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EXHIBIT 10.7
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement') is made and entered into as
of this 25th day of March, 1997, by and between CHEMI-TROL CHEMICAL COMPANY, an
Ohio corporation having offices at 2776 C.R. 69, Gibsonburg, Ohio 43431
("Seller"), and TERRA INTERNATIONAL, INC., a Delaware corporation, having an
address of 600 Fourth Street, P.0. Box 6000, Sioux City, IA 51102-6000
("Purchaser").
RECITALS
WHEREAS, Seller, through its Cory Orchard & Turf Division ("Division")
has been engaged in, among other things, the business of selling wholesale and
retail turf and ornamental chemicals and fertilizer at locations in
Indianapolis, Indiana and Louisville, Kentucky (the "Locations"); and
WHEREAS, the Seller owns and leases certain real property, rolling
stock, buildings, equipment and inventories at the Locations; and
WHEREAS, Seller desires to sell and Purchaser desires to purchase
certain Division assets, subject to the terms and conditions hereinafter stated.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, it is hereby agreed as follows:
1. AGREEMENT TO PURCHASE. On the Closing Date, as hereinafter defined,
and subject to the terms and conditions of this Agreement, Seller shall sell,
convey, grant, assign, transfer and deliver to Purchaser, and Purchaser shall
buy, accept and receive from Seller, all of the Seller's right, title and
interest in and to the following:
A. The real property described in Exhibit A attached
hereto, together with all buildings, fixtures and
other improvements located thereon and all rights,
easements, hereditaments and appurtenances related
thereto (collectively the "Real Property").
B. The machinery, equipment, motor vehicles, furniture
and fixtures and other personal property listed in
Exhibit B and attached hereto (the "Machinery and
Equipment").
C. The Seller's customer information, credit files,
facility records and all other books and records
related to the Business Assets as hereinafter
described plus any and all patents, patent
applications, and other intangible assets relating to
"know-how", proprietary information and customer
lists that relate to Seller's Division assets (the
"Books and Records"). In addition, Seller shall
retain, preserve and maintain all bank and tax
records related to the Division or its assets and
provide Purchaser access to the same for four (4)
years from the date of this Agreement.
D. All trade inventory owned by Seller to be identified
prior to closing and added to this Agreement prior to
closing as Exhibit C (the "Inventory").
E. The contract and lease rights identified in Exhibit D
attached hereto (the "Contract Rights").
The Real Property, Machinery and Equipment, Books and Records,
Inventory and Contract Rights related to the Division are herein sometimes
called the "Business Assets."
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2. CLOSING. Subject to the fulfillment of the closing conditions
contained in this Agreement, the closing (the "Closing") shall take place on
March 25, 1997, or on another mutually agreeable date (the "Closing Date"). The
Seller shall furnish marketable title to the Real Property and shall convey the
property free of liens, encumbrances, easements, restrictions, rights and
conditions of record or known to Seller, other than the following:(a) current
taxes not yet payable and liens arising therefrom, (b) convenants, conditions,
restrictions and public utility easements of record, if any, provided the same
do not render title unmarketable or prevent the present use of the property, (c)
matters which would be disclosed by inspection of the premises or by an accurate
survey of the premises, (d) any matter that a title insurance company would
ordinarily insure against without additional premium, (e) zoning regulations and
local ordinances. Seller shall furnish an owner's title insurance policy,
insuring the title in the amount of the purchase price, issued by a title
insurance company acceptable to the Purchaser. In the event of title objections,
either by Purchaser, Purchaser's attorney or by the title company, Seller shall
have a reasonable time within which to cure such objections. On Seller's failure
to furnish marketable title within a reasonable time, Purchaser may cancel this
Agreement. Conveyance shall be by general Warranty Deed, in proper statutory
form for record, and shall be duly executed and acknowledged so as to convey to
the Purchaser the fee simple title of the Real Property, free from all liens and
encumbrances, except as stated herein.
Any taxes on the Real Property being transferred hereunder, for the
calendar year 1996, shall be paid by Seller by giving Purchaser a credit at the
time of Closing, unless the Seller shall present acceptable proof that such 1996
taxes have been paid. Any Real Property taxes for the calendar year 1997 shall
be pro-rated to the date of Closing, a credit shall be given Purchaser in such
pro-rated amount, and Purchaser agrees to any such taxes when they become due.
3. Purchase Price
The purchase price (the "Purchase Price") for the business Assets shall
be as follows:
A. Real Property (land, $1,320,000.00
land improvements
and buildings)
B. Machinery and $ 180,000.00
Equipment,
Books and Records
Contract Rights
C. Inventory (net To be determined prior to closing
of customer based upon Seller's cost.
prepays)
D. Seller's Accounts To be determined prior to closing
Receivable based on the value of the
accounts as mutually agreed
by the parties.
(Exhibit F)
4. PAYMENT OF PURCHASE PRICE. On the Closing Date, Purchaser shall pay
an amount equal to the Purchase Price to Seller. Purchaser shall pay the sales
tax in respect of the transfer of the motor vehicles and shall pay the recording
fees in respect of the recording of the deeds to the Real Property.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to Purchaser that the representations and warranties contained in
this Section 5 are true and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date.
A. Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the
State of Ohio. Seller has corporate power and
authority to make, execute and deliver this Agreement
and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement
have been duly authorized and approved by all
necessary and proper corporate proceedings,
including, but not limited to, approval by the Board
of Directors of Seller.
B. Since December 31, 1996, there have been no material
changes with respect to the condition of the Business
Assets, normal wear and tear excepted.
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C. The Seller has good and Marketable title to the
Business Assets, free and clear of all claims, liens,
security interests and other encumbrances, except as
disclosed to and accepted by Purchaser or as
specified herein.
D. There is no litigation, proceeding unpaid judgment or
investigation, pending or threatened, against the
Division or the Business Assets. There is no
litigation, proceeding or investigation, pending or
threatened, against the Seller that would, if
adversely determined, affect the validity of this
Agreement or the ability of the Seller to complete
the transactions contemplated hereby.
E. The execution and delivery of this Agreement, and the
completion of the transactions contemplated hereby,
do not violate or conflict with the articles of
incorporation or by-laws of Seller, any law to which
Seller is subject or any agreement by which the
Seller or the Business Assets are bound. No consent
of any third parties or governmental authorities is
required to complete the transactions contemplated by
this Agreement.
F. The Seller has filed all required tax returns and
paid all taxes due or claimed to be due related to
the Division and the Business Assets.
G. The Seller has delivered to Purchaser true and
complete copies of each contract listed on Exhibits D
and G. To Seller's knowledge, with respect to each
such contract: (i) the contract is legal, valid,
binding, enforceable and in full force and effect
(subject to bankruptcy and other laws affecting
creditors' rights generally); (ii) no party is in
breach or default, and no event has occurred which
with notice or lapse of time would constitute a
breach or default or permit termination,
modification, or acceleration under the contract; and
(iii) no party has repudiated any provision of the
contract.
H. All improvements located on and the use presently
being made of the Real Property owned by the Seller
comply in all material respects with (i) all
applicable zoning and building code ordinances and
(ii) all applicable occupational safety and health
standards established by law or regulation under
current interpretations.
I. No work has been performed nor any material provided
to the Seller during the ninety (90) days preceding
Closing which would give rise to any mechanics,
materialmen, artisans or other liens.
J. Except for a fee to be paid to McDonald & Company
Securities, Inc. (which fee shall be paid by Seller),
the Seller has not committed or obligated itself or
Purchaser to the payment of any broker's fee or
finder's fee or commission in connection with the
transactions contemplated by this Agreement.
K. This Agreement has been duly executed and delivered
by the Seller and, assuming due execution and
delivery by Purchaser, is a valid and binding
agreement of Seller, enforceable against Seller in
accordance with its terms subject to bankruptcy laws
affecting creditor's rights generally.
L. The Seller is solvent and has sufficient assets to
discharge its liabilities as they come due.
M. The Business Assets constitute all of the tangible
personal property held or used by the Seller in
connection with the manufacture, sale and marketing
of turf and ornamental fertilizer and chemicals. All
buildings and other improvements used by the Seller
in the conduct of its business are located entirely
on the Real Property described on Exhibit A or on the
leased premises in Louisville, Kentucky 13000
Middletown Industrial Blvd., Suite J-K and 13005
Middletown Industrial Blvd., Suite B ("Leased
Premises").
N. Except as set forth on Exhibit I, or in the
environmental audits performed by Purchaser, on the
date hereof there are no hazardous or toxic materials
(as hereinafter defined) located in, on or under the
Real Property or the Leased Premises in violation of
any applicable law or regulation. Except as set forth
on Exhibit I, to the best of Seller's knowledge, on
the date hereof there are no subterranean tunnels,
cavities, wells, mines, sinkholes, springs or
concealed fill in, on or under
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the Real Property or Leased Premises. "Hazardous or
toxic materials", as used in this Agreement,shall
include the following materials: (i) any "Hazardous
waste," as defined by the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. Section 6901 et.
seq.), as amended from time to time, and regulations
promulgated thereunder, (ii) a "hazardous substance"
as defined by the Comprehensive Environmental
Response Compensation and Liability Act of 1980 (42
U.S.C. Section 9601 et. seq.), as amended from time
to time, and regulations promulgated thereunder,
(iii) asbestos, (iv) petroleum and petroleum based
products, flammables, explosives and radioactive
materials, (V) chemicals known to cause cancer or
reproductive toxicity, (vi) pollutants, (vii)
polychlorinated biphenyls, (viii) any substance the
presence of which on the Real Property is prohibited
by any governmental requirement, and (ix), other than
Inventory, any other substance which is declared to
be hazardous or toxic under any law or regulation or
which, under any governmental law or regulation,
requires special handling in its use, collection,
storage, treatment, or disposal. The parties agree
that Seller's warranties contained in this paragraph
5. N. shall cease and be of no further force or
effect beginning March 25, 2000.
O. Exhibit F contains a complete and accurate list of
all of the accounts receivable of Seller relating to
the Business Assets and the amounts owed to Seller by
each purchaser. On the Closing Date, Purchaser shall
pay Seller the agreed value of the accounts
receivable listed on Exhibit F and shall undertake
reasonable efforts to collect such accounts. On
August 1, 1997, Purchaser shall return to Seller all
of Seller's accounts receivable remaining uncollected
and Seller shall pay Purchaser, no later than August
15, 1997, the value of all accounts remaining
uncollected. Purchaser shall not, in its efforts to
collect Seller's accounts receivable, take any action
which impairs Seller's right to collect the accounts.
P. The Seller is the sole legal and equitable owner of
the Real Property and all interests therein, and has
the full and exclusive right, power and authority to
convey or assign its interest in the Real Property.
There are no adverse or other parties in possession
of the Real Property or any portion or portions
thereof. There are no pending or threatened
condemnation, eminent domain or similar proceedings
affecting the Real Property or any portion thereof.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to the Seller that the representations and warranties contained in
this Section 6 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date.
A. Purchaser is a corporation duly incorporated, validly
existing and in good standing under the laws of the
State of Delaware and is qualified to do business and
in good standing in the State of Indiana. Purchaser
has full corporate power and authority to make,
execute and deliver this Agreement, and to perform
its obligations hereunder. The execution, delivery
and performance of this Agreement have been duly
authorized and approved by all necessary and proper
corporate proceedings.
B. There is no litigation, proceeding or investigation,
pending or threatened, against purchaser that would,
if adversely determined, affect the validity of this
Agreement or the ability of Purchaser to complete the
transactions contemplated hereby.
C. The execution and delivery of this Agreement, and the
completion of the transactions contemplated hereby,
do not violate or conflict with the certificate of
incorporation or by-laws of Purchaser, any law to
which Purchaser is subject or any agreement by which
Purchaser is bound. No consent of any third parties
or governmental authorities is required to complete
the transactions contemplated by this Agreement.
D. This Agreement has been duly executed and delivered
by Purchaser and is a valid and binding agreement of
Purchaser, enforceable against purchaser in
accordance with its terms.
E. Purchaser has not committed nor obligated itself or
the Seller to the payment of any broker's or finder's
fee or commission in connection with the transaction
contemplated by this Agreement.
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7. PAYMENTS RECEIVED FOR UNDELIVERED GOODS . Any payments received from
customers by the Seller for goods which have not been delivered prior to the
date of this Agreement shall be assigned to Purchaser and Purchaser shall assume
the responsibility of delivering the goods ordered by the customer and shall
indemnify and hold Seller harmless from all claims, actions, damages, loss or
expense relating to or arising from Purchaser's failure to perform those
contracts or agreements. The customers who have made prepayments, the amounts of
prepayments and the goods ordered are specified on Exhibit G attached hereto,
and Purchaser shall receive a credit therefor at Closing.
8. CONDITIONS TO CLOSING
A. PURCHASER'S CONDITIONS. The obligations of
Purchaser under this Agreement shall be subject to
the fulfillment, on or prior to the Closing Date, of
each of the following conditions:
Seller shall have agreed to indemnify and hold Purchaser harmless from
all claims, actions, damages, loss or expenses relating to or arising from the
Indiana Bulk Sales Act.
B. SELLER'S CONDITIONS. The obligations of the Seller
under this Agreement shall be subject to the
fulfillment, on or prior to the Closing Date, of each
of the following conditions:
(1) The representations and warranties of
Purchaser under the Agreement shall be true
and complete as of the Closing Date.
(2) Purchaser shall have tendered the Purchase
Price payable pursuant to Section 4 of the
Agreement.
9. DOCUMENTS TO BE PROVIDED AT CLOSING
A. At the Closing, the Seller shall deliver to Purchaser
the following:
(1) A warranty deed conveying good and
marketable title to the Real Property.
(2) A bill of sale conveying title to Purchaser
to the Machinery and Equipment, Inventory
and Books and Records.
(3) Certificates of title to the motor vehicles.
Conveyance of title shall be by assignment
duly endorsed on certificates of title.
(4) A certified copy of resolutions by Seller's
Board of Directors authorizing the execution
and performance of this Agreement.
(5) All further conveyances, assignments,
confirmations, satisfactions, releases,
powers of attorney, instruments of further
assurance, approvals, consents and any and
all such further instruments and documents
as may be reasonably necessary, expedient or
proper in the opinion of Purchaser in order
to complete any and all conveyances,
transfers, sales and assignments herein
provided.
(6) Executed and delivered covenants not to
compete by Seller in the form attached
hereto as Exhibit H.
(7) An Assignment and Assumption of Contract
Rights.
(8) Assignment and Assumption of Customer
Prepayments and Assumption of Customer
Orders.
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(9) Releases of all liens, security interests
and other encumbrances on the Business
Assets.
(10) The Books and Records.
B. Purchaser shall deliver to Seller the sum described
in Section 4, less any adjustments thereto under the
terms of this Agreement.
10. DELIVERIES SUBSEQUENT TO CLOSING. The Seller, upon the request of
Purchaser, shall deliver such additional documents, instruments and materials
as may be necessary or advisable in order to carry out the provisions and
purposes of this Agreement or to report the transaction to appropriate
governmental authorities, including additional specific bills of sale and
instruments of assignment.
11. OTHER. The parties agree to the following:
A. At Closing, Seller's Division business shall cease
and Purchaser shall make or have made employment
offers to all of Seller's employees listed on Exhibit
J. The duties and compensation included in such
employment offers shall be in Purchaser's sole
discretion. If Seller's employees accept such offers,
they shall become at-will employees of Purchaser and
no additional rights or guarantees of employment is
granted to the employees by Purchaser.
12. SURVIVAL. All of the respective representations, warranties,
covenants, indemnities, and other agreements of the Seller and Purchaser
hereunder or contained in any certificate or other document given in connection
herewith or contemplated hereby shall survive the Closing Date. The
representation and warranties of the Seller contained in this Agreement or any
document or certificate by or on behalf of the Seller delivered pursuant hereto
shall not be affected or deemed waived by reason of any investigation made by
Purchaser or its representatives.
13. INDEMNIFICATION. Except as otherwise provided in this Agreement,
Seller shall indemnify and hold Purchaser free and harmless from and against any
actions, suits, proceedings, demands, claims, assessments, judgments,
liabilities, losses, damages, costs or expenses (including reasonable attorneys'
fees) incurred by Purchaser as a result of (a) any breach of any representation,
warranty, covenant or agreement of the Seller under this Agreement or any
agreement or instrument delivered by the Seller pursuant to this Agreement, (b)
the operation of the Business Assets prior to the date of this Agreement, except
to the extent expressly assumed by Purchaser under this Agreement. Purchaser
shall indemnify and hold Seller free and harmless from and against any actions,
suits, proceedings, demands, claims, assessments, judgments, liabilities,
losses, damages, costs or expenses (including reasonable attorneys' fees)
incurred by the Seller as a result of (c) any breach of any representation,
warranty, covenant or agreement of Purchaser under this Agreement or any
agreement or instrument delivered by Purchaser pursuant to this Agreement and
(d) the operation of the Business Assets after closing.
14. MISCELLANEOUS. No waiver and no modification or amendment of this
Agreement shall be valid unless the same is in writing and signed by the party
against which the enforcement of such modification or amendment is sought. This
Agreement, including all documents, agreements and instruments delivered
pursuant hereto, constitutes the entire agreement between the parties and
supersedes any prior understandings, agreements, or representations by or
between the parties, written or oral, that may have related in any way to the
subject matter hereof. This Agreement shall be binding upon and inure to the
benefit of the parties named herein and their respective successors and
permitted assigns.
15. NO ASSUMPTION OF LIABILITIES. Except with respect to obligations
(i) arising after the date of this Agreement under the contracts listed on
Exhibits D and G, (ii) prepayments received by Seller before the closing and
assigned to Purchaser and (iii) contracts for the delivery of inventory to be
performed by Purchaser after the closing, Purchaser does not assume or agree to
pay any liabilities, debts or obligations of the Seller. It is specifically
understood that Purchaser is not assuming any of the Seller's employment
contracts or other obligations to the Seller's employees and Seller shall defend
and indemnify Purchaser in respect to all claims or costs brought by employees
of Seller or the Division arising or relating to employment with Seller or the
Division.
16. NOTICES. All notices, demands, requests and other communications
under this Agreement shall be in writing and shall be deemed properly served if
delivered by hand to the party to whose attention it is directed or if
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sent by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
A. If intended for the Seller:
Mr. Robert W. Woolf, President
Chemi-Trol Chemical Company
2776 C.R. 69
Gibsonburg, OH 43431
B. If intended for Purchaser:
Terra International, Inc.
600 Fourth Street
P.O. Box 6000
Sioux City, IA 51102-6000
Attention: General Counsel
or such other address of which any party entitled to receive notice hereunder
designates to the other in writing.
17. GOVERNING LAW AND JURISDICTION. The validity, meaning and effect of
this Agreement shall be determined in accordance with the laws of the State of
Indiana applicable to contracts made and to be performed in that state.
18. CAPTIONS. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Agreement or any of the provisions hereof.
19. ASSIGNABILITY. Neither this Agreement nor the right to receive any
payment from Purchaser hereunder shall be assignable without prior written
consent of Purchaser, and without such consent, there shall be no right to
designate a payee of such proceeds. Any attempt at assignment without such
consent shall be void.
20. SEVERABILITY. Should any part or provision contained in this
Agreement be rendered or declared invalid by reason of any existing or
subsequently enacted legislation or by any decree of a court of competent
jurisdiction, the remaining provisions shall nevertheless remain in full force
and effect to the maximum extent permitted by law.
21. COUNTERPARTS. This Agreement may he executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
CHEMI-TROL CHEMICAL COMPANY TERRA INTERNATIONAL, INC.
By: /s/ Robert W. Woolf By: /s/ Mark A. Kalafut
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Name: Robert W. Woolf Name: Mark A. Kalafut
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Title: President Title: Vice President
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SCHEDULE AND EXHIBIT SUMMARY
Exhibit A Real Property
Exhibit B Machinery, Rolling Stock and Equipment
Exhibit C Inventory
Exhibit D Contract Rights
Exhibit E Allocations of Purchase Price
Exhibit F List of Accounts Receivable
Exhibit G Prepayments by Customers and Items Purchased
Exhibit H Covenant Not to Compete
Exhibit I Exceptions to Environmental Representations and
Warranties
Exhibit J Employee List
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