EXHIBIT 2.4
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GREENSTEEL, INC.,
the Buyer,
and
AMERICAN CHALKBOARD COMPANY, L.L.C.,
the Seller,
and
SUMMIT AMERICA, L.L.C. and W. XXXXXX XXXXXX, JR.,
the Equityholders
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ASSET PURCHASE AGREEMENT
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Dated January 21, 2000
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement"), dated January 21, 2000, by
and among GREENSTEEL, INC., a Delaware corporation and wholly-owned subsidiary
of PolyVision Corporation (the "Buyer"), and AMERICAN CHALKBOARD COMPANY,
L.L.C., an Alabama limited liability company (the "Seller"), and SUMMIT AMERICA,
L.L.C. and W. XXXXXX XXXXXX, JR. (each an "Equityholder" and together the
"Equityholders").
W I T N E S S E T H :
WHEREAS, the Seller is engaged primarily in the business of
manufacturing and constructing chalkboards and other visual display boards as a
subcontractor to firms in the building and servicing of educational and
commercial facilities (the "Business"); and
WHEREAS, in connection with and in furtherance of its business, the
Seller is the owner of certain assets and properties; and
WHEREAS, the Seller desires to sell certain of its assets and
properties to the Buyer, and the Buyer desires to purchase such assets and
properties, and the Business of the Seller as a going concern, all upon the
terms and conditions set forth in this Agreement; and
WHEREAS, Summit America, L.L.C. is the record and beneficial owner of
all issued and outstanding equity interests of the Seller, and will thus derive
benefit from the transactions contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. ACQUIRED ASSETS.
1.1 THE ASSETS. Subject to the terms and conditions of this
Agreement, on and as of the Closing Date (as such term is hereinafter defined),
the Seller shall sell, transfer and deliver to the Buyer, and the Buyer shall
purchase and receive from the Seller, all of the following assets, properties,
improvements and business of the Seller as same are constituted on the Closing
Date (collectively, the "Assets"):
(a) All laminating and other machinery, equipment, tools,
aluminum profile and other dies, workbench set-ups and jigs, and vehicles
(including trucks and trailers) owned or leased by the Seller, including but not
limited to those items listed on SCHEDULE 1.1 annexed hereto (collectively, the
"Fixed Assets");
(b) All furniture and fixtures of the Seller;
(c) All inventory and supplies of the Seller (collectively,
the "Inventory");
(d) All down payments, if any, held by the Seller, and all
accounts receivable, contract rights and other rights of the Seller to receive
payment for products sold and/or services rendered;
(e) All of the Seller's rights and interests in and to the
real property described on EXHIBIT A attached hereto and made part hereof,
located in Wetumpka, Alabama, together with the Seller's right, title and
interest in and to (i) the building, facility and any other structure or
improvement thereon, (ii) all rights, privileges, hereditaments and
appurtenances appertaining thereto or to such building, facility or any other
structure or improvement, (iii) all rights of way, easements, water rights,
rights to any minerals, oil, gas and other hydrocarbon substances, if any, and
(iv) to the extent constituting real property under applicable law, all
fixtures, installations, machinery, equipment and other property attached
thereto or located thereon (collectively, the "Wetumpka Facility");
(f) To the extent permitted by law and any subject warranty
agreement, all manufacturers' warranties and/or vendors' warranties in effect
with respect to any of the Fixed Assets and/or the Inventory;
(g) All patents, trademarks, tradenames, service marks,
copyrights and other intellectual property, and all pending applications and
registrations therefor, and all good will related thereto, in which the Seller
has any rights (collectively, the "Intellectual Property");
(h) All rights under executory contracts and agreements
between the Seller and its customers relating to ongoing and/or future products
to be sold or services to be rendered to such customers and between the Seller
and its vendors relating to ongoing and/or future purchases of raw materials and
other supplies, in either case to be assumed by the Buyer pursuant to Section
2.1(b);
(i) Any and all down payments relating to any of the Assets
and any and all prepaid expenses and other prepayments (including, without
limitation, prepayments in respect of the Assumed Liabilities described in
Section 2.1 below) relating to any of the Assets;
(j) All customer lists, supplier lists, operating manuals,
artwork, silkscreens, trade secrets, technical information, and other such
knowledge and information constituting the "know-how" of the Seller, the name
"American Chalkboard," and the goodwill of the Seller; and
(k) All books, records, software, databases, printouts,
drawings, data, files, notes, notebooks, correspondence and memoranda relating
to the foregoing Assets.
1.2 EXCLUDED ASSETS. Anything elsewhere contained in this
Agreement to the contrary notwithstanding, the Seller will not be selling,
assigning or transferring, and the
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Buyer will not be purchasing or acquiring, any cash (other than amounts
representing down payments), deposit, checking, money market or stock accounts,
or marketable securities of the Seller, life insurance policies, prepaid
premiums for hazard, liability and life insurance or any notes receivable from
affiliates of the Seller.
2. ASSUMED LIABILITIES.
2.1 ASSUMED LIABILITIES. Subject to the terms and conditions of
this Agreement, on and as of the Closing Date, the Seller shall transfer and
assign to the Buyer, and the Buyer shall assume and thereafter pay as and when
due, the following debts, liabilities and obligations of the Seller as same are
constituted on the Closing Date (collectively, the "Assumed Liabilities"):
(a) the obligations of the Seller from and after the
Closing Date under the contracts and leases in respect of any of the Assets; and
(b) (i) all purchase orders for the purchase of raw
materials and supplies for use in the Business including, without limitation,
those set forth in Part I of SCHEDULE 4.15 (the "Purchase Orders"), and (ii) all
sales orders from customers including, without limitation, those set forth in
Part II of SCHEDULE 4.15 (the "Sales Orders"); and
(c) those liabilities reflected in the Statement of Assets,
Liabilities & Members' Equity of the Seller as of December 31, 1998, except to
the extent paid prior to the Closing, and any trade payables and normal
operating accruals and expenses incurred in the ordinary course of business
subsequent to December 31, 1998; PROVIDED that environmental matters and
warranty, guaranty or product liability claims are not deemed to be incurred in
the ordinary course of business.
2.2 DISCLAIMER OF LIABILITIES. Except for those Assumed
Liabilities described Section 2.1 above, the Buyer will not assume, and hereby
expressly disclaims any assumption of, any debts, liabilities or obligations
(absolute or contingent) of any kind of the Seller, including but not limited to
(a) indebtedness for money borrowed, (b) income taxes, sales taxes, payroll
taxes, withholding taxes, franchise taxes and other taxes, including but not
limited to any taxes which may arise out of or be assessable in respect of the
transactions contemplated by this Agreement, (c) claims, litigation, liabilities
or obligations (whether now pending or hereafter asserted) arising out of or
relating to the operations of the Seller prior to the Closing Date, (d) lease
obligations of any kind, (e) liabilities or obligations of any kind in respect
of any past or present equityholders, directors, officers, employees or
consultants of the Seller, whether under any contract or agreement, pursuant to
any pension plan or employee benefit or welfare plan, or otherwise, (f)
liabilities or obligations for accrued employee benefits and/or severance
benefits in respect of any past or present employee of the Seller, or any
ongoing obligations of the Seller under any employment, consulting or management
agreement, (g) any obligations or liabilities in respect of any unfunded pension
or retirement benefits, or in respect of any funding obligations to, or
transactions in or relating to any trust funds under, any pension, employee
benefit or retirement plans now or heretofore maintained by or on behalf of
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the Seller for the benefit of any past or present employees, (h) claims,
obligations or liabilities in respect of any environmental remediation or any
violation of any environmental laws or regulations, or any other violation or
alleged violation of applicable law by the Seller, and/or (i) liabilities or
obligations relating to recapture of any depreciation deduction or investment
tax credit of the Seller.
3. PURCHASE PRICE.
3.1 CONSIDERATION TO THE SELLER. The purchase price for the
Assets, subject to Section 3.2 below (the "Consideration"), shall be equal to
Five Million Two Hundred Fifty Thousand Dollars ($5,250,000), which shall be
payable by (a) delivering to and depositing with SunTrust Bank, as Escrow Agent
under the Escrow Agreement (as defined in Section 7.3), on behalf of the Seller,
Two Hundred Fifty Thousand Dollars ($250,000), and (b) paying to the Seller,
subject to Sections 3.2 and 3.5 below, the remaining Consideration in U.S.
dollars in cash or certified funds by wire transfer of immediately available
funds to such account or accounts as shall be designated by the Seller
reasonably in advance of the Closing Date.
3.2 NET CONSIDERATION. To the extent that the Seller has not
already paid its then existing bank and other institutional debts and
liabilities out of its cash on hand (other than trade payables and employee
accruals incurred in the ordinary course of business), the Buyer shall, on the
Closing Date, apply a portion of the Consideration payable pursuant to Section
3.1(b) above to the payment of the Seller's outstanding bank and other
institutional debts and liabilities described on SCHEDULE 3.2 annexed hereto, so
that such debts and liabilities are paid in full.
3.3 ALLOCATION OF CONSIDERATION. The Consideration specified in
Section 3.1 above shall be allocated, as among the Assets, in accordance with
SCHEDULE 3.3 annexed hereto, and the parties shall abide by such allocations in
all tax filings and other reports which the parties shall make or render.
3.4 SALES TAXES. To the extent that any sales or use taxes may
be payable in respect of the transactions pursuant to this Agreement, such sales
and use taxes shall be reported and paid by the Seller in a timely manner.
3.5 APPORTIONMENTS. To the extent such items are not covered by
Section 3.4 hereof, the following items shall be apportioned as of midnight of
the day preceding the Closing Date: (a) real estate and personal property taxes,
assessments, sewer rents and charges and other state, county and municipal taxes
and charges affecting the Wetumpka Facility or any portion thereof, including
sales and use taxes, on the basis of the tax fiscal year for which the same are
levied, imposed or assessed; (b) charges for water, electricity, gas, oil,
steam, telephone and all other utilities incurred in connection with the
Wetumpka Facility (except to the extent disposed of by final billing to the
Seller); and (c) such other items as are customarily apportioned in connection
with the sale of similar real and personal property in the location of the
Wetumpka Facility. Any net amount owing under this Section 3.5 shall be paid
together with, or offset against, as the case may be, the payment of the
Consideration pursuant to Section 3.1 hereof.
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4. REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND THE EQUITYHOLDERS.
In connection with the sale of the Assets to the Buyer, the Seller
and the Equityholders hereby jointly and severally represent and warrant to the
Buyer as follows:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Seller
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Alabama, with full power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby, and to own its assets and conduct its business as owned and
conducted on the date hereof. The Seller is qualified as a foreign entity under
the laws of the State of North Carolina.
4.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Seller have been duly and validly authorized by the
Manager or Board of Managers of the Seller (to the extent required or permitted
by applicable law) and by the Equityholders (as all of the equityholders of the
Seller), without dissent. No further corporate authorization is required on the
part of the Seller to consummate the transactions contemplated hereby.
4.3 VALID AND BINDING AGREEMENTS. This Agreement, and, when
executed and delivered by the Seller and the Equityholders, the Escrow
Agreement, the Xxxx of Sale, the Assumption Agreement, the Deed and, to the best
knowledge of the Seller and the Equityholders, the Non-Competition Agreements
(as such terms are hereinafter defined), constitute and will constitute the
legal, valid and binding obligations of the Seller and the Equityholders (to the
extent a party thereto), enforceable against the Seller and the Equityholders in
accordance with their respective terms.
4.4 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement and/or the Escrow Agreement, the Xxxx of Sale, the
Assumption Agreement, the Non-Competition Agreements or the Deed by the Seller
or the Equityholders, nor compliance with the terms and provisions of this
Agreement and/or the Escrow Agreement, the Xxxx of Sale, the Assumption
Agreement, the Deed and, to the best knowledge of the Seller and the
Equityholders, the Non-Competition Agreements on the part of the Seller and the
Equityholders, will: (a) violate any statute or regulation of any governmental
authority, domestic or foreign, affecting the Seller or any of the
Equityholders; (b) require the issuance or grant of any authorization, license,
consent or approval of any federal or state governmental agency or any other
person; or (c) conflict with or result in a breach of any of the terms,
conditions or provisions of the Seller's limited liability company operating
agreement or any judgment, order, injunction, decree, agreement or instrument to
which the Seller or any of the Equityholders is a party, or by which the Seller
or any of the Equityholders is bound, or constitute a default thereunder.
4.5 SUBSIDIARIES AND INVESTMENTS. The Seller does not own,
directly or indirectly, any stock or other equity securities of any corporation
or entity, or have any direct or
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indirect equity or ownership interest in any person, firm, partnership,
corporation, venture or business other than the Business conducted by the
Seller.
4.6 FINANCIAL INFORMATION.
(a) Annexed hereto as SCHEDULE 4.6 are the Statements of
Assets, Liabilities & Members' Equity of the Seller as of December 31, 1998 and
1997, and the related Statements of Operations and Cash Flows for the years then
ended (collectively, the "Financial Statements"), all of which fairly reflect,
in all material respects, the financial condition and results of operations of
the Seller as of the dates thereof and for the years then ended, in accordance
with generally accepted accounting principles consistently applied; and, without
limitation of the foregoing, the Seller has no material liabilities, fixed or
contingent, except to the extent reflected in the most recent of such Financial
Statements or thereafter incurred in the normal course of the Seller's business.
(b) The Seller has not experienced any substantial
variations or inconsistencies in its accounts receivable collections or accounts
payable payments since the date of the most recent of the Financial Statements.
(c) Since the date of the most recent of the Financial
Statements, (i) the business of the Seller has been operated solely in the
normal course, (ii) there has been no material adverse change in the assets,
financial condition, operations, business or prospects of the Seller from that
reflected in such Financial Statements, (iii) the Seller has not incurred any
material obligation or liability except in the normal course of the Business,
(iv) the Seller has not paid or declared any dividend or distribution other than
in cash to the Equityholders, (v) the Seller has not granted or authorized any
increase in the rate of salary or compensation paid or payable to any employee,
consultant or any other person performing services in the Business, and (vi) the
Seller has not experienced any material adverse change in its relationships with
customers and/or suppliers, or received any written notice of any existing,
announced or anticipated changes in the policies of any material customers or
suppliers which would materially adversely affect the Business.
4.7 TAX MATTERS.
(a) Except as disclosed in SCHEDULE 4.7 annexed hereto, the
Seller has, to the date hereof, filed all tax reports and tax returns required
to be filed by the Seller, and the Seller and/or the Equityholders (as
applicable) have paid all taxes, assessments and other impositions with respect
to the Seller and its income as and to the extent required by applicable law.
All taxes and other assessments and levies which the Seller is required by law
to withhold or to collect have been duly withheld and collected, and have been
paid over to the proper governmental authorities to the extent due and payable
on or before the date hereof. There are no outstanding or pending claims,
deficiencies or assessments for taxes, interest or penalties with respect to any
taxable period of the Seller. The Seller will, from time to time from and after
the date hereof, provide to the Buyer and its representatives, upon request
therefor, copies any and all tax reports and/or tax returns heretofore filed by
the Seller.
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(b) Except as disclosed in SCHEDULE 4.7 annexed hereto,
there are no audits pending with respect to any federal, state or local tax
reports or tax returns of the Seller, and no waiver of statutes of limitations
have been given or requested with respect to any tax years or tax filings of the
Seller.
4.8 TITLE TO THE ASSETS. The Seller has and owns good and
marketable title to all of the Assets, free and clear of all liens, pledges,
claims, security interests and encumbrances of every kind and nature, other than
interests of equipment lessors pursuant to those lease agreements set forth in
SCHEDULE 4.8 annexed hereto and except for Permitted Encumbrances. Substantially
all of the Fixed Assets are listed in SCHEDULE 1.1, and the Fixed Assets are in
good operating condition and repair (reasonable wear and tear excepted), are
adequate for their use in the Business as presently conducted, and are
sufficient for the continued conduct of such Business.
4.9 INVENTORIES. All supplies and other inventories reflected
in the Financial Statements, and all inventories thereafter acquired by the
Seller prior to the Closing Date, have been valued at the lower of cost or
market (on a first-in, first-out basis), and consist of items which are of a
quality and quantity which are useable in the ordinary course of the Business.
4.10 RECEIVABLES. All of the accounts receivable included in the
Assets represent bona fide sales made or services rendered by the Seller prior
to the Closing Date. To the best of the Seller's and the Equityholders'
knowledge, (i) no offsets, deductions or claims have been asserted against or in
respect of any of such accounts receivable, and (ii) all of such accounts
receivable will be collectible by the Buyer in the ordinary course of business
(and without requirement to resort to any legal proceedings) subsequent to the
Closing Date.
4.11 WETUMPKA FACILITY.
(a) The Wetumpka Facility constitutes all of the real
property interests owned by the Seller which comprise, form a part of, or are
used in connection with the Business.
(b) On the Closing Date, the Seller will have good and
marketable title to and actual possession of the Wetumpka Facility free and
clear of any and all liens and encumbrances except the Permitted Encumbrances
(as defined in Section 8.7(a)).
(c) As of the date hereof, to the best knowledge of the
Seller and the Equityholders, the use being made of the Wetumpka Facility is in
conformity with the certificates of occupancy or other similar certificates
issued therefor; all licenses and permits required for the continued operation
of the Wetumpka Facility have been issued and are in full force and effect; and
the operation of the Wetumpka Facility complies with all federal, state and
local laws, rules and regulations applicable thereto.
(d) The Wetumpka Facility will be in the same condition on
the Closing Date as on the date hereof, subject to ordinary wear and tear.
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(e) As of December 1, 1999, all utilities serving the
Wetumpka Facility are supplied directly to the Wetumpka Facility and cost of
installation of such utilities is fully paid.
(f) The Seller has no knowledge of any federal, state or
local plans to change the highway or road system in the vicinity of the Wetumpka
Facility or to restrict or change access from any such highway or road to the
Wetumpka Facility or of any pending or threatened condemnation of any portion of
the land used in connection with the Wetumpka Facility.
(g) To the knowledge of the Seller (after reasonable
internal inquiry), except as otherwise disclosed in the Phase I nvironmental
Assessment Report prepared by Law Engineering and Environmental Services, Inc.
for the Buyer regarding the Wetumpka Facility:
(i) no Hazardous Materials (hereinafter defined) have
been present at the Wetumpka Facility;
(ii) no Release (as defined below) of any Hazardous
Materials or any petroleum product or by-product has occurred at, upon
or under the Wetumpka Facility;
(iii) the Seller does not have any current contingent
liability in connection with the Release of any Hazardous Materials
into the indoor or outdoor environment (whether on-site or off-site);
(iv) the Seller is not, nor will be, prior to the
Closing Date engaged in the generation, transportation, treatment,
storage or disposal of Hazardous Materials;
(v) the Wetumpka Facility does not now contain, nor in
the past has contained, any (A) underground or aboveground tanks for
the storage of fuel oil, gasoline and/or any other petroleum products,
(B) asbestos containing material, (C) equipment containing
polychlorinated biphenyls, or (D) by-products of Hazardous Materials;
(vi) the Seller is in compliance with all Environmental
Law (hereinafter defined) now in effect relating to Hazardous Materials
and applicable to the Wetumpka Facility;
(vii) the Seller has provided to the Buyer all
environmentally related audits, studies, reports, analyses, and results
of investigations that have been performed with respect to the Wetumpka
Facility;
(viii) the Seller has not received any notice of writs,
injunctions, decrees, orders or judgments outstanding, or suits,
claims, actions, proceedings or investigations instituted or threatened
under any Environmental Law applicable to the Wetumpka Facility;
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(ix) as used herein, the term "Environmental Law" means
any foreign, federal, state or local statue, regulation, ordinance, or
rule of common law in any way relating to the protection of human
health and safety or the environment including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Section 9601 ET SEQ.) ("CERCLA"); (B) the
Hazardous Materials Transportation Act (49 U.S.C. App. Section 1801 ET
SEQ.); (C) the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 ET SEQ.); (D) the Clean Water Act (33 U.S.C. Section
1251 ET SEQ.); (E) the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.);
(F) the Toxic Substance Control Act (15 U.S.C. Section 2601 ET SEQ.);
(G) the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
Section 136 ET SEQ.); and (H) the Occupational Safety and Health Act
(29 U.S.C. Section 651 ET SEQ.), and the regulations promulgated
pursuant thereto;
(x) as used herein, the term "Hazardous Materials"
means any substance, material or waste which is regulated by the United
States, or any state or local governmental authority including, without
limitation, petroleum and it's by-products, asbestos, and any material
or substance which is defined as a "hazardous waste," "hazardous
substance," "hazardous material," "restricted hazardous waste,"
"industrial waste," "solid waste," "contaminant," "pollutant," "toxic
waste" or "toxic substance" under any provision of Environmental Law;
and
(xi) as used herein, the term "Release" means any
release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, or leaching into indoor or outdoor
environment, or into or out of any property.
4.12 LEGAL COMPLIANCE.
(a) The Seller is (and has been at all times in the past
three (3) years) in compliance in all material respects with all laws, statutes,
regulations, rules and ordinances applicable to the conduct of its business
(including, without limitation, all environmental laws, rules and regulations,
and all other legal requirements relating to the storage, handling, processing,
use, transport or disposal of hazardous or regulated substances), and has in
full force and effect all licenses, permits and other authorizations required
for the conduct of the Business as presently constituted; and the Seller has not
received notice of any default or violation in respect of or under any of the
foregoing. Neither the Seller nor any of the Equityholders has any knowledge of
any reason why the Buyer will not be able to renew or have reissued (to the
extent required by applicable law) any of the licenses, permits and other
authorizations required for the continued conduct of the Business from and after
the Closing Date.
(b) Neither the Seller nor any of the Equityholders has
received any written notice of default or violation by the Seller with respect
to any judgment, order, writ, injunction, decree, demand or assessment issued by
any court or any federal, state, local, municipal or other governmental agency,
board, commission, bureau, instrumentality or department, domestic or foreign,
relating to any aspect of the Business or the Assets; and neither the Seller nor
any of its officers, directors or employees has received written notice of,
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been charged with, or is under investigation with respect to, any violation of
any provision of any federal, state, local, municipal or other law or
administrative rule or regulation, domestic or foreign, relating to any aspect
of the Business or the Assets.
4.13 EMPLOYEES. Except as disclosed in SCHEDULE 4.13 annexed
hereto, the Seller is not a party to or bound by any collective bargaining
agreement, employment agreement, consulting agreement, management agreement or
other commitment for the employment or retention of any person, and no union is
now certified or, to the best of the Seller's and the Equityholders' knowledge,
claims to be certified as a collective bargaining agent to represent any
employees of the Business. There are no labor disputes existing or, to the best
of the Seller's and the Equityholders' knowledge, threatened, involving any
employees of the Business, and the Seller has not had any unfair labor practice
charges or material labor difficulty in the past two (2) years.
4.14 EMPLOYEE BENEFITS. Except as disclosed in SCHEDULE 4.14
annexed hereto, the Seller does not maintain and is not required to make any
contributions to any pension, profit-sharing, retirement, deferred compensation
or other such plan or arrangement for the benefit of any employee, former
employee or other person. The Seller has, on the date hereof, made all required
payments, contributions and filings under or in respect of any such plans or
arrangements, and there has not occurred any act, omission, event or condition
such as would give rise to any liability of the Seller thereunder other than the
obligations to make normal payments and contributions thereunder.
4.15 CONTRACTS. (a) The Seller has no contracts or commitments
relating to the Assets or the Business, whether written or oral and whether or
not legally binding, other than:
(i) the contracts and commitments set forth in SCHEDULE
4.15 annexed hereto;
(ii) purchase orders, each of which, to the best
knowledge of the Seller and the Equityholders, (1) is in the ordinary
course of business, (2) involves a purchase price of less than $20,000,
and (3) is performable by the Seller within six months from the date
hereof;
(iii) sale orders, each of which, to the best knowledge
of the Seller and the Equityholders, (1) is in the ordinary course of
business, (2) involves pricing consistent with the Seller's usual
practice, (3) involves an aggregate sales price of less than $20,000,
and (4) is performable by the Seller within six months from the date
hereof; and
(iv) maintenance, service and other contracts relating
to the Assets or the Business, each of which (1) is in the ordinary
course of business, (2) involves an aggregate expenditure of less than
$10,000 after the date hereof, and (3) is terminable by the Seller
without penalty on notice of 30 days or less.
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(b) The Seller is not in default under any of the contracts
set forth in Parts I and II of SCHEDULE 4.15, and has no knowledge of any
default with respect to any such contract by the other party to any such
contract or any claim of default by any such party. Complete and correct copies
of all contracts together with all amendments thereto (or, in the case of oral
contracts and commitments, a description thereof) referred to in paragraph
(a)(i) of this Section 4.15 and listed in SCHEDULE 4.15 have been delivered to
the Buyer.
(c) All of the Purchase Orders and Sales Orders were made
by the Seller in the ordinary course of the Business. The Purchase Orders do not
include the sale of additional products or services or grant special discounts
other than as is stated in any applicable written purchase order contract.
4.16 LITIGATION. Except as disclosed in SCHEDULE 4.16 annexed
hereto, there is no pending or, to the best knowledge of the Seller and the
Equityholders, threatened litigation, arbitration, administrative proceeding or
other legal action or proceeding against the Seller or relating to its Business.
Neither the Seller nor any of the Equityholders is aware of any event, cause or
condition which might reasonably give rise to or properly form the basis of any
such suit, action, arbitration or proceeding. The Seller is not currently
engaged in any legal action to recover any sums of money due to the Seller or
damages sustained by the Seller.
4.17 INTELLECTUAL PROPERTY. The Seller has the valid right to
utilize any and all trade names and other intellectual property utilized in its
Business (including but not limited to the Intellectual Property, all of which
is disclosed in SCHEDULE 4.17 annexed hereto), and has not received notice of
any pending challenge to its rights therein or any claimed infringement of such
intellectual property with the rights or property of any other person. The
Seller has not granted any license or other right to any person to utilize any
of the Intellectual Property for any purpose.
4.18 YEAR 2000. None of the Fixed Assets or any stored
information relating to any of the Assets contains or relies upon embedded
information which will suffer any material disruption or interruption by reason
of or in respect of the entry of dates which are on or after January 1, 2000, or
the operation thereof on or after January 1, 2000.
4.19 AFFILIATE TRANSACTIONS. Except as disclosed in SCHEDULE
4.19 annexed hereto, none of the assets required for the operation of the
Business is owned by, leased from or leased to any of the Equityholders or any
of their respective affiliates.
4.20 GOING CONCERN. Neither the Seller nor any of the
Equityholders has any knowledge of any fact, event, circumstance or condition
(including but not limited to any announced or anticipated changes in the
policies of any material customer) that would materially impair the ability of
the Buyer to continue the Business heretofore conducted by the Seller in
substantially the manner heretofore conducted by the Seller (other than general,
industry-wide conditions).
4.21 ACCURACY OF INFORMATION. None of the representations and
warranties of the Seller or the Equityholders contained herein or in any
Schedule hereto contains any untrue
11
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein not misleading in light of the
circumstances in which made. To the best of the Seller's and the Equityholders'
knowledge, the Seller and the Equityholders have disclosed to the Buyer, as the
purchaser of the Assets and the Business, all material information relating to
the Assets and the Business.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Seller's sale of the Assets to the Buyer,
the Buyer hereby represents and warrants to the Seller and the Equityholders as
follows:
5.1 ORGANIZATION, GOOD STANDING AND OWNERSHIP. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with all necessary power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
5.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Buyer has been duly and validly authorized by the
Board of Directors of the Buyer. No further corporate authorization is required
on the part of the Buyer to consummate the transactions contemplated hereby.
5.3 VALID AND BINDING AGREEMENT. This Agreement, and, when
executed and delivered by the Buyer, the Escrow Agreement, the Assumption
Agreement, the Non-Competition Agreements and the Deed (as such terms are
hereinafter defined), constitute and will constitute the legal, valid and
binding obligations of the Buyer, enforceable against the Buyer in accordance
with their respective terms.
5.4 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement and/or the Escrow Agreement, the Assumption
Agreement, the Non-Competition Agreements or the Deed by the Buyer, nor
compliance with the terms and provisions of this Agreement and/or the Escrow
Agreement, the Assumption Agreement, the Non-Competition Agreements and the Deed
on the part of the Buyer, will: (a) violate any statute or regulation of any
governmental authority, domestic or foreign, affecting the Buyer; (b) require
the issuance of any authorization, license, consent or approval of any federal
or state governmental agency; or (c) conflict with or result in a breach of any
of the terms, conditions or provisions of any judgment, order, injunction,
decree, note, indenture, loan agreement or other agreement or instrument to
which the Buyer is a party, or by which the Buyer is bound, or constitute a
default thereunder.
5.5 ACCURACY OF INFORMATION. None of the representations and
warranties of the Buyer contained herein contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances in which made.
To the best of the Buyer's knowledge, the Buyer has disclosed to the Seller, as
the seller of the Assets and the Business, all material information relating to
the Buyer's ability to perform hereunder.
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6. THE SELLER'S OBLIGATIONS BEFORE THE CLOSING DATE.
The Seller covenants and agrees that, from the date hereof until
the Closing Date:
6.1 ACCESS TO INFORMATION.
(a) The Seller shall permit the Buyer and its counsel,
accountants and other representatives, upon reasonable advance notice to the
Seller, during normal business hours and without undue disruption of the
business of the Seller, to have reasonable access to all properties, books,
accounts, records, contracts, documents and information relating to the Seller
and the Business. The Buyer and its representatives shall also be permitted to
freely consult with the Seller's counsel concerning the Seller and the Business.
(b) The Seller will make available to the Buyer and its
accountants all financial and tax records relating to the Seller and the
Business, and shall cause the Seller's accountants to cooperate with the Buyer's
accountants and make available to the Buyer's accountants all work papers and
other materials developed by or in the possession of the Seller's accountants,
for the purpose of assisting the Buyer's accountants in (i) verifying the
accuracy of the Financial Statements and the other representations and
warranties of the Seller and the Equityholders pursuant to Sections 4.6 and 4.8
above.
6.2 CONDUCT OF BUSINESS IN NORMAL COURSE. The Seller shall
carry on their business activities in substantially the same manner as
heretofore conducted, shall maintain inventories in types and amounts consistent
with historical practice, and shall not make or institute any unusual or novel
practices or methods of service, sale, purchase, lease, management, accounting
or operation that will vary materially from those methods used by the Seller as
of the date hereof, without in each instance obtaining the prior written consent
of the Buyer.
6.3 PRESERVATION OF BUSINESS AND RELATIONSHIPS. The Seller
shall, without making or incurring any unusual commitments or expenditures, use
all reasonable efforts to preserve its business organization intact, and
preserve its present relationships with referral sources, clients, customers,
suppliers and others having business relationships with the Seller.
6.4 MAINTENANCE OF INSURANCE. The Seller shall continue to
carry its existing insurance, to the extent obtainable upon reasonable terms.
6.5 CORPORATE MATTERS. The Seller shall not, without the prior
written consent of the Buyer in each instance:
(a) amend, cancel or modify any material contract or enter
into any material new agreement, commitment or transaction except, in each
instance, in the ordinary course of business;
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(b) pay, grant or authorize any material salary increases
or bonuses except in the ordinary course of business and consistent with past
practice, or enter into any employment, consulting or management agreements;
(c) modify in any material respect any material agreement
to which the Seller is a party or by which it may be bound, except in the
ordinary course of business;
(d) make any change in management personnel;
(e) except pursuant to commitments in effect on the date
hereof (to the extent disclosed in this Agreement or in any Schedule hereto),
make any capital expenditure(s) or commitment(s), whether by means of purchase,
lease or otherwise, or any operating lease commitment(s), in excess of $50,000
in the aggregate;
(f) dispose of or transfer any asset outside of the
ordinary course of the Business, or sell, assign or dispose of any capital
asset(s) with a net book value in excess of $25,000 as to any one item or
$50,000 in the aggregate as to all items;
(g) materially change its method of collection of accounts
or notes receivable, or slow in any material respect its payment of accounts
payable;
(h) make any payment or distribution of any assets or
property other than cash to the Equityholders;
(i) incur any material liability or indebtedness except, in
each instance, in the ordinary course of business;
(j) subject any of its assets or properties to any liens or
encumbrances; or
(k) agree to do, or take any action in furtherance of, any
of the foregoing.
7. ADDITIONAL AGREEMENTS OF THE PARTIES.
7.1 CONFIDENTIALITY. Notwithstanding anything to the contrary
contained in this Agreement, and subject only to any disclosure requirements
which may be imposed upon any party under applicable state or federal securities
or antitrust laws, it is expressly understood and agreed by the parties that,
except with respect to matters or information which are publicly available other
than by reason of a breach of this Section 7.1, (i) this Agreement, the
Disclosure Schedules hereto, and the conversations, negotiations and
transactions relating hereto and/or contemplated hereby, and (ii) all financial
information, business records and other non-public information concerning either
party which the other party or its representatives has received or may hereafter
receive, shall be maintained in the strictest confidence by the recipient and
its representatives, and shall not be disclosed to any person that is not
associated or affiliated with the recipient and involved in the transactions
contemplated hereby, without the prior written
14
approval of the party which provided the information. The parties hereto shall
use their best efforts to avoid disclosure of any of the foregoing or undue
disruption of any of the business operations or personnel of the parties, and no
party shall issue any press release or other public announcement regarding the
transactions contemplated hereby without the prior approval of each other party
(such approval not to be unreasonably withheld or delayed). In the event that
the transactions contemplated hereby shall not be consummated for any reason,
each party covenants and agrees that neither it nor any of its representatives
shall, except to the extent required in connection with any claims arising out
of the termination of this Agreement, retain (other than information which is
publicly available other than by reason of a breach of this Section 7.1) any
documents, lists or other writings of any other party which it may have received
or obtained in connection herewith or any documents incorporating any of the
information contained in any of the same (all of which, and all copies thereof
in the possession or control of the recipient or its representatives, shall be
returned to the party which provided the information).
7.2 EXCLUSIVITY. From the date hereof through any termination
of this Agreement in accordance with Section 11 below, the Seller and the
Equityholders shall not (and shall not permit any of their directors, officers
or affiliates to) negotiate with or enter into any other commitments, agreements
or understandings with any person, firm or corporation (other than the Buyer) in
respect of any sale of equity interests in or assets of the Seller, any merger,
consolidation or corporate reorganization, or any other such transaction
relating to the Seller or the Business.
7.3 COVENANT NOT TO COMPETE. The Seller acknowledges that an
important part of the consideration which the Buyer will receive in connection
with the transactions contemplated hereby is the goodwill of the Business and
the confidential information of the Seller (including, without limitation, trade
secrets, customer lists, manufacturing processes, technology, know-how and other
proprietary information). In order that the Buyer may enjoy the benefits of such
goodwill and such confidential information, the Seller and Summit America,
L.L.C. will not in any manner compete with the Buyer or, directly or indirectly,
own, manage, operate, control, be a consultant to, participate or have any
interest in or be connected in any manner with, the ownership, management,
operation or control of any business manufacturing or selling chalkboards or
other visual display boards in the United States of America until the fifth
anniversary of the Closing.
7.4 ESCROW AGREEMENT; XXXX OF SALE; TRANSFER DOCUMENTS;
ASSUMPTION AGREEMENT.
(a) On the Closing Date, (i) the Seller and the Escrow
Agent named therein shall execute and deliver to the Buyer an escrow agreement
in respect of a portion of the Consideration in substantially the form of
EXHIBIT B annexed hereto (the "Escrow Agreement"), and (ii) the Seller shall
execute and deliver to the Buyer a Xxxx of Sale and Assignment in respect of the
Assets in substantially the form of EXHIBIT C annexed hereto (the "Xxxx of
Sale"). In addition, to the extent that specific assignments may be necessary or
appropriate in respect of any of the Assets, and/or to the extent that any of
the Assets are represented by certificates of
15
title or other documents, then the Seller shall, on the Closing Date, execute
and deliver to the Buyer any and all additional transfer documents, and shall
endorse to and in the name of the Buyer all certificates of title and other such
documents, as may be necessary or appropriate in order to effect the full
transfer to the Buyer of all of the Assets.
(b) On the Closing Date, the Seller and the Buyer shall
execute and deliver to one another an Instrument of Assumption in respect of the
Assumed Liabilities in substantially the form of EXHIBIT D annexed hereto (the
"Assumption Agreement"). In addition, to the extent that specific assignments
may be required in order to effect the assignment to and assumption by the Buyer
of any particular Assumed Liabilities, the Seller and the Buyer shall, on the
Closing Date, execute and deliver to one another such additional assignment and
assumption documents.
7.5 NON-COMPETITION AGREEMENTS. On the Closing Date, the Buyer
(on the one hand) and W. Xxxxxx Xxxxxx, Jr., Xxxx Xxxxxx and Xxxxxxx Xxx (on the
other hand) shall execute and deliver to one another Non-Competition and
Non-Disclosure Agreements in substantially the form of EXHIBIT E annexed hereto
(collectively, the "Non-Competition Agreements").
7.6 NAME CHANGE. On the Closing Date, the Seller and its
affiliates shall execute and deliver to the Buyer, for filing with the Secretary
of State of the State of Alabama, an Amendment of the Articles of Organization
of the Seller and an Amendment to the Articles of Incorporation of American
Chalkboard, Inc. whereby the name of the Seller and each of its affiliates will
be changed to a name that does not include "American Chalkboard" or any
confusingly similar name (the "Articles of Amendment").
7.7 CERTAIN WARRANTY CLAIMS; INDEMNITY. In the event a claim is
brought against the Seller for faulty or defective chalkboards or other visual
display boards, which were provided by the Seller prior to the Closing Date, the
Buyer shall repair or replace such faulty or defective boards, and the Seller
shall indemnify the Buyer, at Buyer's actual cost, to make such repair or
replacement. However, the Seller shall have no obligation to indemnify the Buyer
for such costs in the event the boards were faulty or defective as a result of
the porcelain enamel steel material supplied by Alliance America to the Seller,
in which case the Buyer shall be responsible for all costs and expense of repair
or replacement.
7.8 ADDITIONAL AGREEMENTS AND INSTRUMENTS. On or before the
Closing Date, the Buyer, the Seller and the Equityholders shall execute, deliver
and file all exhibits, agreements, certificates, instruments and other
documents, not inconsistent with the provisions of this Agreement, which, in the
opinion of counsel to the parties hereto, shall reasonably be required to be
executed, delivered and filed in order to consummate the transactions
contemplated by this Agreement.
7.9 NON-INTERFERENCE. None of the Buyer, the Seller or the
Equityholders shall cause to occur any act, event or condition which would cause
any of their respective representations and warranties made in this Agreement to
be or become untrue or incorrect in any material respect as of the Closing Date,
or would interfere with, frustrate or render
16
unreasonably expensive the satisfaction by the other party or parties of any of
the conditions precedent set forth in Sections 8 and 9 below.
7.10 TERMINATION OF SUPPLY AGREEMENT. The Long-Term Supply
Agreement, dated as of December 2, 1999, between Alliance America, a Division of
PolyVision Corporation, and the Seller, shall automatically terminate and be of
no further force or effect on the Closing Date.
8. CONDITIONS PRECEDENT TO THE BUYER'S PERFORMANCE.
In addition to the fulfillment of the parties' agreements in
Section 7 above, the obligations of the Buyer to consummate the transactions
contemplated by this Agreement are further subject to the satisfaction, at or
before the Closing Date, of all the following conditions, any one or more of
which may be waived in writing by the Buyer:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by the Seller and/or the Equityholders in
this Agreement and in any letter, statement, certificate or other document
delivered to the Buyer pursuant to this Agreement shall be true and correct on
and as of the Closing Date as though such representations and warranties were
made on and as of that date.
8.2 PERFORMANCE. The Seller and the Equityholders shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by them
on or before the Closing Date.
8.3 CERTIFICATION. The Buyer shall have received a certificate,
dated the Closing Date, signed by the Seller and the Equityholders, certifying,
in such detail as the Buyer and its counsel may reasonably request, that the
conditions specified in Sections 8.1 and 8.2 above have been fulfilled.
8.4 RESOLUTIONS. The Buyer shall have received certified
resolutions of the Manager or Board of Managers and the Equityholders of the
Seller, in form reasonably satisfactory to counsel for the Buyer, authorizing
the Seller's execution, delivery and performance of this Agreement and all
actions to be taken by the Seller hereunder.
8.5 OPINION OF THE SELLER'S COUNSEL. The Buyer shall have
received a written opinion from Page, Scrantom, Sprouse, Xxxxxx & Ford, P.C.,
counsel for the Seller, addressed to the Buyer and dated the Closing Date,
satisfactory to the Buyer as to form and substance, in substantially the form of
EXHIBIT G annexed hereto.
8.6 ABSENCE OF LITIGATION. No action, suit or proceeding by or
before any court or any governmental body or authority, against the Seller or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall have been instituted on or before the Closing Date, which
action, suit or proceeding would, if determined adversely, have a material
adverse effect on the Business or any material portion of the Assets.
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8.7 TITLE INSURANCE; SURVEY.
(a) The Buyer shall have received a title commitment for an
owner's fee title insurance policy with respect to the Wetumpka Facility (the
"Title Commitment"), which policy shall be issued on American Land Title
Association Owner's Form B, including mechanics' lien coverage and survey
coverage, by a reputable title insurance company reasonably satisfactory to the
Buyer (the "Title Company"). The owner's title insurance policy (the "Title
Policy") shall be dated the Closing Date and be in amounts reasonably acceptable
to the Buyer based upon the Purchase Price, and insuring the Buyer's fee simple
title to the Wetumpka Facility, subject to no exceptions, whether standard,
printed or otherwise, except such standard or printed exceptions as are required
to be included by applicable law or regulations, or as are, by custom or
practice uniformly and consistently adhered to, not waived or omitted,
notwithstanding mechanics' lien and survey coverage under the policy (the
"Permitted Encumbrances").
(b) The Buyer shall have received a current, accurate
survey of the Wetumpka Facility, certified to the Buyer and the Title Company,
dated no more than thirty (30) days prior to the Closing Date and prepared and
certified by a licensed surveyor acceptable to the Title Company. Such survey
shall locate all buildings and improvements, encroachments, easements and other
encumbrances, and shall contain a certification by the surveyor stating that the
buildings and improvements comply with all zoning requirements applicable to the
Wetumpka Facility; PROVIDED, HOWEVER, that the foregoing zoning certification
shall not be required if the Title Company shall provide such certification in
the form of a zoning endorsement.
8.8 CONSENTS. All necessary disclosures to and agreements and
consents of (i) any parties to any material contracts and/or any licensing
authorities which are material to the Business, and (ii) any governmental
authorities or agencies to the extent required to be obtained prior to the
Closing in connection with the transactions contemplated by this Agreement,
shall have been obtained and true and complete copies thereof delivered to the
Buyer. Any such material consents must be obtained without imposing any
unreasonable burden or obligation on the Buyer or the Business from and after
the Closing Date.
8.9 AVAILABILITY OF FUNDS. The Buyer shall have available on
the Closing Date sufficient funds to enable it to consummate the transactions
contemplated by this Agreement.
8.10 EXECUTION AND DELIVERY OF EXHIBITS. On or before the
Closing Date, (a) the Seller shall have executed and delivered to the Buyer the
Escrow Agreement, the Xxxx of Sale, the Assumption Agreement and the Articles of
Amendment, (b) the Equityholders and the other parties thereto shall have
executed and delivered to the Buyer the Non-Competition Agreements, and (c) the
Escrow Agent shall have executed and delivered to the Buyer the Escrow
Agreement.
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9. CONDITIONS PRECEDENT TO THE SELLER'S AND THE EQUITYHOLDERS'
PERFORMANCE.
In addition to the fulfillment of the parties' agreements in
Section 7 above, the obligations of the Seller and the Equityholders to
consummate the transactions contemplated by this Agreement are further subject
to the satisfaction, at or before the Closing Date, of all of the following
conditions, any one or more of which may be waived in writing by the Seller and
the Equityholders:
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by the Buyer in this Agreement and in any
letter, statement, certificate or other document delivered to the Seller and/or
the Equityholders pursuant to this Agreement shall be true and correct on and as
of the Closing Date as though such representations and warranties were made on
and as of that date.
9.2 PERFORMANCE. The Buyer shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer on or before
the Closing Date.
9.3 CERTIFICATION. The Seller and the Equityholders shall have
received a certificate, dated the Closing Date, signed by the Buyer, certifying,
in such detail as the Seller and the Equityholders and its counsel may
reasonably request, that the conditions specified in Sections 9.1 and 9.2 above
have been fulfilled.
9.4 OPINION OF THE BUYER'S COUNSEL. The Seller shall have
received a written opinion from Xxxxxxxxx Traurig, counsel for the Buyer,
addressed to the Seller and dated the Closing Date, satisfactory to the Seller
as to form and substance, in substantially the form of EXHIBIT H annexed hereto.
9.5 EXECUTION AND DELIVERY OF EXHIBITS. On or before the
Closing Date, (a) the Buyer shall have executed and delivered to the Seller, the
Deed, the Escrow Agreement and the Assumption Agreement, and (b) the Buyer shall
have executed and delivered to the Equityholders and the other parties thereto
the Non-Competition Agreements.
10. CLOSING.
10.1 PLACE AND DATE OF CLOSING. Unless this Agreement shall be
terminated pursuant to Section 11 below, the consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of counsel to the Buyer, Xxxxxxxxx Xxxxxxx, located at MetLife Building, 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as is
agreed to between the parties, at 10:00 a.m., local time, on January 21, 2000,
or such later date (not later than February 15, 2000) as may be reasonably
agreeable to all parties (the date of the Closing being referred to in this
Agreement as the "Closing Date").
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10.2 ACTIONS AT CLOSING. On the Closing Date, (a) the Buyer
shall pay to the Seller the portion of the Consideration provided in Section
3.1(b) above, (b) the Seller shall execute and deliver to the Buyer the Deed and
a Xxxx of Sale in respect of the Assets, together with such further conveyancing
documents in respect of the Assets (including but not limited to endorsements of
vehicle titles and other title documents, as appropriate) as may be necessary or
appropriate in order to effect the transfer of the Assets to the Buyer, (c) the
Buyer (on the one hand) and W. Xxxxxx Xxxxxx, Jr., Xxxx Xxxxxx and Xxxxxxx Xxx
(on the other hand) shall execute and deliver to one another Non-Competition
Agreements, and (d) the Seller shall deliver to the Buyer correct and complete
pay-off letters of the Seller's creditors as of the Closing Date (setting forth
names, addresses and amounts owed), and the Buyer shall, out of the
Consideration, remit payment to the subject creditors of the full amounts
reflected in such schedule.
10.3 TITLE TO WETUMPKA FACILITY. The Seller shall convey good
and marketable title, free and clear of all liens and encumbrances (except the
Permitted Encumbrances described in Section 8.7), to the Wetumpka Facility by
general warranty deed, in recordable form, substantially in the form set forth
in EXHIBIT F annexed hereto (the "Deed") (a) sufficient to transfer all right,
title and interest in and to the Wetumpka Facility to the Buyer on the Closing
Date, and (b) duly executed and acknowledged and with all documentary, revenue
and tax stamps in the required amounts affixed thereto by the Seller at its
expense. The Wetumpka Facility shall be accurately described in the Deed, by a
metes and bounds description or in such other manner as shall be reasonably
acceptable to the Buyer or the Title Company (as such term is defined in Section
8.7), such description to be as set forth in the title insurance policy referred
to in Section 8.7(a) hereof.
11. TERMINATION OF AGREEMENT.
11.1 GENERAL. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing: (a) by the mutual written consent of the Buyer, the Seller and the
Equityholders; (b) by the Buyer, or by the Seller and the Equityholders; if: (i)
a material breach shall exist with respect to the written representations and
warranties made by the other party or parties, as the case may be, and not cured
promptly if curable, (ii) the other party or parties, as the case may be, shall
take any action prohibited by this Agreement, if such actions shall or may have
a material adverse effect on the Business and/or the transactions contemplated
hereby, and not cured promptly if curable, (iii) the other party or parties, as
the case may be, shall not have furnished, upon reasonable notice therefor, such
certificates and documents required in connection with the transactions
contemplated hereby and matters incidental thereto as it or they shall have
agreed to furnish, and it is reasonably unlikely that the other party or parties
will be able to furnish such item(s) prior to the Outside Closing Date specified
below, or (iv) any consent of any third party to the transactions contemplated
hereby (whether or not the necessity of which is disclosed herein or in any
Disclosure Schedule hereto) is reasonably necessary to prevent a default under
any outstanding material obligation of the Buyer or the Seller, and such consent
is not obtainable without material cost or penalty (unless the party or parties
not seeking to terminate this Agreement agrees or agree to pay such cost or
penalty); or (c) by the Buyer or by the Seller and
20
the Equityholders, at any time on or after February 15, 2000 (the "Outside
Closing Date"), if the transactions contemplated hereby shall not have been
consummated prior thereto, and the party directing termination shall not then be
in material breach or default of any obligations imposed upon such party by this
Agreement.
11.2 EFFECT OF TERMINATION. In the event of termination by
either party as above provided in this Section 11, prompt written notice shall
be given to the other party. Termination of this Agreement shall not relieve any
party of any of its obligations pursuant to Section 7.1 above, and shall not
relieve any breaching party from liability for any breach of this Agreement.
12. INDEMNIFICATION.
12.1 GENERAL.
(a) Without prejudice to any rights of contribution as
between or among the Seller and the Equityholders, the Seller and the
Equityholders shall jointly and severally defend, indemnify and hold harmless
the Buyer from, against and in respect of any and all claims, losses, costs,
expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorneys' fees, that the Buyer may
incur, sustain or suffer ("Losses") as a result of (i) any breach of, or failure
by the Seller or the Equityholders to perform, any of the representations,
warranties, covenants or agreements of the Seller or the Equityholders contained
in this Agreement or in any Disclosure Schedule to this Agreement, and/or (ii)
any failure by the Seller to pay or perform when due any of its retained
liabilities.
(b) The Buyer shall defend, indemnify and hold harmless the
Seller and the Equityholders from, against and in respect of any and all claims,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees, that
the Seller or the Equityholders may incur, sustain or suffer as a result of (i)
any breach of, or failure by the Buyer to perform, any of the representations,
warranties, covenants or agreements of the Buyer contained in this Agreement,
and/or (ii) any failure by the Buyer to pay or perform when due any of the
Assumed Liabilities.
12.2 LIMITATIONS ON CERTAIN INDEMNITY.
(a) Notwithstanding any other provision of this Agreement
to the contrary, neither the Seller nor any of the Equityholders shall be liable
to the Buyer with respect to Losses unless and until the aggregate amount of all
Losses incurred by the Buyer shall exceed the sum of $50,000 (the "Basket");
PROVIDED, HOWEVER, that the Basket shall not be available with respect to any
Losses under Section 12.1(a)(ii) above or any Losses involving proven fraud by
the Seller or any Equityholder. The Seller and the Equityholders shall
thereafter be jointly and severally liable for all Losses in excess of the
Basket, provided that the Seller's and the Equityholders' maximum aggregate
liability in respect of all Losses shall not in any event exceed the aggregate
amount of $2,625,000 (the "Limitation"); PROVIDED, HOWEVER, that the Limitation
shall not be available with respect to any Losses under Sections 4.7, 4.8,
21
4.11, 4.12 and 4.14 or any Losses involving proven fraud by the Seller or the
Equityholders. The Buyer shall, in respect of any such Losses, seek recourse
first against the Escrow Fund in accordance with the procedures set forth in
this Section 12 and the Escrow Agreement.
(b) The Buyer shall be entitled to indemnification by the
Seller and the Equityholders for Losses only in respect of claims for which
notice of claim shall have been given to the Seller or the Equityholder on or
before the second anniversary of the Closing Date.
12.3 CLAIMS FOR INDEMNITY. Whenever a claim shall arise for
which any party shall be entitled to indemnification hereunder, the indemnified
party shall notify the indemnifying party in writing within sixty (60) days of
the indemnified party's first receipt of notice of, or the indemnified party's
obtaining actual knowledge of, such claim, and in any event within such shorter
period as may be necessary for the indemnifying party or parties to take
appropriate action to resist such claim. Such notice shall specify all facts
known to the indemnified party giving rise to such indemnity rights and shall
estimate (to the extent reasonably possible) the amount of potential liability
arising therefrom. If the indemnifying party shall be duly notified of such
dispute, the parties shall attempt to settle and compromise the same or may
agree to submit the same to arbitration or, if unable or unwilling to do any of
the foregoing, such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement, compromise,
arbitration or litigation shall promptly thereafter be paid and satisfied by
those indemnifying parties obligated to make indemnification hereunder.
12.4 RIGHT TO DEFEND. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by any
third party against the indemnified party or any of its affiliates, the
indemnifying party or parties shall be entitled (without prejudice to the
indemnified party's right to participate at its own expense through counsel of
its own choosing), at their expense and through a single counsel of their own
choosing, to defend or prosecute such claim in the name of the indemnifying
party or parties, or any of them, or if necessary, in the name of the
indemnified party. In any event, the indemnified party shall give the
indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or demand
is solely money damages, the indemnifying party shall have fifteen (15) days
after receipt of such notice of settlement to object to the proposed compromise
or settlement, and if it does so object, the indemnifying party shall be
required to undertake, conduct and control, though counsel of its own choosing
and at its sole expense, the settlement or defense thereof, and the indemnified
party shall cooperate with the indemnifying party in connection therewith.
13. POST-CLOSING EVENTS.
13.1 CORPORATE NAME. From and after the Closing Date, the Seller
and its affiliates shall cease and desist from any and all further use of the
name "American Chalkboard" or any confusingly similar name, other than for
purposes of filing routine reports, tax returns and other such items. The Seller
and its affiliates shall, upon request of the Buyer made at any time from and
after the Closing Date, execute and deliver (and permit the Buyer to
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file) an amendment of the Seller's Articles of Organization and an amendment to
the Articles of Incorporation of American Chalkboard, Inc. whereby the name of
the Seller and each of its affiliates shall be changed to a name that does not
include the name "American Chalkboard" or any confusingly similar name.
13.2 ACCOUNTS RECEIVABLE COLLECTIONS. To the extent that, at any
time from and after the Closing Date, the Seller shall receive payment of any
accounts receivable included in the Assets, the Seller shall immediately turn
same over to the Buyer in the form received (subject to any necessary
endorsement), and pending such delivery, shall hold same in trust for the
benefit of the Buyer. Each of the Buyer and the Seller shall be permitted to
pursue collection of its accounts receivable in the normal course of business
and utilizing collection methods which are customary in the historic operation
of its business.
13.3 FURTHER ASSURANCES. From time to time from and after the
Closing Date, the parties will execute and deliver to one another any and all
further agreements, instruments, certificates and other documents as may
reasonably be requested by any other party in order more fully to consummate the
transactions contemplated hereby, and to effect an orderly transition of the
business being acquired by the Buyer hereunder.
14. COSTS.
14.1 FINDER'S OR BROKER'S FEES. Each of the Buyer, the Seller
and the Equityholders represents and warrants that neither they nor any of their
respective affiliates have dealt with any broker or finder in connection with
any of the transactions contemplated by this Agreement, and no broker or other
person is entitled to any commission or finder's fee in connection with any of
these transactions.
14.2 EXPENSES. The Buyer, the Seller and the Equityholders shall
each pay all costs and expenses incurred or to be incurred by them,
respectively, in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.
15. FORM OF AGREEMENT.
15.1 EFFECT OF HEADINGS. The Section headings used in this
Agreement and the titles of the Schedules hereto are included for purposes of
convenience only, and shall not affect the construction or interpretation of any
of the provisions hereof or of the information set forth in such Schedules.
15.2 ENTIRE AGREEMENT; WAIVERS. This Agreement and the other
agreements and instruments referred to herein constitute the entire agreement
between the parties pertaining to the subject matter hereof, and supersede all
prior agreements or understandings as to such subject matter. No party hereto
has made any representation or warranty or given any covenant to the other
except as set forth in this Agreement, the Schedules hereto, and the other
agreements and instruments referred to herein. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provisions, whether or
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not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
15.3 COUNTERPARTS. This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
16. PARTIES.
16.1 PARTIES IN INTEREST. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns, nor is anything in this Agreement intended to
relieve or discharge the obligations or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over or against any party to this Agreement.
16.2 NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, on the first day after delivery thereof to a
recognized overnight delivery service for next day delivery with all charges
prepaid or billed to the account of the sender, or on the third day after
mailing if mailed to the party to whom notice is to be given, by first class
mail, registered or certified, postage prepaid, and properly addressed as
follows:
(a) If to the Seller and/or the Equityholders, to:
c/o Summit America, L.L.C.
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Mr. W. Xxxxxx Xxxxxx, Jr.
with a copy to:
Page, Scrantom, Sprouse, Xxxxxx & Ford, P.C.
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
(b) If to the Buyer, to:
c/o PolyVision Corporation
0000 Xxxxx Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxx
President and Chief Executive Officer
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with a copy to:
Xxxxxxxxx Traurig
MetLife Building
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
or to such other address as either party shall have specified by notice in
writing given to the other party.
17. MISCELLANEOUS.
17.1 AMENDMENTS AND MODIFICATIONS. No amendment or modification
of this Agreement or any Schedule hereto shall be valid unless made in writing
and signed by the party to be charged therewith.
17.2 NON-ASSIGNABILITY; BINDING EFFECT. Neither this Agreement,
nor any of the rights or obligations of the parties hereunder, shall be
assignable by any party hereto without the prior written consent of all other
parties hereto. Otherwise, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
17.3 GOVERNING LAW; JURISDICTION. This Agreement shall be
construed and interpreted and the rights granted herein governed in accordance
with the laws of the State of Georgia applicable to contracts made and to be
performed wholly within such State. Except as otherwise provided in Section 12.3
above, any claim, dispute or controversy arising under or in connection with
this Agreement or any actual or alleged breach hereof shall be settled
exclusively by arbitration to be held in Atlanta, Georgia, or in any other
locale or venue as legal jurisdiction may otherwise be had over the party
against whom the proceeding is commenced, before a single arbitrator appointed
pursuant to and in accordance with the commercial arbitration rules of the
American Arbitration Association then obtaining. As part of his or her award,
the arbitrator shall make a fair allocation of the fee of the American
Arbitration Association, the cost of any transcript, and the parties' reasonable
attorneys' fees, taking into account the merits and good faith of the parties'
claims and defenses. Judgment may be entered on the award so rendered in any
court having jurisdiction. Any process or other papers hereunder may be served
by registered or certified mail, return receipt requested, or by personal
service, provided that a reasonable time for appearance or response is allowed.
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IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the date first set forth above.
GREENSTEEL, INC.
By: /s/Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
AMERICAN CHALKBOARD COMPANY, L.L.C.
By: /s/Xxxxxxx Xxx
--------------------------------
Xxxxxxx Xxx, Manager
SUMMIT AMERICA, L.L.C.
By: /s/Xxxxxxx Xxx
--------------------------------
Xxxxxxx Xxx, Manager
/s/W. Xxxxxx Xxxxxx, Jr.
-----------------------------------
W. Xxxxxx Xxxxxx, Jr.
The undersigned hereby agrees with the Seller, the Equityholders and
the Buyer to be bound by the provisions of Sections 7.7 and 7.10 of the
foregoing Agreement effective upon the Closing.
ALLIANCE AMERICA, a Division of PolyVision
Corporation
By:/s/Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
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