EXHIBIT 10.1 ASSET PURCHASE AGREEMENT

 

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                                                                    EXHIBIT 10.1

 

                            ASSET PURCHASE AGREEMENT

 

      THIS ASSET PURCHASE AGREEMENT made and entered into on this 31st day of

January, 2005, by and among FREEPORT BRICK COMPANY, INC. ("Freeport") KITTANNING

BRICK COMPANY ("Kittanning"), FREE-MADIE COMPANY ("Free-Madie"), FREEPORT

REFRACTORIES, INC. ("Refractories" and, together with Freeport, Kittanning and

Free-Madie, the "Sellers") and FREEPORT AREA ENTERPRISES, INC. (the

"Shareholder"), each of the Sellers and Shareholder being a Pennsylvania

corporation, on the one hand, and REFRACTORY & INDUSTRIAL SUPPLY GROUP, INC., a

Tennessee corporation (the "Buyer"), and DIVERSIFIED THERMAL SOLUTIONS, INC., a

Nevada corporation ("Diversified"), on the other hand.

 

                              W I T N E S S E T H:

 

      WHEREAS, Sellers are engaged in the business of manufacturing refractory

products, including but not limited to fireclay, high alumina, ladle, barrier,

high duty, bottom pour and chemical resistant bricks; mortar, sleeves, nozzles,

industrial grade pavers; and tools and dies used in the refractory business

(collectively the "Business") at their plants located at Clay Road, Adrian,

Pennsylvania 16210, Mill Street Extension, Freeport, Pennsylvania 16229 and 114

W. Park Drive, Kittanning, Pennsylvania 16201 (the "Facilities"); and

 

      WHEREAS, Sellers desire to sell certain assets, as more specifically

identified herein, and Buyer desires to purchase such assets upon the terms and

conditions contained herein.

 

      NOW, THEREFORE, in consideration of the premises and the mutual covenants

contained herein, the parties, intending to be legally bound, hereby agree as

follows:

 

                                     ARTICLE I

 

                           PURCHASE AND SALE OF ASSETS

 

      1.1 PURCHASE AND SALE OF ASSETS. On the Closing Date, as hereinafter

defined, subject to the terms and conditions set forth in this Agreement,

Sellers shall sell, and Buyer shall purchase, effective as of the close of

business on the Closing Date, the following assets owned and used by Sellers in

the ordinary course of business free from any and all liens, charges,

restrictions or encumbrances except for such liens, charges, restrictions or

encumbrances set forth in Schedule 1.1 (the "Permitted Encumbrances")

(hereinafter collectively referred to as the "Assets"):

 

            (a) All machinery, equipment, furniture, fixtures, vehicles, tools,

spare parts and other fixed assets owned by Sellers and used, or held for use,

exclusively in connection with the Business, including without limitation, those

items listed on Schedule 1.1(a) attached hereto (the "Fixed Assets");

 

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            (b) All inventory of finished goods, work-in-process, raw materials

and supplies of Sellers used exclusively in the Business at the close of

business on the Closing Date, including without limitation, those items listed

on Schedule 1.1(b) attached hereto (the "Inventory");

 

            (c) All accounts receivable owned by Sellers on the Closing Date

(the "Accounts Receivable") including without limitation, those Accounts

Receivable listed on Schedule 1.1(c);

 

            (d) All Sellers' right, title and interest in and to the Assigned

Contracts and the Assigned Leases (each as defined in Section 2.12) as listed on

Schedule 2.12;

 

            (e) The Facilities, consisting of the real property more

particularly described on Schedule 1.1 (e) attached hereto, together with all

rights and appurtenances pertaining to said property and any improvements,

fixtures and personal property situated on or attached to said real property.

The exact legal description of the Facilities shall be determined by surveys

prepared and certified as of current date, at Buyer's expense, by a qualified

person or firm acceptable to Sellers which survey shall locate all roads,

easements, utilities, burial grounds, cemeteries, church lots, rights-of-way,

drainage districts, applicable zoning districts, any flood hazard areas, parties

in possession, and other matters that affect that title or use of the Facilities

for commercial operations and use and shall further reflect the number of acres

as are contained within the exterior boundaries of the Facilities, and shall

otherwise be satisfactory to Buyer;

 

            (f) All data and records related to the operations of the Business

as they are currently operated, including client and customer lists and records,

referral sources, research and development reports and records, production

reports and records, service and warranty records, equipment logs, operating

guides and manuals, financial and accounting records, creative materials,

advertising materials, promotional materials, studies, reports, correspondence

and other similar documents and records and copies of all personnel records

relating to those employees who are offered, and who accept, employment with

Buyer;

 

            (g) All of the intangible rights and property of the Business,

subject to Section 7.5(a), including intellectual property assets, logos, going

concern value, goodwill, post office boxes, telephone, telecopy and email

addresses and listings of the Business;

 

            (h) All internet URL's, website contents, software and marketing

materials currently used by Sellers in connection with the Business; and

 

            (i) All rights of Sellers relating to claims for refunds relating to

the Assets and rights to offset in respect thereof; and

 

            (j) In addition to the Assets, on the Closing Date, Shareholder

shall sell, transfer and convey to Buyer certain items designated on Schedule

1.1(j).

 

      1.2 EXCLUDED ASSETS. Notwithstanding the foregoing, the Sellers and

Shareholder are not selling, and the Buyer is not purchasing, pursuant to this

Agreement, any tangible or

 

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intangible properties, assets or rights of the Sellers or Shareholder not

specifically included in the Assets. Without limiting the foregoing, there shall

not be sold, assigned, transferred or delivered hereunder: (a) any cash on hand

or in banks or marketable securities owned by the Sellers; (b) all minute books,

stock records and corporate seals; (c) the shares of capital stock of the

Sellers; (d) any rights or claims of the Sellers with respect to any tax refund,

carryback or carryforward or other credits to the Sellers for the period ending

on or prior to the Closing Date; (e) those rights relating to deposits and

prepaid. expenses; (f) any property, casualty, workers' compensation or other

insurance policy or related insurance services contract relating to the Sellers

and any right of the Sellers under any such insurance policy or contract

including, but not limited to, right to any cancellation value; (g) key-man life

insurance policies listed on Schedule 1.2(g); (h) all personnel records and

other records that Sellers are required by law to retain in its possession; (i)

all prepaid items; (j) all assets of Shareholder other than the assets of

Sellers as set forth in this Agreement and the assets listed on Schedule 1.1(j);

(k) any rights or claims of Sellers and Shareholder against any third party

relating to the Assets, Business or Facilities; (l) any collective bargaining

agreements, (m) any assets associated with any pension plans Sellers maintain,

contribute to, or sponsor, including, but not limited to, the Retirement Plans

for Hourly and Salaried Employees of Freeport Area Enterprises ("Hourly Pension

Plan"), and (n) other property and assets expressly designated in Schedule

1.2(l).

 

      1.3 ASSUMPTION OF LIABILITIES. On the Closing Date, Buyer shall assume,

and agrees to pay, perform and comply with, only the following debts,

obligations and liabilities of Sellers:

 

            (a) All debts, obligations and liabilities of Sellers accruing from

and after the Closing Date pursuant to any of the Assigned Contracts (as defined

in Section 2.12) listed on Schedule 2.12, provided that any third party to any

of the Assigned Contracts whose approval or consent is required in order for

Sellers to assign same to Buyer shall have been obtained;

 

            (b) All debts, obligations and liabilities of Sellers accruing from

and after the Closing Date pursuant to any of the Assigned Leases (as defined in

Section 2.12) listed on Schedule 2.12, provided that (i) any lessor named in any

of the Assigned Leases whose approval or consent is required in order for

Sellers to assign same to Buyer shall have been obtained, or (ii) Buyer shall

have renegotiated the terms of such Assigned Leases to Buyer's satisfaction; and

 

            (c) The Assumed Liabilities (as defined in Section 2.13) of the

Sellers as shown on Schedule 2.13, which liabilities shall include, without

limitation, all of the liabilities set forth on the Balance Sheet (as defined in

Sec. 2.11).

 

Provided, however, that the foregoing assumptions and undertakings of the Buyer

shall not relieve Sellers from any debt, obligation or liability resulting from

a breach by Sellers of any representations, warranty or agreement contained in

this Agreement or in any such Assigned Contract, Assigned Lease or Assumed

Liability. Further, the foregoing assumptions and undertakings of the Buyer

shall not restrain or limit Buyer's right to contest or assert defenses against

third parties with respect to any such debts, obligations or liabilities. Buyer

shall not assume any other debts, liabilities or obligations of the Sellers

other than the Assigned Contracts, Assigned Leases or Assumed Liabilities.

 

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       1.4 PURCHASE PRICE AND PAYMENT TERMS. The purchase price for the Assets

shall be a total of Five Million Dollars ($5,000,000.00) (the "Purchase Price").

The Purchase Price shall be allocated to the Assets, Assigned Contracts,

Assigned Leases and Assumed Liabilities in accordance with Schedule 1.4 (which

Sellers and Buyer shall prepare and deliver following the Closing), and shall be

payable as follows:

 

            (a) At Closing, Buyer shall assume the Assigned Contracts, Assigned

Leases and Assumed Liabilities in the amounts reflected on Schedule 1.4

representing $1,084,000 of the Purchase Price, subject to the adjustments set

forth in Section 1.5 below.

 

            (b) Buyer shall deliver to Sellers at Closing, in immediately

available funds, the cash portion of the Purchase Price in the amount of Three

Million Nine Hundred Sixteen Thousand Dollars ($3,916,000) (the "Cash Portion"),

subject to the adjustments set forth in Section 1.5 below, as follows:

$2,415,742.39 to Sellers in accordance with the wire transfer instructions

provided in Schedule 1.4(b)(i); $500,257.61 to National City Bank in accordance

with the wire transfer instructions provided in Schedule 1.4(b)(ii); and

$1,000,000 to JP Morgan Chase Bank in accordance with the wire transfer

instructions provided in Schedule 1.4(b)(iii).

 

      1.5 ADJUSTMENTS TO CASH PORTION OF PURCHASE PRICE. The Cash Portion of the

Purchase Price shall be adjusted as follows:

 

            (a) Preparation of Pre-Closing Date Balance Sheet and Closing Date

Balance Sheet.

 

                  (i) Within fifteen (15) days prior to the Closing Date, the

      Sellers will prepare and deliver to the Buyer a draft combined balance

      sheet (the "Draft Pre-Closing Date Balance Sheet") for Sellers as of the

      close of business on the last day of the month ending closest to the

      Closing Date (determined on a pro forma basis as though the Parties had

      not consummated the transactions contemplated by this Agreement). The

      Sellers will prepare the Draft Pre-Closing Date Balance Sheet in

      accordance with U.S. generally accepted accounting principles applied on a

      basis consistent with the preparation of Schedule 1.4, the Financial

      Statements and the Balance Sheet; and

 

                  (ii) Within sixty (60) days after the Closing Date, the

      Sellers will prepare and deliver to the Buyer a draft combined balance

      sheet (the "Draft Closing Date Balance Sheet") for Sellers as of the close

      of business on the last business day prior to the Closing Date (determined

      on a pro forma basis as though the Parties had not consummated the

      transactions contemplated by this Agreement). The Sellers will prepare the

      Draft Closing Date Balance Sheet in accordance with U.S. generally

      accepted accounting principles applied on a basis consistent with the

      preparation of Schedule 1.4, the Financial Statements and the Balance

      Sheet.

 

                  (iii) If the Buyer has any objections to the Draft Pre-Closing

      Date Balance Sheet or the Draft Closing Date Balance Sheet, it will

      deliver a detailed statement describing its objections to the Sellers

      within ten (10) days after receiving either such Balance Sheet. The Buyer

      and the Sellers will use reasonable efforts to

 

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      resolve any such objections themselves. If the parties do not obtain a

      final resolution within five (5) days after the Sellers have received a

      statement of objections, however, the Buyer and the Sellers will select an

      independent accounting firm mutually acceptable to them to resolve any

      remaining objections. If the Buyer and the Sellers are unable to agree on

      the choice of an accounting firm, they will select a nationally-recognized

      accounting firm by lot (after excluding their respective regular outside

      accounting firms). The determination of any accounting firm so selected

      will be set forth in writing within fifteen (15) days of the dispute being

      presented to it and will be conclusive and binding upon the parties. The

      Sellers will revise the Draft Pre-Closing Date Balance Sheet and/or the

      Draft Closing Date Balance Sheet as appropriate to reflect the resolution

       of any objections thereto pursuant to this Section 1.4(a)(iii). The

      "Pre-Closing Date Balance Sheet" shall mean the Draft Pre-Closing Date

      Balance Sheet together with any revisions thereto pursuant to this Section

      1.4(a)(iii). The "Closing Date Balance Sheet" shall mean the Draft Closing

      Date Balance Sheet together with any revisions there to pursuant to this

      Section 1.4(a)(iii).

 

                  (iv) In the event the parties submit any unresolved objections

      to an independent accounting firm for resolution as provided in Section

      1.4(a)(iii) above, the Buyer and the Sellers will share equal

      responsibility for the fees and expenses of the accounting firm.

 

                  (v) The Sellers will make the work papers and back-up

      materials used in preparing the Draft Pre-Closing Date Balance Sheet and

      the Draft Closing Date Balance Sheet available to the Buyer, its

      accountants, other representatives and, if necessary, the independent

      accounting firm at reasonable times and upon reasonable notice at any time

      during (A) the preparation by the Sellers of the Draft Pre-Closing Date

      Balance Sheet or the Draft Closing Date Balance Sheet, (B) the review by

      the Buyer of the Draft Pre-Closing Date Balance Sheet or the Draft Closing

      Date Balance Sheet, and (C) the resolution by the parties of any

      objections thereto.

 

            (b) Adjustments to Cash Portion of the Purchase Price. The Cash

Portion of the Purchase Price will be adjusted by the amount by which the value

of the Assets, Assumed Contracts, Assumed Leases and Assumed Liabilities on the

Closing Date Balance Sheet differs from the value of the Assets, Assumed

Contracts, Assumed Leases and Assumed Liabilities on the May 31, 2004 Balance

Sheet. If the value of the Assets, Assumed Contracts, Assumed Leases and Assumed

Liabilities on the Closing Date Balance Sheet exceed the value of the Assets,

Assumed Contracts, Assumed Leases and Assumed Liabilities on the May 31, 2004

Balance Sheet, Buyer shall pay the full amount of the difference to Sellers; and

if the value of the Assets, Assumed Contracts, Assumed Leases and Assumed

Liabilities on the Closing Date Balance Sheet is less than the value of the

Assets, Assumed Contracts, Assumed Leases and Assumed Liabilities on the May 31,

2004 Balance Sheet, Sellers shall pay the full amount of the difference to

Buyer. All payments due hereunder, if any, shall be made within three (3)

business days of the final determination of the Closing Date Balance Sheet.

 

                                   ARTICLE II

 

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REPRESENTATIONS AND WARRANTIES OF SELLERS AND SHAREHOLDER

 

      Sellers and Shareholder, jointly and severally, make the following

representations and warranties to Buyer, which shall be true and correct on the

Closing Date:

 

      2.1 ORGANIZATION AND QUALIFICATION. Sellers and Shareholder are

corporations duly organized, validly existing and in good standing under the

laws of the Commonwealth of Pennsylvania. Sellers have all requisite corporate

power and authority to own, lease and operate their properties, and to carry on

the Business as it is now being conducted and to operate the Facilities as they

are now being operated. Sellers are duly qualified and in good standing to do

business in all other states in which they conduct business, except where the

failure to be so qualified and in good standing would not have a material

adverse effect.

 

      2.2 AUTHORIZATION AND CONSENTS.

 

            (a) Sellers and Shareholder have full corporate power and authority

to enter into this Agreement and to carry out their obligations pursuant to the

terms hereof. The execution, delivery and performance of this Agreement by

Sellers and Shareholder have been duly authorized by all requisite corporate

actions. This Agreement constitutes valid and legally binding obligations of

Sellers and Shareholder enforceable in accordance with the terms hereof. Neither

the execution and performance of this Agreement, nor the consummation of the

transactions contemplated hereby, will (i) violate, or conflict with, or result

in a breach of any provision of, or constitute a default (or an event which,

with notice or lapse of time or both, would constitute a default) under, or

result in the termination of, or accelerate the performance required by, or

result in the creation of any lien, security interest, charge or encumbrance

upon any of the properties or assets of Sellers under any of the terms,

conditions or provisions of, the Articles of Incorporation or bylaws of Sellers

and Shareholder, or any note, bond, mortgage, indenture, deed of trust, lease,

license, contract, lien, agreement, instrument, or other obligation to which

Sellers and Shareholder are a party or by which Sellers or any of their

properties or assets may be bound or affected, or (ii) violate any order, writ,

injunction, decree, statute, rule or regulation applicable to Sellers and

Shareholder or any of their properties or assets.

 

             (b) Except as set forth on Schedule 2.2 (b), Sellers have obtained

all consents or approvals, notified or registered with any governmental

authority or other third party, required on the part of Sellers in connection

with the execution and delivery of this Agreement or the consummation by Sellers

of the transactions contemplated hereby.

 

      2.3 TAXES AND TAX RETURNS. For all periods through the Closing Date,

Sellers shall have timely filed all federal, state, and local withholding,

social security, and unemployment tax returns; and all such tax returns are

complete and accurate in accordance with all legal requirements applicable

thereto in all material respects. Sellers have paid all taxes required to be

paid for such periods, and there is, and to the knowledge of the Sellers, there

will be, no further liability (whether disclosed on such returns or assessments)

for any such taxes, and no interest or penalties have accrued or are accruing

with respect thereto. There are no liens on any property relating to the

Business, Assets or the Facilities by reason of the delinquent payment, or

non-

 

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payment, of any tax, assessment, fee, or other governmental charge (except for

inchoate liens for taxes not yet due and payable).

 

      2.4 PERMITS, ETC. Schedule 2.4 contains a listing of all material federal,

state, and local licenses, permits, franchises, certificates, approvals, and

authority held by Sellers relating to the operation of the Business and the

Facilities, all of which Sellers will assign to Buyer without charge on the

Closing Date to the extent they are assignable under applicable law. Neither the

Business nor the Facilities require any other material license, franchise,

permit, or governmental authorization from any governmental body, whether

federal, state, local, or foreign.

 

      2.5 TITLE AND CONDITION OF ASSETS.

 

            (a) Sellers collectively have good and marketable title to the

Assets, and the Assets are free and clear of any leases, security interests,

mortgages, charges, liens, claims, encumbrances, easements, restrictions,

covenants, rights of first refusal, options, or other matters affecting title

and use of the Assets, except for the Permitted Encumbrances and such leases,

security interests, mortgages, charges, liens, claims, encumbrances, easements,

restrictions, covenants, rights of first refusal, options, or other matters as

would not reasonably have a material adverse effect.

 

            (b) All of the Fixed Assets are in reasonably good operating

condition, subject to normal wear and tear.

 

            (c) None of the Assets is subject to any commitment or other

arrangement for its use by any third party.

 

            (d) All items included in the Inventory are being sold "as is, where

is." Sellers are not in possession of any inventory not owned by Sellers. All

Inventory was purchased or produced in the ordinary course of business of

Sellers.

 

            (e) All Accounts Receivable reflected in Schedule 1.1(c) or on the

accounting records of Sellers relating to the Business as of the Closing Date

represent or will represent valid obligations arising from sales actually made

or services actually performed by Sellers in the ordinary course of business.

Except to the extent paid prior to the Closing Date, the Accounts Receivable are

or will be as of the Closing Date current and collectible using commercially

reasonable efforts net of the respective reserves shown on the Financial

Statements and the Balance Sheet. There is no contest, claim, defense or right

of setoff with any account debtor of an Account Receivable relating to the

amount or validity of such Account Receivable. Schedule 1.1(c) contains a

complete and accurate list of all Accounts Receivable as of the Closing Date,

which list sets forth the aging of each such Account Receivable.

 

      2.6 NO VIOLATION OF STATUTE, DECREE, OR ORDER. Sellers are not in default

under or in violation of any material federal, state, municipal, or other

governmental law, ordinance, statute, or administrative or court regulations,

rule, decision, or order, or other law of any kind relating to

 

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the Business and the consummation of transactions contemplated by this Agreement

will not constitute or result in any such material default or violation.

 

      2.7 EMPLOYEE BENEFIT PLANS. Except as disclosed on Schedule 2.7, there are

no employee benefit plans (as defined in Section 3(3) of the Employee Retirement

Security Act) or other employee benefit plans, programs, or arrangements,

including, but not limited to, pension, vacation, short term disability, dental,

life insurance, bonus, deferred compensation, profit sharing, stock purchase,

stock option, performance unit plans, or other employee benefit plans maintained

by Sellers, contributed to by Sellers, or for which Sellers contract for the

benefit of their employees (the "Plans"). Sellers have made full payment with

respect to all amounts and premiums which Sellers are required to have paid as

contributions to such Plans as of the Closing Date or accrued the same on the

Balance Sheet. Sellers are not a party to any agreement the effect of which

would be that Buyer will be required to make contributions in respect to past

services of any present or former employee of Sellers, or otherwise incur any

present or continuing liability to any employee as a result of acquiring the

Assets. Sellers do not have any obligation to provide retiree health benefits to

any employees or former employees.

 

      2.8 LITIGATION. Except as set forth on Schedule 2.8, there is no (a)

material suit, action, or legal, administrative, or other proceeding or

governmental investigation pending or, to the knowledge of the Sellers,

threatened against Sellers, nor is there any basis therefor known to Sellers, or

(b) writ, injunction or decree of any court or governmental instrumentality to

which the Sellers are a party or by which they are bound which could reasonably

be expected to have a material adverse effect on the Sellers' ability to

complete the transactions contemplated herein.

 

      2.9 ENVIRONMENTAL LAWS. Except as set forth on Schedule 2.9, to the

knowledge of Sellers, Sellers have complied, and remain in compliance in all

material respects, with the provisions of all Environmental Laws, as hereinafter

defined, applicable to the Facilities; and neither Sellers (or any agent or

contractor of Sellers) nor, to the knowledge of the Sellers, any unrelated third

party, has disposed of or released any Hazardous Substances, as hereinafter

defined, at, from, in or on any of the Facilities in violation of applicable

Environmental Laws.

 

      For purposes of this Agreement, "ENVIRONMENTAL LAWS" means any and all

governmental requirements in effect as of the Closing Date, applicable to the

Facilities, and relating to the environment, including ambient air, surface

water, land surface or subsurface strata, or to emissions, discharges, releases

or threatened releases of pollutants, contaminates, chemicals or industrial

toxic or hazardous substances or wastes (including Hazardous Substances) or

noxious noise or odor into the environment, or otherwise relating to the

manufacture, processing, distribution, use, treatment, storage, disposal,

recycling, removal, transport or handling of pollutants, contaminates, chemicals

or industrial toxic or hazardous substances or wastes (including petroleum,

petroleum distillates, asbestos or asbestos-containing material, polychlorinated

biphenyls, chlorofluoro-carbons, or hydrochlorofluoro-carbons).

 

      For purposes of this Agreement, "HAZARDOUS SUBSTANCES" means any material

or substance, or combination of materials or substances, that by reason of

quantity, concentration, composition or characteristic is regulated under any

Environmental Law.

 

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      2.10 NO BROKER. No person, firm, or corporation has acted in the capacity

of broker or finder on Sellers' behalf to bring about the negotiation or

consummation of this Agreement or the purchase of any assets of Sellers.

 

      2.11 FINANCIAL STATEMENTS. Sellers previously have delivered to Buyer true

and correct copies of their compiled financial statements, as of December 31,

2001, December 31, 2002 and December 31, 2003, and for the periods then ended

(collectively, the "Sellers' Financial Statements"). The Sellers' Financial

Statements were prepared (except for the compiled financial statements as of

December 31, 2002, and for the period then ended, of which Buyers are aware) in

accordance with U.S. generally accepted accounting principles, consistently

applied, and present fairly in all material respects the financial position and

the results of operation of Sellers as of the dates and for the periods

indicated. As of the dates of the Sellers' Financial Statements, Sellers had no

material obligations, fixed or contingent, not adequately reflected in the

Seller' Financial Statements or the notes or exhibits thereto. Schedule 2.11 is

a true, correct and complete combined balance sheet of Sellers in all material

respects as of May 31, 2004 (the "Balance Sheet").

 

      2.12 ASSIGNED CONTRACTS AND ASSIGNED LEASES. Schedule 2.12 lists all

assigned contracts, which shall include all open customer purchase orders to be

assumed by the Buyer ("Assigned Contracts") and assigned leases (the "Assigned

Leases") that are to be assigned to, and assumed by, Buyer pursuant to Section

1.3, subject to the provisions of this Section 2.12; provided, however, that

"Assigned Contracts" and "Assigned Leases" shall only include those contracts

and leases as to which the consent of the other party has been obtained in

writing prior to Closing, if consent to assignment is required under the terms

of such contract or lease. Each Assigned Contract or Assigned Lease to which

Seller is a party is valid and in full force and effect and constitutes the

legal, valid and binding obligation of Seller and the other party or parties

thereto; there are no existing defaults thereunder and no event, act or omission

has occurred which (with or without notice, lapse of time or the happening or

occurrence of any other event) would result in a default thereunder. No default

exists or, except as set forth on Schedule 2.2, will exist under any of the

Assigned Contracts and Leases as a result of the execution and delivery or

performance of this Agreement.

 

      2.13 LIABILITIES OF SELLERS. Attached hereto as Sche