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Title: |
Purchase Agreement |
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Date: |
2001 |
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$37 |
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#809817 |
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RIVER HILL PURCHASE AGREEMENT W/ COVOL
RIVER HILL PROJECT
PURCHASE AGREEMENT
by and between
DTE RIVER HILL, L.L.C.
and
COVOL TECHNOLOGIES, INC.
August 27, 1999
{PAGE}
TABLE OF CONTENTS
Page
RECITALS................................................................... 1
ARTICLE I DEFINITIONS.......................................................1
1.1. Affiliate.....................................................1
1.2. Agreement.....................................................1
1.3. As-Built Drawings.............................................2
1.4. Assets........................................................2
1.5. Assignment and Assumption Agreement...........................2
1.6. Assumed Liabilities...........................................2
1.7. Bill of Sale..................................................2
1.8. Books and Records.............................................2
1.9. Business......................................................2
1.10. Buyer's Closing Certificate..................................2
1.11. Closing......................................................2
1.12. Closing Date.................................................3
1.13. Code.........................................................3
1.14. Confidentiality Agreement....................................3
1.15. Construction Agreements......................................3
1.16. Contracts....................................................3
1.17. Covol Plant..................................................3
1.18. Covol Process................................................3
1.19. Effective Time...............................................3
1.20. Excluded Assets..............................................3
1.21. Facility.....................................................3
1.22. Fixed Assets.................................................3
1.23. Fun Enterprises..............................................4
1.24. Fun Indebtedness.............................................4
1.25. GAAP.........................................................4
1.26. Ground Lease.................................................4
1.27. HSR Act......................................................4
1.28. Improvements.................................................4
1.29. Improvements Deed............................................4
1.30. Inventory....................................................4
1.31. IRS..........................................................4
1.32. Knowledge of Buyer...........................................4
1.33. Knowledge of Seller..........................................4
1.34. Law..........................................................4
i
{PAGE}
Page
1.35. License and Binder Purchase Agreement........................4
1.36. Lien.........................................................5
1.37. Loss.........................................................5
1.38. Material Adverse Effect......................................5
1.39. Modification Agreement.......................................5
1.40. O&M Agreement................................................5
1.41. Opinion of Seller's Counsel..................................5
1.42. Performance Payments.........................................5
1.43. Performance Thresholds.......................................5
1.44. Permits......................................................5
1.45. Permitted Liens..............................................5
1.46. Plans and Specifications.....................................6
1.47. Product......................................................6
1.48. Purchase Consideration.......................................6
1.49. Real Property................................................6
1.50. Required Consents............................................6
1.51. Requirements Supply Agreement................................6
1.52. RHC..........................................................6
1.53. Sales Agency Agreement.......................................6
1.54. Section 29 Product...........................................6
1.55. Seller's Closing Certificate.................................6
1.56. Transaction Documents........................................6
ARTICLE II PURCHASE AND SALE................................................7
2.1. Purchase and Sale; Assignment and Assumption..................7
2.2. Payment of the Purchase Consideration.........................7
2.3. Deliveries at Closing.........................................7
2.4. Allocation of Purchase Price..................................8
2.5. No Assumption of Liabilities..................................8
2.6. Prorations....................................................8
2.7. Performance Payments..........................................8
2.8. Sales Tax Exemption...........................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER........................9
3.1. Corporate Standing............................................9
3.2. Authorizations; Binding Agreements............................9
3.3. No Actions Affecting Enforcement of the Agreement and
the other Transaction Documents..............................10
ii
{PAGE}
Page
3.4. Taxes........................................................10
3.5. Brokers or Finders Fees......................................10
3.6. No Imposition of Liens.......................................11
3.7. Applicable Contracts and Permits.............................11
3.8. Title to Assets..............................................11
3.9. Condition of Assets..........................................11
3.10. Inventory...................................................11
3.11. Pending Litigation..........................................11
3.12. Compliance with Laws........................................12
3.13. Status of Contracts.........................................12
3.14. Consents....................................................12
3.15. Ground Lease................................................12
3.16. No Fee Property.............................................12
3.17. Books and Records...........................................13
3.18. Environmental Conditions....................................13
3.19. Liabilities.................................................14
3.20. Agreements with Related Persons.............................14
3.21. Adequacy of the Purchased Assets............................14
3.22. Production Capacity.........................................14
3.23. Section 29 Issues...........................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER.........................14
4.1. Organization and Standing....................................14
4.2. Authorizations; Binding Agreements...........................15
4.3. Brokers or Finders Fees......................................15
4.4. No Actions Affecting Enforcement of the Agreement
and the other Transaction Documents..........................15
ARTICLE V CERTAIN UNDERSTANDINGS AND AGREEMENTS............................16
5.1. Conduct of Seller Prior to Closing...........................16
5.2. Exclusivity..................................................16
5.3. Access to Information........................................16
5.4. Best Efforts.................................................17
5.5. Public Announcements.........................................17
5.6. Confidentiality..............................................17
5.7. Negative Covenants...........................................17
5.8. Taxes........................................................18
5.9. Private Letter Ruling........................................18
iii
{PAGE}
Page
ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER................19
6.1. Compliance with Agreement....................................19
6.2. Proceedings and Instruments Satisfactory.....................19
6.3. No Litigation................................................19
6.4. Representations and Warranties...............................19
6.5. Material Damage to Assets....................................20
6.6. Permits......................................................20
6.7. Consents.....................................................20
6.8. Lien Waivers and Estoppel Certificates.......................20
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER..............20
7.1. Compliance with Agreement....................................20
7.2. Proceedings and Instruments Satisfactory.....................21
7.3. No Litigation................................................21
7.4. Representations and Warranties...............................21
7.5. Required Consents............................................21
ARTICLE VIII INDEMNITIES AND ADDITIONAL COVENANTS..........................21
8.1. Seller's Indemnity...........................................21
8.2. Buyer's Indemnity............................................23
8.3. Bulk Sales Compliance........................................24
8.4. Additional Instruments.......................................24
8.5. Access to Books, Records and Employees.......................24
ARTICLE IX TERMINATION.....................................................25
9.1. Termination..................................................25
9.2. Rights on Termination; Waiver................................25
ARTICLE X MISCELLANEOUS....................................................26
10.1. Entire Agreement; Amendment.................................26
10.2. Expenses....................................................26
10.3. Governing Law; Consent to Jurisdiction......................26
10.4. Assignment..................................................27
10.5. Notices.....................................................27
10.6. Counterparts; Headings......................................28
iv
{PAGE}
Page
10.7. Interpretation..............................................28
10.8. Severability................................................28
10.9. No Reliance.................................................28
10.10. Parties in Interest........................................29
10.11. Specific Performance.......................................29
v
{PAGE}
EXHIBITS AND SCHEDULES
SCHEDULE 1.6 Exclusions from Assumed Liabilities
SCHEDULE 1.16 Contracts
SCHEDULE 1.20 Excluded Assets
SCHEDULE 1.22 Fixed Assets
SCHEDULE 1.32 Knowledge of Buyer
SCHEDULE 1.33 Knowledge of Seller
SCHEDULE 1.41 Opinion of Seller's Counsel
SCHEDULE 1.44 Permits
SCHEDULE 1.45 Permitted Liens
SCHEDULE 1.49 Real Property
SCHEDULE 1.50 Required Consents
SCHEDULE 3.5 Brokers or Finders Fees of Seller
SCHEDULE 3.8 Title
SCHEDULE 3.11 Pending Litigation
SCHEDULE 3.15 Ground Lease Exceptions
SCHEDULE 3.18 Environmental Matters
SCHEDULE 3.20 Agreements with Related Persons
SCHEDULE 4.3 Brokers or Finders Fees of Buyer
SCHEDULE 5.9 Post-Closing Conditions
EXHIBIT A Assignment and Assumption Agreement
EXHIBIT B Bill of Sale
EXHIBIT C Buyer's Closing Certificate
EXHIBIT D [Reserved]
EXHIBIT E Improvements Deed
EXHIBIT F O&M Agreement
EXHIBIT G Performance Thresholds
EXHIBIT H Seller's Closing Certificate
EXHIBIT I License and Binder Purchase Agreement
EXHIBIT J Allocation of Purchase Price
EXHIBIT K Estoppel Certificate
EXHIBIT L Modification Agreement
vi
{PAGE}
PURCHASE AGREEMENT
PURCHASE AGREEMENT, made as of August 27, 1999, by and between
DTE RIVER HILL, L.L.C., a Delaware limited liability company ("Buyer"), and
COVOL TECHNOLOGIES, INC., a Delaware corporation ("Seller").
RECITALS
WHEREAS, Seller has constructed and owns the Assets comprised
principally of a processing facility to produce solid synthetic fuel pellets
from coal fines located near Karthus, Clearfield County, Pennsylvania; and
WHEREAS, Seller desires to sell the Assets and the Contracts
to Buyer and Buyer desires to purchase the Assets from Seller, all on the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the Recitals and of the
mutual covenants, conditions and agreements set forth herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed that:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the
meanings specified:
1.1 Affiliate shall mean, as to any person, any other person or entity
that, directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such person.
1.2. Agreement shall mean this Purchase Agreement, together with the
Exhibits and Schedules attached hereto, as the same may be amended from time to
time in accordance with the terms hereof.
{PAGE}
1.3. As-Built Drawings shall mean as-built drawings reflecting
necessary revisions on the original tracings of the Plans and Specifications and
related drawings relating to the Facility necessary to indicate such field
changes as may have been found necessary to suit conditions at the Real Property
and any other revisions made in the course of construction of the Facility.
1.4. Assets shall mean, collectively, all of the assets, other than the
Contracts and the Excluded Assets, owned by Seller and relating primarily to the
Business, and comprising, used in or necessary for the operation of the Facility
as of the Effective Time, including, without limitation, the Improvements, the
Books and Records, the Fixed Assets, and the Inventory, together with all
goodwill associated with the Facility.
1.5. Assignment and Assumption Agreement shall mean the Assignment and
Assumption Agreement between Seller and Buyer relating to the Contracts and the
Assumed Liabilities, in the form of Exhibit A attached hereto.
1.6. Assumed Liabilities shall mean the obligations to be assumed by
Seller pursuant to the Modification Agreement and those obligations of Seller,
if any, arising under the Contracts which, pursuant to the terms thereof, relate
to periods and become due from and after the Effective Time, other than
obligations under those Contracts listed in Schedule 1.6 attached hereto.
1.7. Bill of Sale shall mean the Bill of Sale from Seller to Buyer
relating to the Assets, in the form of Exhibit B attached hereto.
1.8. Books and Records shall mean original or true and complete copies
of all of the books, records, files, data and information of Seller relating to
the design, construction and operation of the Facility and operation of the
business prior to the Effective Time, which are relevant to Buyer's use of the
Assets, performance under the Contracts and operation of the Facility and the
Business after the Effective Time, including without limitation Plans and
Specifications, all original tracings of the related drawings and designs and
the As-Built Drawings.
1.9. Business shall mean the business conducted by Seller at the
Facility, which consists of the ownership, construction, moving, financing,
selling and operation of and otherwise dealing with the Facility and the
manufacture and sale of the Product.
1.10. Buyer's Closing Certificate shall mean the certificate of Buyer
substantially in the form of Exhibit C attached hereto.
1.11. Closing shall mean the meeting of the parties to be held at 9:00
a.m., local time, on the Closing Date, at the offices of Hunton & Williams,
Riverfront Plaza, East Tower, 951 East Byrd Street, Richmond, Virginia, or such
other time and place as the parties may mutually agree in writing.
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