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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): September 13, 1999
DECTRON INTERNATIONALE INC.
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(Exact name of registrant as specified in its charter)
Quebec 011 14503 N/A
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of organization) Identification No.)
4300 Poirier Blvd.
Montreal, Quebec H4R 2C5
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (514) 334-9609
Not Applicable
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(Former name or former address; if changed since last report)
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ITEM 5. ACQUISITION OR DISTRIBUTION OF ASSETS
(a) On September 13, 1999, Dectron Internationl Inc. ("Dectron")
acquired substantially all of the assets of IPAC, Inc. ("IPAC") for an aggregate
purchase price of $3,700,000. The transaction was negotiated on an arms-length
basis. IPAC, the seller, had no affiliation with Dectron or any of its officers
or directors. Dectron utilized a portion of the proceeds of its recent initial
public offering to consummate the acquisition.
(b) The purchase included all of the equipment utilized in IPAC's
business of precision cooling products air conditioning products and compressed
air products. IPAC also manufactures industrial products, heat transfer
products, compressed air products, engineered systems sheet metal fabrication
and painting products.
ITEM 7. EXHIBITS
99.1 Press Release dated September 14, 1999
99.2 Asset Purchase Agreement dated August 30, 1999, by and between IPAC,
Inc. and Dectron International, Inc.
99.3 All financial information required by Article 11 of Regulation S-X will
be filed within 60 days of the date of this 8-K.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunder duly authorized.
DECTRON INTERNATIONALE INC.
By: /s/ Ness Lakdawala
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Ness Lakdawala
President
September 29, 1999
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DECTRON PURCHASES ASSETS OF IPAC INC.
MONTREAL, QUEBEC, CANADA - September 14, 1999 - Dectron Internationale, Inc.
(NASDAQ: DECT, DECW) today announced that it has purchased the assets of IPAC
Inc. - no details of the transaction were announced and additional
information will be made available in a subsequent 8-K filing.
Located in Niagara Falls, New York, IPAC Inc. designs and manufactures a
complete line of precision air conditioning products in their well-equipped
125,000 square foot plant. IPAC product lines also include heat transfer
systems, industrial heat exchangers, fluid cooling systems, compressed air
treatment products, replacement parts and custom metal components and
enclosures. IPAC products are supported in Canada through a sales and
marketing office in Mississauga, Ontario.
IPAC 2000 Inc. has been formed as a new division of Dectron Internationale to
expand on the solid core or opportunity which the IPAC product lines
represent. The distribution network for IPAC 200 products will be enhanced
almost immediately, and there will be a direct benefit from additional cross
selling between Dectron Internationale divisions.
Ness Lakdawala, President and CEO of Dectron Internationale Inc. affirmed
"With this purchase, our group will increase its market reach in a rapidly
growing segment of the Indoor Air Quality sector while expanding our
manufacturing base."
Through its operating divisions, Dectron, Circul-aire, Refplus, Thermoplus,
Klaasco, and now IPAC 2000, Dectron Internationale manufactures and supplies
an extensive array of products for the indoor aire quality (IAQ),
dehumidification, refrigeration, air conditioning and energy recovery markets
for industrial and commercial clients.
THIS NEWS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS DEFINED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995: FORWARD-LOOKING STATEMENTS INCLUDE
STATEMENTS CONCERNING GOALS, OBJECTIVES, STRATEGIES, PLANS, FUTURE EVENTS OF
PERFORMANCE, AND UNDERLYING ASSUMPTIONS AND OTHER STATEMENTS, WHICH ARE OTHER
THAN STATEMENTS OF HISTORICAL FACTS. THESE STATEMENTS ARE SUBJECT TO
UNCERTAINTIES AND RISKS INCLUDING, BUT NOT LIMITED TO, PRODUCT AND SERVICE
DEMAND AN ACCEPTANCE, CHANGES IN TECHNOLOGY, ECONOMIC CONDITIONS, THE IMPACT
OF COMPETITION AND PRICING, GOVERNMENTAL REGULATION, AND OTHER RISKS DEFINED
IN THE DOCUMENT AND IN STATEMENTS FILED FROM TIME TO TIME WITH THE SECURITIES
AND EXCHANGE COMMISSION. AS SUCH FORWARD-LOOKING STATEMENTS, WHETHER WRITTEN
OR ORAL, AND WHETHER MADE BY OR ON BEHALF OF THE COMPANY, ARE EXPRESSLY
QUALIFIED BY THESE CAUTIONARY STATEMENTS AND ANY OTHER CAUTIONARY STATEMENTS
WHICH MAY ACCOMPANY THE FORWARD-LOOKING STATEMENTS. IN ADDITION, THE COMPANY
DISCLAIMS ANY OBLIGATIONS TO UPDATE ANY FORWARD-LOOKING STATEMENTS TO REFLECT
EVENTS OF CIRCUMSTANCES AFTER THE DATE HEREOF.
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ASSET PURCHASE AGREEMENT
AGREEMENT made this 30th day of August, 1999, by and between IPAC,
Inc., a Maryland Corporation with its principal place of business at 2107
Liberty Drive, Niagara Falls, New York 14304 ("U.S. Seller"); IPAC, INC., an
Ontario corporation having its principal place of business at 2180 Darwin Drive,
Unit No. 7, Mississauga, Ontario, Canada ("Canadian Seller") (the U.S. Seller
and Canadian Seller are sometimes collectively referred to herein as "Sellers")
and DECTRON INTERNATIONALE, INC., a Canadian Corporation with offices 4300
Poirier Boulevard, Montreal, Quebec Canada, H4R 2C5, ("Buyer").
W I T N E S S E T H :
WHEREAS, the Sellers have for many years operated a business (the
"Business") manufacturing and selling the following types of products:
(a) Industrial products (consisting of heat transfer products,
compressed air treatment products and engineered systems);
(b) Sheet metal fabrication and painting; and
(c) Precision cooling and air conditioning products and replacement
parts for precision air and compressed air.
WHEREAS, Sellers desire to sell certain assets, properties and rights
now owned and held by it and used and usable in connection with the operation of
the Business; and
WHEREAS, Buyer desires to purchase such assets, properties and rights
of Sellers upon the terms and conditions hereinafter set forth and to continue
the operation of the Business.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained and other good and valuable
consideration, the receipt and sufficiency of which is acknowledged, the parties
hereto agree as follows:
1. ASSETS TO BE SOLD. On the Closing Date, subject to the terms and
conditions hereinafter set forth, Sellers agree to sell, assign, transfer and
convey, and Buyer agrees to purchase, acquire, assume and accept, all of the
Sellers' right, title and interest in and
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to the following assets of the Sellers (all which are collectively referred to
herein as the "Assets"):
1.1 The inventory of finished goods and raw materials of the
Sellers' Business including work in process, manufacturing supplies, spare parts
and repair materials (the "Inventory").
1.2 All machinery, tools, dies, appliances, furniture,
equipment (including space and replacement parts), supplies and materials of the
Sellers used or usable in the Business including those items listed on Exhibit
1.2 A (U.S. Seller) and 1.2 B (Canadian Seller) attached hereto (the
"Equipment").
1.3 All trade names, trademarks, service marks, copyrights,
patents, patent rights, licenses, brand names, trade secrets, trade dress,
technical knowhow, goodwill and other intangibles used by Sellers in the
Business (the "Intangibles").
1.4 All customer credit files, sales records, inventory
purchase records, past and present customer lists (including records of sales to
such customer), supplier lists, maintenance records and warranties relating to
the Assets sold hereunder and any other records maintained by the Sellers and
necessary to operate the Business, as they may exist (hereinafter the "Business
Records").
2. ITEMS NOT SOLD. The cash, bank accounts, accounts payable, accounts
receivable owned by Sellers are not included in the Assets to be sold pursuant
to this Agreement.
3. NO LIABILITIES ASSUMED. Buyer is not assuming and shall not be held
responsible for any liabilities of Sellersof any kind or nature or at any time
existing or asserted, whether fixed, contingent or otherwise, including, without
limitation, accounts, accounts payable, notes and taxes payable, warranty
claims, salesmen's commissions, union contracts, salaries, wages, severance or
separation pay or vacation, profit sharing, retirement, pension, bonus,
hospitalization or other employee benefits or any employment or old-age benefits
relating to Sellers' employees.
4. PURCHASE PRICE.
4.1 The aggregate purchase price of the Assets to be sold and
assigned hereunder (the "Purchase Price") shall be Three Million Seven Hundred
Thousand Dollars ($3,700,000).
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4.2 The Purchase Price shall be payable as follows:
4.2.1 Upon the execution of this Agreement, the sum
of $200,000 (the "Deposit") to be held in escrow by Gross, Shuman, Brizdle &
Gilfillan, P.C. in an interest bearing account for the account of the Purchaser.
At closing, the Deposit, together with any interest earned thereon, shall be
returned to the Purchaser or applied on account of the purchase price. If the
sale pursuant to this Agreement does not close, the deposit shall be refunded to
Buyer.
4.2.2 The balance in certified funds, bank draft or
wire transfer at Closing.
4.2.3 All sums to be paid pursuant to this Agreement
and all values stated herein
are in U.S. funds.
4.3 The Purchase Price shall be allocated among the Assets
purchased as designated in writing by Buyer at or prior to Closing.
4.4 At the Closing accrued but unpaid expenses which the Buyer
may agree to assume shall be adjusted as of the Closing Date and the net
adjustment shall be paid by Sellers or Buyer.
4.5 The Buyer will pay any New York State Sales Tax due on the
purchase of the Assets.
5. CLOSING. The Closing and consummation of all transactions provided
for in this Agreement including, without limitation, the payment of the Purchase
Price and the execution and delivery of the other documents referred to herein,
shall take place at 10:00 a.m. on September 13, 1999 at the offices of Gross,
Shuman, Brizdle & Gilfillan, P.C., Suite 600, 465 Main Street, Buffalo, New York
14203 (the "Closing" or "Closing Date") or at such other time and place as the
parties hereto may mutually agree. Sellers shall conduct its business in the
ordinary course between the date of this Agreement and Closing and shall not
make or institute any unusual methods of manufacture, purchase, sale, lease,
management, accounting or operation that will vary from the methods used by the
Seller as of the date of this Agreement..
The proceeds of any sales on such date shall be for the account of the
Buyer and the Buyer shall be responsible for the payroll expenses of the
employees of the Business for such day.
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6. REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers jointly and
severally, represent and warrant to the Buyer as follows:
6.1 (a) U.S. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland, and has
full power and lawful authority to own and lease its assets and carry on the
Business as and where such Business is now being conducted.
(b) Canadian Seller is a corporation duly organized,
validly existing and in good standing under the laws of the Province of Ontario,
and has full power and lawful authority to own and lease its assets and carry on
the Business as and where such Business is now being conducted.
6.2 The Sellers have all necessary corporate power and
authority to enter into and consummate the transactions provided for and
contemplated in this Agreement and all related agreements and all documents
described herein or attached hereto and has taken, or will take prior to
Closing, all action required by law, their certificates or Articles of
incorporation, and by-laws to authorize the execution and delivery of this
Agreement and the sale of Assets described herein. Upon execution and delivery
by the duly authorized officers of Sellers, this Agreement and all agreements
and other documents provided herein or attached hereto will be the valid and
binding obligations of Sellers enforceable in accordance with their terms.
6.3 Except for liens to be discharged at Closing, Sellers have
no other agreement with any other party with respect to the sale or encumbrance
of the Assets or any part thereof. The execution and delivery of this Agreement,
and the consummation of the transactions provided hereunder does not require any
third party consent and does not violate, conflict with, result in the breach
of, or cause the acceleration of or default under any provision of any
obligation, mortgage, lien, lease, agreement, instrument, law, order,
arbitration award, judgment, decree or any other restriction to which either of
the Sellers is a party or by which either of Sellers is subject or bound.
6.4 Except for liens to be discharged by Sellers at Closing,
Sellers have good, marketable and indefeasible title to all of their Assets,
free and clear of any and all security interests, liens, encumbrances,
mortgages, deeds of trust, pledges, leases, equities, charges, condition of sale
or other title retention agreements, commitments, obligations, liabilities or
other burdens of every nature and kind.
6.5 Sellers have no contracts or commitments of any kind or
nature which would adversely affect the Business, the Assets or the continuation
of the Business by Buyer.
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6.6 There are no strikes, arbitrations, grievances, other
labor disputes or union organization of drivers pending or threatened between
either of Sellers and any of their employees. Sellers are not and never has been
a party to any collective bargaining agreement. Sellers have paid in full all
wages, salaries, commissions, bonuses and other compensation (including
severance pay and vacation benefits) for all services performed by their
employees. There is no legal obligation nor any legislative enactment that would
require Buyer to engage Sellers' employees nor is there any deemed continuity of
employment resulting from the transactions envisioned by this Agreement.
6.7 Exhibit 6.7 attached hereto sets forth the wages,
salaries, commission or bonus arrangements, welfare and other benefits
(including, but not limited to, hospitalization and major medical plans funded
through insurance), vacation entitlement (including accrual of vacation time and
pay) and all other expenses for the employees of the Sellers' Business as of the
date of this Agreement, the terms of which will not have been in any manner
increased or improved upon between now and the Closing Date without Buyer's
express written consent.
6.8 Sellers have no oral or written contracts or agreements
with any of its employees except as summarized on Exhibit 6.7 attached hereto.
There are no oral employment agreements relating to the Business regarding the
continuation of employment for any employee.
6.9 The U.S. Seller has completed a valid Form I-9 for each
employee hired on or after November 7, l986 and continuously employed on or
after May 31, l987. To the best of U.S. Seller's knowledge, all of the U.S.
Seller's employees are (i) United States citizens, or lawful permanent residents
of the United States, (ii) aliens whose right to work in the United States is
unrestricted, (ii) aliens who have valid, unexpired work authorization issued by
the Attorney General of the United States (Immigration and Naturalization
Service) or (iii) aliens who have been continually employed by the U.S. Seller
or any subsidiary of the U.S. Seller since November 6, l986. The U.S. Seller is
not, or has not been, the subject of an immigration compliance or employment
visit from, and the U.S. Seller has not been assessed any fine or penalty by or
been the subject of any order or directive of, the United States Department of
Labor or the Attorney General of the United States (Immigration and
Naturalization Service).
6.10 Except as disclosed in Exhibit 6.10, neither of the
Sellers have been charged with, have not received any notice of and to the
Sellers' knowledge are not under investigation for the failure to comply with,
any statute, law, ordinance, rule, regulation, permit, license, order and/or
directive of any Government Agency governing or regulating the use, generation,
storage, leaching, escaping, buying, disposing or
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emitting of any Regulated Material ("Environmental Law") pertaining to the
Business of the Seller, the real or personal property or other assets owned or
leased by the Seller, its Business or the operation, conduct or occupancy
thereof. For the purposes of this agreement, the term "Regulated Material" shall
mean any hazardous or toxic chemical, waste or substance, or other pollutant or
contaminant as currently defined in or governed by any applicable Environmental
Law or as currently determined by any Governmental Agency or regulatory body.
For purposes of this Agreement, the term Governmental Agency means any federal,
state, local or foreign government, political subdivision, court, agency or
other entity, body, organization or group exercising any executive, legislative,
judicial, quasi-judicial, regulatory or administrative function of government.
Each transporter and disposal facility that has transported or
disposed of any Regulated Material on behalf of the Seller, if any, is listed on
Exhibit 6.10 attached hereto. All manifests or equivalent documents required by
any and all of the statues, laws, ordinances, rules, regulations, orders or
directives of any Governmental Agency to be completed and retained by the
Sellers in connection with each such instance of transportation were so
completed and retained, copies of which are included in the Business Records to
be delivered to Buyer at Closing.
6.11 There is no suit, action or legal, administrative,
arbitration or similar proceeding pending or threatened against either of the
Sellers which materially affects the Assets, the conduct of the Business, or
Sellers' ability to consummate this Agreement, nor is there any basis or ground
for any such litigation, proceeding or investigation.
6.12 Sellers have filed returns for and paid in full all of
its federal, state provincial and local taxes to the extent such filings and
payments are required prior to the date of this Agreement. All such returns were
true and correct when filed. Sellers have not had any tax deficiencies proposed
against it which remain unpaid, nor has it executed any waiver of the statute of
limitations on the assessment or collection of any tax. Tax returns of Sellers
have not been audited by the Internal Revenue Service or Canadian taxing
authorities in the last five (5) years.
6.13 All of Sellers' Inventory included in the Assets to be
sold hereunder is located on the premises of Sellers is usable or salable in the
ordinary course of the Business, is in a quantity and of a quality suitable for
sale in the ordinary course of the Business, and is not excessive in quantity
for the ordinary requirements of the Business.
6.14 Neither of the Sellers have any agreement, arrangement or
understanding with respect to the Business or any customer of Sellers providing
for sales commissions, price concessions or rebates. There are no outstanding
proposals or
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commitments of any nature to sell materials except as disclosed in Exhibit 6.14.
6.15 Neither of the Sellers have engaged or retained any
broker in connection with this transaction.
6.16 No representation or warranty by the Sellers in this
Agreement or any Exhibit to this Agreement, or in any certificate, schedule or
exhibit furnished to Buyer at Closing as provided herein contains any untrue
statement of material fact or omits to state a material fact necessary to make
the statements herein or therein not misleading.
6.17 The representations and warranties by Sellers in this
Agreement shall be true and accurate in all material respects at Closing, and
shall survive the Closing.
7. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Sellers as follows:
7.1 The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of Canada, and has full corporate
power to own its properties and conduct the business currently being conducted
by it.
7.2 The Buyer has full corporate power and authority to
execute and deliver this Agreement, and the other agreements and instruments to
be executed and delivered by it pursuant hereto and to consummate the
transactions contemplated hereby and thereby. All corporate acts and other
proceedings required to be taken by or on the part of the Buyer to authorize it
to carry out this Agreement and such other agreements and instruments and the
transactions contemplated hereby and thereby have been duly and properly taken.
This Agreement has been duly executed and delivered by the Buyer and
constitutes, and such other agreements and instruments when duly executed and
delivered by Buyer will constitute, legal, valid and binding obligations of the
Buyer enforceable in accordance with their respective terms.
7.3 No approval, authorization, consent or other order or
action of or filing with any court, administrative agency or other governmental
authority is required for the execution and delivery by Buyer of this Agreement
or any of the other agreements and instruments to be executed and delivered by
the Buyer pursuant hereto or the consummation of the transactions contemplated
hereby or thereby. Buyer is not subject to any charter, by-law, mortgage,
agreement, instrument or other restriction of any kind or character which would
prevent consummation of this Agreement and the transactions contemplated hereby.
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7.4 Buyer has not engaged or retained any broker in connection
with this transaction.
7.5 The Buyer's statements, representations, and warranties in
this Agreement do not contain any untrue statement of any material fact or omit
to state any material fact required to be stated to make such statements,
representations and warranties in the light of the circumstances in which they
are made, not misleading.
7.6 The representations and warranties by Buyer in this
Agreement shall be true and accurate in all material respects at Closing and
shall survive the Closing.
8. WARRANTY AGREEMENTS. If, within one (1) year of Closing, Buyer
performs any repair and rework to Sellers' products pursuant to Sellers'
warranty agreements in excess of Ten Thousand Dollars ($10,000) in the
aggregate, Sellers jointly and severally agree to reimburse Buyer an amount
equal to (i) direct labor and material costs, (ii) shipping and handling costs
and (iii) overhead costs in an amount equal to $50.00 per hour of Buyer's labor,
which are in excess of Ten Thousand Dollars ($10,000.00).
9. INDEMNIFICATION BY SELLERS. The Sellers jointly and severally, agree
to defend, indemnify and hold Buyer harmless from and against any and all
liabilities, levies, losses, damages, claims, costs and expenses (including
reasonable attorney's fees and costs) resulting from any misrepresentation,
breach of warranty or non-fulfillment of any agreement or covenant on the part
of the Sellers under this Agreement or any instrument provided for herein, or
from any misrepresentation in or omission from any schedule or exhibit hereto or
any certificate or other instrument furnished to Buyer hereunder.
10. INDEMNIFICATION BY BUYER. The Buyer agrees to defend, indemnify and
hold Sellers harmless from and against any and all liabilities, levies, losses,
damages, claims, costs and expenses (including reasonable attorney's fees and
costs) resulting from any misrepresentation, breach of warranty or
non-fulfillment of any agreement or covenant on the part of the Buyer under this
agreement or any instrument provided for herein, or from any misrepresentation
in or omission from any schedule or exhibit hereto or any certificate or other
instrument furnished to Sellers hereunder.
11. BULK SALES COMPLIANCE. The Seller shall comply with any and all
provisions of the New York Uniform Commercial Code, the Bulk Sales Act of
Ontario and any other laws and regulations relating to the transfer of the
Sellers' assets. The Buyer agrees, in accordance with Section 1141(c) of the New
York Tax Law to notify the Department of Taxation and Finance at least ten (10)
days prior to the Closing Date of the transaction contemplated by this
Agreement. If within five (5) days after the filing of the bulk sales notice,
the Department of Taxation notifies the Buyer of a
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possible claim for sales or use taxes due, then the U.S. Seller shall cause
Fifty Thousand Dollars ($50,000) of the Purchase Price to be placed in escrow
with Sellers' attorney for ninety (90) days or, if earlier, until authorized to
release such funds by the Department.
12. BUSINESS NAME; TELEPHONE NUMBER. On and after the Closing Date, the
Sellers shall no longer use the name "IPAC" or any similar name in the conduct
of its business except for collection of its receivables and the winding up of
its business affairs. Sellers shall take all reasonably requested actions so
that Buyer may, following the Closing Date, if it desires, file a Certificate to
Do Business under the name "IPAC". Further, as of the Closing Date, the Sellers
shall assign to Buyer all of its rights and interest in and to the Sellers'
telephone numbers and internet worldwide web site used in the Business.
13. EMPLOYEE MATTERS. Sellers shall be responsible for any and all
obligations for wages, salaries, welfare and other benefits (including, but not
limited to, hospitalization and major medical plans funded through insurance),
inclusive of all other payroll expenses for employees of the Sellers accruing as
of, existing or payable on the Closing Date, and claims and obligations under
insurance and similar coverage arising out of event occurring up to the Closing
Date. Buyer shall be responsible only for such obligations which accrue after
the Closing Date.
14. CONDUCT OF BUSINESS PENDING CLOSING. The Sellers covenant that
pending the Closing, except as otherwise requested by the Buyer, and without
making any commitment on its behalf, the Sellers will use its best efforts to
preserve their business organizations intact; to keep available to the Buyer the
services of its present employees and salesmen; and to preserve for the benefit
of Buyer the good will of the Sellers' suppliers, customers and others having
business relations with it.
15. RISK OF LOSS. All risk of loss to the Assets shall remain on
Sellers until the transfer of the Assets and the Business on the Closing Date.
In the event of any casualty or loss to any Asset prior to the Closing, Buyer
may, at Buyer's option, either (i) pay the full Purchase Price at Closing and
require Sellers at Closing to assign by specific assignment to Buyer all of
Sellers' claims relative to such casualty or loss including the proceeds of any
and all insurance policies (whether received before or after Closing), as well
as claims against any third parties relating to such casualty or loss, or
alternatively, (ii) reduce the Purchase Price by the amount of the loss and
permit Sellers to retain such claims and proceeds. In the event that prior to
the Closing Date a substantial portion of the Assets to be sold hereunder shall
be totally or substantially lost or damaged by fire or other casualty, the Buyer
shall have the further option of terminating this Agreement.
16. CONDITIONS TO BUYER'S OBLIGATIONS. The obligations of Buyer under
this Agreement are, at the option of Buyer, subject to the following conditions:
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16.1 There shall not have been any breach of any of the
representations or warranties of the Sellers contained in this Agreement and
such representations and warranties shall continue to be true on the Closing
Date.
16.2 The Sellers shall have performed and complied with all
agreements and conditions required by this Agreement to be performed and/or
complied with by it.
16.3 The Business and Assets shall not have been adversely
affected as a result of any transaction or event occurring from the date hereof
to the Closing Date.
16.4 Buyer shall have completed the inspection of the Real
Property (including environmental testing) described in Paragraph 10 and the
results of such inspection shall be satisfactory to it.
16.5 Buyer shall have obtained any permits or licenses
necessary to continue to operate the Business at the Real Property.
16.6 Sellers shall have delivered to Buyer a UCC and tax
search of all documents filed pursuant to the Uniform Commercial Code with the
Clerk of the County of Niagara and the Secretary of State in New York and a
search of filings under the Personal Property Securities Act and tax search in
connection with the Assets to be sold hereunder, which searches shall be dated
within thirty (30) days of the Closing and shall show no liens or encumbrances
on the Assets other than liens to be discharged by Sellers at Closing.
16.7 Sellers shall have delivered to Buyer Certificates of
Good Standing and/or compliance issued by the appropriate governmental agency.
16.8 The Buyer shall receive noncompetition agreements from
Sellers, IPAC Holdings, Inc., Stephen A. Saldanha and Lawrence J. Romano (the
"Covenantors") containing the following covenants:
(a) for a period of six (6) years following closing, or so
long as Buyer or its assigns or successors in interest carry on a like business,
whichever is shorter:
(i) Covenantors shall not engage in any business
activity which is substantially the same as the business conducted by Buyer.
(ii) Covenantors shall not disclose to any person or
use for their own benefit any price lists, pricing data, customer lists or
similar matters relating to the Assets or the Business transferred to Buyer,
unless such matters are at the time of the proposed disclosure common knowledge
within the trade.
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(iii) Covenantors shall not solicit any employee of
Buyer or of any direct or indirect subsidiary of Buyer to leave such employment
if such employee was at any time during the one (1) year prior to Closing an
employee of Sellers.
16.9 The Buyer shall receive from IPAC Holdings, Inc. and
Stephen A. Saldanha indemnification for damages resulting from the breach of the
representation contained in Paragraph 6.6 hereof in form and substance
satisfactory to Buyer .
16.10 The Buyer shall receive opinion letters of counsel for
the Sellers, dated as of the Closing Date in form and substance satisfactory to
the Buyer to the effect that:
(i) U.S. Seller is a corporation duly organized,
validly existing and in good standing under the laws
of the State of Maryland, and has full power and
lawful authority to own and lease its assets and
carry on its business as and where such business is
now being conducted.
(ii) Canadian Seller is a corporation duly organized,
validly existing and in good standing under the laws
of the Province of Ontario, and has full power and
lawful authority to own and lease its assets and
carry on its business as and where such business is
now being conducted.
(iii) The Sellers have all necessary corporate power
and authority to enter into and consummate the
transaction provided and contemplated in this
agreement and all related agreements and documents
described herein or attached hereto and has taken all
action required by law, its certificate of
incorporation and by-laws, to authorize the execution
and delivery of this Agreement and the sale of Assets
provided herein.
(iv) Upon execution and delivery by the duly
authorized officers of Sellers, this Agreement and
all agreements and other documents provided herein or
attached hereto will be the valid and binding
obligations of Sellers
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enforceable in accordance with their terms, except as
such obligations may be affected by laws affecting
creditors' rights generally or the application of
general principles of equity.
(v) They do not know of a suit, action or legal,
administrative or arbitration or similar proceeding
pending or threatened against the Sellers which
materially affects the Assets to be sold by it
hereunder, the conduct of its business or Sellers'
ability to consummate this Agreement.
(vi) The execution, delivery and performance of this
Agreement and the transactions provided herein will
not violate, result in a breach of or constitute a
default under any terms or conditions of any
agreement, instrument, arbitration award, judgment or
decree affecting in any manner the Assets to be sold
hereunder.
16.11 HDNA, Inc. shall simultaneously close on the sale and
purchase of 2107 Liberty Drive, Niagara Falls, New York pursuant to the Purchase
Agreement of even date herewith between the Buyer and HDNA, Inc.
17. CONDITIONS TO SELLERS' Obligations. The obligations of the Seller
sunder this Agreement are, at the option of Sellers, subject to the following
conditions:
17.1 All the terms, covenants, and conditions of this
Agreement to be complied with and performed by the Buyer at or before the
Closing Date shall have been duly complied with and performed by the Buyer, and
the representations and warranties made by the Buyer in this Agreement shall be
correct as of the Closing Date in all material respects with the same force and
effect as though such representations and warranties had been made as of the
Closing Date, except insofar as Buyer may have been given notice to the contrary
as provided herein.
17.2 Buyer shall simultaneously close on the sale and purchase
of 2107 Liberty Drive, Niagara Falls, New York pursuant to the Purchase
Agreement of even date herewith between the Buyer and HDNA, Inc.
18. ITEMS TO BE DELIVERED BY SELLERS AT CLOSING. At the Closing, or
thereafter as
<PAGE>
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herein required, the Sellers shall deliver to the Buyer the following:
18.1 Such instruments and documents of transfer as may be
necessary or appropriate to sell and transfer the Assets being sold hereunder
including a bill of sale with warranty of title covering all of the tangible
assets described in Paragraph 1 hereof.
18.2 Written consent executed by each of the shareholders and
directors of the Sellers authorizing the transaction set forth in this
Agreement.
18.3 A certificate signed by the President of the Sellers to
the effect that their representations and warranties set forth in this Agreement
continue to be true as of the Closing Date.
18.4 The Business Records referred to in Paragraph 1.4. Buyer
covenants that for a period of six years after Closing, upon reasonable notice,
Buyer shall make the original Business Records available to Sellers who shall
only use such Business Records in connection with any investigations or audits
by any federal, state, provincial or other governmental agency or any other
reasonable need of Sellers but Sellers may not use such Business Records to
conduct the Business after Closing or give access to such Business Records to
any person engaged in a business similar to the Business. Buyer may destroy or
discard any of the Business Records upon thirty (30) days written notice to
Sellers.
18.5 The Noncompetition Agreement referred to in Paragraph
16.8.
18.6 The Indemnification referred to in Paragraph 16.9.
19. ITEMS TO BE DELIVERED BY BUYER AT CLOSING. At Closing, the Buyer
shall deliver:
19.1 $3,700,000.00 in certified funds, bank draft or wire
transfer with such adjustments as are described in this Agreement.
19.2 A written consent of the directors of the Buyer
authorizing the transaction set forth in this Agreement.
20. ACCOUNTS RECEIVABLE. In the event Buyer receives any amounts after
Closing on account of the accounts receivable of either of the Sellers, it will
promptly pay over such amounts to such Seller. In the event either of the
Sellers receive any amounts after Closing on account of the accounts receivable
of Buyer which resulted from sales of merchandise after the Closing they will
promptly pay over such amounts to
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the Buyer. Further, Sellers agree to notify Buyer in writing prior to referring
any accounts receivable of the Business which existed as of the Closing to a
collection service or commencing any legal proceedings to collect such
receivables.
21. SURVIVAL. Except as otherwise expressly provided herein, all of the
representations, warranties, covenants, agreements, conditions, provisions and
terms contained in this agreement or in any schedules, exhibits, agreements or
documents attached hereto shall survive the Closing Date and the consummation of
the transaction provided for herein for a period of one (1) year following
closing.
22. EFFECTIVE AGREEMENT. This Agreement sets forth the entire
understanding of the parties. It shall not be changed or terminated orally. All
of the terms and provisions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the successors and assigns of the parties.
Buyer may assign this Agreement to any entity related to Buyer provided that the
Buyer guaranties the obligations hereunder of such related entity.
23. NOTICES. Any and all notices required to be sent pursuant to the
terms of this agreement shall be sent registered or certified mail, addressed as
follows:
To the Seller: IPAC, Inc.
c/o Stephen A. Saldanha
<PAGE>
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Pacer International
551 S.W. 8th Street
Delray Beach, Florida 33483
copy to: GROSS, SHUMAN, BRIZDLE & GILFILLAN, P.C.
465 Main Street - Suite 600
Buffalo, New York 14203
Attn.: Cindy Algase Gradl, Esq.
To the Buyer: DECTRON INTERNATIONALE, INC.
4300 Poirier Boulevard
Montreal, Quebec
Canada H4R 2C5
copy to: Shaffer & Associates
4150 Sherbrooke Street West
3rd Floor
Montreal, Quebec
Canada H3Z 1Cz
Attn: Malcolm Oppen, Esq.
<PAGE>
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24. CONSTRUCTION. This Agreement shall be governed by and enforced in
accordance with the laws of the State of New York. The parties hereby consent
and agree to the exclusive jurisdiction and venue of the State and Federal
Courts located in Erie County, New York in the event of any case or controversy
in connection with this Agreement. The section headings contained in this
Agreement are for reference only and shall not in any way effect the meaning or
interpretation of this Agreement.
25. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute but a single Agreement. Facsimile signatures shall be
deemed originals and shall be sufficient to prove the existence of such
signatures.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their corporate seals affixed hereto as of the day and year
first above written.
SELLERS: U.S. SELLER:
IPAC, INC.
By:
---------------------------------------
Lawrence J. Romano, President
CANADIAN SELLER:
IPAC, INC.
By:
---------------------------------------
Stephen A. Saldanha, President
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BUYER: DECTRON INTERNATIONALE, INC.
By:
---------------------------------------
Mauro Parissi
Chief Financial Officer
<PAGE>
ASSIGNMENT
FOR AND IN CONSIDERATION of One and No More Dollars ($1.00 and no
more), Dectron Internationale, Inc., a Canadian Corporation, hereby transfers
and assigns to IPAC 2000 INC. all of its right, title and interest to an Asset
Purchase Agreement dated August 30, 1999 by and amount IPAC, INC., a Maryland
Corporation, IPAC, INC., and Ontario Corporation and itself (the "Asset Purchase
Agreement") and IPAC 2000 INC. does hereby agree to be bound by and to promptly
perform or cause to be performed the terms, conditions and covenants, if any,
agreed to be done, kept and performed by Dectron Internationale, Inc. arising
after the date hereof under the Asset Purchase Agreement.
Dated: September __, 1999
Dectron Internationale, Inc.
By:
------------------------------------
IPAC 2000 INC.
By:
------------------------------------
We, the undersigned, Stephen A. Saldanha and Lawrence J. Romano acting
for and on behalf of IPAC, INC. (U.S.A.) and (Canada), duly authorized hereto as
we so declare, do hereby acknowledge, consent and agree to the assignment of all
the rights, title and interest of Dectron Internationale, Inc. to IPAC 2000 INC.
in and to the Asset Purchase Agreement dated August 30, 1999 as well as all
ancillary agreements relating thereto.
Dated: September 13, 1999
IPAC, INC. (U.S.A.) IPAC, INC. (Canada
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