EXHIBIT 10.3
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT is made and entered into as of October 9,
1997 by and between Kemper Pressure Treated Forest Products, Inc., a Mississippi
corporation ("Seller") and Electric Mills Wood Preserving, LLC, a Washington
limited liability company ("Buyer").
RECITALS
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WHEREAS, Seller is engaged in the business of operating a certain wood
preserving and treating facility located in Electric Mills, Mississippi (the
"Facility"); and
WHEREAS, Seller desires to sell Buyer, and Buyer desires to purchase from
Seller, substantially all of the assets of Seller at the Facility, all on the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, covenants, representation
and warranties contained herein, and other good and valuable consideration, the
adequacy and receipt of which are hereby acknowledged, Seller and Buyer agree as
follows:
Section 1. Transfer of Assets. (a) On the terms and subject to the
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conditions of this Agreement, on the Initial Closing Date (as defined herein),
the Seller shall sell and assign to the Buyer and the Buyer shall purchase and
accept from the Seller, subject to all existing mortgages, liens, pledges,
security interests, changes, claims, restrictions and encumbrances, all of
Seller's right, title and interest to those certain assets set forth below
(collectively, the "Purchased Assets"); (i) the leasehold interest in real
property described in Schedule 1(a)(i) hereto (the "Leased Real Property"); (ii)
all rights, title and interest of Seller as lessee under each lease for
equipment or other personal property ("Leased Equipment"), including, but not
limited to, the equipment or other personal property described in Schedule
1(a)(ii) hereto; (iii) all fixtures, furniture, and equipment, including,
without limitation, all technology equipment and a non-exclusive royalty free
license to operate all software located at the Facility, all leasehold
improvements and other tangible assets located now and at Initial Closing at the
Facility (the "Equipment"); (iv) all Inventory wherever located, except Finished
Inventory (as defined in Section 1(d) hereto ("Inventory"); (v) all Intellectual
Property and General Intangible ("General Intangibles"); (vi) all vehicles and
spare and replacement parts therefor owned by the Seller and used in the
operation of the Facility (the "Vehicles"); (vii) to the extent transferable,
all Licenses and Permits of the Seller used in the Facility (the "Permits");
(viii) claims under any casualty or liability insurance policies ("Insurance
Claims"); and (ix) all other assets located at the Facility, other than the
Excluded Assets (the "Other Assets").
(b) On the terms and subject to the conditions of this Agreement,
on the Final Closing Date (as defined herein), the Seller shall obtain the
release and cancellation of all mortgages, liens, pledges, security interests,
changes, claims, restrictions and encumbrances of any nature whatsoever against
the Purchased Assets (except for the "Assumed Liability" as hereinafter
defined), so that the Purchased Assets shall be free and clear of all mortgages,
liens, pledges, security interests, changes, claims, restrictions and
encumbrances of any nature whatsoever (except for Assumed Liability).
(c) On the terms and subject to the conditions of this Agreement,
at the Final Closing, the Buyer shall assume all of the Seller's obligations
under the Lease.
(d) The Buyer is not acquiring, and the Seller shall retain all
rights, title and interest in any property, assets or rights not expressly
identified as Purchased Assets in Section 1 (a) and (b), including, without
limitation the following (collectively, the "Excluded Assets"); (i) all
deposits, accounts, investments and funds maintained in any bank or financial
institution; (ii) all accounts; (iii) all leases and contracts not included in
Purchased Assets; (iv) all books and records of the Seller, including all
personnel and employment records of the Seller; (v) all rights to use the
telephone numbers of the Seller; (vi) all treated wooden poles ("Finished
Inventory"); (vii) any and all sludge or other hazardous collected waste
products at the Facility ("Waste"); and (viii) all claims, demands and causes of
action against third parties.
(e) The Purchased Assets shall be transferred to Buyer on an
"as-is, where-is" basis, and without any warranty as to condition, either
express or implied.
Section 2. Assignment of Lease to Leased Real Property and Leased
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Equipment. (a) At the Initial Closing, Seller shall assign to Buyer all of its
rights under that certain Lease Agreement effective July 1, 1988, by and between
the Kemper County Economic Development Authority ("Kemper Co. EDA") and the
Kemper County, Mississippi ("Kemper County") (collectively, the "Lessor") and
Kemper Pressure Treated Forest Products, Inc. ("Lessee") (the "Lease"), covering
all real property and substantially all of the personal property used by Seller
in connection with Seller's Facility. Seller and Buyer agree to execute an
Assignment of Lease in substantially the form attached as Schedule (2)(a) hereof
(the "Assignment of Lease").
(b) Prior to Final Closing, Seller shall obtain the Lessor's
consent to the Assignment of Lease and to also provide Buyer with an estoppel
certificate executed by the Lessor, which consent and estoppel certificate shall
be in substantially the form attached as Schedule 2(b) hereof (the "Consent and
Estoppel Certificate").
Section 3. Assumed Liability. (a) At the Final Closing, the Buyer shall
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assume only the obligations and liabilities arising under the Lease, but only as
to those obligations and liabilities which accrue on or after the Final Closing
Date (the "Assumed Liability"). At the Initial Closing, the Buyer shall become
responsible for and shall pay the rental payments due under the Lease from and
after the Initial Closing, but only for that period of time that the Buyer
occupies and operates the Facility. In the event of reversion of the Lease to
the Seller, as set forth in Section 12 hereof, Buyer shall have no liability for
rental payments under the Lease after reversion of the Lease to the Seller.
(b) Except as to the Assumed Liability, the Buyer shall not
assume, and shall not be deemed to assume, and the Seller shall hold the Buyer
harmless and indemnify the Buyer against, any liabilities or obligations of the
Seller arising from or relating to the ownership of or operation of the
Purchased Assets or the Facility of the Seller which arises or accrues before
the Initial Closing Date.
Section 4. Purchase Price. (a) In consideration for the sale and
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transfer of the Purchased Assets, the Buyer shall pay the Seller at the Initial
Closing, the sum of $10,000.00 (the "Initial Payment").
(b) In consideration for the sale and transfer of the Purchased
Assets, free and clear of all mortgages, liens, pledges, security interests,
changes, claims, restrictions and encumbrances of any nature whatsoever (except
for Assumed Liability), the Buyer shall pay the Seller at the Final Closing, the
sum of $115,000.00 (the "Final Payment"). The total of $125,000.00 shall be the
total purchase price (the "Purchase Price").
(c) In consideration for the sale and transfer of the Purchased
Assets, free and clear of all mortgages, liens, pledges, security interests,
changes, claims, restrictions and encumbrances of any nature whatsoever (except
for Assumed Liability), and subject to the terms and conditions of this
Agreement, at Final Closing, the Buyer shall assume the obligation of Seller
under the Lease (which totals approximately $350,000.00 for the remaining term
of the Lease).
(d) In consideration for the sale and transfer of the Purchased
Assets, free and clear of all mortgages, liens, pledges, security interests,
changes, claims, restrictions and encumbrances of any nature whatsoever (except
for Assumed Liability), and subject to the terms and conditions of this
Agreement.
(e) Seller shall use all of the proceeds of the Purchase Price to
pay claims of its creditors, and Buyer is authorized to issue joint checks or
take such other actions as it may deem appropriate to ensure compliance with
this provision.
Section 5. Closings. (a) The Initial Closing of the transactions
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described herein shall occur on or before October 9, 1997, (the "Initial Closing
Date") at 10:00 a.m. in the offices of Butler, Snow, O'Mara, Stevens & Cannada,
PLCC 210 East Capitol Street, 17th Floor Deposit Guaranty Plaza, Jackson,
Mississippi, or at such other date, time and location as Buyer and Seller may
agree (the "Initial Closing").
(b) The Final Closing of the transactions described herein shall occur
on or before October 31, 1997, (the "Final Closing Date") at 10:00 a.m. in the
offices of Butler, Snow, O'Mara, Stevens & Cannada, PLLC, 210 East Capitol
Street, 17th Floor Deposit Guaranty Plaza, Jackson, Mississippi, or at such
other date, time and location as Buyer and Seller may agree (the "Final
Closing"). Buyer shall have the unilateral option to extend the Final Closing
Date for up to an additional three hundred sixty (360) days, in its sole
discretion. Furthermore, the parties agree that the Final Closing may be
extended thereafter by mutual agreement of Buyer and Seller.
Section 6. Items to be Delivered at Initial Closing and at Final
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Closing. (a) At the Initial Closing and subject to the terms and conditions
hereof:
(1) Seller shall deliver to Buyer the following: (i) the
Assignment of Lease for the Leased Real Property and the Leased Equipment; and
(ii) a bill of sale and certificates of title (as appropriate) for the
Equipment, Inventory, Vehicles, Permits, and Other Assets in a form reasonably
satisfactory to Buyer and its counsel, as shall be necessary and effective to
transfer and assign, and vest in, Buyer all of Seller's right, title and
interest in and to the Purchased Assets. Simultaneously with such delivery,
Seller shall take all steps as may be required to put Buyer in actual possession
and control of the Purchased Assets.
(2) Buyer shall deliver to Seller the Initial Payment portion
of the Purchase Price in accordance with Section 3 hereof.
(b) At the Final Closing and subject to the terms and conditions
hereof:
(1) Seller shall deliver to Buyer the following: (i) the
Consent and Estoppel Certificate required by Section 10(c) hereto; and (ii) the
Closing Certificate required by Section 10(a) hereto.
(2) Buyer shall deliver to Seller the Final Payment portion
of the Purchase Price in accordance with Section 3 hereof.
Section 7. Further Assurances. Seller, from time to time after the
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Initial Closing or the Final Closing, at Buyer's request, will execute,
acknowledge and deliver to the Buyer such other instruments of conveyance and
transfer and will take such other actions and execute and deliver such other
documents, certifications and further assurances as Buyer may reasonably require
in order to vest more effectively in Buyer, or to put Buyer more fully in
possession of, any of the Purchased Assets, or to better enable Buyer to
complete, perform or discharge any of the liabilities or obligations assumed by
Buyer at the Final Closing. Each of the parties hereto will cooperate with the
other and execute and deliver to the other parties hereto such other instruments
and documents and to take such other actions as may be reasonably requested from
time to time by any other party hereto as necessary to carry out, evidence and
confirm the intended purposes of this Agreement.
Section 8. Representations and Warranties of Seller. Seller hereby
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represents and warrants to Buyer as follows:
(a) Corporate Existence. Seller is a corporation duly organized,
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validly existing under the laws of the State of Mississippi and is in good
standing with the Secretary of State of Mississippi.
(b) Corporate Powers; Authorization: Enforceable Obligations.
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Seller has the corporate power, authority and legal right to execute, deliver
and perform this Agreement. Seller has taken all requisite corporate action to
authorize the execution and delivery of the Agreement and the Assignment of
Lease and the performance of its obligations thereunder. This Agreement has
been duly executed, and the other agreements, documents and instruments required
to be delivered by Seller in accordance with the provisions hereof
(collectively, the "Seller's Documents") will be duly executed and delivered
immediately after the execution of this Agreement on behalf of Seller by a duly
authorized officer of Seller, and this Agreement constitutes, and the Seller's
Documents when executed and delivered will constitute, the legal, valid and
binding obligations of Seller and enforceable against Seller in accordance with
their respective terms.
(c) Validity of Contemplated Transactions. The execution and
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delivery of the Agreement and the Assignment of Lease by the Seller and the
performance by the Seller of its obligations thereunder do not (i) conflict with
the articles of organization or by-laws of the Seller, (ii) conflict with or
violate, in any material respect, any statute, law or governmental rule or
regulation or any order, writ, injunction, judgment or decree of any court, or
(iii) conflict with or result in a breach of or constitute a default under or
result in the creation of any mortgage or lien upon the property or assets of
the Seller pursuant to, any material deed of trust, loan agreement or other
agreement or instrument to which the Seller is a party or by which the Seller or
any of the Leased Property may be bound.
(d) No Third Party Options. There are no existing agreements,
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options, commitments or rights with, or to any person to acquire any of Seller's
assets, properties or rights which are part of the Purchased Assets or any
interests therein.
(e) No Tax Liens. There are no tax liens (other than any lien for
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current taxes not yet due and payable) on any of the assets or properties of
Seller. Seller has no knowledge of any basis for additional assessment of any
taxes which will in any manner result in a lien against the Purchased Assets or
be imposed on the transfer to be consummated in accordance with this Agreement.
(f) Title To Properties. Seller has or will have at Final Closing
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good, valid and marketable title to all the Purchased Assets, free and clear of
all mortgages, liens, pledges, security interests, changes, claims, restrictions
and other encumbrances and defects of title of any nature whatsoever, except for
the encumbrances of the Lessor under the Lease.
(g) No Claims Against Seller; Quiet Enjoyment of Purchased Assets.
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Within fifteen (15) days of the Initial Closing, Seller shall deliver to Buyer a
list of all of its liabilities and obligations, whether or not accrued, and all
claims asserted against it, including, but not limited to the following:
promissory notes, accounts payable, guaranties, contract claims, claims of
employees, shareholders, officers, or directors, governmental claims, or any
other claim which may threaten the quiet enjoyment of the Purchased Assets by
the Buyer (collectively, the "Claims"). Prior to Final Closing, all Claims
shall be satisfied or resolved to the satisfaction of the Buyer.
(h) Condition of Tangible Assets. All Equipment and other items
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of tangible property and assets included in the Purchased Assets are in good
operating condition and repair subject to normal wear and maintenance are usable
in the regular and ordinary course of business and conform to all applicable
laws, ordinances, codes, and rules and regulations.
(i) Compliance With Law. Seller has compiled with each, and is
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not in violation of any, law, ordinance, or governmental or regulatory rule or
regulation, whether federal, state, local or foreign to which the included
assets are subject (the "Regulations").
(j) Litigation. No litigation, including any arbitration,
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investigation or any other proceeding of or before any court arbitrator or
governmental or regulatory official, body or authority is pending or, to the
best knowledge of Seller, threatened against Seller or which relates to the
Purchased Assets or the transactions to be consummated according to the terms of
this Agreement, nor does Seller know of any reasonably likely basis for any such
litigation, arbitration, investigation or proceeding, the result of which could
materially, adversely affect the Purchased Assets or the transactions to be
consummated according to the terms of this Agreement. Seller is not a party to
or subject to the provision of any judgment, order, writ, injunction, decree or
a ward of any court, arbitrator or governmental or regulatory official, body or
authority which may materially and adversely affect the initial Purchased Assets
or the transactions to be consummated according to the terms of this Agreement.
(k) Labor Relations. Seller agrees to notify all of its employees
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who are engaged at or in connection with the operation of the Facility that they
will be terminated from the employment of the Seller effective as of the Initial
Closing Date (the "Seller's Terminated Employees"). Thereafter, Buyer may
interview Seller's Terminated Employees and other for positions as employees of
the Buyer, either on a temporary or regular basis. At or before the Initial
Closing, Seller shall terminate the employment of all its employees effective as
of the Initial Closing Date. Effective as of the Initial Closing, Buyer shall
have the right to offer employment to such Seller's Employees, on such terms and
conditions as Buyer shall in its sole discretion determine. Seller shall
reasonably cooperate with Buyer regarding Buyer's offers of employment
contemplated by this Section. Seller shall remain liable for the payment to the
Seller's Employees hired by Buyer for all wages, severance benefits and other
obligations of any kind whatsoever which accrue prior to or at the Initial
Closing.
Seller shall be liable to Seller's Employees who are not subsequently
employed by Buyer for all wages, severance and other obligations of any kind
whatsoever, whether earned or accrued before or after the Initial Closing, and
Seller shall hold Buyer harmless from and indemnify Buyer against, any and all
liabilities (including, without limitation, any severance or unemployment pay or
benefits, whether contractual or statutory) to Seller's employees which may
accrue or become payable as a result of any transaction or matter contemplated
by this Agreement, including without limitation, the termination of the
employment of Seller's employees as of the Initial Closing, the failure of Buyer
to offer continued employment to any or all of Seller's employees employed on
the Initial Closing Date, the failure of Seller's employees to receive adequate
notice of the transactions contemplated by this Agreement, and the failure of
Buyer to employ any of such employees, except for claims that Buyer has
discriminated in its employment practices.
(l) Employee Benefit Plans. The consummation of the transactions
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contemplated by this Agreement will not entitle any current or former employee
or officer of the Facility to severance pay, sick pay, vacation pay,
unemployment compensation or any other payment from the Buyer, but any such
obligations shall be those of Seller.
(m) Environmental Matters. All references to the Seller in this
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Section 8(m) refer only to the Purchased Assets and to the Seller's ownership
and operation of the Facility on or at the Leased Real Property and not to the
Seller's activities unrelated to the Purchased Assets or to the Facility
conducted other than on or at the Leased Real Property. Seller is in
compliance with applicable environmental laws, including the possession by the
Seller of all Permits required under applicable environmental laws. Seller has
received no notice of violation or administrative proceedings relating in any
way to any environmental laws, and there is not environmental claim, civil or
criminal litigation pending or, to the Seller's knowledge, threatened against
the Seller relating in any way to environmental laws. The Seller is not
potentially responsible with respect to any investigation or clean-up of any
threatened or actual release of any hazardous materials (whether on-site or
off-site). Seller has disclosed to Buyer any improperly buried or discarded
wastes or other environmental violations with respect to the Facility of which
Seller knows or has reason to know.
Section 9. Representation and Warranties of Buyer.
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(a) Corporate Existence. Buyer is a limited liability company
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duly organized, validly existing and in good standing under the law of the State
of Mississippi.
(b) Corporate Powers; Authorization; Enforceable Obligations.
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Buyer has the power, authority and legal right to execute, deliver and perform
this Agreement. The execution, delivery and performance of this Agreement by
Buyer has been duly authorized by all necessary company and member action. This
Agreement has been, and the other agreements, documents and instruments required
to be delivered by Buyer in accordance with the provisions hereof (the "Buyer's
Documents") will be, duly executed and delivered immediately after the execution
of this Agreement, where appropriate, on behalf of Buyer by a duly authorized
officer of Buyer, and this Agreement constitutes, and the Buyer's documents when
executed and delivered will constitute, the legal, valid and binding obligations
of Buyer and enforceable against Buyer in accordance with their respective
terms.
(c) Validity of Contemplated Transactions. The execution,
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delivery and performance of this Agreement by Buyer does not and will not
violate, conflict with, in any material way, or result in the breach of any
material term, condition or provision of, or require the consent of any other
person under, (a) any existing law, ordinance, or governmental rule or
regulation to which Buyer is subject, (b) any judgment, order, writ, injunction,
decree, or work of any court, arbitrator or governmental or regulatory official,
body or authority which is applicable to Buyer, or (c) any agreement, contract,
commitment, plan or other instrument, document or understanding, oral or
written, to which Buyer is a party by which Buyer may have rights or by which
any of the Purchased Assets may be bound or affected, or give any party with
rights thereunder the right to terminate, modify, accelerate, otherwise change
the existing rights or obligations of Buyer thereunder.
(d) Subject to the terms and conditions of this Agreement, at
Final Closing, Buyer shall assume obligations and liabilities arising under the
Lease for the Leased Real Property and the Leased Equipment described above, but
only as to those obligations and liabilities which accrue on or after the
Initial Closing Date.
(e) Between the Initial Closing and the Final Closing, Buyer shall
conduct all due diligence necessary to confirm the condition of the tangible
assets.
Section 10. Conditions to Buyer's Obligations to Close. All
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obligations of Buyer under this Agreement are subject to the fulfillment or
satisfaction, prior to or at Final Closing, of each of the following conditions
precedent:
(a) Compliance With This Agreement. Seller shall have performed
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and complied in all material respects with all agreements and conditions
required by this Agreement to be performed or complied with by it prior to or at
the Final Closing.
(b) Representations and Warranties as of Final Closing. Each and
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every one of the representations and warranties of Seller contained in this
Agreement or in any schedule, certificate or document delivered by Seller to
Buyer pursuant to the provisions hereof is materially correct on the date hereof
and will be materially correct on the date of Final Closing.
(c) Consents and Approvals. Buyer shall have received the Consent
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and Estoppel Certificate executed by Lessor required by the Assignment of Lease
executed by Seller and Buyer, dated October 9, 1997.
(d) Economic Incentives. This Agreement is conditioned upon and
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subject to Buyer's obtaining the following economic incentives prior to Final
Closing.
(i) An Inducement Resolution of the Mississippi Business
Finance Corporation ("MBFC") including Buyer into financing satisfactory to
Buyer, through an industrial development revenue bond issue under the
Mississippi Small Business Financing Act and the Rural Economic Development
Assistance Program ("Bonds"), Sections 57-10-201 et. seg. and 57-10-401 et.
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seg., respectively, of the Mississippi Code of 1972, as amended ("Code") for the
Purchased Assets and an expansion thereof proposed by the Buyer ("Proposed
Expansion");
(ii) A Resolution of the Board of Supervisors of Kemper
County, Mississippi ("Board"), satisfactory to Buyer's legal counsel, approving
of and consenting to the granting to the Buyer of any ad valorem real and
personal property tax exemption for the Purchased Assets and Proposed Expansion
by the MBFC under Sections 57-10-255 and 57-10-439 of the Code in connection
with issuance by the MBFC of the Bonds; and
(iii) A Resolution of Intent of the Board, satisfactory to
Buyer's legal counsel, declaring the intention and agreement of the Board to
grant the following ad valorem real and personal property tax exemptions to
Buyer for the Purchased Assets and Proposed Expansion:
(a) A manufactured products inventory
exemption under Section 27-31-7 of the Code:
(b) A free port warehouse inventory
exemption under Section 27-31-51 et. seg. of the Code; and
(c) A new enterprise/expansion exemption
under Sections 27-31-101 et. seg. of the Code.
(e) Closing Certificate. Buyer shall have received a certificate
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from Seller dated the date hereof, and certifying in such details Buyer may
reasonably request that the conditions specified in this Agreement have been
fulfilled.
(f) Liability and Casualty Insurance. Seller shall cooperate with
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any claim asserted by Buyer under any liability insurance policy held by Seller
of any of its predecessors at the Final Closing in title. Seller shall provide
Buyer with a schedule of prior liability insurance policies. Seller shall
maintain casualty insurance on the Purchased Assets until the earlier of
November 30, 1997 or the Final Closing Date, and Buyer shall reimburse Seller on
or before November 30, 1997 for the pro rata cost of such insurance provided by
Seller.
(g) Approval of Counsel; Corporate Matters. All actions,
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proceeding, resolutions, instruments and documents required to carry out this
Agreement or incidental hereto in all other related legal matter shall have been
approved by counsel for Buyer, in the exercise of its reasonable judgment.
Seller shall also have delivered to Buyer such other documents, instruments,
certifications and further assurances as such counsel reasonably may require.
(h) Power of Attorney. Seller shall have executed a Power of
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Attorney, in a form satisfactory to counsel for Buyer, in favor of Thomas Gibbs,
its vice president ("Gibbs"), by which Seller grants Gibbs the power and
authority to execute such documents as may be necessary, appropriate, or
required to consummate the transactions contemplated by this Agreement.
(i) Removal of Waste. Prior to Final Closing, Seller shall have
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removed all hazardous and nonhazardous waster at the Facility as determined by
an inspection conducted by the Buyer.
(j) Cost of Selling, Transferring, or Treating Finished Inventory.
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Seller shall reimburse Buyer for all costs and expenses incurred by Buyer in
handling, treating or transporting the Finished Inventory for the Seller.
Section 11. Conditions to Obligations of Seller to Close. All
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obligations of Seller under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Final Closing, of each of the following
conditions precedent:
(a) Representations and Warranties as of Final Closing. The
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representations and warranties of Buyer contained in this Agreement or any
schedule, certificate or document delivered by Buyer to Seller pursuant to the
provisions hereof are materially correct on the date hereof and will be
materially correct on the date of Final Closing.
(b) Compliance With This Agreement. Buyer shall have performed
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and complied in all material respects with all agreements and conditions
required by this Agreement to be performed or complied with by it prior to or at
the Final Closing.
Section 12. Reversion. If all the conditions to Final Closing set
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forth in Section 10 above have not been satisfied within the specified time,
then, at the option of the Buyer, if it appears that the Final Closing will not
occur because the conditions precedent thereto cannot reasonably be satisfied,
the Lease shall revert to the Seller and Buyer shall reassign the Lease
(including the Leased Real Property and the Leased Equipment) to the Seller and
shall reconvey to Seller, without any warranty or representation whatsoever, the
remainder of the Purchased Assets in substantially the same condition as of the
Initial Closing Date, reasonable wear and tear and ordinary casualty losses
excepted, and Buyer shall have no further liability whatsoever to Seller or to
any third party with respect to this Agreement or the transactions contemplated
hereby.
Section 13. Termination; Remedies for Breach.
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(a) If all the conditions to Final Closing set forth in Section 10
above shall have been satisfied and Buyer fails to consummate the purchase of
the Purchased Assets by the Final Closing Date, the Seller may terminate this
Agreement by written notice to Buyer and Buyer shall reassign the Lease to
Seller and Seller thereafter may sell all or any portion of the Purchased Assets
to any third party or parties free of any restrictions under the Agreement.
Seller shall have such additional remedies against Buyer for Buyer's failure to
perform as may be available at law or in equity to Seller, including specific
performance and other rights granted under this Agreement.
(b) If all the conditions set forth in Section 11 above shall have
been satisfied, and Seller fails to consummate the sale of the Purchased Assets
by the Final Closing Date, then Buyer shall be entitled to all remedies against
Seller for Seller's failure to perform as may be available at law or in equity
to Buyer, including specific performance and all other rights granted by this
Agreement.
(c) If all the conditions set forth in Section 10 above have not been
satisfied by Seller at or prior to the Final Closing Date, then, at its option,
the Buyer shall be entitle to terminate this Agreement without any further
obligation to the Seller, or Buyer may bake such curative actions to satisfy the
conditions set forth in Section 10 above, except for costs associated with
Buyer's efforts to obtain inducement resolutions, deduct the cost thereof from
the Purchase Price, and proceed to close the transaction contemplated by this
Agreement.
Section 14. Seller's Indemnity. Seller covenants and agrees to
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indemnify and hold harmless the Buyer, its officers, directors, employees,
agents, advisers, representatives and Affiliates (collectively, the "Buyer
Indemnities") from and against, and pay or reimburse the Buyer Indemnities for,
any and all claims, liabilities, obligations, losses, fines, costs, royalties,
proceedings, deficiencies or damages (whether absolute, accrued, conditional or
otherwise and whether or not resulting from third party claims), including
out-of-pocket expenses and reasonable attorneys' and accountants' fees incurred
in the investigation or defense of any of the same or in asserting any of their
respective rights hereunder (collectively, "Losses") incurred after the Final
Closing, resulting from or arising out of:
(a) any material inaccuracy of any representation or warranty made by
Seller herein or in any exhibit or schedule hereto, or in any other statement,
certificate or document furnished or to be furnished to Buyer pursuant hereto or
in connection with the transactions contemplated hereby; or
(b) any failure of any Seller to perform any covenant or agreement
hereunder. Such indemnity obligations of Seller to Buyer for Losses may be
collected only by offset under any obligation otherwise owed to Seller or any of
its affiliates, related parties, or principals by Buyer or any of its affiliates
or related parties.
Section 15. Taxes. Seller shall pay all federal, state and local taxes
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(whether income, sales or otherwise), if any, due as a result of the purchase,
sale or transfer of the Purchased Assets in accordance herewith whether imposed
by law on Seller or Buyer and Seller shall indemnify, reimburse and hold
harmless Buyer in respect of the liability for payment of or failure to pay any
such taxes or the filing of or failure to file any reports required in
connection therewith.
Section 16. Confidential Information. The specific details of this
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Agreement shall be kept confidential by the parties and shall not be disclosed
to any third party, except as is necessary to consummate this transaction or as
may be required by law or as the parties may agree may be disclosed.
Section 17. Cooperation. Seller agrees to cooperate with Buyer and to
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take such actions and to execute such documents as may be necessary or
appropriate to carry out the intent of this Agreement and to effectuate the
transactions contemplated hereby.
Section 18. Arbitration. Any dispute arising out of or relating to
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this Agreement or its breach shall be settled by arbitration under and in
accordance with the rules of the American Arbitration Association. The
arbitration shall be held in Jackson, Mississippi. The arbitrator's decision in
such arbitration will be final, binding and non-appealable and judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction. This Agreement to arbitrate shall not prevent either party from
applying to the state or federal courts of Mississippi for a temporary
restraining order, preliminary injunction, or other equitable relief to preserve
the status quo or prevent irreparable harm.
Section 19. Expenses. Except otherwise provided in this Agreement,
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each party hereto shall pay its own expenses incidental to the preparation of
this Agreement, the carrying out of the provisions of this Agreement and the
consummation of the transactions contemplated hereby.
Section 20. Binding Effect. Subject to the foregoing, all the terms
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and provisions of this Agreement shall be binding upon and in your to the
benefit of and be enforceable by the successor and assigns of Seller and Buyer.
Section 21. Notices. Any notice, request, demand waiver, consent,
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approval or other communication which is required or permitted hereunder shall
be in writing and shall be deemed given only if hand-delivered, sent by
certified or registered mail, postage prepaid, or by telecopier as follows:
If to Seller: Kemper Pressure Treated Forest
Products, Inc.
c/o Farnsworth Gray
1250 24th Street, N.W., Suite 300
Washington, D.C. 20037
Attention: Brian L. Sorrentino, President
Telecopier: (301) 540-6447
with a copy to: Mr. Shawn Mitchell
12530 Newton Street
Broomfield, CO 80020
Telecopier: (303) 464-9422
If to Buyer: Electric Mills Wood Preserving, LLC
Rt. Box 514 Hwwy . 45 South
Scooba, MS. 39358
Attention: President
with a copy to: Mr. Stephen W. Rosenblatt
Butler, Snow, O'Mara, Stevens
& Cannada, PLLC
Post Office Box 22567
Jackson, MS 39225-2567
Telecopier: (601) 949-4555
Any notice required or permitted to be given under this Agreement or by law
shall be deemed given on the first business day after it is hand-delivered or
sent by telecopy or on the third business day after it is mailed by certified or
registered mail. Either party may change its address for notice purposes by a
notice sent in the above manner, with such change effective for notices given
after fifteen (15) days following the effective date thereof (or such later
effective date as is therein specified).
Section 22. Mississippi Law to Govern. This Agreement shall be
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governed by and interpreted and enforced in accordance with the substantive
internal law of the State of Mississippi without regard to conflicts of law.
Section 23. Headings, Gender. All section headings contained in this
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Agreement are for convenience and reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine, or neutered, as the context
requires.
Section 24. Schedules and Exhibits. All exhibits and schedules
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referred to herein are intended to be and hereby are specifically made a part of
this Agreement.
Section 25. Severability. Any provision under this Agreement which in
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invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 26. Counterparts. This Agreement may be executed in any number
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of counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one in the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
Section 27. Complete Understanding; Parties in Interest. This
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Agreement sets forth the entire understanding of the parties hereto with respect
to the transactions contemplated hereby. It shall not be amended or modified
except by written instrument duly executed by each of the parties hereto. Any
and all previous agreements and understandings between or among the parties
regarding the subject matter hereof, whether written or oral, or superseded by
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date of first above written.
ELECTRIC MILLS WOOD PRESERVING, LLC
By:__________________________
Lloyd W. Docter
Title: Vice President
KEMPER PRESSURE TREATED FOREST PRODUCTS,
INC.
By:__________________________
Brian L. Sorrentino
Title: President