
notice of all waivers by Buyer, if any, shall be delivered to Seller at or
before the Closing.
6.2 Renewal of Representations and Warranties. Except as
otherwise permitted by this Agreement, all representations and warranties by
Seller and Brocks in this Agreement or in any written statement that shall be
delivered to Buyer by any of them under this Agreement shall be true on and as
of the Closing Date as though made at that time. No written statement
contrary to the representations and warranties herein shall result in or cause
the waiver of any or all of Seller's or Stockholders' representations and
warranties herein.
6.3 Performance of Covenants. Seller and Brocks shall have
performed, satisfied, and complied with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by
them, or any of them, on or before the Closing Date.
6.4 Adverse Changes. During the period from the date of this
Agreement to the Closing Date there shall not have been any material adverse
change in the financial condition or the results of operations of Seller. If
any of the Assets to be transferred or conveyed to Buyer pursuant to this
Agreement is damaged or destroyed by fire or other casualty prior to the
Closing Date and the aggregate amount of all such damage or destruction equals
or exceeds $20,000, Buyer may terminate this Agreement and both parties shall
thereupon be relieved of liability under this Agreement, or Buyer may elect to
close and accept in lieu of any diminution in the purchase price the insurance
proceeds payable with respect to the damage; provided, however, that Buyer
shall be required to make one of these elections in such case.
6.5 Performance Certificate. Buyer shall have received a
certificate, dated the Closing Date, signed and verified by Seller's President
certifying, in such form and detail as Buyer and its counsel may reasonably
request, that the conditions specified in Article 6 of this Agreement have
been fulfilled.
6.6 Due Authorization. The execution and delivery of this
Agreement by Seller and the performance of its covenants and obligations under
it, shall have been duly authorized by all necessary corporate action, and
Buyer shall have received copies of all resolutions pertaining to that
authorization, certified by the secretary of Seller, all in form and substance
satisfactory to Buyer and its counsel.
6.7 Consents. All necessary agreements and consents of any
person to the consummation of the transactions contemplated by this Agreement,
or otherwise pertaining to the matters covered by it shall have been obtained
by Seller at its sole cost and expense and delivered to Buyer in form and
substance satisfactory to Buyer and its counsel.
6.8 Tax Payoff Documents. Seller shall have obtained the Tax
Payoff Documents in form and substance acceptable to Buyer.
6.9 Corporate Documentation. Buyer shall have received the
following with respect to Seller:
(a) Certificate of good standing (as of a date not more
than five (5) days prior to the Closing Date) from the Secretary of State of
Tennessee; and
(b) A certificate executed by Seller's secretary, dated as
of the Closing Date, with respect to the incumbency of its officers and
attesting to the validity and accuracy of Seller's articles of incorporation
and by-laws.
6.10 Perry Employment Agreement. Xxxxxx X. Xxxxx shall have
entered into an Employment Agreement as of the Closing Date with the Buyer in
the form attached hereto as Exhibit 6.10, which Employment Agreement also
contains a covenant not-to-compete.
6.11 Lease/Option Agreement. Seller and Buyer shall have entered
into a Lease/Option Agreement relating to the lease of the real property
located at Xxxxxx, Tennessee, together with all improvements thereon, in the
form attached hereto as Exhibit 6.11 (the "Lease").
6.12 Employment Agreement. Buyer and Xxxxxx X. Xxxxx shall have
executed and delivered an Employment Agreement as of the Closing Date in the
form attached hereto as Exhibit 6.12, which Employment Agreement also contains
a covenant not to compete.
7. THE CLOSING.
7.1 Time and Place. The transfer of the Assets by Seller to
Buyer (the "Closing") shall take place at the office of counsel for Buyer,
Proskauer Xxxx Xxxxx & Xxxxxxxxxx, at One Boca Place, 0000 Xxxxxx Xxxx, Xxxxx
000 Xxxx, Xxxx Xxxxx, Xxxxxxx 00000 at ________ a.m. local time, on the third
business day following satisfaction or waiver of all conditions precedent to
Buyer's obligations or at such other time and place as the parties may agree
to in writing; but in no event later than June 1, 1994, unless otherwise
extended by mutual agreement of the parties (the "Closing Date").
7.2 Deliveries by Seller. At the Closing, Seller shall deliver
or cause to be delivered to Buyer the following instruments, in form and
substance satisfactory to Buyer and its counsel:
(a) A certificate executed by the President of Seller and
each of the Brocks, dated the Closing Date, certifying that Seller's and
Brocks' representations and warranties in this Agreement are true and correct
at and as of the Closing Date, as though each representation and warranty had
been made on that date;
(b) Each of the documents and certificates referred to in
Article 6 hereof, including without limitation, the Tax Payoff Documents, the
Lease, and the Consulting Agreement;
(c) Such other deeds, bills of sale, endorsements,
assignments and other good and sufficient instruments of conveyance and
transfer as shall be effective to vest in Buyer all of Seller's rights, title
and interests in and to the Assets; and
(d) All contracts and copies of all documents,
instruments, books, records and data of Seller relating to the Assets.
Simultaneously with the consummation of the transfer of the
Assets, Seller, through its officers, agents, and employees, will put Buyer
into full possession and enjoyment of all properties and assets to be conveyed
and transferred by this Agreement.
Seller and Brocks, at any time before or after the Closing Date,
will execute, acknowledge, and deliver any further deeds, assignments,
conveyances, and other assurances, documents, and instruments of transfer,
reasonably requested by Buyer, and will take any other action consistent with
the terms of this Agreement that may reasonably be requested by Buyer for the
purpose of assigning, transferring, granting, conveying, and confirming to
Buyer, or reducing to possession, any or all property to be conveyed and
transferred by this Agreement.
7.3 Deliveries by Buyer. At the Closing, Buyer shall deliver to
Seller the following against delivery of the items specified in Section 7.2:
(a) The original Note and Guaranty;
(b) The Remaining Balance, less an amount equal to the
outstanding Tax Obligations as set forth in the Tax Payoff Documents and the
amount necessary for the Bank of Xxxxxx to release its lien on the Assets,
which Buyer shall pay directly to the IRS or the Bank of Xxxxxx, as the case
may be;
(c) The Lease; and
(d) A certificate executed by the President or Chief
Executive Officer of Buyer, dated the Closing Date, certifying that all
Buyer's representations and warranties in this Agreement are true and correct
at and as of the Closing Date, as though each representation and warranty had
been made on that date.
8. TERMINATION.
8.1 Termination of Agreement and Abandonment of Purchase.
Anything herein to the contrary notwithstanding, this Agreement and the
purchase contemplated hereby may be terminated as follows, and in no other
manner:
(a) at any time by mutual consent of Seller and Buyer;
(b) by Buyer, at any time in the event of any breach of a
representation, warranty or covenant by Seller or Brocks; provided Seller or
Brocks, as the case may be, shall have 5 days after notice of such breach to
cure such breach to the satisfaction of Buyer;
(c) subject to earlier termination pursuant to the
provisions of Section 6.4 hereof, by Buyer, if by the Closing Date the
transactions contemplated by this Agreement have not otherwise been
consummated, unless due to the failure by Buyer to perform its covenants and
obligations under this Agreement; or
(d) by Seller, if by the Closing Date the transactions
contemplated by this Agreement have not otherwise been consummated, unless due
to the failure by Seller to perform its covenants and obligations under this
Agreement.
8.2 Results of Termination. Any termination of this Agreement
shall operate as a complete release and extinguishment of all liabilities and
obligations of each party to any other party to this Agreement; provided,
however, that any termination pursuant to either Section 8.1 (b) or Sections
8.1(c) or 8.1(d) due to either a breach by Seller or Brocks or the failure by
Buyer or Seller or Brocks to perform any of their respective covenants or
obligations hereunder (the party breaching or failing to perform shall be
referred to as the "Failing Party") shall not affect the rights of the non-
Failing Party to pursue all of its rights and remedies for breach of this
Agreement by the Failing Party. Except in the event of termination of this
Agreement by Seller pursuant to Section 8(d) as a result of Buyer's failure to
perform any of its covenants or obligations hereunder, the Deposit shall be
immediately returned to the Buyer. Any termination of this Agreement pursuant
to Section 6.4 hereof shall not be deemed to result from a breach of this
Agreement.
9. OBLIGATIONS AND OTHER TRANSACTIONS AFTER CLOSING.
9.1 Indemnification.
(a) Seller and Brocks shall, jointly and severally,
indemnify, defend, and hold harmless Buyer from and against any and all
claims, demands, losses, costs, expenses, obligations, liabilities, damages,
recoveries, and deficiencies, including, but not limited to, interest,
penalties, and attorneys' and paraprofessional fees and disbursements, that
Buyer shall incur or suffer, which arise, result from, or relate to: (i) any
breach of, or failure by Seller or Brocks to perform, any of its
representations, warranties, covenants, or agreements in this Agreement or in
any exhibit, or other instrument or document furnished or to be furnished by
Seller or Brocks under this Agreement, (ii) the operation of Seller's business
prior to the Closing Date, including any customer complaints which were based
on work performed prior to the Closing Date or (iii) any liability of Seller
or Brocks not expressly assumed hereunder, including any liability affecting
the Assets as a result of any applicable Bulk Transfer Law or the termination
of Seller's employees pursuant to Section 9.2 hereof.
(b) Buyer shall indemnify, defend and hold harmless Seller
and Brocks from and against any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries, and deficiencies,
including, but not limited to, interest, penalties, and attorneys' and
paraprofessional fees and disbursements, that shall incur or suffer, which
arise, result from, or relate to any breach of, or failure to perform, any of
its representations, warranties, covenants, or agreements in this Agreement or
in any exhibit, or other instrument or document furnished or to be furnished
by Buyer under this Agreement.
(c) A party seeking indemnification hereunder shall
promptly notify the other of the existence of any claim, demand or other
matter to which the other's indemnification obligations would apply, and if a
third party claim reasonably and in good faith disputed by such party shall
give it or them a reasonable opportunity to defend the same at its or their
own expense and with counsel of its or their own selection; provided that the
party seeking indemnification shall at all times also have the right to fully
participate in the defense at its expense. If the other party shall within a
reasonable time after this notice fail to defend, the party seeking
indemnification shall have the right, but not the obligation, to undertake the
defense of, and to compromise or settle (exercising reasonable business
judgment) the claim or other matter on behalf, for the account, and at the
risk, of the other party. A party obligated to provide indemnification
hereunder shall satisfy its or their indemnification obligations in cash
within thirty (30) days after receipt of notice of a claim from the other
party, or if with respect to a third party claim being defended in good faith
by the party with the indemnification obligation, upon resolution of such
claim and in any event not later than the rendering of a judgment by a court
or other tribunal with respect to such claim.
(d) In the event Seller and Brocks refuse or fail to
indemnify Buyer pursuant to any indemnification obligation under this
Agreement, Buyer shall have the right to set-off and deduct the amount of such
obligation from any amounts now or hereafter owed by Buyer to Seller or Brocks
under any agreement (including amounts owing in the event of exercise of
Buyer's purchase option under the Lease) or obligation and/or the Buyer shall
have the right to proceed directly against Seller or Brocks for the indemnity
obligation.
9.2 Employees. Seller will terminate the employment of each of
its employees, effective at 12:01 a.m. on the day following the date hereof,
and will pay all liabilities relating to its employment of and termination of
such employees. Seller shall assist Buyer in the orderly transition and
immediate re-employment by Buyer of such of Seller's employees designated by
Buyer.
9.3 Taxes. Seller shall file all withholding tax reports for
all periods ending prior to and on the date hereof, shall file all taxes for
such periods and will be entitled to any refunds of withholding taxes paid by
it with respect to such periods.
9.4 Name Change. Within thirty (30) days of the date hereof,
Seller shall take all necessary steps to change the name of Seller, including
amending its Articles of Incorporation, so as to delete therefrom the phrase
"Xxxxxxx Sales". Seller further agrees that it shall not use any confusingly
similar name and that all rights and goodwill associated with its name are
being transferred to Buyer hereunder.
9.5 Collection of Accounts Receivable. Buyer agrees that any
payments received by Buyer from an account debtor of Seller in payment of an
account receivable (other than with regard to Work-in-process) of Seller shall
be turned over to Seller. Buyer shall have no obligation to collect any such
accounts receivable. Seller agrees (i) that it shall promptly notify Buyer of
any delinquencies in its collection of accounts receivable, (ii) not to use
any form of collection procedure or mechanism which Buyer deems reasonably
objectionable and (iii) to promptly remit to Buyer any payments received after
the Closing Date relating to Work-in-process.
10. MISCELLANEOUS.
10.1 Brokers. Each of the parties represents and warrants that
it or he has dealt with no broker or finder in connection with any of the
transactions contemplated by this Agreement and, insofar as it or he knows, no
broker or other person is entitled to any commission or finder's fee in
connection with any of these transactions.
10.2 Amendments. The provisions of this Agreement may not be
amended, supplemented, waived or changed orally, but only by a writing signed
by the party as to whom enforcement of any such amendment, supplement, waiver
or modification is sought and making specific reference to this Agreement.
10.3 Assignments. No party shall assign his or its rights and/or
obligations hereunder without the prior written consent of each other party to
this Agreement, except that Buyer may freely assign this Agreement (and any of
the Exhibits hereto) and its rights and obligations hereunder (or thereunder)
to any corporation controlled by, controlling, under common control with, or
otherwise affiliated to, the Buyer.
10.4 Binding Effect. All of the terms and provisions of this
Agreement, whether so expressed or not, shall be binding upon, inure to the
benefit of, and be enforceable by the parties and their respective legal
representatives, successors and permitted assigns.
10.5 Notices. All notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
(including telex and telegraphic communication) and shall be (as elected by
the person giving such notice) hand delivered by messenger or courier service,
telecommunicated, or mailed (airmail if international) by registered or
certified mail (postage prepaid), return receipt requested, addressed to:
If to Buyer:
0000 Xxxxxx Xxxx
Xxxxx 000 Xxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, President
If to Seller or Brocks:
Xxxxxx Industrial Park
P. O. Xxx 000
Xxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxx
or to such other address as any party may designate by notice complying with
the terms of this Section. Each such notice shall be deemed delivered (a) on
the date delivered if by personal delivery; (b) on the date telecommunicated
if by telegraph; (c) on the date of transmission with confirmed answer back if
by telex, telefax or other telegraphic method; and (d) on the date upon which
the return receipt is signed or delivery is refused or the notice is
designated by the postal authorities as not deliverable, as the case may be,
if mailed.
10.6 Survival. All covenants, agreements, representations and
warranties made herein or otherwise made in writing by any party pursuant
hereto shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
10.7 Specific Performance. Each of the parties acknowledges that
the parties will be irreparably damaged (and damages at law would be an
inadequate remedy) if this Agreement is not specifically enforced. Therefore,
in the event of a breach or threatened breach by any party of any provision of
this Agreement, then the other parties shall be entitled, in addition to all
other rights or remedies, to injunctions restraining such breach, without
being required to show any actual damage or to post any bond or other
security, and/or to a decree for specific performance of the provisions of
this Agreement.
10.8 Jurisdiction and Venue. The parties acknowledge that a
substantial portion of negotiations, anticipated performance and execution of
this Agreement occurred or shall occur in Palm Beach County, Florida, and
that, therefore, without limiting the jurisdiction or venue of any other
federal or state courts, each of the parties irrevocably and unconditionally
(a) agrees that any suit, action or legal proceeding arising out of or
relating to this Agreement may be brought in the courts of record of the State
of Florida in Palm Beach County or the District Court of the United States,
Southern District of Florida; (b) consents to the jurisdiction of each such
court in any suit, action or proceeding; (c) waives any objection which it may
have to the laying of venue of any such suit, action or proceeding in any of
such courts; and (d) agrees that service of any court paper may be effected on
such party as may be provided under applicable laws or court rules in said
state.
10.9 Enforcement Costs. If any legal action or other proceeding
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any provision
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys' fees, sales and use taxes, court
costs and all expenses even if not taxable as court costs (including, without
limitation, all such fees, taxes, costs and expenses incident to arbitration,
appellate, bankruptcy and post-judgment proceedings), incurred in that action
or proceeding, in addition to any other relief to which such party or parties
may be entitled. Attorneys' fees shall include, without limitation, paralegal
fees, investigative fees, administrative costs, sales and use taxes and all
other charges billed by the attorney to the prevailing party.
10.10 Governing Law. This Agreement and all transactions
contemplated by this Agreement shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of Florida without
regard to principles of conflicts of laws.
10.11 Preparation of Agreement. This Agreement shall not be
construed more strongly against any party regardless of who is responsible for
its preparation. The parties acknowledge each contributed and is equally
responsible for its preparation.
10.12 Entire Agreement. This Agreement represents the entire
understanding and agreement among the parties with respect to the subject
matter hereof, and supersedes all other negotiations, understandings and
representations (if any) made by and among such parties, including without
limitation, the Letter Agreement.
IN WITNESS WHEREOF, the parties of this Agreement have duly executed it
on the day and year first written.
WITNESSES: EARTH CARE PRODUCTS OF AMERICA, INC.
____________________________ By: ____________________________
Its: President
____________________________
XXXXXXX SALES CORP.
____________________________ By: ____________________________
Its: President
____________________________
_____________________________ ________________________________
Xxxxxx X. Xxxxx
____________________________
_____________________________ ________________________________
Xxxx Xxxxx
____________________________
