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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 Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 1998
AMERICAN EDUCATIONAL PRODUCTS, INC.
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(Exact name of registrant as specified in its charter)
COLORADO 0-16310 84-1012129
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(State or other (Commission file number) (Employer Identi-
incorporation fication No.)
6550 Gunpark Drive, Suite 200, Boulder, Colorado 80301
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 527-3230
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(Former name or former address, if changed since last report)
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ITEM 2: ACQUISITION OF ASSETS
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On August 4, 1998, American Educational Products, Inc., a Colorado
corporation, ("AMEP" or the "Company") closed upon and consummated a
definitive Asset Purchase and Sale Agreement dated as of August 4, 1998, (the
"Agreement") between the Company and SV Distribution Company, a Delaware
corporation, ("SV") pursuant to which the Company purchased substantially all
of the tangible and intangible properties and assets ("Assets") used in
connection with the distribution of supplemental educational products through
the direct mailing of catalogs under the names "Summit Learning" and "Young
Explorers" (the "Business").
Under the terms of the Agreement, the Company acquired the Assets of the
Business, including inventories, accounts receivable, furniture, fixtures,
office machinery and equipment and other tangible property, all mailing,
client and customer lists, leasehold improvements and fixtures, prepaid
expenses, contracts and licenses, development assets and intangible assets.
The purchase price paid by Company to SV for the Assets of the Business
was the sum of $1,621,743, (subject to future adjustments) of which the sum of
$300,000 was paid at Closing and the balance of the purchase price, with
interest at the rate of 8.5% per annum, was evidenced by a Promissory Note
payable in monthly principal installments of $125,000 each which, together
with interest thereon, commence on August 1, 1998 and continue until July 1,
1999 when the entire outstanding principal balance, together with any accrued
and unpaid interred shall be due and payable in full. The Company has the
right, but not the obligation, to prepay the entire principal balance and any
accrued but unpaid interest at any time without penalty.
The Company will continue to operate Summit Learning from its facility in
Fort Collins, Colorado. The Young Explorers consumer catalog is subject to an
agreement in principle to be sold to a third party. If the sale is not
consummated, the Young Explorers catalog will be discontinued.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
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(a) Financial Statements
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Pursuant to Item 7(a)(4), the Registrant declares that it is
impracticable to provide the required audited financial statements relative to
the acquired business at the time of this Report. Such audited financial
statements required by Item 7(a) shall be filed not later than sixty (60) days
after the filing of this Current Report on Form 8-K.
(b) Pro Forma Financial Information
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Pursuant to Item 7(b) and Item 7(a)(4), the Registrant declares it
is impracticable to provide the required pro forma financial information
relative to the acquired business at the time of this Report. Such pro forma
financial information required by Item 7(b) shall be filed not later than
sixty (60) days after the filing of this Current Report on Form 8-K.
(c) Exhibits
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Item Title
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1.1 Asset Purchase and Sale Agreement dated as of August 4, 1998.
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SIGNATURE
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 hereunto duly authorized.
AMERICAN EDUCATIONAL PRODUCTS, INC.
Dated: August 14, 1998 By: /s/ Clifford C. Thygesen
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Clifford C. Thygesen, President
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ASSET PURCHASE AND SALE AGREEMENT
Dated as of
August 4, 1998
between
SV DISTRIBUTION COMPANY
and
AMERICAN EDUCATIONAL PRODUCTS, INC.
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TABLE OF CONTENTS
SECTION 1: GENERAL DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . -1-
1.1 Best Knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
1.2 Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
1.3 Governmental Authority. . . . . . . . . . . . . . . . . . . . . . . . -1-
1.4 Governmental Requirement. . . . . . . . . . . . . . . . . . . . . . . -1-
1.5 Legal Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . -2-
1.6 Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . . -2-
1.7 Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
1.8 Section.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
1.9 Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
SECTION 2: PURCHASE AND SALE OF ASSETS. . . . . . . . . . . . . . . . . . -2-
2.1 Description of Assets . . . . . . . . . . . . . . . . . . . . . . . . -2-
2.2 Excluded Assets.. . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
2.3 Allocation of Purchase Price. . . . . . . . . . . . . . . . . . . . . -4-
2.4 No Assumption of Liabilities. . . . . . . . . . . . . . . . . . . . . -4-
2.5 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
2.6 Taxes and Other Costs . . . . . . . . . . . . . . . . . . . . . . . . -5-
SECTION 3. PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . . -5-
SECTION 4: CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
4.1 General Procedure.. . . . . . . . . . . . . . . . . . . . . . . . . . -6-
4.2 Time and Place. . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
4.3 Effective Date of Closing.. . . . . . . . . . . . . . . . . . . . . . -6-
4.4 Covenants Regarding Closing.. . . . . . . . . . . . . . . . . . . . . -6-
4.5 Conditions to Obligation of Buyer.. . . . . . . . . . . . . . . . . . -7-
4.6 Conditions to Obligation of Seller. . . . . . . . . . . . . . . . . . -8-
4.7 Specific Items to be Delivered at the Closing.. . . . . . . . . . . . -8-
SECTION 5: REPRESENTATIONS AND WARRANTIES OF SELLER. . . . . . . . . . -8-
5.1 Organization and Standing.. . . . . . . . . . . . . . . . . . . . . . -9-
5.2 Authority.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
5.3 No Defaults.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
5.4 Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
5.5 No Liens or Encumbrances. . . . . . . . . . . . . . . . . . . . . . . -9-
5.6 Obligations and Liabilities.. . . . . . . . . . . . . . . . . . . . . -9-
5.7 Representations and Warranties. . . . . . . . . . . . . . . . . . . .-10-
SECTION 6: REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . .-10-
6.1 Organization and Standing.. . . . . . . . . . . . . . . . . . . . . .-10-
6.2 Corporate Acts and Proceedings. . . . . . . . . . . . . . . . . . . .-10-
SECTION 7: TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . .-10-
7.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-10-
7.2 Effect of Termination.. . . . . . . . . . . . . . . . . . . . . . . .-11-
SECTION 8: INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . .-11-
8.1 Indemnification Covenants of Seller . . . . . . . . . . . . . . . . .-11-
8.2 Indemnification Covenants of Buyer. . . . . . . . . . . . . . . . . .-11-
8.3 Method of Asserting Claims . . . . . . . . . . . . . . . . . . . . .-11-
8.4 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-13-
8.5 Limitation on Indemnification Obligations . . . . . . . . . . . . . .-13-
SECTION 9: CONFIDENTIAL INFORMATION AND RELATED MATTERS . . . . . . . . .-13-
SECTION 10: EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . .-14-
SECTION 11: MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . .-15-
11.1 Incorporation by Reference. . . . . . . . . . . . . . . . . . . . . .-15-
11.2 Parties in Interest.. . . . . . . . . . . . . . . . . . . . . . . . .-15-
11.3 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . .-15-
11.4 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-15-
11.5 Governing Law - Construction. . . . . . . . . . . . . . . . . . . . .-15-
11.6 Limitation of Actions.. . . . . . . . . . . . . . . . . . . . . . . .-15-
11.7 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-16-
11.8 Fax/Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . .-17-
11.9 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-17-
11.10 Severability.. . . . . . . . . . . . . . . . . . . . . . . . . .-17-
11.11 Jurisdiction and Venue.. . . . . . . . . . . . . . . . . . . . .-17-
11.12 Good Faith Cooperation and Additional Documents. . . . . . . . .-17-
11.13 Specific Performance.. . . . . . . . . . . . . . . . . . . . . .-17-
11.14 Assignment.. . . . . . . . . . . . . . . . . . . . . . . . . . .-17-
11.15 Entire Agreement - Amendment.. . . . . . . . . . . . . . . . . .-18-
11.16 Authority to Sign. . . . . . . . . . . . . . . . . . . . . . . .-18-
11.17 Execution of Documents.. . . . . . . . . . . . . . . . . . . . .-18-
11.18 Time.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-18-
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EXHIBITS
Exhibit 2.4(a)(2) Equipment Leases
Exhibit 2.4(a)(3) American Educational Products, Inc. Assumptions of
Contracts and Licenses
Exhibit 3.2(b) Promissory Note
Exhibit 3.2(c) Security Agreement
Exhibit 4.5(g) SV Distribution Company Assignment or Consent to
Assumption of Commercial Lease Covering Business Premises
Exhibit 5.3 SV Distribution Company Defaults or Breaches of Existing
Leases, Contracts, Agreements and Insurance Policies
Exhibit 5.4 SV Distribution Company Exceptions to Timely Filing of
Taxes
Exhibit 5.5 Excess Inventories of SV Distribution Company Not Stated
at Lowest Cost
Exhibit 5.6 SV Distribution Company Registered Rights and Proprietary
Information
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ASSET PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into effective this 4th day of August,
1998, by AMERICAN EDUCATIONAL PRODUCTS, INC., a Colorado corporation, (the
"Buyer") and SV DISTRIBUTION COMPANY, a Delaware corporation, ("Seller").
WITNESSETH
WHEREAS, Seller is the owner of certain tangible and intangible
properties and assets (the "Assets") used in connection with the distribution
of supplemental educational products through the direct mailing of catalogs
under the names "Summit Learning" and "Young Explorers" (the "Business"); and
WHEREAS, Buyer desires to purchase and Seller desires to sell the Assets
used in connection with such Business effective as of July 1, 1998 (the
"Effective Date"), subject to the terms and conditions hereinbelow set forth.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, and other good and
valuable consideration, the receipt and adequacy whereof is hereby
acknowledged, the parties agree as follows:
SECTION 1: GENERAL DEFINITIONS
For purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
1.1 Best Knowledge. "Best Knowledge" shall mean both what a Person knew
as well as what the Person should have known had the Person exercised
reasonable diligence. When used with respect to a Person other than a natural
person, the term "Best Knowledge" shall include matters that are known to the
current directors and executive officers of the Person.
1.2 Effective Date. "Effective Date" shall mean July 1, 1998.
1.3 Governmental Authority. "Governmental Authority" shall mean any and
all foreign, federal, state or local governments, governmental institutions,
public authorities and governmental entities of any nature whatsoever, and any
subdivisions or instrumentalities thereof, including, but not limited to,
departments, boards, bureaus, commissions, agencies, courts, administrations
and panels, and any division or instrumentalities thereof, whether permanent
or ad hoc and whether now or hereafter constituted or existing.
1.4 Governmental Requirement. "Governmental Requirement" shall mean any
and all laws (including, but not limited to, applicable common law
principles), statutes, ordinances, codes, rules regulations, interpretations,
guidelines, directions, orders, judgments, writs, injunctions, decrees,
decisions or similar items or pronouncements, promulgated, issued, passed or
set forth by any Governmental Authority.
1.5 Legal Requirements. "Legal Requirements" means applicable common
law and any statute, ordinance, code or other laws, rule, regulation, order,
technical or other standard, requirement, judgment, or procedure enacted,
adopted, promulgated, applied or followed by any governmental authority,
including, without limitation, any order, decree, award, verdict, findings of
fact, conclusions of law, decision or judgment, whether or not final or
appealable, of any court, arbitrator, arbitration board or administrative
agency.
1.6 Management Agreement. "Management Agreement" shall mean the
Agreement entered into between Buyer and Seller on July 8, 1998, pursuant to
which Buyer has been managing the Business.
1.7 Person. "Person" shall mean any natural person, any Governmental
Authority and any entity the separate existence of which is recognized by any
Governmental Authority or Governmental Requirement, including, but not limited
to, corporations, partnerships, joint ventures, joint stock companies, trusts,
estates, companies and associations, whether organized for profit or
otherwise.
1.8 Section. Unless otherwise stated herein, the term "Section" when
used in this Agreement shall refer to the Sections of this Agreement.
1.9 Taxes. "Tax" and "Taxes" shall mean any and all income, excise,
franchise or other taxes and all other charges or fees imposed or collected by
any Governmental Authority or pursuant to any Governmental Requirement, and
shall also include any and all penalties, interest, deficiencies, assessments
and other charges with respect thereto.
SECTION 2: PURCHASE AND SALE OF ASSETS
On the terms and subject to the conditions of this Agreement, and in
reliance upon the representations and warranties of Seller and Buyer contained
in this Agreement:
2.1 Description of Assets. Buyer agrees to acquire from Seller and
Seller agrees to transfer to Buyer, as of the Effective Date, all of the
properties and assets, both tangible and intangible, owned by Seller and used
by it solely in connection with the operation of the Business under the trade
names "Summit Learning" and "Young Explorers," including, without limitation,
the following:
(a) All inventories of the Business of every nature whatsoever,
including, but not limited to, finished goods, work in process
and raw materials;
(b) All accounts receivable of the Business of every nature
whatsoever, including trade and other receivables, excepting
therefrom any and all accounts receivable due and owing from
Steck-Vaughn Company and its affiliates;
(c) Seller's furniture, fixtures, office machinery and equipment
and other tangible property used solely in the operation of the
Business and located at the premises of the Business in Ft.
Collins, Colorado, including, without limitation, all computer
systems, hardware and software (excluding therefrom Seller's
license to use Lotus Notes software), telephone systems,
warehouse assembly, storage, packaging and distribution
equipment and fixtures;
(d) All mailing, client and customer lists used solely in the
conduct and operation of the Business, provided, however, that
Seller shall retain the right to use such lists in the business
of Steck-Vaughn Company and its affiliates;
(e) All leasehold improvements and fixtures located on the business
premises at 825 S.W. Frontage Road, Ft. Collins, Colorado;
(f) All prepaid expenses of the Business including, without
limitation, royalty, contract, catalog expense or lease
advances or deposits and other similar types of advances to
vendors, suppliers, lessors and others;
(g) All contracts and licenses used solely in the conduct of the
Business and assumed by the Buyer pursuant to Section 2.4,
including, without limitation, contracts and licenses with
vendors, suppliers, manufacturers, distributors, publishers,
programmers, consultants and collaborators; all contracts and
licenses for outside art, production and editorial work; all
confidentiality, invention and similar contracts with employees
and consultants; all contracts with depositories for
warehousing and order fulfillment; all printing or
manufacturing contracts requiring performance after closing;
all sales orders and contracts and all contracts for the
distribution of products;
(h) All of Seller's development assets used solely in the conduct
of the Business, including, without limitation, all pre-
publication, sales, marketing, advertising and promotional
materials, transcripts, catalogs, brochures, mailers, edited
works in process, mechanicals, camera copy, flats, plates,
intermediate film, final plate-making film, magnetic disks,
artwork, photographs and transparencies, and other sales,
advertising and promotional materials and rights associated
therewith;
(i) All intangible assets used solely in the conduct of the
Business including, without limitation, any and all software,
prospects lists, databases, marketing scripts, procedures and
practices, copyrights, trademarks, trade names, including
registrations thereof and applications for registration
thereof, and all patents and patent application for any and all
of the foregoing;
(j) All goodwill associated with the Business; and
(k) The telephone numbers of Seller, including, without limitation,
all "800" numbers used solely in the conduct of the Business.
2.2 Excluded Assets. The following assets owned by Seller and used in
the conduct of the Business shall not be included in the properties and Assets
to be purchased by Buyer from Seller on the Closing Date:
(a) All business and accounting records of Seller pertaining to the
Business, except as specified above; provided, however, that
Purchaser shall have reasonable access and opportunity to make
copies of any such records that may be necessary for the
continuing conduct of the Business by Purchaser; and
(b) Cash and cash equivalents as of the Effective Date.
(c) The assets excluded under Sections 2.1(b) and (c).
2.3 Allocation of Purchase Price. The Purchase Price as defined in
Section 3 hereof shall be allocated among the Assets purchased as set forth in
this Section 2.3. The allocation shall be binding on the parties in
accordance with Section 1060 of the Code for all purposes, including without
limitation, the appropriate tax treatment to be accorded to the transactions
contemplated by this Agreement. The Purchase Price shall be allocated to
accounts receivable and inventory as determined in Section 3.1.
2.4 No Assumption of Liabilities. Except as expressly provided for in
this Section 2.4, Buyer will acquire the Assets free and clear of all claims,
liens or liabilities of Seller and shall have no obligation to pay or
otherwise discharge any obligation or liability of Seller incurred in
connection with its operation of the Business or otherwise; and Seller agrees
to indemnify and hold harmless Buyer with respect to any claim, damage or
liability for such obligations. Notwithstanding the forgoing provisions,
Buyer shall assume and agree to pay the following obligations of Seller
incurred in connection with the operation of the Business:
(a) Any obligations incurred after the Effective Date by virtue of
the assignment by Seller to Buyer of certain contracts and other agreements
associated with the operation of the Business; provided, however, that such
obligations arise from operations conducted by Buyer after the Effective
Date. Those contracts and agreements consist exclusively of:
1. The premises lease covering the facility located at 825
S.W. Frontage Road, Ft. Collins, Colorado, subject to the
agreed upon extension of the term to March 31, 1999;
2. Equipment leases set forth on Exhibit 2.4(a)(2) hereto;
3. Contracts and licenses set forth on Exhibit 2.4(a)(3)
hereto.
(b) Seller's accounts payable due and owing to Scott Resources,
Inc. in the amount of $55,845.11.
(c) Any obligation of Seller which may arise in connection with the
use of any trademark or trade name included in the Assets and assigned to
Buyer.
(d) Buyer agrees to reimburse Seller after the Closing for all
payroll and employee related costs and expenses (except those expenses
associated with any retirement benefits plans of Seller and its affiliates
which are not retained by Seller's employees after the Closing Date) of the
Business from and after the Effective Date.
2.5 Labor Matters. It is expressly understood and agreed that Buyer is
not assuming any union contracts, pension liabilities, workman's compensation
commitments or employee obligations of Seller up to the Effective Date, and
all such matters shall be and remain Seller's sole responsibility and
obligation. Notwithstanding the foregoing, it is agreed that Buyer shall
offer employment to all employees of Seller employed at Seller's Ft. Collins,
Colorado facilities. Buyer shall be solely responsible for any and all
employee obligations of Buyer incurred in connection with the operation of the
Business on or after the Effective Date.
2.6 Taxes and Other Costs. All transfer and conveyance taxes related to
the sale shall be payable by Buyer.
SECTION 3. PURCHASE PRICE
3.1 The Purchase Price for the Assets (the "Purchase Price") shall be
the sum of (i) ninety-five percent (95%) of Sellers' net carrying value of
Seller's accounts receivable as of June 30, 1998, plus (ii) eighty-five
percent (85%) of the net carrying value of Seller's inventory as of June 30,
1998, after deducting the sum of (a) the inventory not in "current catalogs,"
(b) excess inventory and (c) damaged product not included in category (a) or
(b) and not in saleable condition as determined by the Buyer, subject to
Seller's right of review, within sixty (60) days of Closing. For the purposes
of this Agreement, "current catalogs" shall mean the 1997 Fall Young Explorers
catalog and any catalog distributed by Seller in 1998; and "excess inventory"
shall mean inventory in excess of a twelve (12) month supply computed on the
basis of total aggregate sales for the preceding twelve (12) months. Based
upon Seller's unaudited financial information, it is agreed that the Purchase
Price as of the Closing shall be One Million Six Hundred Twenty-One Thousand
Seven Hundred Forty-Three Dollars ($1,621,743). It is further agreed that the
determination of the Purchase Price and the principal balance due and owing
under the Promissory Note provided for in Section 3.2(b) below shall be
subject to adjustments based upon the audit of the Business that will be
conducted by the Buyer, at Buyer's sole cost and expense, within sixty (60)
days following the Closing. It is agreed that any modification to the
Purchase Price resulting from the completion of the audit will be effected by
letter agreement duly executed on behalf of Buyer and Seller within ten (10)
days following completion of the audit.
3.2 The Purchase Price to be paid by Buyer to Seller for the Assets
shall be paid in the following manner:
(a) The sum of Three Hundred Thousand Dollars ($300,000) shall be
payable in cash, certified funds or wire transfer at the time
of Closing;
(b) Buyer shall deliver its promissory note for the balance of the
Purchase Price which shall accrue interest at the rate of eight
and one-half percent (8 1/2%) per annum. The Promissory Note
shall be payable in monthly principal installments of One
Hundred Twenty-Five Thousand Dollars ($125,000) each which,
together with interest thereon, shall be payable commencing
August 1, 1998 and shall continue on or before the first day of
each month thereafter until July 1, 1999, when the entire
outstanding principal balance thereon, together with any
accrued and unpaid interest, shall be due and payable in full
(the "Maturity Date"). The Promissory Note shall be
substantially in the form of 3.2(b) hereto. The Buyer shall
have the right, but not the obligation, to prepay the entire
principal balance and any accrued but unpaid interest at any
time without penalty. Further, the entire outstanding
principal balance, together with accrued and unpaid interest,
due and owing under the Promissory Note shall be subject to
mandatory pre-payment in the event (i) Buyer completes an
offering of its equity securities of not less than Three
Million Dollars ($3,000,000) in gross proceeds or (ii) Buyer
exercises its redemption option under its issued and
outstanding Warrants which are traded on the over-the-counter
market and quoted on the NASDAQ Small Cap Market under the
symbol"AMEPW."
(c) The obligation of the Buyer to pay all sums due and owing under
the Promissory Note shall be secured by a security interest in
the inventory and accounts receivable of the Business pursuant
to a Security Agreement in the form of Exhibit 3.2(c) hereto.
(d) At any time on or before January 31, 1999, Buyer shall have the
right to return to Seller any inventory purchased by the
Business prior to the Closing Date from Seller, or any
affiliate of Seller. In the event Buyer exercises its right to
return any or all of such Seller inventory, Buyer shall be
entitled to a credit against the unpaid principal amount due
and owing under the Promissory Note in an amount equal to
eighty-five percent (85%) of the carrying value of such
inventory.
SECTION 4: CLOSING
4.1 General Procedure. At the Closing each party shall deliver such
documents, instruments and materials as may be reasonably required in order to
effectuate the intent and provisions of this Agreement, and all such
documents, instruments and materials shall be satisfactory in form and
substance to counsel for the other parties.
4.2 Time and Place. The Closing shall take place on August 4, 1998 or
on such later date and at such place and in such manner as the Buyer and
Seller may agree, following the satisfaction or waiver of all conditions
precedent set forth in Sections 4.5 and 4.6.
4.3 Effective Date of Closing. Notwithstanding the actual time and
place of Closing, the parties stipulate and agree that the Effective Date of
the sale and purchase of the Assets shall be July 1, 1998.
4.4 Covenants Regarding Closing. Buyer and Seller hereby covenant and
agree that they shall (i) use reasonable efforts to cause each of their
respective Exhibits to be prepared and exchanged with the other party, and its
legal counsel, within ten (10) business days following the execution of this
Agreement, except to the extent the express terms of this Agreement provide
for a different time period for such delivery to be accomplished, (ii) use
reasonable efforts to cause all of their respective representations and
warranties set forth in this Agreement, and Exhibits hereto, to be true on and
as of the Closing, (iii) use reasonable efforts to cause all of their
respective obligations that are to be fulfilled on or prior to the Closing to
be so fulfilled, (iv) use reasonable efforts to cause all conditions to the
Closing set forth in this Agreement to be satisfied on or prior to the
Closing, and (v) use reasonable efforts to deliver to each other at the
Closing the certificates, updated lists, notices, consents, authorizations,
approvals, agreements, transfer documents, receipts and amendments
contemplated hereby (with such additions or exceptions to such items as are
necessary to make the statements set forth in such items accurate and
acceptable, provided that if any such additions or exceptions cause any of the
conditions to a party's obligations hereunder as set forth hereinbelow not to
be fulfilled, such additions and exceptions shall in no way limit the rights
of the other party hereunder to terminate this Agreement or refuse to
consummate the transactions contemplated hereby).
4.5 Conditions to Obligation of Buyer. The obligation of Buyer to
complete the purchase of the Assets on the Closing date on the terms set forth
in this Agreement is, at the option of Buyer, subject to the satisfaction or
waiver by Buyer of each of the following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties made by Seller in this Agreement shall be
correct in all material respects on and as of the Closing date with the same
force and effect as though such representations and warranties had been made
on the Closing date.
(b) Compliance with Covenants. All covenants which Seller is
required to perform or comply with on or before the Closing date shall have
been fully complied with or performed in all material respects.
(c) Corporate Approvals. The Board of Directors of the Seller
shall have approved and ratified, if necessary, this Agreement and shall, if
necessary, have authorized the appropriate officers of the Seller to execute
same and fully perform its terms.
(d) Consents and Approvals. To the extent that any material lease,
mortgage, deed of trust, contract or agreement to which Seller is a party
shall require the consent of any person to the purchase and sale of the Assets
or any other transaction provided for herein, such consent shall have been
obtained; provided, however, that the Seller shall not make, as a condition
for the obtaining of any such consent, any agreements or undertakings not
approved in writing by Buyer to the extent that such condition otherwise has
an effect on Buyer.
(e) No Governmental Actions. No action or proceeding before any
Governmental Authority shall have been instituted or threatened to restrain or
prohibit the transactions contemplated by this Agreement, and the Buyer and
Seller shall have delivered to each other certificates dated as of the Closing
and executed by such parties, stating that to their Best Knowledge, no such
items exist. No Governmental Authority shall have taken any other action as a
result of which the management of any of the Buyer and Seller, in its sole
discretion, reasonably deems it inadvisable to proceed with the transactions
contemplated by this Agreement.
(f) Other Documents. Seller shall have delivered or caused to be
delivered all other documents, agreements, resolutions, certificates or
declarations as Buyer or its attorneys may have reasonably requested.
(g) Lease. Buyer shall have obtained an assignment or consent to
assumption of the Commercial Lease covering the Business premises,
substantially in the form of Exhibit 4.5(g) hereto.
4.6 Conditions to Obligation of Seller. The obligations of Seller to
complete the Sale of Assets on the Closing date on the terms set forth in this
Agreement is, at the option of Seller subject to the satisfaction or waiver by
Seller of each of the following conditions:
(a) Corporate Approvals. Buyer shall have approved and ratified
this Agreement and shall have authorized the appropriate parties to execute
same and fully perform its terms.
(b) Consents and Approvals. To the extent that any material lease,
mortgage, deed of trust, contract or agreement to which Seller is a party
shall require the consent of any person to the purchase and sale of Assets or
any other transaction provided for herein, such consent shall have been
obtained; provided, however, that Seller shall not make, as a condition for
the obtaining of any such consent, any agreements or undertakings not approved
in writing by Buyer to the extent that such condition otherwise has an effect
on the Seller or Buyer.
4.7 Specific Items to be Delivered at the Closing. The parties shall
deliver the following items to the appropriate party at the Closing of the
transactions contemplated by this Agreement.
(a) To be delivered by Seller (in duplicate original): Bills of
Sale, or other documents of conveyance, in form satisfactory to Buyer and its
legal counsel, conveying the Assets to Buyer free and clear of all claims,
liens or encumbrances and containing general warranties with respect to title.
(b) To be delivered by Buyer (in duplicate original):
(i) Cash or certified funds payable to Seller in the amount of
Three Hundred Thousand Dollars ($300,000);
(ii) Promissory Note substantially in the form of Exhibit
3.2(b) hereto;
(iii) Security Agreement in the form of Exhibit 3.2(c);
(iv) First payment of One Hundred Twenty-Five Thousand Dollars
($125,000) plus interest under the Promissory Note; and
(v) Copy of corporate resolution certified by Buyer's
Secretary authorizing the execution of this Agreement and
the consummation by Buyer of the transactions contemplated
by this Agreement.
(c) At the Closing, the Management Agreement shall terminate ab
initio.
SECTION 5: REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Buyer to enter into this Agreement and with
the understanding and expectations that Buyer will be relying thereon in
consummating the transactions contemplated hereunder, Seller (hereinafter
referred to as the "Corporation" for the purposes of this Section 5 only),
hereby represents and warrants as follows:
5.1 Organization and Standing. Seller is a Corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
qualified to do business in the State of Colorado and has all requisite power
and authority to own its assets and properties and to carry on its business as
it is now being conducted.
5.2 Authority. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor compliance by
Seller with any on the provisions hereof will:
(a) conflict with or result in a breach of any provision of its
Certificate of Incorporation or Bylaws;
(b) result in a default (or give rise to any right of termination,
cancellation, or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which Seller is a party, or by which any of its
properties or assets which are material to the Business may be bound except
for such default (or right of termination, cancellation, or acceleration) as
to which requisite waivers or consents shall either have been obtained by
Seller prior to the Closing Date or the obtaining of which shall have been
waived by Buyer; or
(c) violate any order, writ, injunction, decree or, to Seller's
Best Knowledge, any statute, rule or regulation applicable to Seller or any of
its properties or assets. No consent or approval by any governmental
authority is required in connection with the execution and delivery by Seller
of this Agreement or the consummation by Seller of the transactions
contemplated hereby, except for possible notice under plant closing laws.
5.3 No Defaults. Except as set forth on the attached Exhibit 5.3, each
of the leases, contracts, agreements and insurance policies to which Seller is
a party and which will be assumed by Buyer is in full force and effect as of
the date hereof with no material defaults existing thereunder.
5.4 Taxes. Except as set forth in Exhibit 5.4, the Seller has filed (or
has obtained extensions for filing) all income, excise, sales, corporate
franchise, property, payroll and other tax returns or reports required to be
filed by it, as of the date hereof by the United States of America, any state
or other political subdivision thereof or any foreign country and has paid all
Taxes or assessments relating to the time periods covered by such returns or
reports.
5.5 No Liens or Encumbrances. The Seller has good and marketable title
to all of the Assets, tangible and intangible, employed in the operation of
the Business, free of any mortgages, security interests, pledges, easements or
encumbrances of any kind whatsoever, except for such property and assets as
may be leased by the Seller.
5.6 Obligations and Liabilities. All of the Assets to be transferred
and conveyed to Buyer pursuant to this Agreement shall, on the Closing Date,
be free and clear of any claim, lien, encumbrance or any liability of Seller
of whatsoever kind or description. Except as provided in Sections 2.4 and 2.5
and under no circumstance shall Buyer be liable or obligated to pay, discharge
or otherwise satisfy any indebtedness, liability or obligation of Seller,
whether incurred in connection with the operation of the Business or
otherwise; and Seller, for itself, successors and assigns, agrees to indemnify
and hold harmless Buyer, its successors and assigns, from any such liability
or obligation.
5.7 Representations and Warranties. The representations and warranties
contained in this Agreement shall be true on and as of the Closing Date with
the same force and effect as though such representations and warranties had
been made on and as of the Closing Date. Such representations and warranties
shall survive the Closing Date and shall remain operative in full force and
effect for the period of time set forth in Section 11.8 hereof regardless of
any investigation at any time made by or on behalf of Buyer and shall not be
deemed merged in any document or instruction so executed and/or delivered by
Buyer or the Seller.
SECTION 6: REPRESENTATIONS AND WARRANTIES OF BUYER
6.1 Organization and Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado
and has all requisite corporate power and authority to own its assets and
properties and to carry on its business as it is now being conducted.
6.2 Corporate Acts and Proceedings. This Agreement has been duly
authorized by all necessary corporate action on behalf of Buyer, has been duly
executed and delivered by authorized officers of Buyer, and is a valid and
binding Agreement on the part of Buyer that is enforceable against Buyer in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and to judicial
limitations on the enforcement of the remedy of specific performance and other
equitable remedies.
SECTION 7: TERMINATION
7.1 This Agreement may be terminated and abandoned solely as follows:
(a) At any time until the Closing Date by the mutual agreement of
the Seller and Buyer.
(b) By either Buyer or Seller, if for any reason the parties have
failed to close this Agreement on or before August 7, 1998, provided that
neither Buyer nor Seller is then in default thereunder.
In the event of any termination pursuant to this Section 7.1 (other
than pursuant to subparagraph 7.1(a), written notice setting forth the reasons
therefor shall forthwith be given by Seller, if it is the terminating party,
to Buyer, or by Buyer, if it is the terminating party, to the Seller.
7.2 Effect of Termination. If the sale and purchase of Assets is
terminated and abandoned as provided for in this Section, this Agreement shall
forthwith become wholly void and of no effect without liability to any party
to this Agreement except for breach of this Agreement.
SECTION 8: INDEMNIFICATION
8.1 Indemnification Covenants of Seller. Subject to the limitations set
forth in this Section 8, the Seller shall defend, indemnify, save and keep
harmless the Buyer and its affiliates, directors, officers, agents or
representatives and their respective successors and permitted assigns (the
"Buyer Indemnitees"), against and from all liability, demands, claims, actions
or causes of action, assessments, losses, fines, penalties, costs, damages and
expenses, including reasonable attorneys' fees (collectively the "Damages")
sustained or incurred by any of the Buyer Indemnitees as a result of or
arising out of or relating to:
(a) Any inaccuracy in a representation or breach of a warranty made
by the Seller in this Agreement or in any document or instrument delivered to
the Buyer in connection with this Agreement; or
(b) The failure of the Seller to comply with, or the breach by the
Seller of, any of the covenants contained in this Agreement or in any document
or instrument delivered to the Buyer in connection with this Agreement, to be
performed by the Seller; or
(c) Any liability now or subsequently existing arising out of or in
connection with the Business relating to periods prior to the Effective Date,
except to the extent that any such liability is expressly assumed by the Buyer
pursuant to this Agreement.
8.2 Indemnification Covenants of Buyer. Subject to the limitations set
forth in this Section 8, the Buyer shall defend, indemnify, save and keep
harmless the Seller and its affiliates, directors, officers, agents or
representatives and their respective successors and permitted assigns (the
"Seller Indemnitees"), against and from all Damages sustained or incurred by
any of the Seller Indemnitees as a result of or arising out of or relating to:
(a) Any inaccuracy in a representation or breach of a warranty made
by the Buyer in this Agreement or in any document or instrument delivered to
the Seller in connection with this Agreement; or
(b) The failure of the Buyer to comply with, or the breach by the
Buyer of, any of the covenants contained in this Agreement or in any document
or instrument delivered to the Seller in connection with this Agreement, to be
performed by the Buyer; or
(c) Any liability now or subsequently existing arising out of or in
connection with the Business, solely to the extent that such liabilities
and/or obligations relate to the acts or omissions of the Buyer subsequent to
the Effective Date; except to the extent that any such liability is expressly
retained by the Seller pursuant to this Agreement.
8.3 Method of Asserting Claims.
(a) For purposes of this Section 8.3, the following terms shall be
defined as follows:
(b) "Claims" shall mean all claims asserted pursuant to this
Section 8, whether or not arising as a result of a Third Party
Claim.
(c) "Indemnified Person" shall mean any Buyer Indemnitee or any
Seller Indemnitee, as the context requires.
(d) "Indemnifying Person" shall mean any person obligated to
indemnify an Indemnified Person pursuant to this Section 8, as
the context requires.
(e) "Third Party Claims" shall mean any Claim asserted by any
person not a party to this Agreement (including without
limitation any governmental authority), asserting that an
Indemnified Person is liable for monetary or other obligations
which may constitute or result in Damages for which such
Indemnified Person may be entitled to indemnification pursuant
to this Section 8.
(f) All Claims shall be made in writing and shall set forth with
reasonable specificity the facts and circumstances of the
Claim, as well as the basis upon which indemnification pursuant
to this Section 8 is sought. Notwithstanding the foregoing, no
delay or failure by any Indemnified Person to provide
notification of any Claim shall preclude any Indemnified Person
from recovering for Damages pursuant to this Section 8, except
to the extent that such delay or failure materially compromises
the rights of any Indemnifying Person under this Section 8.
(g) Within ten (10) days after receipt by an Indemnifying Person of
any notification of a Claim, the Indemnifying Person may, upon
written notice thereof to the Indemnified Person, assume (at
the Indemnifying Person's expense) control of the defense of
such action, suit or proceeding with counsel reasonably
satisfactory to the Indemnified Person, provided the
Indemnifying Person acknowledges in writing to the Indemnified
Person that any Damages that may be assessed against the
Indemnified Person in connection with such action, suit or
proceeding constitute Damages for which the Indemnified Person
shall be entitled to indemnification pursuant to this Section
8. If the Indemnifying Person does not so assume control of
such defense, the Indemnified Person shall control such
defense, but in so doing shall not waive or limit its right to
recover under this Section 8 for any Damages that may be
assessed against the Indemnified Person in connection with such
action, suit or proceeding. The party not controlling such
defense may participate therein at its own expense; provided
that if the Indemnifying Person assumes control of such
defense, and the Indemnified Person has been advised in writing
by outside legal counsel that under the applicable standards of
professional conduct, the Indemnifying Person and the
Indemnified Person may not be represented by the same counsel
with respect to such action, suit or proceeding, the reasonable
fees and expenses of one law firm for the Indemnified Person
shall be paid by the Indemnifying Person. The party
controlling such defense shall keep the other party advised of
the status of such action, suit or proceeding and the defense
thereof and shall consider in good faith recommendations made
by the other party with respect thereto. The Indemnified
Person shall not agree to any settlement of such action, suit
or proceeding without the prior written consent of the
Indemnifying Person, which (with respect to an action, suit or
proceeding as to which the Indemnifying Person has not elected
to assume control of the defense) shall not be unreasonably
withheld. The Indemnifying Person shall not agree to any
settlement of such action, suit or proceeding without the prior
written consent of the Indemnified Person, which shall not be
unreasonably withheld so long as the settlement includes a
complete release of the Indemnified Person from all liability
and does not contain or contemplate any payment by, or
injunctive or other equitable relief binding upon, the
Indemnified Person.
8.4 Survival. The representations, warranties, covenants, agreements
and indemnities of the parties set forth in this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby and shall
continue until the first anniversary of the date hereof. If a notice is
properly given with respect to a Claim prior to the expiration of the relevant
survival period set forth in this Section 8.4, then notwithstanding such
expiration, the representation, warranty, covenant, agreement or indemnity
applicable to such Claim shall survive until, but only for purposes of, the
resolution of such Claim.
8.5 Limitation on Indemnification Obligations. The Seller shall not be
obligated to make any payments under this Section 8 until the amount of
Damages incurred by the Buyer Indemnitees exceeds One Hundred Thousand Dollars
($100,000), and shall then be responsible to make payments under this Section
8 in excess of that amount only up to the amount of the Purchase Price.
SECTION 9: CONFIDENTIAL INFORMATION AND RELATED MATTERS
9.1 Each of the Buyer and Seller recognizes and acknowledges that it has
and will have access to certain non-public information of the other which
shall be deemed the confidential information of the other party that is
included in the Assets (including, but not limited to, business plans, costs,
trade secrets, licenses, research projects, profits, markets, sales, customer
lists, strategies, plans for future development, financial information and any
other information of a similar nature) that after the consummation of the
transactions contemplated hereby will be valuable, special and unique property
of the Buyer. Information shall not be deemed Confidential Information and
afforded the protections of this Section 9 if, on the Closing Date, such
information has been (i) developed by the receiving party independently of the
disclosing party, (ii) rightfully obtained without restriction by the
receiving party from a third party, provided that the third party had full
legal authority to possess and disclose such information, (iii) publicly
available other than through the fault or negligence of the receiving party,
(iv) released without restriction by the disclosing party to anyone, including
the United States government, or (v) properly and lawfully known to the
receiving party at the time of its disclosure, as evidenced by written
documentation conclusively established to have been in the possession of the
receiving party on the date of such disclosure. Each of the Companies agrees
that they will not disclose, and that they will use their best efforts to
prevent disclosure by any other Person of, any such confidential information
to any Person for any purpose or reason whatsoever, except to authorized
representatives of the Companies. Notwithstanding, a party may use and
disclose any such confidential information to the extent that a party may
become compelled by Legal Requirements to disclose any such information;
provided, however, that such party shall use all reasonable efforts and shall
have afforded the other Companies the opportunity to obtain an appropriate
protective order or other satisfactory assurance of confidential treatment for
any such information compelled to be disclosed. In the event of termination
of this Agreement, each party shall use all reasonable efforts to cause to be
delivered to the other parties, and to retain no copies of, any documents,
work papers and other materials obtained by such party or on such party's
behalf during the conduct of the matters provided for in this Agreement,
whether so obtained before or after the execution hereof. Each of the
Companies recognizes and agrees that violation of any of the agreements
contained in this Section 9 will cause irreparable damage or injury to the
Companies, the exact amount of which may be impossible to ascertain, and that,
for such reason, among others, the Companies shall be entitled to an
injunction, without the necessity of posting bond therefor, restraining any
further violation of such agreements. Such rights to any injunction shall be
in addition to, and not in limitation of, any other rights and remedies the
Companies may have against each other.
9.2 Seller further covenants with Buyer that all information concerning
the customers, clients, contracts, mailing lists and business of Summit
Learning is confidential information, is being acquired by Buyer and will be
treated by Seller as such, and that Seller will not hereafter, directly or
indirectly, make use of such information or divulge any such information nor
reveal any customer or mailing lists or other confidential information to any
other person except as provided for herein. The foregoing restrictions on
disclosure of information shall not include (i) information that has properly
come into the public domain, (ii) information learned by Seller from a third
party without an obligation of confidentiality or (iii) information gained or
learned by Seller independent of and subsequent to the closing of the
transactions covered by this Agreement.
9.3 Notwithstanding the provisions of this Agreement to the contrary, it
is agreed that after the Closing Seller shall have the right to utilize the
1997 Fall Young Explorers mailing list solely to offer Steck-Vaughn print
products to consumers that are not competitive with products distributed by
the Business through a direct-mail catalog.
9.4 In consideration of the transactions provided for or contemplated by
this Agreement, Seller acknowledges and agrees that Buyer shall be released
and forever discharged from any further duty, obligation or undertaking to
comply with the covenants and restrictions contained in that certain Non-
Competition Agreement dated as of December 20, 1995 (the "1995 Non-Compete"),
between and among American Educational Products, Inc., Summit Learning, Inc.
and Steck-Vaughn Publishing Corporation. It is expressly understood and
agreed that the terms and provisions of this Agreement shall for all purposes
be deemed to supercede the 1995 Non-Compete, which shall be deemed null, void
and un-enforceable for all purposes.
SECTION 10: EXPENSES
10.1 Each of the parties will pay all costs and expenses of its or his
performance and compliance with this Agreement. Notwithstanding the
foregoing, if the Agreement is not consummated by reason of a default of one
of the Companies, then the expenses of each of the Companies in connection
with the transaction contemplated herein shall be paid by such defaulting
Company.
10.2 Seller and Buyer each covenant and agree that they have not engaged
the services of any broker or finder in connection with the transactions
provided for herein and that no brokers' or finders' fees are payable
hereunder.
SECTION 11: MISCELLANEOUS
11.1 Incorporation by Reference. All appendices to this Agreement and
all documents delivered pursuant to or referred to in this Agreement are
herein incorporated by reference and made a part hereof.
11.2 Parties in Interest. Nothing in this Agreement, whether express or
implied, is intended to, or shall, confer any rights or remedies under, or by
reason of, this Agreement, on any person other than the parties hereto and
their respective and proper successors and assigns. Nor shall anything in
this Agreement act to relieve or discharge the obligation or liability of any
third persons to any party to this Agreement.
11.3 Amendments and Waivers. This Agreement may not be amended, nor may
compliance with any term, covenant, agreement, condition or provision set
forth herein be waived (either generally or in a particular instance and
either retroactively or prospectively) unless such amendment or waiver is
agreed to in writing by all parties hereto.
11.4 Waiver. No waiver of any breach of any one of the agreements,
terms, conditions, or covenants of this Agreement by the parties shall be
deemed to imply or constitute a waiver of any other agreement, term,
condition, or covenant of this Agreement. The failure of any party to insist
on strict performance of any agreement, term, condition, or covenant, herein
set forth, shall not constitute or be construed as a waiver of the rights of
either or the other thereafter to enforce any other default of such agreement,
term, condition, or covenant; neither shall such failure to insist upon strict
performance be deemed sufficient grounds to enable either party hereto to
forego or subvert or otherwise disregard any other agreement, term, condition,
or covenants of this Agreement.
11.5 Governing Law - Construction. This Agreement, and the rights and
obligations of the respective parties, shall be governed by and construed in
accordance with the laws of the State of Colorado, excluding conflict of law
provisions which would act to apply the laws of another state.
Notwithstanding the preceding sentence, it is acknowledged that each party
hereto is being represented by, or has waived the right to be represented by,
independent counsel. Accordingly, the parties expressly agree that no
provision of this Agreement shall be construed against any party on the ground
that the party or its counsel drafted the provision. Nor may any provision of
this Agreement be construed against any party on the grounds that party caused
the provision to be present.
11.6 Limitation of Actions. No action may be brought by any party to
this Agreement to enforce any covenant made by any party hereto or to seek
damages or equitable relief arising from any claimed breach or nonperformance
of a covenant, representation, warranty or other performance provided for
herein unless such action is commenced within one (1) year of the date of
Closing. The parties hereto agree to be bound by the aforesaid limitation of
actions notwithstanding the provisions of any applicable statutory limitation
of actions to the contrary.
11.7 Notices. Any notice, communication, offer, acceptance, request,
consent, reply, or advice (herein severally and collectively, for convenience,
called "Notice"), in this Agreement provided or permitted to be given,
served, made, or accepted by any party or person to any other party or
parties, person or persons, hereunder must be in writing, addressed to the
party to be notified at the address set forth below, or such other address
as to which one party notifies the other in writing pursuant to the terms of
this Section, and must be served by (1) telefax or other similar electronic
method, or (2) depositing the same in the United States mail, certified,
return receipt requested and postage paid to the party or parties, person or
persons to be notified or entitled to receive same, or (3) delivering the
same in person to such party.
Notice shall be deemed to have been given immediately when sent by
telefax or other electronic method and seventy-two hours after being deposited
in the United States mail, or when personally delivered in the manner
hereinabove described. Notice provided in any manner not specified above
shall be effective only if and when received by the party or parties, person
or persons to be, or provided to be notified.
All notices, requests, demands and other communications required or
permitted under this Agreement shall be addressed as set forth below:
If Buyer, to: American Educational Products, Inc.
6550 Gunpark Drive, Suite 200
Boulder, Colorado 80301
With copy to: Clifford L. Neuman, Esq.
Neuman, Drennen & Stone, LLC
1507 Pine Street
Boulder, Colorado 80302
If Seller, to: Todd Wehner, CFO
Steck-Vaughn Company
4515 Seton Center Parkway, Suite 300
Austin, Texas 78759
With copies to: Paul Gibbons, Vice President and Treasurer
Harcourt General, Inc.
27 Boylston Street
Chestnut Hill, Massachusetts 02167
and
Eric P. Geller, Senior Vice President and
General Counsel
Harcourt General, Inc.
27 Boylston Street
Chestnut Hill, Massachusetts 02167
Any party receiving a facsimile transmission shall be entitled to rely upon a
facsimile transmission to the same extent as if it were an original. Any
party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions
of this Section for the giving of notice.
11.8 Fax/Counterparts. This Agreement may be executed by telex, telecopy
or other facsimile transmission, and such facsimile transmission shall be
valid and binding to the same extent as if it were an original. Further, this
Agreement may be signed in one or more counterparts, all of which when taken
together shall constitute the same documents. For all evidentiary purposes,
any one complete counter set of this Agreement shall be considered an
original.
11.9 Captions. The caption and heading of various sections and
paragraphs of this Agreement are for convenience only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
11.10 Severability. Wherever there is any conflict between any
provision of this Agreement and any statute, law, regulation or judicial
precedent, the latter shall prevail, but in such event the provisions of this
Agreement thus affected shall be curtailed and limited only to the extent
necessary to bring it within the requirement of the law. In the event that
any part, section, paragraph or clause of this Agreement shall be held by a
court of proper jurisdiction to be invalid or unenforceable, the entire
Agreement shall not fail on account thereof, but the balance of the Agreement
shall continue in full force and effect unless such construction would clearly
be contrary to the intention of the parties or would result in unconscionable
injustice.
11.11 Jurisdiction and Venue. Jurisdiction over any action,
proceeding or arbitration shall be proper only if filed and maintained in
Colorado, and venue shall be proper therefor only in the County of Boulder as
to state court proceedings or the District Court for the District of Colorado
as to federal court proceedings.
11.12 Good Faith Cooperation and Additional Documents. The parties
shall use their reasonable good faith efforts to fulfill all of the conditions
set forth in this Agreement over which it has control or influence. Each
party covenants and agrees to cooperate in good faith and to enter into and
deliver such other documents and papers as the other party reasonably shall
require in order to consummate the transactions contemplated hereby, provided
in each instance, any such document is in form and substance approved by the
parties and their respective legal counsel.
11.13 Specific Performance. The obligations of the parties under
Section 9 are unique. If either party should default in its obligations under
said section(s), the parties each acknowledge that it would be extremely
difficult and impracticable to measure the resulting damages; accordingly, the
non-defaulting party, in addition to any other available rights and remedies,
may sue in equity for injunction (mandatory or prohibitive) or specific
performance (all without the need to post a bond or undertaking of any
nature), and the parties each expressly waive the defense that a remedy at law
in damages is adequate.
11.14 Assignment. Neither party may directly or indirectly assign or
delegate, by operation of law or otherwise, all or any portion of
its/their/his rights, obligations or liabilities under this Agreement without
the prior written consent of all other parties, which consent may be withheld
in their respective sole and absolute discretion.
11.15 Entire Agreement - Amendment. For purposes of this Section,
the term "Agreement" shall include this Agreement and the Exhibits and other
documents attached hereto. This Agreement, and other documents delivered
pursuant to this Agreement, contain all of the terms and conditions agreed
upon by the parties relating to the subject matter of this Agreement and
supersede all prior and contemporaneous agreements, letters of intent,
representations, warranties, disclosures, negotiations, correspondence,
undertakings and communications of the parties, oral or written, respecting
that subject matter.
11.16 Authority to Sign. Each of the persons signing below of any
party hereby represents and warrants that s/he or it is signing with
full and complete authority to bind the party on whose behalf of whom s/he or
it is signing, to each and every term of this Agreement.
11.17 Execution of Documents. The parties hereto agree to execute
and deliver any and all other documents necessary and convenient to effectuate
the exchange of stock herein provided for, and Seller as an inducing
condition, represent that it has the authority to enter into this Agreement
and to make the foregoing commitments for itself.
11.18 Time. Time is of the essence of this Agreement and each of its
provisions.
IN WITNESS WHEREOF, the parties have signed the Agreement the date and
year first above written.
SV DISTRIBUTION COMPANY,
ATTEST: a Delaware corporation
/s/ Susan Myers By: /s/ Todd Wehner
- -------------------------- -----------------------------------
Secretary Todd Wehner, Controller/CFO
AMERICAN EDUCATIONAL PRODUCTS, INC.
ATTEST: a Colorado corporation
/s/ Frank Jennings By: /s/ Clifford C. Thygesen
- --------------------------- -----------------------------------
Secretary Clifford C. Thygesen, President
