<PAGE>
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) July 15, 1996
American Body Armor & Equipment, Inc.
(Exact name of registrant as specified in its charter)
Florida 0-18863 59-2044869
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
191 Nassau Place Road, Yulee, Florida 32097
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (904) 261-4035
(Former name or former address, if changed since last report.)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On May 13, 1996, the Board of Directors of American Body Armor &
Equipment, Inc. (the "Company") held a meeting at which the Board of Directors
authorized the purchase by the Company of certain assets of the NIK Public
Safety Product Line from IversLee Corporation ("Ivers-Lee"). Ivers-Lee's NIK
Public Safety Product Line is a producer and distributor of narcotics testing
products. The Company and NIK Public Safety, Inc., a newly formed wholly-owned
subsidiary of the Company (collectively, the "Purchaser"), acquired from
Ivers-Lee and LFC No. 46 Corp., a wholly-owned subsidiary of Ivers-Lee
(Ivers-Lee and LFC No. 46 Corp., collectively, the "Seller"), certain assets of
the NIK Public Safety Product Line of Ivers-Lee pursuant to an asset purchase
agreement (the "Asset Purchase Agreement"), dated as of July 2, 1996, pursuant
to which: (i) the Purchaser agreed to purchase inventory, receivables,
intellectual property, contracts and other tangible and intangible properties
and related assets of the NIK Public Safety Product Line from the Seller
(collectively, the "NIK Assets"); and (ii) in consideration therefor, the
Purchaser agreed to issue to the Seller $2,400,000 worth of Common Stock of the
Company, to be valued in accordance with the Asset Purchase Agreement (the "NIK
Shares"), subject to adjustment (the "Purchase Price"). Such valuation amounted
to 310,931 shares of Common Stock of the Company.
The acquisition of the NIK Assets is being accounted for by the
Company under the purchase method of accounting. Of the $2,400,000 Purchase
Price, the inventory purchased by the Company is valued at $500,000,
receivables are valued at $300,000, and the patents and trademarks are valued
at $1,600,000.
In connection with the execution of the Asset Purchase Agreement, the
Purchaser agreed to register the NIK Shares for sale under the Securities Act
of 1933, as amended. On the closing date, the Purchaser advanced to the Seller
$1,200,000 (the "Advance"). Such Advance will not bear interest and must be
repaid by the Seller with the first $1,200,000 realized by the Seller from the
sales of the NIK Shares. In the event that the sum of the aggregate net
proceeds from sales of the NIK Shares prior to December 31, 1996, less any
amounts paid to the Company on account of the Advance (the "Seller's Balance"),
and the Advance are less than $2,400,000, the Company has agreed to pay to the
Seller, on December 31, 1996, the difference between $2,400,000 and the sum of
Seller's Balance and the Advance. In the event that the sum of the Seller's
Balance and the Advance at any time exceeds $2,400,000, then Seller has agreed
to pay to the Purchaser, an amount equal to the excess of such Seller's Balance
and the Advance over $2,400,000. The foregoing description of the Asset
Purchase Agreement and the transactions contemplated thereby is not intended to
be complete and is qualified in its entirety by the complete text of the Asset
Purchase Agreement.
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements.
Not applicable.
(b) Unaudited Pro Forma Financial Information.
The following unaudited pro forma balance sheet as of March 31, 1996
gives effect to the issuance of the 5% convertible subordinated notes of the
Company due April 30, 2001 (the "Notes") and the acquisition of certain NIK
Assets as if such transactions had occurred on March 31, 1996.
The unaudited pro forma balance sheet may not be indicative of the
results that actually would have occurred if the transactions referred to above
had been in effect on the dates indicated or the results that may be obtained
in the future.
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<PAGE>
American Body Armor & Equipment, Inc.
Unaudited Pro Forma Balance Sheet
as of March 31, 1996
<TABLE>
<CAPTION>
Acquisition Issuance of
Historical of NIK Convertible
ABA Assets(1) Sub-Total Debt (2) Pro Forma
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $41,649 ($1,200,000) ($1,158,351) $8,950,000 $7,791,649
Accounts receivable $1,910,348 $300,000 $2,210,348 $2,210,348
Inventories $1,198,565 $500,000 $1,698,565 $1,698,565
Prepaid expenses and other current assets $500,473 $500,473 $500,473
----------- ----------- ----------- ----------- -----------
Total current assets $3,651,035 $400,000 $3,251,035 $8,950,000 $12,201,035
PROPERTY AND EQUIPMENT, net $457,582 $457,582 $457,582
REORGANIZATION VALUE IN
EXCESS OF AMOUNTS
ALLOCABLE TO IDENTIFIABLE
ASSETS, net $3,541,574 $3,541,574 $3,541,574
PATENTS, TRADEMARKS and
OTHER INTANGIBLES $1,855,000 $1,855,000 $1,855,000
OTHER ASSETS $72,770 $72,770 $850,000 $922,770
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS $7,722,961 $1,455,000 $9,177,961 $9,800,000 $18,977,961
=========== =========== =========== =========== ===========
</TABLE>
See Notes to Unaudited Pro Forma Balance Sheet
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<PAGE>
American Body Armor & Equipment, Inc.
Unaudited Pro Forma Balance Sheet - continued
as of March 31, 1996
<TABLE>
<CAPTION>
Acquisition Issuance of
Historical of NIK Convertible
ABA Assets(1) Sub-Total Debt(2) Pro Forma
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Liability for acquisition of NIK Assets $1,455,000 $1,455,000 $1,455,000
Short term borrowings and current
portion of long-term debt $1,733,287 $1,733,287 ($1,700,000) $33,287
Accounts payable, accrued expenses and
other current liabilities $967,999 $967,999 $967,999
------------ ------------ ------------ ------------ ------------
Total current liabilities $2,701,286 $1,455,000 $4,156,286 ($1,700,000) $2,456,286
5% CONVERTIBLE DEBT $11,500,000 $11,500,000
OTHER LONG-TERM DEBT AND
CAPITALIZED LEASE OBLIGATION,
less current portion $25,723 $25,723 $25,723
------------ ------------ ------------ ------------ ------------
Total liabilities $2,727,009 $1,455,000 $4,182,009 $9,800,000 $13,982,009
STOCKHOLDERS' EQUITY
Convertible preferred stock, $1 stated
value, 1,700,000
shares authorized, 0
shares issued and outstanding $0 $0 $0
Common stock, $.03 par value,
15,000,000 shares authorized, 6,825,835
shares issued and outstanding $204,775 $204,775 $204,775
Additional paid-in capital $3,755,012 $3,755,012 $3,755,012
Retained earnings $1,036,165 $1,036,165 $1,036,165
------------ ------------ ------------ ------------ ------------
Total stockholders' equity $4,995,952 $0 $4,995,952 $0 $4,995,952
------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $7,722,961 $1,455,000 $9,177,961 $9,800,000 $18,977,961
============ ============ ============ ============ ============
</TABLE>
See Notes to Unaudited Pro Forma Balance Sheet
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<PAGE>
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
(1) Acquisition of NIK Assets
On July 15, 1996, the Company acquired certain assets of the NIK
Public Safety Product Line from Ivers-Lee Corporation (the "NIK
Assets"). The purchase price of the acquisition was $2,400,000 in
stock, plus $255,000 in costs incurred related to the purchase. The
Company acquired inventory, receivables and certain intangibles. The
total purchase price was allocated to the NIK Assets based on relative
fair market values. Patents, trademarks and other intangibles will be
amortized over their respective useful lives, which range from 5-25
years.
(2) Issuance of Convertible Debt
On April 30, 1996, the Company issued 5% convertible notes whereby the
Company received cash of $11,500,000. The cash was reduced by paying
down the Company's credit facility by approximately $1,700,000, and
paying debt-related costs of $850,000. The deferred debt issue costs
are being amortized over the term of the note, which is five years.
-5-
<PAGE>
(c) Exhibits.
The following Exhibit is filed herewith:
2.1 Asset Purchase Agreement, dated as of July 2, 1996, among the
Purchaser and Seller.
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<PAGE>
SIGNATURES
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 BODY ARMOR & EQUIPMENT, INC.
By: /s/Jonathan M. Spiller
---------------------------------------------
Dated: July 30, 1996 Name: Jonathan M. Spiller
Title: President and Chief Executive Officer
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<PAGE>
ASSET PURCHASE AGREEMENT
AMONG
AMERICAN BODY ARMOR & EQUIPMENT, INC.;
NIK PUBLIC SAFETY, INC.;
IVERS-LEE CORPORATION;
AND
LFC #46 CORP.
Dated as of July 2, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - Definitions........................................................... 2
ARTICLE II -Purchase of Assets; Consideration..................................... 4
Section 2.1 Terms of the Purchase................................. 4
Section 2.2 The Closing........................................... 12
Section 2.3 Transactions at the Closing........................... 12
Section 2.4 Right of Purchaser to Withhold Future Payments........ 13
Section 2.5 Management of Purchased Assets........................ 14
ARTICLE III - Representations and Warranties of the Seller........................ 16
Section 3.1 Organization.......................................... 16
Section 3.2 Authorization; Enforceability......................... 17
Section 3.3 No Violation or Conflict.............................. 17
Section 3.4 Consents of Governmental Authorities and Others....... 18
Section 3.5 Conduct of Business................................... 18
Section 3.6 Litigation............................................ 20
Section 3.7 Brokers............................................... 20
Section 3.8 Compliance............................................ 21
Section 3.9 Corporate Records..................................... 21
Section 3.10 Rights, Warrants, Options............................. 22
Section 3.11 Financial Statements.................................. 22
Section 3.12 Absence of Undisclosed Liabilities.................... 23
Section 3.13 Title to Personal Property............................ 23
Section 3.14 Licenses.............................................. 23
Section 3.15 Proprietary Rights.................................... 24
Section 3.16 Major Customers and Suppliers; Supplies............... 26
Section 3.17 Related Parties....................................... 27
Section 3.18 Absence of Certain Business Practices................. 28
Section 3.19 Labor Relations....................................... 29
Section 3.20 Tax Matters........................................... 30
Section 3.21 Material Agreements................................... 31
Section 3.22 Products.............................................. 33
Section 3.23 Environmental Matters................................. 34
Section 3.24 Solvency.............................................. 35
Section 3.25 Non-Distributive Intent............................... 36
Section 3.26 Inventories........................................... 36
Section 3.27 Accounts Receivable................................... 37
Section 3.28 Disclosure............................................ 37
</TABLE>
i
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<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE IV - Representations and Warranties of ABA and the Purchaser.............. 38
Section 4.1 Organization; Standing and Power...................... 38
Section 4.2 Authorization; Enforceability......................... 39
Section 4.3 Validity of ABA Common Stock.......................... 39
Section 4.4 Brokers............................................... 39
Section 4.5 SEC Filings........................................... 40
Section 4.6 ABA's Unencumbered Cash............................... 40
ARTICLE V - Additional Agreements................................................. 41
Section 5.1 Survival.............................................. 41
Section 5.2 Investigation......................................... 41
Section 5.3 Indemnification....................................... 42
(a) By Seller......................................... 42
(b) By ABA and the Purchaser.......................... 43
(c) Indemnity Procedure............................... 44
(d) Limitations....................................... 47
Section 5.4 Registration of ABA Common Stock...................... 48
Section 5.5 Seller Not to Use Name................................ 48
Section 5.6 Adjustment to Valuation of Shares of
ABA Common Stock...................................... 48
Section 5.7 Additional Agreements................................. 50
ARTICLE VI - Conditions Precedent; Termination.................................... 51
Section 6.1 Conditions Precedent to the Obligations
of ABA and the Purchaser.............................. 51
(a) Representations and Warranties True............... 51
(b) Performance....................................... 52
(c) No Adverse Change................................. 52
(d) Seller's Certificate.............................. 52
(e) No Litigation..................................... 52
(f) Consents.......................................... 53
(g) Opinion of Counsel................................ 53
Section 6.2 Conditions Precedent to the Obligations
of Seller............................................. 53
(a) Representations and Warranties True............... 53
(b) Performance....................................... 54
(c) Officers' Certificate............................. 54
(d) No Litigation..................................... 54
(e) Receipt of Notice................................. 55
Section 6.3 Reasonable Efforts.................................... 55
Section 6.4 Termination........................................... 55
ARTICLE VII - Covenants........................................................... 57
Section 7.1 Interim Operations of the Company..................... 57
Section 7.2 Access................................................ 59
</TABLE>
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<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 7.3 Confidentiality (through Closing Date)................ 60
Section 7.4 Notification.......................................... 61
Section 7.5 Exclusivity........................................... 61
Section 7.6 Non-Competition....................................... 62
Section 7.7 General Confidentiality............................... 64
Section 7.8 Continuing Obligations................................ 65
ARTICLE VIII - Miscellaneous...................................................... 66
Section 8.1 Notices............................................... 66
Section 8.2 Entire Agreement...................................... 67
Section 8.3 Binding Effect........................................ 67
Section 8.4 Knowledge of the Parties.............................. 68
Section 8.5 Assignment............................................ 68
Section 8.6 Waiver and Amendment.................................. 68
Section 8.7 No Third Party Beneficiary............................ 69
Section 8.8 Severability.......................................... 69
Section 8.9 Expenses.............................................. 69
Section 8.10 Headings.............................................. 70
Section 8.11 Counterparts.......................................... 70
Section 8.12 Time of the Essence................................... 70
Section 8.13 Injunctive Relief..................................... 70
Section 8.14 Remedies Cumulative................................... 71
Section 8.15 Governing Law; Jurisdiction........................... 71
Section 8.16 Participation of Parties.............................. 72
Section 8.17 Further Assurances.................................... 72
Section 8.18 Publicity............................................. 72
</TABLE>
iii
<PAGE>
ASSET PURCHASE AGREEMENT
Asset Purchase Agreement, dated as of July 2, 1996, among American Body
Armor & Equipment, Inc., a Florida corporation with offices at 191 Nassau Place
Road, Yulee, Florida 32097 ("ABA"); NIK Public Safety, Inc., a Delaware
corporation and a wholly-owned subsidiary of ABA with offices at 191 Nassau
Place Road, Yulee, Florida 32097 (the "Purchaser"); and Ivers-Lee Corporation, a
Delaware corporation with offices at 147 Clinton Road, West Caldwell, New Jersey
07006, and LFC #46 Corp., a Delaware corporation with offices at 204-D Weldin
Building, 3411 Silverside Road, Wilmington, Delaware 19810 (collectively
referred to herein as the "Seller").
W I T N E S S E T H :
WHEREAS, the Purchaser desires to acquire certain of the properties and
assets of the NIK Public Safety product line (the "NIK Product Line") of the
Seller in exchange for common stock, par value $.03 per share, of ABA ("ABA
Common Stock"), and the Seller desires to sell such assets and effect such
exchange.
NOW, THEREFORE, the parties hereto, in consideration of the mutual promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, hereby agree as follows:
<PAGE>
ARTICLE I
Definitions
In addition to terms defined elsewhere in this Agreement, the following
terms when used in this Agreement shall have the meanings indicated below:
"Affiliate" shall mean, with respect to any Person, any Person that
directly or indirectly controls, is controlled by or is under common
control with the Person in question.
"Agreement" shall mean this Asset Purchase Agreement, together with
all exhibits and schedules referred to herein.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall mean the common stock of ABA, par value $.03 per
share.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Financial Statements" shall mean the unaudited income statements of
the NIK Product Line for each of the fiscal years ended September 30, 1994
and September 30, 1995, in each case with detail cost back-up, the
unaudited income statement of the NIK Product Line for the four months
ended January 31, 1996 with detail cost back-up, and the unaudited income
statement of the NIK Product Line for each of the months ended February 29,
March 31 and April 30, 1996, without detail cost back-up, as more
particularly set forth on Schedule 3.11 attached hereto, in each case
including
2
<PAGE>
any related notes, each prepared in accordance with United States generally
accepted accounting principles, consistently applied with prior periods
(except for the inclusion of corporate general expenses and the treatment
of certain intra-company and inter-company items which were transferred
from Becton-Dickinson Company, Inc. to the Seller at cost prior to February
1, 1996); provided, however, that in the case of any conflicts between
generally accepted accounting principles and consistency with prior
periods, the provisions of generally accepted accounting principles shall
prevail.
"Guaranty" shall mean, as to any Person, all liabilities or
obligations of such Person in respect of any indebtedness or other
obligations of others guaranteed, directly or indirectly, in any manner by
such Person, or in effect guaranteed, directly or indirectly, by such
Person through an agreement, contingent or otherwise, to purchase such
indebtedness or obligation, or to purchase or sell property or services,
primarily for the purpose of enabling the debtor to make payment of such
indebtedness or obligation or to assure the owner of such indebtedness or
obligation against loss, or to supply funds to or in any manner invest in
the debtor, or otherwise.
"Person" shall mean any natural person, corporation, unincorporated
organization, limited liability company, partnership, limited liability
partnership, association, joint stock company, joint venture, trust or
government, or any agency or political subdivision of any government, or
any other entity.
3
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"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subsidiary" of any Person shall mean any Person, whether or not
capitalized, in which such Person owns, directly or indirectly, an equity
interest of more than 50%, or which may effectively be controlled, directly
or indirectly, by such Person.
ARTICLE II
Purchase of Assets; Consideration
Section 2.1 Terms of the Purchase
On the basis of the representations, warranties, covenants, and agreements
contained in this Agreement and subject to the terms and conditions of this
Agreement:
(a) The Seller shall sell, assign, transfer and convey to the
Purchaser at the Closing (as hereinafter defined) all of the following
tangible and intangible properties and assets owned by Seller and primarily
used in connection with the NIK Product Line and set forth on Schedule
2.1(a)(i), (ii), (iii), and (iv) hereto, but specifically excluding the
Excluded Assets (as hereinafter defined) (the "Purchased Assets"):
(i) all inventory, including parts, raw materials, work in process
and finished goods, as set forth on Schedule 2.1(a)(i) attached
hereto (the "Inventory");
(ii) all accounts receivable of the Seller relating to the NIK Product
Line as of July 1, 1996 (the "Receivables"), a list of which is
set forth on Schedule 2.1(a)(ii) attached hereto;
4
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(iii) all inventions, whether or not patented, know-how, domestic and
foreign letters patent, patent applications, patent licenses,
software licenses and know-how licenses, trade secrets
(including, but not limited to, all results of research and
development), tradenames, trademarks, service marks, copyrights,
trademark registrations and applications, service mark
registrations and applications, copyright registrations and
applications and rights-to-use (collectively, "Intellectual
Property"), as set forth on Schedule 2.1(a)(iii) attached hereto;
(iv) all right, title and interest in, to and under all purchase
orders, sales agreements, distribution agreements and other
contracts, agreements and commitments of Seller identified on
Schedule 2.1(a)(iv) hereto, subject in each case to the terms of
such contracts ("Contracts");
(v) copies of all books and records predominantly relating to the NIK
Product Line and the Purchased Assets (including, but not limited
to, such books and records as are contained in computerized
storage media), including all inventory, purchasing, sales,
export, import, manufacturing, marketing and shipping records and
all files, price lists, records, literature, correspondence and
marketing materials, and artworks and other set-ups, whether or
not in the possession of the Seller, relating to brochures and
other marketing materials of the NIK Product Line; and
(vi) all showbooths, tables, and goodwill primarily relating to or
used in connection with the NIK Product Line.
(b) Notwithstanding anything to the contrary in Section 2.1(a) of this
Agreement, the following rights, properties
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and assets shall not be included in the Purchased Assets (the "Excluded
Assets"):
(i) all cash and cash equivalents;
(ii) all machinery, vehicles, furniture, equipment and other personal
property not specifically set forth on Schedules 2.1(a)(i) to
(iv) hereof; and
(iii) all ownership, leasehold and other interests in real property,
in each case together with all buildings thereon.
(c) Subject to adjustment as provided in Section 5.6 below, the
aggregate purchase price for the Purchased Assets shall be $2,400,000 (the
"Purchased Price"), and shall be paid at the Closing by the issuance to the
Seller of such number of unregistered shares (the "Shares") of ABA Common
Stock as will have a value, as determined by the average closing price of
ABA's Common Stock on the American Stock Exchange (or such other exchange
or market on which ABA's Common Stock is principally traded) for the ten
consecutive trading day period ending two trading days prior to the Closing
date, of $2,400,000.
(d) On the Closing date, the Purchaser shall advance to the Seller, by
wire transfer of immediately available funds, $1,200,000 on account of the
proceeds from the sales of Shares referred to in subparagraph (e) below
(the "Advance"), which Advance shall not bear interest and shall be repaid
with the first $1,200,000 realized from the sales of the Shares as
hereinafter provided. Seller shall supply its broker-dealer with
irrevocable written instructions for such purpose. Thereafter, subject to
6
<PAGE>
subparagraph (e) below, all net proceeds from the sale of the Shares shall
be paid directly to the Seller.
(e) The Purchaser shall select a broker-dealer, who shall be
reasonably acceptable to Seller, on or before the Closing. All sales of
Shares shall be made only through such broker-dealer at such times and in
such amounts as the Purchaser shall have consented to in its sole
discretion and shall be made after the effectiveness of the Registration
Statement required to be filed by the Purchaser for such purpose pursuant
to the Registration Rights Agreement referred to in Section 5.4 below. In
the event that the sum of the aggregate net proceeds from sales of the
Shares prior to December 31, 1996, less any amounts paid to ABA on account
of the Advance, and the Advance are less than $2,400,000, ABA shall, by
wire transfer of immediately available funds on December 31, 1996, pay to
the Seller the difference between $2,400,000 and the sum of the aggregate
net proceeds realized by Seller from the sale of the Shares, less any
amounts paid to ABA on account of the Advance, and the Advance. In the
event that the sum of the aggregate net proceeds realized by the Seller
from sales of the Shares, less any amounts paid to ABA on account of the
Advance, and the Advance at any time exceeds $2,400,000 then Seller shall
pay to the Purchaser, within five (5) business days of receipt of such
excess
7
<PAGE>
amounts, in immediately available funds, an amount equal to the excess of
such net proceeds, less any amounts paid to ABA on account of the Advance,
and Advance over $2,400,000.
(f) In order to secure the Seller's obligations described in
subsections (d) and (e) above, the Shares shall be pledged to the
Purchaser, and Seller hereby grants to Purchaser a power of attorney, which
is coupled with an interest and is irrevocable, in order that the sales as
herein described are effected. Such pledge shall be terminated and the
certificates representing the Shares shall be returned to the Seller if
Seller has not received the entire Purchase Price on or before December 31,
1996 or if Purchaser or ABA is otherwise in default of its obligations to
Seller pursuant to this Agreement.
(g) ABA shall at all times prior to the receipt by Seller of the full
amount of the Purchase Price in cash, whether upon receipt of the Advance
or from the sale of the Shares, maintain unencumbered cash and cash
equivalents sufficient for the payment of all amounts potentially payable
to Seller pursuant to subsection (e) hereof.
(h) Neither the Purchaser nor ABA shall assume or be responsible for
any obligation or liability of the Seller of any nature, whether accrued,
contingent, absolute or otherwise, except pursuant to the terms of the
Contracts.
(i) The consideration paid by the Purchaser shall be allocated among
the Purchased Assets as set forth in Schedule
8
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2.1(c) in accordance with Section 160 of the Internal Revenue Code of 1986,
as amended.
(j) With respect to any properties or assets sold hereunder that
cannot be physically delivered to the Purchaser because they are in the
possession of third parties or otherwise, the Seller shall give irrevocable
instructions to the party in possession thereof, if such be the case, with
copies to the Purchaser, that all right, title, and interest therein have
been vested in the Purchaser and that the same are to be held for the
Purchaser's exclusive use and benefit.
(k) To the extent that the assignment by the Seller to the Purchaser
of any contract, agreement, instrument, lease, license, understanding, or
arrangement to be assigned to the Purchaser hereunder shall require the
consent of a party other than the Seller which has not been obtained by the
Closing and if ABA and the Purchaser shall nevertheless elect to consummate
the transactions contemplated by this Agreement, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment
without such consent would constitute a breach thereof unless the Purchaser
before, at, or after the Closing elects in a writing delivered to the
Seller, specifically identifying such absent consent, to waive such
consent. Nothing in this Section 2.1(k) regarding such non-assignment or
such election shall limit any rights ABA or the Purchaser may have against
the Seller as a result of the failure to obtain such consent.
9
<PAGE>
(l) The Seller agrees that, from and after the Closing date, the
Purchaser shall have the right and authority to collect for its own account
the Receivables, subject to the provisions hereof, and to endorse with the
name of the Seller all checks received on account of the Receivables. The
Seller agrees that it will, within three business days of receipt,
transfer, assign and deliver to the Purchaser all cash or other property
which it may receive with respect to any Receivable from and after the date
thereof, and pending any such receipt by Seller and delivery to the
Purchaser of any such property, the Seller shall hold any such property in
trust for the benefit of the Purchaser. The Purchaser shall, after the
Closing date, use reasonable commercial efforts at least consistent with
its normal business practices at the Purchaser's expense to collect the
Receivables of the NIK Product Line incurred prior to the Closing date but
the Purchaser shall have no obligation to resort to legal action or other
third party collection methods. Any amounts received from the account
debtor of a Receivable shall be applied first to the oldest outstanding
Receivable, except for (i) amounts which the debtor has directed to be
applied to a particular debt or (ii) cases in which the debtor has disputed
a specific Receivable. To the extent that any Receivable remains
outstanding upon expiration of the 90-day period subsequent to the Closing
date, as referred to above, the Purchaser shall give prompt notice of the
non- collectibility of such Receivable to the Seller, and the Seller
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shall have the opportunity, during the ten business day period following
the expiration of such 90-day period, to consult with and advise the
Purchaser with respect to the manner in which such Receivable may be
collected, it being understood by the parties hereto that the Purchaser
shall have the sole right to implement any such collection methods and that
neither the Seller nor its Affiliates shall contact any account debtors in
respect of such collection without the express written consent of the
Purchaser in each instance. In the event that the Purchaser has received in
the aggregate more than $300,000 at any time on account of the Receivables,
the Purchaser shall remit to the Seller in cash any such excess over
$300,000 within 30 days of receipt of any such excess. In the event that
the Purchaser has received less than $300,000 on account of the Receivables
upon expiration of the ten business day period described above, the Seller
shall remit to the Purchaser in cash any such difference between $300,000
and the amounts so received by Purchaser within 30 days following
expiration of such ten business day period upon assignment by the Purchaser
to the Seller of all uncollected Receivables. Thereafter, the Seller shall
have the right to pursue the collection of outstanding Receivables for its
own account, provided that the Seller shall confer with the Purchaser prior
to taking such action and the Seller shall not injure any customer
relationships of the Purchaser by virtue of its collection practices.
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Section 2.2 The Closing
The closing of the transactions contemplated by this Agreement shall take
place at the offices of Kane Kessler, P.C., 1350 Avenue of the Americas, New
York, New York, at 10:00 A.M., New York time on July 12, 1996, or such other
date, time or place as the parties may agree. The closing of the transactions
contemplated by this Agreement is herein called the "Closing."
Section 2.3 Transactions at the Closing
The following transactions shall take place at the Closing:
(a) The Seller shall deliver to the Purchaser all such bills of sale,
assignments, evidences of consent, and other instruments or documents as in
the opinion of counsel to the Purchaser may be necessary or desirable to
evidence or perfect the sale, assignment, transfer, and conveyance of good
title to all properties and assets to be sold to the Purchaser by the
Seller hereunder, in each case free and clear of all liens, mortgages,
security interests, pledges, charges, and encumbrances (except such as are
listed in Schedule 2.3). The Seller shall also deliver to the Purchaser all
books and records of the NIK Product Line of the Seller; provided, however,
that the Seller and its officers, employees, attorneys, and agents shall be
afforded access to the NIK Product Line's tax and accounting records
relating to periods prior to the Closing and shall be permitted to make
extracts from and copies of such records.
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(b) The Purchaser shall deliver or cause to be delivered to the Seller
a certificate registered in the Seller's name for unregistered shares of
ABA Common Stock, as set forth in Section 2.1(a), with appropriate
restrictive legends thereon.
(c) The Purchaser shall deliver to the Seller $1,200,000 in
immediately available funds.
Section 2.4 Right of Purchaser to Withhold Future Payments
Without limiting such other rights as ABA or the Purchaser may have, if,
prior to the time all shares of ABA Common Stock are delivered pursuant to
Section 2.1(c), the Purchaser has learned of a breach of any representation,
warranty, covenant, or agreement of the Seller contained in this Agreement, the
Purchaser in its discretion may by written notice to the Seller, sell, for the
account of the Purchaser, such number of shares of ABA Common Stock delivered by
the Purchaser at the Closing that will result in net proceeds from such sale
equal to the aggregate of (a) the amount necessary to cure or make whole such
breach and (b) the amount of losses, deficiencies, damages, and legal and other
expenses (including legal fees and expenses of attorneys chosen by ABA or the
Purchaser) incurred or demonstrably in prospect of being incurred by ABA or the
Purchaser in connection with claims, suits, actions, proceedings (formal or
informal), investigations, judgments, or settlements as a result of, or to
remedy a situation or circumstance caused by, such breach, and the Purchaser
shall be entitled to retain such net proceeds for its own account.
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Section 2.5 Management of Purchased Assets
From and after the execution of this Agreement, the parties hereto agree to
conduct the business of the NIK Product Line as follows:
(a) The Seller will continue to manufacture and fulfill orders of the
NIK Product Line on behalf of the Purchaser from July 1, 1996 through July
19, 1996 provided that the Closing has occurred on or before July 12, 1996.
Upon the Closing, all goods manufactured and fulfilled by the Seller
relating to the NIK Product Line from and after July 1, 1996 will be for
the account of the Purchaser and all goods received by the Seller relating
to the NIK Product Line will be for the account of the Purchaser. The
parties acknowledge that goods received after July 1, 1996 by the Seller
will include inventory not currently included in Schedule 3.26 and the
related accounts payable generated after July 1, 1996 in respect of such
inventory shall be the obligation of the Purchaser.
(b) The Seller will invoice the Purchaser for the cost of
manufacturing and fulfilling orders relating to the NIK Product Line on
behalf of the Purchaser from and after July 1, 1996 through July 19, 1996
(or July 26, 1996 if the Purchaser has given notice to the Seller by July
17, 1996 that it desires to extend such date to July 26, 1996). The costs
of manufacturing and fulfilling orders relating to the NIK Product Line
which will be invoiced by the Seller to the Purchaser shall be comprised of
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Direct Labor Costs (as hereinafter defined), plus Benefits and Overhead
(each as hereinafter defined). "Direct Labor Costs" shall mean the actual
cost of labor paid by the Seller for four laborers, one materials handler,
Mr. Anthony Manla and Ms. Jennifer Byrnes. "Benefits" shall equal 25% of
the Direct Labor Costs. "Overhead" shall equal 30% of the Direct Labor
Costs.
(c) The Seller shall continue to perform order entry and customer
service relating to the NIK Product Line on behalf of the Purchaser until
the Closing. Order entry and customer service shall commence at the
Purchaser's facility in Yulee, Florida on Monday, July 22, 1996 but not
later than July 26, 1996. From and after the Closing date and until
production of the NIK Product Line commences in Yulee, Florida, the
Purchaser will forward orders relating to the NIK Product Line to the
Seller via facsimile transmission daily for fulfillment on the next
business day.
(d) The Seller and the Purchaser will agree upon a production schedule
at the Closing for the time between the Closing date and the date on which
production at the Seller's facility in West Caldwell, New Jersey ceases.
(e) Inventory relating to the NIK Product Line will be delivered by
the Seller to the Purchaser at the Seller's facility in West Caldwell, New
Jersey (f.o.b. shipping point). The Purchaser will provide trucks for the
shipment of such inventory in accordance with the schedule attached hereto
as Schedule 2.5.
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(f) The Seller shall cause Mr. Anthony Manla to be available to the
Purchaser in Yulee, Florida for a two week period, beginning one week after
the Closing date.
(g) At the Closing, the Seller will transfer and assign to the
Purchaser the Seller's telephone and facsimile numbers relating to the NIK
Product Line to the extent practicable. From and after the Closing date,
the Seller will refer all incoming telephone calls and facsimile
transmissions relating to the NIK Product Line to the Purchaser.
ARTICLE III
Representations and Warranties of the Seller
In order to induce ABA and the Purchaser to enter into this Agreement and
to consummate the transactions contemplated hereby, the Seller makes the
representations and warranties set forth below to ABA and to the Purchaser.
Section 3.1 Organization
The Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Seller is duly qualified
to transact business as a foreign corporation in all jurisdictions where the
ownership or leasing of the properties of the NIK Product Line or the conduct of
the business of the NIK Product Line requires such qualification, except where
the failure to be so qualified would not have an adverse effect on the Seller.
Each jurisdiction in which the
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Seller is so qualified is listed on Schedule 3.1 hereto. The Seller has the
requisite power and authority to (a) own or lease and operate the properties,
and (b) conduct the business as presently conducted, in each case, of the NIK
Product Line.
Section 3.2 Authorization; Enforceability
The Seller has the corporate power and authority to execute, deliver and
perform this Agreement. This Agreement and all other documents to be executed
and delivered by the Seller pursuant to this Agreement have been and will be
duly authorized by all necessary corporate action, including, but not limited
to, board of director and shareholder approval to the extent necessary, executed
and delivered, and constitute the legal, valid and binding obligations of the
Seller, enforceable in accordance with their respective terms, except to the
extent that their enforcement is limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights generally and by general principles of equity.
Section 3.3 No Violation or Conflict
The execution, delivery and performance of this Agreement by the Seller and
the consummation by the Seller of the transactions contemplated hereby: (a) do
not violate or conflict with any provision of law or regulation (whether
federal, state or local), or any writ, order or decree of any court or
governmental or regulatory authority, or any provision of the Seller's
Certificate of Incorporation or Bylaws; and (b) except as set forth
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on Schedule 3.3 hereto, do not, with or without the passage of time or the
giving of notice, or both, result in the breach of, or constitute a default,
cause the acceleration of performance or require any consent under, or result in
the creation of any lien, charge or encumbrance upon any property or assets of
the Seller relating to the NIK Product Line of the Seller pursuant to any
instrument or agreement to which the Seller is a party or by which the Seller or
its properties as they relate to the NIK Product Line may be bound or affected,
other than instruments or agreements as to which consent shall have been
obtained at or prior to the Closing (each of which instruments or agreements is
listed in Schedule 3.3 hereto).
Section 3.4 Consents of Governmental Authorities and Others
Except as set forth on Schedule 3.4, no material consent, approval or
authorization of, or registration, qualification or filing with, any federal,
state or local governmental or regulatory authority, or any other Person, is
required in connection with the execution, delivery or performance of this
Agreement by the Seller or the consummation by the Seller of the transactions
contemplated hereby.
Section 3.5 Conduct of Business
Except as disclosed on Schedule 3.5 hereto, since February 1, 1996, the NIK
Product Line of the Seller has conducted its businesses in the ordinary and
usual course and there has not occurred any material adverse change in the
condition (financial or
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otherwise), results of operations, properties, assets, liabilities, business or
prospects of the NIK Product Line of the Seller. Without limiting the generality
of the foregoing, except as disclosed on Schedule 3.5, since February 1, 1996,
the NIK Product Line has not: (a) suffered any damage, destruction or loss,
whether or not covered by insurance, which has had or could have an adverse
effect on any of its properties, assets, business or prospects; (b) granted or
made any mortgage or pledge or subjected itself or any of its properties or
assets to any lien, charge or encumbrance of any kind, except liens for taxes
not currently due; (c) made or committed to make any capital expenditures in
excess of $5,000; (d) become subject to any Guaranty; (e) granted any increase
in the compensation payable or to become payable to officers or employees
(including, without limitation, any such increase pursuant to any bonus,
pension, profit-sharing or other plan or commitment); (f) entered into any
agreement which would be a Material Agreement (as hereinafter defined), or
amended or terminated any existing Material Agreement or received notice of any
such amendment or termination; (g) experienced any strike, work stoppage or
slowdown; (h) received written notice of any material adverse change in its
relationship with any customer or supplier with which it currently does
business, nor is it aware of any circumstances that could reasonably lead to a
material adverse change to the NIK Product Line, nor does the Seller have any
knowledge of any of the foregoing; or (i) experienced any other
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event or condition of any character which has had an adverse effect on the
condition (financial or otherwise), results of operations, assets, liabilities,
properties, business or prospects of the NIK Product Line of the Seller, or on
its employee, customer or supplier relations.
Section 3.6 Litigation
Except as set forth on Schedule 3.6, there are no actions, suits,
investigations, claims or proceedings ("Litigation") pending or, to the
knowledge of the Seller, threatened before any court or by or before any
governmental or regulatory authority or arbitrator, (a) affecting the Seller (as
plaintiff or defendant) which could, individually or in the aggregate, have an
adverse effect on the condition (financial or otherwise), results of operations,
properties, assets, liabilities, business or prospects of the Seller or the NIK
Product Line or (b) against the Seller or the NIK Product Line relating to the
Purchased Assets or the transactions contemplated by this Agreement and there
exist no facts or circumstances known to Seller creating any reasonable basis
for the institution of any such action, suit, investigation, claim or proceeding
described above. Schedule 3.6 sets forth a list of any Litigation commenced in
the last five years relating to the Purchased Assets.
Section 3.7 Brokers
The Seller has not employed any financial advisor, broker or finder, and
has not incurred or will not incur any
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broker's, finder's, investment banking or similar fees, commissions or expenses
in connection with the transactions contemplated by this Agreement, except in
connection with the sale of ABA's Common Stock.
Section 3.8 Compliance
The Seller is in compliance with all federal, state, local and foreign
laws, ordinances, regulations, judgments, rulings, orders and other requirements
applicable to the NIK Product Line (except where the failure to be in such
compliance would not have a material adverse effect on the NIK Product Line)
including, without limitation, those relating to (a) the development,
manufacture, packaging, distribution and marketing of products, and (b)
employment, safety and health. The Seller is not subject to any judicial,
governmental or administrative order, judgment or decree. Purchaser has been
furnished with true and correct copies of all reports of inspections of the NIK
Product Line's business and properties through the date hereof, under all
applicable federal, state, foreign and local laws and regulations, all of which
are set forth on Schedule 3.8 hereto.
Section 3.9 Corporate Records
True and complete copies of the Seller's Certificate of Incorporation and
By-laws, as amended and in effect on the date hereof, have been previously
delivered to the Purchaser.
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Section 3.10 Rights, Warrants, Options
There are no outstanding (a) securities or instruments convertible into or
exercisable for any of the capital stock or other equity interests of the Seller
that relate to the NIK Product Line; (b) options, warrants, subscriptions or
other rights to acquire capital stock or other equity interests of the Seller
that relate to the NIK Product Line; or (c) commitments, agreements or
understandings of any kind, including employee benefit arrangements, relating to
the issuance or repurchase by the Seller of any capital stock or other equity
interests of the Seller that relate to the NIK Product Line, any such securities
or instruments convertible or exercisable for securities or any such options,
warrants or rights.
Section 3.11 Financial Statements
The Financial Statements attached hereto as Schedule 3.11 are true and
correct in all material respects, and are prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied, and fairly and
accurately present the financial position of the NIK Product Line as of the
dates thereof, and the results of the NIK Product Line's operations for the
respective periods indicated in all respects (except for the inclusion of
corporate general expenses and the treatment of certain intra-company and
inter-company items which were transferred from Becton-Dickinson Company, Inc.
to the Seller at cost prior to February 1, 1996).
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Section 3.12 Absence of Undisclosed Liabilities
Other than as set forth on Schedule 3.12 hereto, the Seller does not have
any material direct or contingent liabilities, commitments or obligations,
including, but not limited to, any Guaranty (other than nonmaterial liabilities,
commitments or obligations incurred since May 31, 1996, in the ordinary course
of business to Persons who are not Affiliates of the Seller) or any unrealized
or anticipated losses from any commitments of the Seller, in each case relating
to the NIK Product Line, and there is no basis for assertion against the Seller
of any such liability, commitment or obligation.
Section 3.13 Title to Personal Property
The Seller has good title to each Purchased Asset free and clear of any
security interests, liens, claims, charges or encumbrances whatsoever,
including, but not limited to, claims of landlords, warehousemen and other
creditors of Seller, except as set forth in Schedule 3.13 hereto. There are no
assets owned by any third party which are used in the operation of the business
of the NIK Product Line of the Seller, as presently conducted or proposed to be
conducted.
Section 3.14 Licenses
Schedule 3.14 lists all material authorizations, consents, approvals,
franchises, licenses and permits required under applicable law or regulation for
the operation of the business of the NIK Product Line of the Seller as presently
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operated (the "Governmental Authorizations"). All Governmental Authorizations
have been duly issued or obtained and are in full force and effect, and the
Seller is in material compliance with the terms of all Governmental
Authorizations. The Seller has no knowledge of any facts which could reasonably
be expected to cause it to believe that the Governmental Authorizations will not
be renewed by the appropriate governmental authorities in the ordinary course.
To the best of Seller's knowledge, neither the execution, delivery nor
performance of this Agreement shall adversely affect the status of any of the
Governmental Authorizations in any material respect.
Section 3.15 Proprietary Rights
Set forth on Schedule 3.15 is a list and description of all foreign and
domestic patents, patent rights, trademarks, service marks, trade names, brands
and copyrights (whether or not registered and, if applicable, including pending
applications for registration) owned, used or controlled by the Seller relating
to the NIK Product Line (collectively, the "Rights"). Except as set forth on
Schedule 3.15: (a) the Seller owns the Rights and each invention, software,
trade secret, technology, product, composition, formula, method or process used
by the NIK Product Line (together with the Rights, collectively referred to as
the "Intangible Property"), and has the exclusive right to use and license the
same, free and clear of any claim or conflict with the rights of others; (b) no
royalties or fees (license or otherwise)
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are payable by the Seller to any Person by reason of the ownership or use of any
of the Intangible Property; (c) there have been no written claims made against
the Seller asserting the invalidity, abuse, misuse, or unenforceability of any
of the Intangible Property, and Seller is not aware of any reasonable grounds
for any such claims; (d) the Seller has not made any claim of any violation or
infringement by others of its rights in the Intangible Property, and Seller is
not aware of any reasonable grounds for such claims; (e) the Seller has not
received any written notice or other type of overt notice that it is in conflict
with or infringing upon the asserted rights of others in connection with the
Intangible Property and neither the use of the Intangible Property by the
Seller, the operation of the business of the NIK Product Line, the manufacture
of the products of the NIK Product Line, nor any formula, method, process, part
or material employed by the Seller in connection therewith, is infringing or has
infringed upon any rights of others; (f) the Intangible Property includes all
rights necessary for the Seller to be legally entitled to conduct the business
of the NIK Product Line as presently being conducted; (g) the consummation of
the transactions contemplated hereby will not alter or impair any of the
Intangible Property; (h) no interest of the Seller's rights to any Intangible
Property has been assigned, transferred, licensed or sublicensed by the Seller
to third parties; (i) to the extent that any item constituting part of the
Intangible Property has been registered with, filed in or issued
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by, as the case may be, any governmental or other regulatory authority, such
registrations, filings or issuances are listed on Schedule 3.15, and were duly
made and remain in full force and effect; (j) there is no act or failure to act
by the Seller or any of its directors, officers, employees, attorneys or
authorized agents during the prosecution or registration of, or any other
proceeding relating to, any of the Intangible Property or of any other fact
which could render invalid or unenforceable, or negate the right to any of the
Intangible Property.
Section 3.16 Major Customers and Suppliers; Supplies
The Seller has provided Purchaser with a list of the ten (10) largest
customers (measured by dollar volume) of the NIK Product Line of the Seller and
all suppliers of significant goods or services to the NIK Product Line of the
Seller for the four month period ended May 31, 1996. Schedule 3.16 identifies
those suppliers of significant goods or services with respect to which
alternative sources of supply are not readily available. Except as indicated on
Schedule 3.16, to the best of Seller's knowledge, all supplies and services
necessary for the conduct of the business of the NIK Product Line of the Seller,
as presently conducted, may be obtained from alternate sources and no facts,
circumstances or conditions exist which create a reasonable basis for believing
that the Purchaser will be unable to continue to procure the supplies and
services necessary to conduct the business conducted by the NIK Product Line of
the Seller. All such supply and service agreements
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relating to the NIK Product Line with its suppliers are at arm's length. There
has not been any adverse change in the relations of the Seller with their
respective customers, suppliers, contractors, licensors and lessors relating to
the NIK Product Line, as a result of the announcement of the transactions
contemplated by this Agreement and the Seller has no knowledge that any of the
Seller's major customers or suppliers relating to the NIK Product Line has or is
contemplating terminating its relationship with the NIK Product Line. Except as
set forth on Schedule 3.16, to the Seller's knowledge, there are no pending
disputes or controversies between any major customer or supplier of the NIK
Product Line of the Seller, and there exist no facts which in the future would
impair the relationship of the Purchaser with such major customers or suppliers.
Section 3.17 Related Parties
Except as set forth on Schedule 3.17, none of the Seller, nor any current
or former (within the past five (5) years) director or officer of the Seller
(individually a "Related Party" and collectively the "Related Parties") or any
Affiliate of any of the Seller or any Related Party: (a) owns, directly or
indirectly, any interest in any person which is a competitor of the NIK Product
Line of the Seller, or of a supplier or customer of the NIK Product Line of the
Seller; (b) except for the real property housing the business of the NIK Product
Line, owns, directly or indirectly, in whole or in part, any property, asset or
right, real, personal or
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mixed, tangible or intangible (including, but not limited to, any of the
Intangible Property) which is utilized in the operation of the business of the
NIK Product Line and not included in the Purchased Assets; or (c) has an
interest in or is, directly or indirectly, a party to any contract, agreement,
lease or arrangement pertaining or relating to the NIK Product Line, except for
employment, consulting or other personal service agreements that may be in
effect and which are listed on Schedule 3.17 hereto.
Section 3.18 Absence of Certain Business Practices
None of the Seller, any Related Parties, any Affiliate of the Seller, or
any Related Party, any agent of the Seller, any other Person acting on behalf of
or associated with the Seller or any individual related to any of the foregoing
Persons, acting alone or together, has: (a) received, directly or indirectly,
any rebates, payments, commissions, promotional allowances or any other economic
benefits, regardless of their nature or type, from any customer, supplier,
trading company, shipping company, governmental employee or other Person with
whom the NIK Product Line of the Seller has done business directly or
indirectly; or (b) directly or indirectly, given or agreed to give any gift or
similar benefit to any customer, supplier, trading company, shipping company,
governmental employee or other Person who is or may be in a position to help or
hinder the business of the NIK Product Line of the Seller (or assist the NIK
Product Line of the Seller in connection with any actual or proposed
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transaction) which (i) may subject the Seller to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (ii) if not given in
the past, may have had an adverse effect on the assets, business, operations or
prospects of the NIK Product Line of the Seller as reflected in the Financial
Statements or (iii) if not continued in the future, may adversely affect the
assets, business, operations or prospects of the NIK Product Line of the Seller
or subject the Seller to suit or penalty in any private or governmental
litigation or proceeding.
Section 3.19 Labor Relations
There is no strike, work stoppage or slowdown or labor disturbance pending
or, to the best of the Seller's knowledge, threatened that involves any
employees of the NIK Product Line of the Seller. Except as set forth on Schedule
3.19 attached hereto, the Seller is not a party to, otherwise bound by or
threatened with any labor or collective bargaining agreement and there have been
no attempts to organize a labor union or to seek recognition as a collective
bargaining unit by or with respect to any employees of the NIK Product Line of
the Seller. Without limiting the generality of Section 3.6, except as identified
on Schedule 3.19, (a) (i) no unfair labor practice complaints have been filed
against the Seller relating to the NIK Product Line with any governmental or
regulatory agency, which either the Seller has received notice, (ii) the Seller
has not received any written notice or communication reflecting an intention or
threat to file
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any such complaint, and (iii) no Person has made any claim, and there is no
basis for any claim, against the Seller relating to the NIK Product Line under
any statute, regulation or ordinance relating to discrimination with respect to
employees or employment practices, and (b) no claim is pending or, to the best
knowledge of the Seller, threatened against the Seller relating to the NIK
Product Line in connection with the United States Wage and Hour Law, the
Americans with Disabilities Act, or the Occupational Safety and Health Act.
Section 3.20 Tax Matters
All tax returns and tax reports required to be filed with respect to the
business and assets of the NIK Product Line of the Seller have been timely filed
(or appropriate extensions have been obtained) with the appropriate governmental
agencies in all jurisdictions in which such returns and reports are required to
be filed, all of the foregoing as filed are true, correct and complete and, in
all respects, reflect accurately all liability for taxes of the Seller for the
periods to which such returns relate, and all amounts shown as owing thereon
have been paid. All income, profits, franchise, sales, use, value added,
occupancy, property, excise, payroll, FICA, FUTA and other taxes (including
interest and penalties), if any, collectible or payable by the NIK Product Line
of the Seller or relating to or chargeable against any of its assets, revenues
or income through September 30, 1995, and through the Closing date, were fully
collected and paid by such date or
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provided for by adequate reserves in the September 30, 1995 Financial Statements
and all similar items due through the Closing date will have been fully paid by
that date or provided for by adequate reserves. No taxation authority has sought
to audit the records of the NIK Product Line for the purpose of verifying or
disputing any tax returns, reports or related information and disclosures
provided to such taxation authority. No claims or deficiencies have been
asserted against the Seller relating to the NIK Product Line with respect to any
taxes or other governmental charges or levies which have not been paid or
otherwise satisfied or for which accruals or reserves have not been made in the
September 30, 1995 Financial Statements, and there exists no reasonable basis
for the making of any such claims. The Seller has not waived any restrictions on
assessment or collection of taxes or consented to the extension of any statute
of limitations relating to taxation, in each case, relating to the business of
the NIK Product Line.
Section 3.21 Material Agreements
(a) Schedule 3.21 sets forth a list of all material written contracts or
agreements relating to the NIK Product Line of the Seller, including without
limitation any: (i) contract resulting in a commitment for expenditure or other
obligation, or which provides for the receipt, involving in excess of $25,000 in
any instance, or series of related contracts that in the aggregate give rise to
rights or obligations exceeding such amount including,
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but not limited to, employment agreements, employee benefit plans, stock option
plans, health and medical plans, pension or retirement plans, bonus plans or any
other similar plans or arrangements; (ii) agreement which restricts the NIK
Product Line of the Seller from engaging in any line of business or from
competing with any other Person; (iii) warranties made with respect to products
manufactured, packaged, distributed or sold by the NIK Product Line of the
Seller; or (iv) any other contract, agreement, instrument, arrangement or
commitment that is material to the condition (financial or otherwise), results
of operation, assets, properties, liabilities, business or prospects of the NIK
Product Line of the Seller (collectively, and together with all other agreements
required to be disclosed on any Schedule to this Agreement, the "Material
Agreements"). The Seller has previously furnished to Purchaser true, complete
and correct copies of all written agreements, as amended, required to be listed
on Schedule 3.21.
(b) Except as set forth on Schedule 3.21, none of the Material Agreements
was entered into outside the ordinary course of business of the Seller.
(c) The Material Agreements are each in full force and effect and are the
valid and legally binding obligations of the Seller, enforceable in accordance
with their respective terms, subject only to bankruptcy, insolvency or similar
laws affecting the rights of creditors generally and to general equitable
principles. The Seller has not received notice of default by the
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Seller under any of the Material Agreements and no event has occurred which,
with the passage of time or the giving of notice or both, would constitute a
default by the Seller thereunder. To the best of Seller's knowledge, none of the
other parties to any of the Material Agreements is in default thereunder, nor
has an event occurred which, with the passage of time or the giving of notice or
both would constitute a default by such other party thereunder. The Seller has
not received written notice of the pending or threatened cancellation,
revocation or termination of any of the Material Agreements, nor is it aware of
any facts or circumstances which could reasonably be expected to lead to any
such cancellation, revocation or termination.
(d) Except as otherwise indicated on Schedule 3.21, the continuation,
validity and effectiveness of the Material Agreements included in the Purchased
Assets under the current terms thereof will not be materially adversely affected
by the consummation of the transactions contemplated by this Agreement.
Section 3.22 Products
(a) Except as set forth on Schedule 3.22, there exists no set of facts that
would impose liability on the Purchaser with respect to products distributed or
sold by the NIK Product Line prior to the Closing date (i) which could furnish a
basis for the recall, withdrawal or suspension of any product, governmental
license, approval or consent of any governmental or regulatory agency with
respect to any product distributed or sold by the NIK
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Product Line of the Seller (a "Product") prior to the Closing date, (ii) which
could furnish a basis for the recall, withdrawal or suspension by order of any
state, federal or foreign court of law of any Product sold prior to the Closing
date, or (iii) which could otherwise cause the Seller to recall, withdraw or
suspend any such Product from the market or to change the marketing
classification of any such Product.
(b) True, correct and complete copies of all correspondence received or
sent by or on behalf of the Seller relating to the NIK Product Line since
February 1, 1996 and, to the extent available, during the past five (5) years,
from or to any governmental regulatory agency have been previously delivered or
made available to Purchaser.
Section 3.23 Environmental Matters
Except as described on Schedule 3.23, the business of the NIK Product Line
has been operated in material compliance with all laws, regulations and other
federal, state or local governmental requirements, and all applicable judgments,
orders, writs, notices, decrees, permits, licenses, approvals, consents or
injunctions relating to the generation, management, handling, transportation,
treatment, disposal, storage, delivery, discharge, release or emission of any
waste, pollutant or toxic or hazardous substance (including, without limitation,
asbestos, radioactive material and pesticides) utilized by the NIK Product Line
of the Seller in its business or to any other actions, omissions or
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conditions affecting the environment applicable to the NIK Product Line of the
Seller or its business as a result of any hazardous substance utilized by the
NIK Product Line of the Seller in its business or otherwise placed at any of the
facilities owned or operated by the NIK Product Line of the Seller (the
"Environmental Laws"). Except as described on Schedule 3.23, neither the Seller,
nor its directors or officers, has received any complaint, notice, order, or
citation of any actual, threatened or alleged noncompliance by the NIK Product
Line of the Seller with any of the Environmental Laws, and there is no
proceeding, suit or investigation pending or, to the best of Seller's knowledge,
threatened against any of the Seller, any of its directors or officers with
respect to any violation or alleged violation of the Environmental Laws relating
to the NIK Product Line, and to the best of Seller's knowledge, there is no
reasonable basis for the institution of any such proceeding, suit or
investigation.
Section 3.24 Solvency
The Seller is and will be able to pay its debts as they mature for a period
of one year from the date hereof and the transfer of the Purchased Assets by the
Seller to Purchaser in accordance with the terms of this Agreement shall not
constitute a voidable preference or transfer in fraud by any creditor under
applicable federal or state insolvency law.
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Section 3.25 Non-Distributive Intent
The Seller is acquiring the shares of ABA Common Stock to be issued
hereunder for its own account (and not for the account of others). The Seller
will not sell or otherwise dispose of such shares (whether pursuant to a
liquidating dividend or otherwise) without registration under the Securities Act
or an exemption therefrom, and the certificate or certificates representing such
shares may contain a legend to the foregoing effect. The Seller understands that
it may not sell or otherwise dispose of such shares in the absence of either a
registration statement under the Securities Act or an exemption from the
registration provisions of the Securities Act.
Section 3.26 Inventories
Schedule 3.26 sets forth the inventories of the NIK Product Line of the
Seller (raw materials, work-in-process and finished goods) included in the
Purchased Assets. The net inventory as will be finally determined in accordance
with Section 5.6 purchased by the Purchaser has been and/or will be written down
and/or reserved for and does not or will not include any items below standard
quality, damaged or spoiled, obsolete or of a quality or quantity not useable or
saleable in the ordinary course of the business of the NIK Product Line of the
Seller as currently conducted or any items whose expiration date has passed or
will pass within twelve months of the date hereof. The NIK Product Line of the
Seller has and will continue to have through the Closing
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date adequate quantities and types of inventory to enable it to conduct its
business as presently conducted.
Section 3.27 Accounts Receivable
Schedule 3.27 attached hereto sets forth a true and complete aged list of
Receivables owing to the Seller as of July 1, 1996, setting forth the due dates
thereof, that are a part of the Purchased Assets. All of such Receivables
constitute only bona fide, valid and binding claims arising in the ordinary
course of the NIK Product Line business, subject to no valid counterclaims or
setoffs, at the aggregate recorded amount thereof subject to normal reserves for
doubtful accounts and normal discounts. All sales underlying such Receivables
are final sales, with no right of return, and except as set forth on Schedule
3.27 attached hereto, were made under normal sales terms in the ordinary course
of business and all related warranties have been adequately reserved. All
products that have been shipped by the NIK Product Line to customers had a
useful life as of the date of such shipment of at least six months.
Section 3.28 Disclosure
No representation or warranty of the Seller contained in this Agreement,
and no statement of fact, report, or certificate furnished by or on behalf of
the Seller to Purchaser or its agents pursuant hereto or in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact or intentionally omits or will omit to state a
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material fact necessary in order to make the statements contained herein or
therein not misleading or intentionally omits or will omit to state a material
fact necessary in order to provide a prospective purchaser of the Purchased
Assets with full and proper information as to the business, financial condition,
assets, results of operation or prospects of the NIK Product Line of the Seller
and the value of its properties.
ARTICLE IV
Representations and Warranties of ABA and the Purchaser
In order to induce the Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, ABA and the Purchaser make the
representations and warranties set forth below to the Seller.
Section 4.1 Organization; Standing and Power
Each of ABA and the Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation.
Each of ABA and the Purchaser is duly qualified to transact business as a
foreign corporation in all jurisdictions where the ownership or leasing of its
respective properties or the conduct of its respective businesses requires such
qualification, except where the failure to be so qualified would not have an
adverse effect on the business, operations or properties of ABA or the
Purchaser, as the case may be. Each of ABA and the Purchaser has all requisite
right, power and authority
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to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
Section 4.2 Authorization; Enforceability
The execution, delivery and performance of this Agreement by ABA and the
Purchaser and the consummation by ABA and the Purchaser of the transactions
contemplated hereby have been duly authorized by all requisite corporate action
on the part of ABA and the Purchaser. This Agreement has been duly executed and
delivered by ABA and the Purchaser, and constitutes the legal, valid and binding
obligation of ABA and the Purchaser, enforceable in accordance with its terms,
except to the extent that its enforcement is limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights generally and by general principles of equity.
Section 4.3 Validity of ABA Common Stock
The shares of ABA Common Stock to be delivered to Seller pursuant to this
Agreement, when issued in accordance with the terms and provisions of this
Agreement, will be validly authorized, validly issued, fully paid and
nonassessable.
Section 4.4 Brokers
Neither ABA nor the Purchaser has employed any financial advisor, broker or
finder and has not incurred and will not incur any broker's, finder's,
investment banking or similar fees, commissions or expenses, in connection with
the transactions contemplated by this Agreement.
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Section 4.5 SEC Filings
ABA has heretofore made available to the Seller true and complete copies of
all reports, registration statements, definitive proxy statements and other
documents (in each case together with all amendments and supplements thereto)
filed by the Company with the Commission since September 20, 1993 (such reports,
registration statements, definitive proxy statements and other documents,
together with any amendments and supplements thereto, are sometimes collectively
referred to as the "SEC Filings"). The SEC Filings constitute all of the
documents (other than preliminary materials) that ABA was required to file with
the Commission since such date. As of their respective dates, each of the SEC
Filings complied in all material respects with the applicable requirements of
the Securities Act and the Exchange Act, as applicable, and the rules and
regulations under each such Act. None of the SEC Filings contained as of such
date any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Section 4.6 ABA's Unencumbered Cash
ABA currently has and will maintain until the earlier of December 31, 1996
or such time as the Seller has received $2,400,000 pursuant to Section 2.1(e)
unencumbered cash and cash equivalents sufficient for the payment of all amounts
potentially payable to the Seller pursuant to Section 2.1(e) hereof.
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ARTICLE V
Additional Agreements
Section 5.1 Survival
The representations, warranties, covenants and agreements of ABA, the
Purchaser, and the Seller set forth in this Agreement shall survive the Closing
date; provided, however, that the representations and warranties of the Seller
contained in Article III and the representations and warranties of ABA and the
Purchaser contained in Article IV shall survive the Closing date until March 31,
1998; and provided, further, that none of the limitations of the immediately
preceding proviso shall apply with respect to indemnification obligations of a
party arising in connection with the breach of any representation or warranty
set forth in Sections 3.7, 3.18, 3.20, 3.22 or 3.23 of this Agreement, and none
of such limitations shall apply with respect to any action based upon
intentional or fraudulent actions, misrepresentations or breaches of any party.
Section 5.2 Investigation
The representations, warranties, covenants and agreements set forth in this
Agreement shall not be affected or diminished in any way by any investigation
(or failure to investigate) at any time by or on behalf of the party for whose
benefit such representations, warranties, covenants and agreements were made.
All statements contained herein or in any schedule,
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certificate, exhibit, list or other document delivered pursuant hereto, shall be
deemed to be representations and warranties for purposes of this Agreement.
Section 5.3 Indemnification
(a) By Seller. Subject to the limitations set forth in Section 5.1, the
Seller agrees to indemnify and hold harmless ABA, the Purchaser and their
respective directors, officers, employees and agents from, against and in
respect of, the full amount of any and all liabilities, damages, claims,
deficiencies, fines, assessments, losses, taxes, penalties, interest, costs and
expenses, including, without limitation, reasonable fees and disbursements of
counsel, arising from, in connection with, or incident to (i) any breach or
violation of any of the representations, warranties, covenants or agreements of
the Seller contained in this Agreement; (ii) any and all claims arising out of,
relating to, resulting from or caused (whether in whole or in part) by any
transaction, event, condition, occurrence or situation in any way relating to
the NIK Product Line of the Seller or the conduct of its business arising or
occurring on or prior to the Closing date without regard to whether such claim
exists on the Closing date or arises at any time thereafter; (iii) any
obligation or liability of the NIK Product Line of the Seller of any nature,
whether accrued, contingent, absolute or otherwise, not expressly assumed by ABA
or the Purchaser in accordance with this Agreement; and (iv) any and all
actions, suits, proceedings, demands,
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assessments or judgments, costs and expenses incidental to any of the foregoing.
(b) By ABA and the Purchaser. Subject to the limitations set forth in
Section 5.1, ABA and the Purchaser agree, jointly and severally, to indemnify
and hold harmless the Seller and its officers, directors, employees and agents,
from, against and in respect of, the full amount of any and all liabilities,
damages, claims, deficiencies, fines, assessments, losses, taxes, penalties,
interest, costs and expenses, including, without limitation, reasonable fees and
disbursements of counsel, arising from, in connection with, or incident to (i)
any breach or violation of any of the representations, warranties, covenants or
agreements of ABA or the Purchaser contained in this Agreement or any agreement
referred to herein and delivered at or prior to the Closing; (ii) any and all
claims arising out of, relating to, resulting from or caused (whether in whole
or in part) by any transaction, event, condition, occurrence or situation in any
way relating to the NIK Product Line of the Seller or the conduct of its
business arising or occurring after the Closing date; (iii) any obligation or
liability of the NIK Product Line of the Seller of any nature, whether accrued,
contingent, absolute or otherwise, expressly assumed by ABA or the Purchaser in
accordance with this Agreement; (iv) any tax liability incurred by the Seller
arising out of or based upon the sale of the shares of ABA Common Stock issued
to the Seller in accordance with the terms of this
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Agreement; and (v) any and all actions, suits, proceedings, demands, assessments
or judgments, costs and expenses incidental to any of the foregoing.
(c) Indemnity Procedure. A party or parties hereto agreeing to be
responsible for or to indemnify against any matter pursuant to this Agreement is
referred to herein as the "Indemnifying Party" and the other party or parties
claiming indemnity is referred to as the "Indemnified Party".
An Indemnified Party under this Agreement shall, with respect to claims
asserted against such party by any third party, give written notice to the
Indemnifying Party of any liability which might give rise to a claim for
indemnity under this Agreement within 30 business days of (i) the receipt of any
written claim from any such third party, but not later than 15 days prior to the
date any answer or responsive pleading is due, and with respect to other matters
for which the Indemnified Party may seek indemnification, or (ii) any other
liability which might give rise to a claim for indemnity; provided, however,
that any failure to give such notice will not waive any rights of the
Indemnified Party except to the extent the rights of the Indemnifying Party are
prejudiced.
The Indemnifying Party shall have the right, at its election, to take over
the defense or settlement of such claim by giving written notice to the
Indemnified Party at least 10 days prior to the time when an answer or other
responsive pleading or
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notice with respect thereto is required. If the Indemnifying Party makes such
election, it may conduct the defense of such claim through counsel of its
choosing (subject to the Indemnified Party's approval of such counsel, which
approval shall not be unreasonably withheld), shall be solely responsible for
the expenses of such defense and shall be bound by the results of its defense or
settlement of the claim. The Indemnifying Party shall not settle any such claim
without prior notice to and consultation with the Indemnified Party, and no such
settlement involving any equitable relief may be agreed to without the written
consent of the Indemnified Party (which consent shall not be unreasonably
withheld). So long as the Indemnifying Party is diligently contesting any such
claim in good faith, the Indemnified Party may pay or settle such claim only at
its own expense and the Indemnifying Party will not be responsible for the fees
of separate legal counsel to the Indemnified Party, unless the named parties to
any proceeding include both parties and representation of both parties by the
same counsel would be inappropriate. If the Indemnifying Party does not make
such election, or having made such election does not, in the reasonable opinion
of the Indemnified Party proceed diligently to defend such claim, then the
Indemnified Party may (after written notice to the Indemnifying Party), at the
expense of the Indemnifying Party, elect to take over the defense of and proceed
to handle such claim in its discretion and the Indemnifying Party shall be bound
by any defense or settlement that
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the Indemnified Party may make in good faith with respect to such claim. In
connection therewith, the Indemnifying Party will fully cooperate with the
Indemnified Party should the Indemnified Party elect to take over the defense of
any such claim.
The parties agree to cooperate in defending such third party claims and the
Indemnified Party shall provide such cooperation and such access to its books,
records and properties as the Indemnifying Party shall reasonably request with
respect to any matter for which indemnification is sought hereunder; and the
parties hereto agree to cooperate with each other in order to ensure the proper
and adequate defense thereof.
With regard to claims of third parties for which indemnification is payable
hereunder, such indemnification shall be paid by the Indemnifying Party upon the
earlier to occur of: (i) the entry of a judgment against the Indemnified Party
and the expiration of any applicable appeal period, or if earlier, five (5) days
prior to the date that the judgment creditor has the right to execute the
judgment; (ii) the entry of an unappealable judgment or final appellate decision
against the Indemnified Party; or (iii) a settlement of the claim.
Notwithstanding the foregoing, provided that there is no dispute as to the
entitlement to indemnification, the reasonable legal fees and expenses of
counsel to the Indemnified Party shall be reimbursed on a current basis by the
Indemnifying Party if such legal fees and expenses are a liability of the
Indemnifying Party. With regard to other claims for which
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indemnification is payable hereunder, such indemnification shall be paid
promptly by the Indemnifying Party upon demand by the Indemnified Party.
(d) Limitations. The indemnification obligations of the parties hereto
pursuant to Sections 5.3(a) and (b) shall be subject to the following
limitations. No Indemnifying Party shall be required to indemnify an Indemnified
Party unless the aggregate of all claims of such Indemnified Party has first
reached $25,000 (the "Threshold Amount"), at which time all claims of an
Indemnified Party, including the Threshold Amount, shall be subject to the
Indemnifying Party's indemnification obligations; provided, however, that (i)
any liabilities, costs, or expenses inurred by the Purchaser arising out of or
relating to any matter described in Schedule 3.6 attached hereto, and (ii) the
obligation of the Purchaser and the Seller, as the case may be, to remit amounts
to the other pursuant to Section 2.1(l) hereof shall not be subject to or
counted towards the Threshold Amount, and any such (i) liability, cost or
expense or (ii) Receivable that is not collected by the Purchaser or the Seller,
as the case may be, within the time periods set forth in this Agreement, in
accordance with Section 2.1(l), shall be an indemnifiable claim, dollar for
dollar, against the Seller, regardless of whether the Threshold Amount has been
reached. Notwithstanding the foregoing, (i) the obligations of the Seller, on
the one hand, and of the Purchaser and ABA, on the other hand, shall not exceed
$2,400,000, and (ii) the limitations contained in this Section 5.3(d) shall not
apply with respect to
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(A) any action based upon intentional or fraudulent actions, misrepresentations
or breaches of any party, (B) any liabilities, costs or expenses incurred by the
Purchaser arising out of or relating to any matter described in Schedule 3.6
attached hereto, and (C) any liabilities arising out of a breach of Sections
3.20, 3.26 and 3.27.
Section 5.4 Registration of ABA Common Stock
ABA will use its commercially reasonable efforts to include the shares of
ABA Common Stock issued to the Seller in a registration statement of ABA to be
filed with the Commission on or about July 31, 1996 pursuant to the terms of a
Registration Rights Agreement set forth on Schedule 5.4 attached hereto. Such
registration statement shall also register the shares of ABA's Common Stock
underlying the 5% Convertible Subordinated Notes issued by ABA, and such other
securities as ABA may determine. All costs relating to such registration
statement shall be borne by ABA.
Section 5.5 Seller Not to Use Name
From and after the Closing date, the Seller will not use, directly or
indirectly, the name "NIK Public Safety" or any combination or derivation
thereof.
Section 5.6 Adjustment to Valuation of Shares of ABA Common Stock
To the extent that the book value of inventory of the NIK Product Line of
the Seller differs from $500,000 as of the date of Closing, all as more fully
described hereinafter, the
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Purchaser shall remit to the Seller, in the event such book value exceeds
$500,000, and the Seller shall remit to the Purchaser, in the event such book
value is less than $500,000, the amount of any such difference within 30 days
after such book value is calculated. Seller's book value of inventory as of the
date of Closing shall be determined in accordance with GAAP, consistently
applied with prior periods in accordance with the methodology set forth on
Schedule 3.26. Within seven days after the Closing date, the Purchaser or its
independent accountants shall determine the book value of inventory of the NIK
Product Line in accordance with Schedule 2.1(a)(i) as of July 1, 1996 and submit
its calculation to the Seller for review. The Seller shall be provided access to
the work papers and all of Purchaser's or its independent accountants' records
used to arrive at such calculation. The Seller shall accept or reject the
calculation within 15 days of its presentation to the Seller. Failure to reject
the calculation within such 15- day period shall be deemed conclusive acceptance
of the calculation. If Seller disputes the calculation, the parties will attempt
to resolve their differences jointly, but if no resolution is reached within ten
business days, then the parties agree to submit the disputed items to Arthur
Andersen LLP or, if Arthur Andersen LLP is unable to serve in such capacity, to
such other Big 6 accounting firm as may be mutually agreed upon, for
determination within 15 business days, which determination shall be conclusive
for all purposes. Such accountants' sole assignment shall be to
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determine whether the book value of inventory of the NIK Product Line as of July
1, 1996 has been computed in accordance with the terms of this Section 5.6. The
cost of such accountants' determination shall be borne equally by the parties.
Section 5.7 Additional Agreements
(a) All supply and distribution agreements and similar business
relationships to which the NIK Product Line is currently a party shall remain in
full force and effect in accordance with their respective terms as of the
Closing date, and neither the NIK Product Line nor the Seller shall take any
action that will have the effect of terminating any such agreement or
jeopardizing any such relationship.
(b) The Seller will use its reasonable efforts to have the exclusive
distribution agreement with Thomas & Betts for the "Flex-Cuff" products renewed
for a term of three years on substantially the same terms and conditions, and
such agreement shall expressly be assignable to the Purchaser without any
further action by any party thereto.
(c) In the event that Mr. Anthony Manla is not employed by the Purchaser
subsequent to the Closing, then the Seller shall provide the services of Mr.
Anthony Manla to the Purchaser commencing from the Closing date and continuing
for three weeks thereafter, of which the last two weeks shall be at the
Purchaser's facility in Yulee, Florida, to train replacement
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personnel for assembly and customer service/order entry staff, and the Purchaser
shall pay Mr. Manla's salary during such period.
(d) Purchaser shall offer employment to Joseph Flaherty on substantially
the same terms and conditions as Mr. Flaherty is currently employed by Seller,
such employment to commence on the Closing date. Prior to the Closing date and
subsequent to June 30, 1996, the Purchaser shall reimburse the Seller for all of
the salary and benefits payable to Mr. Flaherty during such period, as well as
reasonable business expenses incurred during such period.
ARTICLE VI
Conditions Precedent; Termination
Section 6.1 Conditions Precedent to the Obligations of ABA and the
Purchaser
Each and every obligation of ABA and the Purchaser to consummate the
transactions described in this Agreement and any and all liability of ABA and
the Purchaser to the Seller shall be subject to the fulfillment on or before the
Closing date of the following conditions precedent:
(a) Representations and Warranties True. Each of the representations
and warranties of the Seller contained herein or in any certificate or
other document delivered pursuant to this Agreement or in connection with
the transactions contemplated hereby shall be true and correct in all
material respects as of the Closing date with the same force and effect as
though made on and
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as of such date (except for changes specifically permitted by this
Agreement, including, without limitation, Section 7.1 hereof).
(b) Performance. The Seller shall have performed and complied in all
material respects with all of the agreements, covenants and obligations
required under this Agreement to be performed or complied with by it on or
prior to the Closing date, including, but not limited to, the obligations
set forth in Section 5.7(b) hereof.
(c) No Adverse Change. Except as expressly permitted or contemplated
by this Agreement, no event or condition shall have occurred which has
materially adversely affected or may materially adversely affect in any
respect the condition (financial or otherwise) of the NIK Product Line of
the Seller or of its assets, liabilities (whether accrued, absolute,
contingent or otherwise), earnings, book value, business, operations or
prospects, and the NIK Product Line shall have operated its business in the
ordinary course, consistent with past practices from the date hereof
through the Closing date.
(d) Seller's Certificate. The Seller shall have delivered to Purchaser
a certificate dated the Closing date, certifying that the conditions
specified in Section 6.1(a), (b) and (c) above have been fulfilled.
(e) No Litigation. No litigation, arbitration or other legal or
administrative proceeding shall have been commenced, be pending or
threatened by or before any court, arbitration panel
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or governmental authority or official, and no statute, rule or regulation
of any foreign or domestic, national or local government or agency thereof
shall have been enacted after the date of this Agreement, and no judicial
or administrative decision shall have been rendered which enjoins or
prohibits, or seeks to enjoin or prohibit, the consummation of all or any
of the transactions contemplated by this Agreement.
(f) Consents. The Seller shall have obtained all authorizations,
consents, waivers and approvals and given all notices as may be required or
advisable to consummate the transactions contemplated by this Agreement
including, but not limited to, consents with respect to any Material
Agreement and notices to creditors of the Seller in respect of bulk
transfer laws, if applicable, or otherwise.
(g) Opinion of Counsel. An opinion letter from counsel to the Seller
addressed to ABA and the Purchaser, in form and substance reasonably
satisfactory to ABA and the Purchaser, shall have been delivered to ABA and
the Purchaser at the Closing.
Section 6.2 Conditions Precedent to the Obligations of Seller
Each and every obligation of Seller to consummate the transactions
described in this Agreement and any and all liability of Seller to ABA and the
Purchaser shall be subject to
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the fulfillment on or before the Closing date of the following conditions
precedent:
(a) Representations and Warranties True. Each of the representations
and warranties of ABA and the Purchaser contained herein or in any
certificate or other document delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be true and
correct in all material respects as of the Closing date with the same force
and effect as though made on and as of such date.
(b) Performance. ABA and the Purchaser have performed and complied in
all material respects with all of the agreements, covenants and obligations
required under this Agreement to be performed or complied with by them on
or prior to the Closing date.
(c) Officers' Certificate. Purchaser shall have delivered to the
Seller a certificate addressed to Seller executed by Purchaser's President
and Chief Executive Officer, dated the Closing date, certifying that the
conditions specified in Sections 6.2(a) and (b) above have been fulfilled.
(d) No Litigation. No litigation, arbitration or other legal or
administrative proceeding shall have been commenced or be pending by or
before any court, arbitration panel or governmental authority or official,
and no statute, rule or regulation of any foreign or domestic, national or
local government or agency thereof shall have been enacted after the date
of this Agreement,
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and no judicial or administrative decision shall have been rendered which
enjoins or prohibits, or seeks to enjoin or prohibit, the consummation of
all or any of the transactions contemplated by this Agreement.
(e) Receipt of Notice. The Seller shall not have received the written
notice described in Section 2.4 hereof.
Section 6.3 Reasonable Efforts
Subject to the terms and conditions provided in this Agreement, each of the
parties shall use their respective reasonable efforts in good faith to take or
cause to be taken as promptly as practicable all reasonable actions that are
within its power to cause to be fulfilled each of the conditions precedent to
its obligations or the obligations of the other parties to consummate the
transactions contemplated by this Agreement that are dependent upon its actions,
including obtaining all necessary consents, authorizations, orders, approvals
and waivers.
Section 6.4 Termination
This Agreement and the transactions contemplated hereby may be terminated
(i) at any time by the mutual consent of the parties hereto; (ii) by Seller or
by ABA and the Purchaser, jointly, if the Closing has not occurred on or prior
to July 22, 1996 (such date of termination being referred to herein as the
"Termination Date"), provided the failure of the Closing to occur by such date
is not the result of the failure of the party seeking to terminate this
Agreement to perform or fulfill any of its
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obligations hereunder; (iii) by Purchaser at any time at or prior to Closing in
its sole discretion if (1) any of the representations or warranties of the
Seller in this Agreement are not in all material respects true, accurate and
complete or if the Seller breaches in any material respect any covenant
contained in this Agreement, provided that such misrepresentation or breach is
not cured within ten (10) business days after notice thereof, but in any event
prior to the Termination Date or (2) any of the conditions precedent to ABA's or
the Purchaser's obligations to conduct the Closing have not been satisfied by
the date required thereof; (iv) by Seller at any time at or prior to Closing in
their sole discretion if (1) any of the representations or warranties of ABA or
the Purchaser in this Agreement are not in all material respects true, accurate
and complete or if ABA or the Purchaser breaches in any material respect any
covenant contained in this Agreement, provided that such misrepresentation or
breach is not cured within ten (10) business days after notice thereof, but in
any event prior to the Termination Date or (2) any of the conditions precedent
to Seller's obligations to conduct the Closing have not been satisfied by the
date required thereof. If this Agreement is terminated pursuant to this Section
6.4, written notice thereof shall promptly be given by the party electing such
termination to the other party and, subject to the expiration of the cure
periods provided in clauses (iii) and (iv) above, if any, this Agreement shall
terminate without further actions by the
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parties and no party shall have any further obligations under this Agreement.
Notwithstanding the preceding sentence, the respective obligations of the
parties under Sections 7.3, 7.5(b), 7.7, 8.9 and 8.15 shall survive the
termination of this Agreement. Notwithstanding anything to the contrary
contained herein, if the termination of this Agreement is a result of the
willful misrepresentation, willful inaccuracy or omission in a representation,
willful breach of warranty, fraud or any willful failure to perform or comply
with any covenant or agreement contained herein, the aggrieved party shall be
entitled to recover from the non-performing party all out-of-pocket expenses
which such aggrieved party has incurred and the termination of this Agreement
shall not be deemed or construed as limiting or denying any other legal or
equitable right or remedy of such party.
ARTICLE VII
Covenants
Section 7.1 Interim Operations of the Company
During the period from the date of this Agreement to the Closing date,
except with Purchaser's prior specific written consent or as expressly
contemplated by this Agreement, the Seller shall operate the business of the NIK
Product Line only in the ordinary and usual course and to preserve intact its
business organization and good will in all respects. Additionally, during the
period from the date of this Agreement to the Closing date, the
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Seller shall not do any of the following with respect to the NIK Product Line
(unless expressly permitted in writing by Purchaser):
(i) voluntarily sell, transfer, surrender, abandon or dispose of any of
its assets or property rights (tangible or intangible), other than in
the ordinary course of business;
(ii) grant or make any mortgage or pledge or subject itself or any of its
properties or assets to any lien, charge or encumbrance of any kind,
except liens for taxes not currently due;
(iii) create, incur or assume any liability or indebtedness, except in the
ordinary course of business;
(iv) make or commit to make any capital expenditures exceeding in the
aggregate One Thousand Dollars ($1,000.00);
(v) become subject to any Guaranty;
(vi) apply any of its assets to the direct or indirect payment, discharge,
satisfaction or reduction of any amount payable directly or indirectly
to or for the benefit of the Seller or any Affiliate of the Seller or
any Related Party or to the prepayment of any such amounts, other than
compensation benefits, and expenses payable in the ordinary course of
business to Seller;
(vii) grant any increase in the compensation payable or to become payable
to employees of the NIK Product Line (including, without limitation,
any such increase pursuant to any bonus, pension, profit-sharing or
other plan or commitment);
(viii) enter into any agreement which would be a Material Agreement, or
amend or terminate any existing Material Agreement, which is outside
the ordinary course of business;
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(ix) alter the manner of keeping its books, accounts or records, or change
in any manner the accounting practices therein reflected;
(x) enter into any commitment or transaction other than in the ordinary
course of business including, but not limited to, the making of any
loan to any Person;
(xi) do any act, or omit to do any act, or permit to the extent within the
Company's or the Seller's control, any act or omission to act which
would cause a violation or breach of any of the representations,
warranties or covenants of the Seller set forth in this Agreement; or
(xii) agree, whether in writing or otherwise, to do any of the foregoing.
Section 7.2 Access
The Seller shall afford to Purchaser and its agents and representatives,
access throughout the period prior to the Closing date to the properties, books,
records and contracts of the Seller relating to the NIK Product Line, for the
purpose of permitting Purchaser to fully investigate and perform a due diligence
review of the NIK Product Line of the Seller, its businesses, assets and
properties, and financial condition, provided that such access shall be granted
during normal business hours in such a manner as to not unreasonably interfere
with the Seller's normal business operations. During such period the Seller
shall furnish promptly to Purchaser copies of (i) all correspondence received or
sent by or on behalf of the Seller from or to any governmental authority
relating to the NIK Product Line
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and (ii) all other information and documents concerning the business, assets,
liabilities, properties and personnel of the NIK Product Line as Purchaser may
reasonably request.
Section 7.3 Confidentiality (through Closing Date)
Except as otherwise required in the performance of obligations under this
Agreement and except as otherwise required by law, any non-public information
received by a party or its advisors from the other party shall be kept
confidential and shall not be used or disclosed for any purpose other than in
furtherance of the transactions contemplated by this Agreement. Purchaser shall
not use (or permit to be used) through the Closing date any confidential
information in any manner to compete against the NIK Product Line of the Seller,
whether with respect to corporate acquisitions, sales, financing, development,
management, investment, or otherwise. The obligation of confidentiality shall
not extend to information (a) which is or shall become generally available to
the public other than as a result of an unauthorized disclosure by a party to
this Agreement or a person to whom a party has provided such information, (b)
which was available to a party to this Agreement on a nonconfidential basis
prior to its disclosure by one party to the other pursuant to this Agreement or
(c) which is disclosed by Purchaser in any legal proceeding requiring any such
disclosure. Upon termination of this Agreement, each party shall promptly return
any confidential information received from the other party and, upon request,
shall destroy any
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copies of such information in its possession. The covenants of the parties
contained in this Section 7.3 shall survive any termination of this Agreement.
Section 7.4 Notification
Each party to this Agreement shall promptly notify the other party in
writing of the occurrence, or pending or threatened occurrence, of any event
that would constitute a breach or violation of this Agreement by any party or
that would cause any representation or warranty made by the notifying party in
this Agreement to be false or misleading in any material respect (including
without limitation, any event or circumstance which would have been required to
be disclosed on any schedule to this Agreement had such event or circumstance
occurred or existed on or prior to the date of this Agreement). Any such
notification shall not limit or alter any of the representations, warranties or
covenants of the parties set forth in this Agreement nor any rights or remedies
a party may have with respect to a breach of any representation, warranty or
covenant.
Section 7.5 Exclusivity
(a) The Seller agrees that unless this Agreement has been terminated in
accordance with Section 6.4 hereof, neither the Seller, nor its Affiliates,
representatives, employees or agents (collectively, "Agents") will, commencing
on the date of this Agreement and continuing through July 15, 1996 (the
"Exclusive Period"), directly or indirectly, (i) solicit, encourage or
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negotiate any proposal (whether solicited or unsolicited) for, or execute any
agreement relating to, a sale of all or any part of the NIK Product Line of the
Seller or its assets or a sale of any equity or debt security of the Seller
relating to the NIK Product Line or any merger, consolidation, recapitalization
or similar transaction involving the NIK Product Line with any other party (any
of the foregoing is referred to as an "Acquisition Proposal"), or (ii) provide
any information regarding the NIK Product Line to any third party for the
purpose of soliciting, encouraging or negotiating an Acquisition Proposal (it
being understood that nothing contained in clauses (i) or (ii) above shall
restrict the Seller or any of its Agents from providing information as required
by legal process).
(b) In the event that the Seller does not consummate the transactions
contemplated by this Agreement as a result of the Seller's breach of Section
7.5(a) hereof, the Seller shall be liable to ABA for all costs and expenses
actually incurred by ABA in pursuit of the transaction, together with the
payment of liquidated damages to ABA in the agreed upon amount of $200,000.
Section 7.6 Non-Competition
The Seller acknowledges that in order to assure Purchaser that Purchaser
will retain the value of the Purchased Assets, the Seller agrees, on the terms
set forth in this Section 7.6, not to utilize its special knowledge of the
business of the NIK Product Line of the Seller and their relationships with
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customers, suppliers and others to compete with ABA or the Purchaser. For a
period of five (5) years beginning on the Closing date, each of the Seller and
their respective Affiliates at the time of determination, shall not engage or
have an interest, anywhere in the United States of America or any other
geographic area where the business of the NIK Product Line is conducted at the
date hereof or in which its products are marketed at the date hereof (in each
case after giving effect to the purchase of the Purchased Assets), alone or in
association with others, as principal, officer, agent, employee, director,
partner, lender or stockholder (except as an employee or consultant of Purchaser
or any of its Affiliates or as an owner of two percent (2%) or less of the stock
of any company listed on a national securities exchange or traded in the
over-the-counter market), or through the investment of capital, lending of money
or property, rendering of services or capital, or otherwise, in the business of
assembly, packaging, and marketing of disposable products for the law
enforcement, industrial security and forensic laboratory markets. The Seller
shall not at any time, directly or indirectly, use or purport to authorize any
Person to use any name, mark, logo, trade dress or other identifying words or
images which are the same as or similar to those used currently or in the past
by the NIK Product Line of the Seller in connection with any product or service,
whether or not such use would be in a business competitive with that of the NIK
Product Line of the Seller, ABA or the Purchaser.
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The Seller acknowledges that compliance with the restrictions set forth in this
Section 7.6 will not prevent it from conducting its businesses. As used herein,
the phrase "competitive business" means any business competitive with the type
of business engaged in by the NIK Product Line of the Seller, ABA, the Purchaser
or any of their Subsidiaries or Affiliates at the date hereof.
Section 7.7 General Confidentiality
The Seller acknowledges that the Intangible Property and all other
confidential or proprietary information with respect to the business and
operations of the NIK Product Line of the Seller are valuable, special and
unique assets of the Seller and are an integral part of the Purchased Assets.
The Seller shall not, at any time after the Closing date, disclose, directly or
indirectly, to any Person, or use or purport to authorize any Person to use any
confidential or proprietary information with respect to the NIK Product Line of
the Seller, ABA, or the Purchaser whether or not for Seller's own benefit,
without the prior written consent of Purchaser or unless required by law,
including without limitation, information as to the financial condition, results
of operations, customers, suppliers, products, products under development,
inventions, sources, leads or methods of obtaining new products or business,
Intangible Property, pricing methods or formulas, cost of supplies, marketing
strategies or any other information relating to the NIK Product Line of the
Seller, ABA or the Purchaser, which could reasonably be regarded as
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confidential. The Seller acknowledges that Purchaser would not enter into this
Agreement without the assurance that all such confidential and proprietary
information will be used for the exclusive benefit of ABA and the Purchaser.
Section 7.8 Continuing Obligations
The restrictions set forth in Sections 7.6 and 7.7 are considered by the
parties to be reasonable for the purposes of protecting the value of the
Purchased Assets acquired by the Purchaser. ABA, the Purchaser, and the Seller
acknowledge that ABA and the Purchaser would be irreparably harmed and that
monetary damages would not provide an adequate remedy to ABA and the Purchaser
in the event the covenants contained in Sections 7.6 and 7.7 were not complied
with in accordance with their terms. Accordingly, Seller agrees that any breach
or threatened breach by it of any provision of Sections 7.6 or 7.7 shall entitle
ABA and the Purchaser to injunctive and other equitable relief to secure the
enforcement of these provisions, in addition to any other remedies (including
damages) which may be available to ABA and the Purchaser. If the Seller breaches
the covenant set forth in Section 7.6, the running of the five (5) year
non-compete period described therein shall be tolled for so long as such breach
continues. It is the desire and intent of the parties that the provisions of
Sections 7.6 and 7.7 be enforced to the fullest extent permissible under the
laws and public policies of each jurisdiction in which enforcement is sought. If
any provisions of
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Sections 7.6 and 7.7 relating to the time period, scope of activities or
geographic area of restrictions is declared by a court of competent jurisdiction
to exceed the maximum permissible time period, scope of activities or geographic
area, as the case may be, the time period, scope of activities or geographic
area shall be reduced to the maximum which such court deems enforceable. If any
provisions of Section 7.6 or 7.7 other than those described in the preceding
sentence are adjudicated to be invalid or unenforceable, the invalid or
unenforceable provisions shall be deemed amended (with respect only to the
jurisdiction in which such adjudication is made) in such manner as to render
them enforceable and to effectuate as nearly as possible the original intentions
and agreement of the parties. In addition, if any party brings an action to
enforce Sections 7.3, 7.6 or 7.7 hereof or to obtain damages for a breach
thereof, the prevailing party in such action shall be entitled to recover from
the non-prevailing party all attorney's fees and expenses incurred by the
prevailing party in such action.
ARTICLE VIII
Miscellaneous
Section 8.1 Notices
Any notice, demand, claim or other communication under this Agreement shall
be in writing and shall be deemed to have been given upon the delivery, mailing
or transmission thereof, as the case may be, if delivered personally or sent by
certified
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mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid
overnight courier to the parties at the addresses set forth herein (or at such
other addresses as shall be specified by the parties by like notice). A copy of
any notices delivered to ABA or the Purchaser shall also be sent to Kane
Kessler, P.C., 1350 Avenue of the Americas, New York, New York 10019, Attention:
Robert L. Lawrence, Esq., Fax No. (212) 245-3009. A copy of any notices
delivered to the Seller shall also be sent to Drinker Biddle & Reath, 1000
Westlakes Drive, Suite 300, Berwyn, Pennsylvania 19312, Attention: Walter
Mostek, Jr., Esq., Fax No. (610) 993-8585.
Section 8.2 Entire Agreement
This Agreement contains every obligation and understanding between the
parties relating to the subject matter hereof and merges all prior discussions,
negotiations and agreements, if any, between them, and none of the parties shall
be bound by any conditions, definitions, understandings, warranties or
representations other than as expressly provided or referred to herein.
Section 8.3 Binding Effect
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, heirs, personal representatives,
legal representatives, and permitted assigns.
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Section 8.4 Knowledge of the Parties
Where any representation or warranty contained in this Agreement is
expressly qualified by reference to the best knowledge or to the knowledge of
any of the parties hereto, each of the parties hereto acknowledges and confirms
that it has made due and diligent inquiry as to the matters that are the subject
of such representations and warranties.
Section 8.5 Assignment
This Agreement may not be assigned by any party without the written consent
of the other party.
Section 8.6 Waiver and Amendment
Any representation, warranty, covenant, term or condition of this Agreement
which may legally be waived, may be waived, or the time of performance thereof
extended, at any time by the party hereto entitled to the benefit thereof, and
any term, condition or covenant hereof (including, without limitation, the
period during which any condition is to be satisfied or any obligation
performed) may be amended by the parties thereto at any time. Any such waiver,
extension or amendment shall be evidenced by an instrument in writing executed
on behalf of the appropriate party by its President or any Vice President or
other person, who has been authorized by its Board of Directors to execute
waivers, extensions or amendments on its behalf. No waiver by any party hereto,
whether express or implied, of its rights under any provision of this Agreement
shall constitute a waiver of such
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party's rights under such provisions at any other time or a waiver of such
party's rights under any other provision of this Agreement. No failure by any
party thereof to take any action against any breach of this Agreement or default
by another party shall constitute a waiver of the former party's right to
enforce any provision of this Agreement or to take action against such breach or
default or any subsequent breach or default by such other party.
Section 8.7 No Third Party Beneficiary
Nothing expressed or implied in this Agreement is intended, or shall be
construed, to confer upon or give any Person other than the parties hereto and
their respective heirs, personal representatives, legal representatives,
successors and permitted assigns, any rights or remedies under or by reason of
this Agreement.
Section 8.8 Severability
In the event that any one or more of the provisions contained in this
Agreement shall be declared invalid, void or unenforceable, the remainder of the
provisions of this Agreement shall remain in full force and effect, and such
invalid, void or unenforceable provision shall be interpreted as closely as
possible to the manner in which it was written.
Section 8.9 Expenses
Except as otherwise set forth herein or in the Registration Rights
Agreement, each party agrees to pay, without right of reimbursement from the
other party, the costs incurred by
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it incident to the performance of its obligations under this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, costs incident to the preparation of this Agreement, and the fees
and disbursements of counsel, accountants and consultants employed by such party
in connection herewith.
Section 8.10 Headings
The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
any provisions of this Agreement.
Section 8.11 Counterparts
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
Section 8.12 Time of the Essence
Wherever time is specified for the doing or performance of any act or the
payment of any funds, time shall be considered of the essence.
Section 8.13 Injunctive Relief
It is possible that remedies at law may be inadequate and, therefore, the
parties hereto shall be entitled to equitable relief including, without
limitation, injunctive relief, specific performance or other equitable remedies
in addition to all other remedies provided hereunder or available to the parties
hereto at law or in equity, and any party hereto seeking such
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injunctive relief shall not be required to post any bond in connection
therewith.
Section 8.14 Remedies Cumulative
No remedy made available by any of the provisions of this Agreement is
intended to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity.
Section 8.15 Governing Law; Jurisdiction
This Agreement has been entered into and shall be construed and enforced in
accordance with the laws of the State of New York without reference to the
choice of law principles thereof. Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement and the
transactions contemplated hereby may be brought against any of the parties in
the courts of the State of New York, County of New York, or, if it has or can
acquire jurisdiction, in the United States District Court for the Southern
District of New York, and each of the parties consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
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Section 8.16 Participation of Parties
The parties hereto acknowledge that this Agreement and all matters
contemplated herein, have been negotiated among all parties hereto and their
respective legal counsel and that all such paries have participated in the
drafting and preparation of this Agreement from the commencement of negotiations
at all times through the execution hereof.
Section 8.17 Further Assurances
The parties hereto shall deliver any and all other instruments or documents
required to be delivered pursuant to, or necessary or proper in order to give
effect to, all of the terms and provisions of this Agreement including, without
limitation, all necessary instruments of assignment and transfer and such other
documents as may be necessary or desirable to transfer ownership of the
Purchased Assets.
Section 8.18 Publicity
No public announcement or other publicity regarding this Agreement or the
transactions contemplated hereby shall be made prior to or after the date hereof
without the prior written consent of both ABA and the Seller as to form,
content, timing and manner of distribution. Notwithstanding the foregoing,
nothing in this Agreement shall preclude ABA or its Affiliates from making any
public announcement or filing required by federal or state securities laws or
stock exchange rules.
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Section 8.19 LFC #46 Corp.
The parties hereto hereby acknowledge that as of the date hereof, it is the
intent of Ivers-Lee Corporation to transfer certain of the Purchased Assets to
LFC #46 Corp. prior to the Closing date, and to have LFC #46 Corp. transfer the
same to the Purchaser on the Closing date. However, to the extent that Ivers-Lee
Corporation does not transfer such Purchased Assets to LFC #46 Corp. by the
Closing date, then Ivers-Lee Corporation will transfer all of the Purchased
Assets to the Purchaser, and this Agreement shall remain in full force and
effect as against all parties hereto.
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IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
IVERS-LEE CORPORATION
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
LFC #46 CORP.
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
NIK PUBLIC SAFETY, INC.
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
AMERICAN BODY ARMOR &
EQUIPMENT, INC.
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
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