EXHIBIR 10.10
STOCK PURCHASE AGREEMENT
This agreement (the "Agreement") is entered into as of the 4th day of
November, 1997, by and among ATC GROUP SERVICES INC., a Delaware corporation
with its principal office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Purchaser"); CONNING INSURANCE CAPITAL LIMITED PARTNERSHIP II, a Delaware
limited partnership with its principal office at City Place II, 000 Xxxxxx
Xxxxxx, Xxxxxxxx, XX 00000 ("Conning II"); CONNING INSURANCE CAPITAL
INTERNATIONAL PARTNERS II, a Cayman Island limited partnership with its
principal office at City Place II, 000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000
("Conning Intl. II"); XXXXXXXXX & XXXXXXXX VENTURE PARTNERS, LIMITED
PARTNERSHIP, a Connecticut limited partnership with its principal office at One
Century Tower, 000 Xxxxxx Xxxxxx, Xxx Xxxxx, XX 00000 ("Xxxxxxxxx"); LAWYERS
TITLE ENVIRONMENTAL INSURANCE SERVICES AGENCY, INC., a Virginia corporation with
its principal office at 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, XX ("LTEISA");and
XXXXXXX X. XXXXX, XX., a Connecticut resident residing at 00 Xxxx Xxxxx Xxxx,
Xxxx Xxxxxxxx, XX 00000 ("Perry") (Conning II, Conning Intl. II, Xxxxxxxxx, and
LTEISA are referred to collectively as the "Preferred Shareholders" and with
Perry are referred to collectively as the "Qualified Stockholders."
RECITALS
Environmental Warranty, Inc. is a Connecticut corporation with its
principal office at 000 Xxxxxxxxxx Xxxxxx, Xxxx Xxxxxxxx, XX 00000 ("EWI"). EWI
has authorized 20,000 shares of capital stock consisting of 15,000 shares, no
par value, designated as Common Stock and 5,000 shares, no par value, designated
as Preferred Stock, of which 2,668 are designated Series A Preferred Stock
("Series A"), 1334 are designated Series B Preferred Stock ("Series B") and 998
are undesignated (and unissued). The Series A and Series B are all issued and
outstanding and are held by the Preferred Shareholders in the numbers indicated
on Exhibit A attached hereto. The Preferred Shareholders have invested
$4,000,000 in EWI, and, as of June 30, 1997, had an aggregate liquidation
preference in excess of $5,300,000, taking into account accrued and unpaid
dividends.
EWI has 1,100 shares of Common Stock issued and outstanding which are
held by seven (7) individuals (the "Common Shareholders") as set forth on
Exhibit A attached hereto.
The Purchaser desires to acquire all of the issued and outstanding
shares of stock and ownership rights in any form of EWI in exchange for cash,
stock and other consideration as hereinafter provided, and Qualified
Stockholders desire to sell the EWI stock which they own, and, on or before the
Closing Date, Preferred Shareholders will seek to cause the 1100 outstanding
shares of Common Stock to be tendered (the "Tendered Common Shares") by the
holders thereof
(the "Tendering Common Shareholders"), so that at Closing Escrow Agent, on
behalf of the Preferred Shareholders and Tendering Common Shareholders, will be
able to deliver to Purchaser stock certificates, duly endorsed for transfer, in
blank or to Purchaser, representing substantially all of the issued and
outstanding capital stock of EWI. The Preferred Shareholders and the Tendering
Common Shareholders are referred to herein as the "Tendering Shareholders."
Qualified Stockholders and Pepe & Hazard LLP have entered into a
certain escrow agreement dated as of October 1, 1997, pursuant to which Pepe &
Hazard LLP, as escrow agent ("Escrow Agent"), on behalf of the Qualified
Stockholders, will (i) deliver the certificates representing the issued and
outstanding Preferred Stock of EWI to the Purchaser, (ii) deliver the
certificates representing the Tendered Common Shares to the Purchaser, and (iii)
distribute the consideration received from the Purchaser hereunder for such
capital stock (the "Escrow Agreement").
On the basis of the representations, warranties, covenants, and
agreements contained in this Agreement and subject to the terms and conditions
of this Agreement, the parties agree as follows:
I. SALE AND PURCHASE
1.01 Terms of Sale and Purchase
(a) At Closing, Qualified Stockholders shall sell and deliver to
Purchaser certificates for the shares set forth after their names in Schedule A
attached hereto, endorsed to effect the assignment to Purchaser, and shall have
Escrow Agent deliver to Purchaser certificates evidencing the Tendered Common
Shares, all endorsed for transfer; provided that tender of 1000 shares of the
Common Stock of EWI, which exclude the 100 shares of EWI Common Stock owned by
Xxxxxx X. Xxx, shall satisfy the obligation of the Qualified Stockholders with
respect to the delivery of shares of EWI. All shares of the capital stock of EWI
so tendered or delivered are referred to as the "Shares."
(1) At Closing Date, Qualified Stockholders shall provide to
Purchaser the Closing Financial Statements (as defined in ss.2.03). Any
disagreements between Purchaser and Qualified Stockholders concerning
EWI's final net tangible book value shall be resolved in accordance
with Section 2.03(c).
(b) As consideration for the Shares, the Tendered Common Shares and the
other promises, agreements, warranties, and covenants hereof, the Purchaser
shall:
(1) Transfer and pay to Escrow Agent, as agent of and for the
benefit of the Qualified Stockholders, at Closing, the sum of Eight
Hundred Twenty-Eight Thousand Dollars ($828,000.00) payable as follows:
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(a) One Hundred Fifty Thousand and 00/100 Dollars
($150,000.00) by money order, cashier's check or
wire transfer of immediately available funds
payable to Escrow Agent pursuant to Escrow
Agent's instructions, and
(b) the Purchaser's conditional, non-negotiable
promissory note evidencing Purchaser's obligation
to pay to the Escrow Agent, as agent of and for
the benefit of Qualified Stockholders, the sum of
Six Hundred Seventy-Eight Thousand and 00/100
Dollars ($678,000.00), with no interest thereon,
substantially in the form of Exhibit B (the
"Note"). The Note shall provide for the payment
of three substantially equal annual installments
of principal without interest on the three
successive anniversary dates of the Closing Date.
The Note shall be subject to the condition that
Purchaser shall have available to it the rights
of set-off against payments to be made under the
Note in accordance with the provisions of Section
1.03.
(2) Issue Thirty-Three Thousand (33,000) shares of Purchaser's
unregistered, restricted common stock (the "ATC Stock") in the names
and for the number of shares set forth in Schedule 1.01(b)(2) attached
hereto. Within thirty (30) days after Closing, Purchaser shall deliver
to the Escrow Agent the certificates for the ATC Stock, marked with
ATC's customary securities legend reflecting the fact that the shares
are unregistered and that their transfer is subject to restrictions, in
the names and for the number of shares set forth in Schedule 1.01(b)(2)
attached hereto.
(c) On behalf of the Tendering Shareholders, Xxxxxx X. Xxxxxxxx
("Xxxxxxxx") and Xxxxxxx X. Xxxxxx, Xx. ("Xxxxxx"), Escrow Agent shall be
responsible for the distribution of the cash paid under Section 1.01(b)(1)(a),
the cash payments made under the Note, and the ATC Stock transferred under
Section 1.01(b)(2), in accordance with the Escrow Agreement. The Qualified
Stockholders acknowledge that payment and delivery to the Escrow Agent of the
items set forth in Section 1.01(b) hereof satisfies the Purchaser's obligations
to the Qualified Stockholders under that section.
1.02 Indemnity Against Debts and Liabilities
(a) Subject to the limitation to the value of the Consideration
received or receivable provided for in Section 1.02(c)(2), in addition to
Purchaser's other rights and remedies available at law or in equity (and not by
way of limitation), each of the Qualified Stockholders, severally, agrees to
indemnify and hold harmless EWI, the Purchaser, and their employees and
successors against and in respect of any and all:
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(1) Claims, suits, actions, proceedings (formal or informal),
governmental investigations, judgments, deficiencies, set-offs,
damages, settlements, liabilities, and reasonable legal and other
expenses (including reasonable attorneys' fees and defense costs) as
and when incurred, arising out of, or based upon, any breach of any
representation, warranty, covenant, or agreement of such Qualified
Stockholder contained in this Agreement or under any of the Related
Agreements;
(2) Debts or liabilities of any kind and claims, liens,
set-offs, suits, actions, and proceedings (formal and informal) of
persons or entities and related judgments, deficiencies, damages,
settlements, set-offs, liens, liabilities, and legal and other expenses
(including reasonable attorneys' fees) as and when incurred arising out
of or based upon the acts, omissions, contractual performance or
conduct of the business of EWI before the Effective Time, except to the
extent expressly assumed by Purchaser and as more fully set forth on
Schedule 1.02(a) (the "Assumed Liabilities");
(a) The indemnity provided by this Section 1.02(a)(2)
shall explicitly include (but is not limited to)
the excess of (I) the sum of (X) the expense of
resolving all claims in connection with the
litigation concerning severance compensation with
EWI's former employee, Xxxxxx X. Xxx (including
claims under the $50,000 litigation bond which
has been posted by EWI) and (Y) the expense of
purchasing the EWI Common Stock held by Xxxxxx X.
Xxx (if any), over (II) the reserve therefor
listed on the Closing Balance Sheet; and
(b) Any loss, damage or cost for which the Qualified
Stockholders have agreed to indemnify Purchaser,
EWI or their employees under any provision of
this Agreement.
(b) In addition to Qualified Stockholders' other rights and remedies
available at law or in equity (and not by way of limitation), Purchaser agrees
to indemnify and hold harmless the Qualified Stockholders and their employees
and successors against and in respect of any and all:
(1) Claims, suits, actions, proceedings (formal or informal),
governmental investigations, judgments, deficiencies, set-offs,
damages, settlements, liabilities, and reasonable legal and other
expenses (including reasonable attorneys' fees and costs of defense) as
and when incurred, arising out of, or based upon, any breach of any
representation, warranty, covenant, or agreement of Purchaser contained
in this Agreement or any of the Related Agreements;
(2) Debts or liabilities of any kind and claims, liens,
set-offs, suits, actions, and proceedings (formal and informal) of
persons or entities and related judgments,
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deficiencies, damages, settlements, set-offs, liens, liabilities, and
reasonable legal and other expenses (including reasonable attorneys'
fees) as and when incurred arising out of (i) the business of EWI after
the Effective Time, except for EWI's debts or liabilities not expressly
assumed by Purchaser as Assumed Liabilities; (ii) based upon the acts,
omissions, contractual performance or conduct of the business of
Purchaser, whether before or after the Effective Time; or (iii) out of
the Assumed Liabilities;
(a) The indemnity provided by this Section 1.02(b)(2)
shall explicitly include (but is not limited to)
the sum of (X) the expense of resolving all
claims in connection with the litigation with
EWI's former employee, Xxxxxx X. Xxx (including
claims under the $50,000 litigation bond which
has been posted by EWI), including all settlement
amounts, all attorneys' fees and other defense
costs relating thereto and (Y) the expense of
purchasing the EWI Common Stock held by Xxxxxx X.
Xxx (if any), as limited in Section 1.02(c)(8)
below; and
(b) Any loss, damage or cost for which the Purchaser
has agreed to indemnify Qualified Stockholders
under any provision of this Agreement.
(c) The parties' respective indemnity obligations hereunder shall be
subject to the following terms, limitations and conditions:
(1) Purchaser and the Qualified Stockholders shall each give
the other prompt notice of any allegedly indemnified item incurred,
asserted or threatened on the basis of which an indemnitee intends to
seek indemnification from an indemnitor as provided herein; provided,
however, that the obligation of an indemnitor shall be reduced for the
failure to give notice at any particular time only to the extent that
the indemnitor has been actually prejudiced thereby. Each indemnitor
shall have the right (but not the obligation) to select and be
represented by counsel of its choice, to manage its own legal
representation or defense and to settle any claim, debt or other
indemnified matter hereunder; provided, however, that if any such
settlement would not accomplish a complete release or satisfaction of
such claim, debt or other matter, then the indemnitor shall be required
to obtain the indemnitee's prior written consent to such settlement.
(2) With the exception of claims covered by insurance to the
extent of such coverage (including the deductible), each Qualified
Stockholders' indemnity obligation hereunder shall be limited to the
value of his or its allocable share of the amount of consideration,
including the value of the ATC Stock (valued as of the date received),
cash
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and amounts payable under the Note, which Purchaser either has paid or
is obligated to pay under this Agreement to such Qualified Stockholder.
(3) The parties' respective indemnity obligations hereunder
(i) are limited to individual losses, claims, etc., having a value of
$1,000.00 or more (an "Indemnified Claim"); and (ii) only arise when
Indemnified Claims, in the aggregate, exceed $10,000.00 (the "Indemnity
Claim Threshold").
(4) The following are not subject to the Indemnified Claim
Threshold and are covered from the first dollar over any amount
reserved therefor on the Closing Balance Sheet: (i) Qualified
Stockholders' warranty that accounts receivable and recorded work in
process, net of reserves, will be collected as specified in Section
2.06(b); and (ii) Qualified Stockholders' warranty in Sections 2.06(b)
or 2.07(b) that there are no unearned xxxxxxxx or receipts in excess of
reserves for such purpose on the Closing Balance Sheet.
(5) With respect to any claim for which an indemnitor shall
indemnify any indemnitee, the indemnitor shall be subrogated to all
rights of indemnitees against any and all third parties up to the
amount paid by indemnitor to, or on behalf of, indemnitees or set-off
against an indemnitor.
(6) No party shall be liable for that portion of any claim for
which an indemnitee actually receives the cost of defense or insurance
proceeds covering such claim (the deductible pertaining to any such
insurance shall not be considered to be insurance proceeds or cost of
defense).
(7) The indemnity agreements contained in this Agreement shall
inure only to the benefit of Purchaser, EWI and Qualified Stockholders,
respectively, (and their respective successors and employees to the
extent they are indemnitees), and shall not be for the benefit of any
other person or entity. These indemnity provisions shall not be
construed to abrogate the corporate liability shield as provided by
law, to extend a right of action to any third party not otherwise
available, or to enlarge the underlying liability of any indemnitor or
indemnitee to any third party.
(8) The indemnity obligation contained in Section
1.02(b)(2)(a) is limited to the reserve therefor set forth on the
Closing Balance Sheet (the "Lux Reserve"); provided, however, that the
Purchaser is obligated to defend the Lux litigation in good faith and
to mitigate damages thereunder and agrees not to settle such litigation
for an amount exceeding the Lux Reserve without the consent of the
Qualified Stockholders, which consent will not be unreasonably
withheld.
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1.03 Right of Set-Off
(a) Without limiting such other rights as it may have at law or equity
or by agreement, the Purchaser shall have the right to set-off against, and
withhold from, any payment due to Escrow Agent as Holder under the Note: (i) any
amount necessary to cure or remedy any breach, default or deficiency of
performance or warranty by Qualified Stockholders under this Agreement; (ii) any
amount for which Purchaser or EWI (or their successors) is entitled to
indemnification under Section 1.02(a); and (iii) Purchaser's or EWI's reasonable
costs or expenses (including reasonable attorneys' fees) related to (i) or (ii).
Purchaser shall have no right to set-off against salary or commission payments
to Perry under Perry's Employment Agreement.
(b) Subject to the procedures of Section 1.03(c) below, it shall not be
necessary that a breach, default or Indemnified Claim or a threatened breach,
default or Indemnified Claim has resulted in actual damage to Purchaser, EWI or
their successors or employees for Purchaser to exercise its set-off rights
provisionally under this section, but rather Purchaser shall have the right to
withhold payment provisionally to cover the future effects of any breach,
default, or Indemnified Claim or threatened breach, default or Indemnified Claim
pending actual conclusion of the matter, provided that Purchaser shall have
produced sufficient objective evidence of facts and sufficient supporting legal
authority for a competent, experienced attorney to conclude that:
(1) Either the loss-threatening event has occurred or there is
a substantial probability that it will occur;
(2) There is a substantial probability that the occurrence or
probable occurrence will cause a loss;
(3) An action to hold the party liable for the loss could
withstand a motion to dismiss or a motion for summary judgment;
(4) There is a substantial probability that the loss,
including associated attorney fees and costs of defense, will be as
great as the amount asserted for provisional set-off;
(5) Either there is a substantial issue as to whether an
available insurance policy provides coverage for the claim, there is a
substantial potential that the insurance coverage available will not be
adequate in amount to pay the portion of the loss asserted as a set-off
or there is a deductible to be satisfied with respect to such
insurance; and
(6) If the set-off is not asserted at the present time,
insufficient funds may remain following the next payment to enable the
Purchaser to protect its interests through the exercise of its set off
rights.
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If such loss or damage does not, in fact, occur, Purchaser shall then pay the
provisionally withheld amount to Escrow Agent, on behalf of the Qualified
Stockholders.
(c) Prior to exercising its right of set-off under this Section 1.03,
Purchaser must give written notice to Qualified Stockholders of the facts which
Purchaser asserts give rise to such right and the amount Purchaser intends to
set-off (the "Set-Off Notice").
(1) If within fifteen (15) days after any Set-Off Notice
Purchaser does not receive notice from any Qualified Stockholder of his
or its intention to contest such set-off ("Set-Off Contest Notice"),
Purchaser may exercise its right of set-off under this Section 1.03
with respect to the next installment due under the Note.
(2) If within fifteen (15) days after any Set-Off Notice,
Purchaser receives a Set-Off Contest Notice from any Qualified
Stockholder, Purchaser shall submit its claim for set-off, and each
Qualified Stockholder opposing such set-off shall submit the basis for
his or its opposition to such set-off, to Mediation Consultants LLC, 0
Xxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxxx 00000, with all facts supporting
their respective positions.
(3) The parties agree to proceed with such mediation process
in good faith and without delay in accordance with the directives of
the mediator.
(a) The decision of the mediator shall be binding and
effective upon the parties and shall be
non-appealable.
(b) If the mediator decides in favor of Purchaser,
Purchaser may exercise its right of set-off under
this Section 1.03 with respect to the next
installment or successive installments due under
the Note for the amount awarded by the mediator
which may include expenses incurred in connection
with the mediation process.
(c) If the mediator decides in favor of the opposing
Qualified Stockholder(s), Purchaser may not
exercise its right of set-off under this Section
1.03 with respect to the amount claimed in the
Set-Off Notice and will pay such Qualified
Stockholders the expenses they incurred in
connection with the mediation process.
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(d) If while such mediation process is pending, an
installment payment under the Note comes due, the
Purchaser shall pay such installment payment net
of its claimed set-off. If thereafter the
mediator decides in favor of the opposing
Qualified Stockholder(s), the Purchaser shall,
within three (3) days of date on which the
mediator issues his decision, make a payment of
the difference between the amount of the
installment which was due under the Note and the
amount which was previously paid plus interest in
the amount of 10% per annum, compounded daily,
for the period during which such partial payment
was due but not paid.
(d) Subject to the provisions of this Section 1.03, the Purchaser's
right of set-off, provided for in this Section 1.03, shall not be contingent in
any way upon or subject to allocation of the amount of such set-off, severally,
among the Qualified Stockholders by Purchaser. Any such allocation shall be the
responsibility of the Qualified Stockholders and shall be handled by separate
agreement with the Escrow Agent.
II. REPRESENTATIONS AND WARRANTIES OF QUALIFIED STOCKHOLDERS
As a material inducement to Purchaser to enter into this Agreement,
Qualified Stockholders, severally, represent and warrant to the Purchaser as
follows:
2.01 Organization and Qualification
(a) EWI has no subsidiary or affiliated corporations or business
enterprises of any type. Schedule 2.01 sets forth as to EWI: its place of
incorporation, principal place(s) of business, jurisdictions in which it is
qualified to do business, and locations in which it currently maintains a place
of business. EWI is a corporation duly organized, validly existing, and in good
standing under the laws of Connecticut, with all requisite power and authority,
and all necessary consents, authorizations, approvals, orders, licenses,
certificates, and permits of and from, and declarations and filings with, all
federal, state, local, and other governmental authorities and all courts and
other tribunals, to own, lease, license, and use its properties and assets and
to carry on the business in which it is now engaged. EWI is duly qualified to
transact the business in which it is engaged and is in good standing as a
foreign corporation in every jurisdiction in which its ownership, leasing,
licensing, or use of property or assets or the conduct of the business makes
such qualification necessary.
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(b) EWI has furnished to the Purchaser its certificate of incorporation
(or other charter document) and by-laws and all amendments thereto, as presently
in effect, certified by the Secretary of the corporation. EWI is not in
violation or breach of, or in default with respect to, any term of its
certificate of incorporation (or other charter document) or by-laws. The
corporate minute book of EWI, as furnished to Purchaser, is true and complete
and accurately reflects all proceedings to date of EWI's directors and
shareholders.
2.02 Capitalization
(a) Schedule 2.02 correctly sets forth: (i) all authorized, issued and
outstanding capital stock and all ownership interests in EWI of any type,
including all options, warrants or other rights under which an ownership right
of any type may be acquired; (ii) the name and address of each owner of, or
claimant to, any such right. Except as set forth on Schedule 2.02, each of such
outstanding shares or rights is validly authorized, validly issued, fully paid,
and nonassessable, has not been issued and is not owned or held in violation of
any federal or state securities law or regulation or any preemptive right of
stockholders, and is owned of record and beneficially by the person so listed.
There is no commitment, plan, arrangement to issue, option, warrant, security,
or other right calling for the issuance of, any share of capital stock or other
ownership interest in EWI or any security or other instrument convertible into,
exercisable for, or exchangeable for capital stock of or ownership in EWI other
than as set forth in Schedule 2.02.
(b) Schedule 2.02 sets forth with respect to all stock and other
ownership interests or rights in EWI all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements, voting trusts, or other
restriction or covenant respecting any such interest, if any (collectively the
"Encumbrances"). Except as set forth on Schedule 2.02, all shares are free and
clear of all Encumbrances.
2.03 Financial Condition
(a) Qualified Stockholders have delivered to the Purchaser and attached
hereto as Schedule 2.03 true and correct copies of the unaudited balance sheet
("Interim Balance Sheet") and statements of income, retained earnings and cash
flows of EWI for the period from July 1, 1996 through June 30, 1997 ("Interim
Financial Statements"). At Closing, Qualified Stockholders shall provide final
unaudited balance sheet ("Closing Balance Sheet") and statements of income,
retained earnings and cash flows of EWI for the period beginning July 1, 1997
and ending on the Effective Time (the "Closing Financial Statements").
The financial statements referred to in this ss.2.03 have been prepared
in accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout the periods involved (except for adjustments
thereto which are known to and expressly
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approved by Purchaser in writing), are correct and complete in all respects,
and are in accordance with the books and records of EWI.
There is no fact presently known to EWI which could materially and
adversely affect the financial condition, results of operations, business,
properties, assets, liabilities, or future business prospects of the EWI except
as disclosed or recorded on Schedule 2.03, the Closing Financial Statements or
the other schedules to this Agreement; provided, however, that Qualified
Stockholders express no opinion as to political or economic matters of general
applicability (except as to market conditions of which a Qualified Stockholder
has present knowledge).
(b) As of the Effective Time, the net tangible book value, as set
forth on the Closing Financial Statements, will be correct.
(c) After Closing, Purchaser's in-house and independent accountants
shall be afforded free and full access to the non-proprietary working papers and
records used by EWI's independent accountants and in-house accountants in
preparing their unaudited last completed fiscal year, Interim and Closing
Financial Statements. If there is a difference of opinion between the
Purchaser's and EWI's accountants as to the general acceptability or consistency
of any of the accounting principles followed in connection with such review and
report or preparation of financial statements or the results indicated thereby,
the parties or their accountants shall promptly confer in an effort to resolve
such differences. If they are unable to resolve a difference, the difference
shall be resolved by the indemnity, set-off and dispute resolution provisions of
Sections 1.02 and 1.03.
2.04 Tax and Other Liabilities
(a) Except as disclosed on Schedule 2.04, EWI has no liability of any
nature, accrued or contingent, including, without limitation, liabilities for
payroll and other employee taxes, federal, state, local, or foreign taxes or
liabilities to customers or suppliers, other than liabilities which are
reflected on the Closing Balance Sheet.
(b) Without limiting the generality of the foregoing, the amounts
reserved for taxes on the Closing Balance Sheet are sufficient for all accrued
and unpaid federal, state, local, employee-related and foreign taxes of EWI,
whether or not due and payable and whether or not disputed, under tax laws in
effect on the Closing Date for the period ended on such date and for all fiscal
years prior thereto. EWI has filed all payroll and other federal, state, local,
and foreign tax returns required to be filed by it; has delivered to the
Purchaser a true and correct copy thereof; has paid all taxes, assessments, and
other governmental charges payable or remittable by it or levied upon it or its
properties, assets, income, or franchises which are due and payable; and has
delivered to the Purchaser a true and correct copy of any report as to any audit
or adjustments received by EWI (or any of EWI's officers concerning EWI) from
any taxing authority during the past five years and
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a statement as to any litigation, governmental or other proceeding (formal or
informal), or audit or investigation pending, threatened, or in prospect with
respect to any such report or the subject matter of such report.
(c) The Closing Balance Sheet contains an adequate reserve for vendor
or supplier invoices in process, including any taxes or expenses in connection
with this transaction which are to be paid or charged to EWI.
(d) EWI has engaged in no act, omission, ownership or operation of a
property or facility or contractual or professional performance prior to the
Effective Time which will render it liable in the future for personal, economic,
environmental, or natural resource damage, except as may be set forth in
Schedule 2.05.
2.05 Litigation and Claims
(a) Except as set forth on Schedule 2.05: (i) there is no litigation,
arbitration, claim, governmental or other proceeding (formal or informal), or
investigation pending or threatened (or any basis therefore known to Qualified
Stockholders) with respect to EWI or any of its business, properties, or assets;
(ii) EWI is not affected by any present or threatened strike or other labor
disturbance nor to the knowledge of Qualified Stockholders is any union
currently representing or attempting to represent any employee of EWI as
collective bargaining agent; (iii) EWI is not in violation of, or in default
with respect to, any law, rule, regulation, order, judgment, or decree,
including any insurance or environmental laws or regulations. Schedule 2.05 sets
forth with respect to EWI, among other matters, all past (previous three years)
and current citations, violations, fines, judgments, decrees, orders, consent
decrees or orders, and, to the best knowledge of each of the Qualified
Stockholders, all pending proceedings of any type arising out of the alleged
violation of any federal, state or local criminal, bidding or procurement,
environmental, health and safety, insurance, licensing or labor or other law or
regulation or out of any alleged act or omission, negligence, intentionally
wrongful act or breach of contract in the performance of services or otherwise.
(b) Except for the liabilities included on the Closing Balance Sheet,
neither EWI nor Purchaser will incur any liability, including any environmental
liability, as a result of EWI's acts, omissions, sales, underwriting, consulting
services or contractual performance prior to the Effective Time.
(c) In consideration of a payment from the cash proceeds set forth in
Section 1.01(b)(1)(a) by the Escrow Agent, on behalf of the Preferred
Shareholders, the holders of the Tendered Common Shares have given the following
release to the Preferred Shareholders in connection with the tendering of their
shares to the Escrow Agent:
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"Satisfaction. Each of the Tendering Common Shareholders hereby accepts
the cash distributed pursuant to Section 1.01, in consideration for their
shares, and in full satisfaction of and in release of all claims they may have
as shareholders of EWI against EWI, its directors, officers, and shareholders
and each of their affiliates, employees, agents, representatives, heirs,
successors and assigns."
2.06 Properties
(a) Except as set forth on Schedule 2.06 or on the list of leases set
forth on Schedule 2.07, EWI has good title to all properties and assets used in
its business or owned by it free and clear of all liens, mortgages, security
interests, pledges, charges, and encumbrances.
(b) All accounts receivable and work in process of EWI recorded on the
Closing Balance Sheet have arisen from valid transactions in the ordinary course
of EWI's business and will be collected by EWI within six (6) months after the
Closing Date, net of any reserve amount on the Closing Balance Sheet which is
excess of reserves that EWI will be required to maintain after such six (6)
month period to conform with GAAP (the "Excess Reserve"), employing reasonable
and customary collection procedures (i.e. the cost of measures such as legal
action, referral to outside collection agency or liens shall be a charge against
collections from such accounts). All accounts receivable of EWI recorded on the
Closing Balance Sheet were fully earned as of the Effective Time, there are no
existing set-offs or counterclaims available against EWI or Purchaser, and
Purchaser will have no performance obligations for which it will not be entitled
to xxxx (no account receivable entry represents a pre-billing except to the
extent an allowance is reserved for it).
(c) Schedule 2.06 sets forth a ledger of all properties and assets,
including Intangibles, owned, leased, or licensed by EWI for which a value is
recorded on the Closing Balance Sheet, detailing location, cost and net book
value with respect to all such properties current as of the Effective Time. All
such properties and assets owned by EWI are reflected on the Closing Balance
Sheet. Except as disclosed on Schedule 2.06, each physical asset having a
depreciated value on EWI's books greater than Five Hundred Dollars ($500.00)
will be in fully operational condition as of the Effective Time (except for
normal wear and tear which is not such as to affect their operability).
2.07 Contracts and Other Instruments
(a) Schedule 2.07 lists and describes all material contracts to which
EWI is a party including leases and licenses and all supply, distribution,
agency, financing or other arrangements and understandings. Qualified
Stockholders have provided to Purchaser, or at Purchaser's election made
available for its review, all of the items so listed and described, including,
but not limited to, the following: (i) true and correct copies of all
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material written contracts, agreements, and instruments; (ii) true and correct
copies of all leases and licenses; and (iii) true and correct written
descriptions of all supply, distribution, agency, financing, or other
arrangements or understandings. Any of the foregoing not disclosed on a schedule
elsewhere in this agreement are listed and described on Schedule 2.07. Neither
EWI nor any other party to any such contract, agreement, instrument, lease, or
license is now or, to the knowledge of Qualified Stockholders, expects in the
future to be in violation or breach of, or in default with respect to complying
with, any material provision thereof, and each such contract, agreement,
instrument, lease, or license is in full force and is the legal, valid, and
binding obligation of the parties thereto and is enforceable as to them in
accordance with its terms, except as is disclosed on Schedule 2.07. Neither EWI
nor any other party to any such arrangement or understanding has given notice of
termination or taken any action inconsistent with the continuance of such
arrangement or understanding; and the execution, delivery, and performance of
this Agreement will not materially violate any such arrangement or
understanding. EWI enjoys peaceful and undisturbed possession under all leases
and licenses under which it is operating. EWI is not a party to or bound by any
contract, agreement, instrument, lease, license, arrangement, or understanding,
or subject to any charter or other restriction, which has had, or to the
knowledge of EWI is likely in the future to have, a material adverse affect on
EWI's operations or business. EWI has neither engaged within the last five years
in, is engaging in, nor intends to engage in any transaction with, nor has had
within the last five years, now has, or intends to have any contract, agreement,
lease, license, arrangement, or understanding with, any stockholder, any
director, officer, or employee of EWI, any relative or affiliate of any
Stockholder or of any such director, officer, or employee, or any other
corporation or enterprise in which EWI, any such director, officer, or employee,
or any such relative or affiliate then had or now has a five percent (5%) or
greater equity or voting or other substantial interest, other than such
contracts and agreements as listed and so identified on Schedule 2.07. There
exists no contract, agreement, right or understanding material to the business
or officers of EWI which is in the name of any principal, officer, director,
stockholder or any other person or entity other than EWI except as disclosed and
so identified on Schedule 2.07. Schedule 2.07 describes EWI's membership in any
customer or user organization or trade association.
(b) Schedule 2.07(b) sets forth a description of each agreement or
understanding entered into by any Stockholder or EWI as a condition for
obtaining any consent, authorization, approval, order, license, certificate, or
permit required for the consummation of the transactions contemplated by this
Agreement.
(c) To the best of each Qualified Stockholder's knowledge, Schedule
2.07(c) sets forth a list of EWI's backlog as of the Effective Time.
(d) To the best of each Qualified Stockholder's knowledge,
14
(1) the Qualified Stockholders have no reason to believe that
business relations currently maintained with EWI's significant
customers will not be similarly maintained in all substantial respects
after the date hereof and the Effective Time; without limiting the
generality of the foregoing, no customer of EWI has notified EWI that
it intends to discontinue its relationship with EWI;
(2) EWI has all properties and rights necessary to conduct its
business and operations in all material respects in substantially the
same manner as such business has been conducted by it prior to the date
hereof;
(3) except as disclosed on Schedule 2.07, EWI is not required
by any person or governmental authority to obtain any consents,
authorizations, licenses, permits, order certificates, registrations,
qualifications or clearances for the conduct of EWI's business
(including qualifications to transact business as a foreign corporation
in various states);
(4) except as set forth on Schedule 2.07, EWI has obtained all
such consents, authorizations, licenses, permits, orders, certificates,
registrations, qualifications and clearances; the same are valid and
subsisting and, the consummation of this Agreement will not invalidate
the same;
(5) the business and operations of the Company have been, and
are being conducted in compliance with all applicable statutes,
ordinances, orders, rules and regulations of any federal, state or
local governmental authority.
2.08 Employees
(a) Set forth on Schedule 2.08 is a list of (i) all of EWI's pension,
profit-sharing, option, other incentive plans, or any other type of employee
benefit plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA")), and (ii) all obligations to, or arrangements
with, EWI's employees for wages, salary, bonuses, incentive compensation,
vacations, severance pay, insurance, or other benefits. EWI has furnished or
made available to the Purchaser true and correct copies of all documents
evidencing such plans, obligations or arrangements referred to in Schedule 2.08
(or written summaries of such plans, obligations, or arrangements to the extent
not evidenced by documents) and true and correct copies of all documents
evidencing trusts relating to any such plans. Schedule 2.08 includes a true and
correct ledger containing the name, position/title, and present rate of
compensation (whether in the form of salary, bonuses, commissions, or other
supplemental compensation now or hereafter payable) of each director, officer,
employee or sales agent of EWI. All notices and performance required under COBRA
and other ERISA plans prior to the Effective Time have been properly given and
performed. All obligations, debts and liabilities associated with EWI's
employees or agents, including all of the above-referenced matters have been
paid or
15
discharged in full by EWI prior to Effective Time or will be properly reflected
as liabilities on the Closing Balance Sheet in accordance with ss.2.03. Except
as set forth on Schedule 2.08 (i) EWI has made all payments due to date under or
with respect to each plan set forth on Schedule 2.08 and all amounts properly
accrued to date due as liabilities of EWI, under or with respect to each such
plan, for the current plan years, have been recorded on the books of EWI; (ii)
EWI has performed all material obligations required to be performed, and is not
in material default under, or in material violation of any such plan; (iii) EWI
is in compliance in all material aspects with the requirements prescribed by all
statutes, orders or governmental rules or regulations applicable to each such
plan, and each trust related to each such plan, and, neither EWI, any such plan
nor any related trust is required to take any action to avoid violation of any
of such requirements; and (v) there are no unfunded or underfunded obligations
under any such plan nor has any such plan incurred any accumulated funding
deficiencies as defined in ERISA or the Internal Revenue Code.
(b) Except as set forth on Schedule 2.05, there is no litigation,
arbitration, claim, governmental or other proceedings (formal or informal), or
investigation pending, or to Stockholder's knowledge threatened, (or any basis
for such known to Qualified Stockholders) with respect to any such employee
benefit plan, compensation arrangement or EWI's acts or omissions with respect
to its employees or its work environment.
(c) Except for the liabilities recorded on the Closing Balance Sheet,
neither EWI nor Purchaser will incur, any liability to or on behalf of EWI's
employees arising out of their employment with EWI prior to the Effective Time
or out of EWI's acts or omissions prior the Effective Time, including (but not
limited to) any liability: under ERISA or the Internal Revenue Code; for
obligations to, or arrangements with employees for wages, salary, bonuses,
incentive compensation, vacation pay, severance pay, insurance, or other
benefits, or employee taxes; for personal injury or property damage; or for
discrimination, harassment, or wrongful discharge under federal, state or local
laws.
2.09 Patents, Trademarks, Et Cetera
Except as set forth and described in Schedule 2.09, EWI neither owns
nor has pending, or is licensed under, any patent, patent application,
trademark, trademark application, trade name, service xxxx, copyright,
franchise, or other intangible property or asset (all of the foregoing being
herein called "Intangibles"), all of which are in good standing and uncontested.
Schedule 2.09 accurately sets forth with respect to Intangibles owned by EWI a
statement of cost, book value and reserve for depreciation of each item for tax
purposes, and net book value of each item for financial reporting purposes, and
with respect to Intangibles licensed by EWI from or to a third party, a
description of such license. Neither any stockholder, any director, officer, or
employee of EWI, any relative or affiliate of any stockholder or of any such
director, officer, or employee, nor any other corporation or enterprise in which
any stockholder, any such director, officer, or employee, or any such relative
or affiliate had or now has a five percent (5%) or greater
16
equity or voting or other substantial interest, possesses any Intangible which
relates to the business of EWI except as such interest is disclosed on Schedule
2.09. There is no right under any Intangible necessary to the business of EWI as
presently conducted or as it contemplates conducting, except such as are so
designated in Schedule 2.09. EWI has neither infringed, is infringing, or has
received notice of infringement of Intangibles of others. To the knowledge of
Qualified Stockholders there is no infringement by others of Intangibles of EWI.
As far as Qualified Stockholders can foresee, there is no Intangible of others
which may materially adversely affect the financial condition, results of
operations, business, properties, assets, liabilities, or future prospects of
EWI.
2.10 Questionable Payments
To the knowledge of Qualified Stockholders, neither EWI, nor any
director, officer, agent, employee, stockholder or other person associated with
or acting on behalf of EWI has, directly or indirectly: (a) used any corporate
funds for unlawful contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; (b) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; (c) violated any provision
of the Foreign Corrupt Practices Act of 1977; (d) established or maintained any
unlawful or unrecorded fund of corporate monies or other assets; (e) made any
false of fictitious entry on the books or records of EWI; (f) made any bribe,
rebate, payoff, influence payment, kickback, or other unlawful payment; (g)
given any favor or gift which is not deductible for federal income tax purposes;
or (h) made any bribe, kickback, or other payment of a similar or comparable
nature, whether lawful or not, to any person or entity, private of public,
regardless of form, whether in money, property, or services, to obtain favorable
treatment in securing business or to obtain special concessions, or to pay for
favorable treatment for business secured or for special concessions already
obtained.
2.11 Authority to Sell
The Qualified Stockholders have all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary corporate
proceedings of EWI have been or as of the Closing Date will have been duly taken
to authorize the execution, delivery, and performance of this Agreement by EWI.
This Agreement has been duly authorized, executed, and delivered by Qualified
Stockholders, constitutes the legal, valid, and binding obligation of Qualified
Stockholders, and is enforceable as to them in accordance with its terms. No
consent, authorization, approval, order, license, certificate, or permit of or
from, or declaration or filing with, any federal, state, local, or other
governmental authority or any court or other tribunal is required by Qualified
Stockholders for the execution, delivery, or
17
performance of this Agreement by them. No consent of any party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
EWI or any Qualified Stockholder is a party, or to which it or they or any of
its or their properties or assets are subject, is required for the execution,
delivery, or performance of this Agreement (except such consents as have been
obtained at or prior to the date of this Agreement, true and correct copies of
which have been delivered to the Purchaser). The execution, delivery, and
performance of this Agreement will not violate, result in a material breach of,
conflict with, or (with or without the giving of notice or the passage of time
or both) entitle any party to terminate or call a default under any term of any
such contract, agreement, instrument, lease, license, arrangement, or
understanding, or materially violate or result in a breach of any term of the
certificate of incorporation (or other charter document) or by-laws of EWI or
violate, result in a breach of, or conflict with any law, rule, regulation,
order, judgment, or decree binding on EWI or any Stockholder or to which any of
their operations, business, properties, or assets are subject. Upon the Closing,
Purchaser will have good title to the Shares, free and clear of all liens,
security interests, pledges, charges, stockholders' agreements, preemptive
rights and encumbrances except those, if any, expressly consented to by
Purchaser in writing.
2.12 Qualified Stockholders. Exchange for Investment Purposes Only
Except for Xxxxxxxx and Xxxxxx, no Stockholder who is not a Qualified
Stockholder will receive any of the ATC Stock. Each Stockholder who is acquiring
part of the ATC Stock from Purchaser is acquiring such stock for investment
purposes only and not with the view to the resale or distribution thereof. Each
Stockholder receiving ATC Stock under ss.1.01(b)(3) or any distribution to them
of such ATC Stock pursuant to the Escrow Agreement or any other agreement or
rights expressly represents and warrants that:
(a) He or it has received a copy of Purchaser's report to the United
States Securities Exchange Commission ("SEC") on Form 10-K for Purchaser's
fiscal year ended February 28, 1997;
(b) Purchaser has provided access to all information which he or it has
requested to verify or investigate the matters referred to in such Form 10-K and
all other matters related to the Purchaser, its business or the ATC Stock;
(c) He or it has had the opportunity to communicate with such officers,
employees, accountants or other representatives of Purchaser as he or it has
deemed necessary or prudent to fully inform himself or itself concerning the
Purchaser, its business, the ATC Stock and the risks associated therewith;
(d) Except as contained in this Agreement, no representations or
warranties from Purchaser have been made to any Stockholder, Qualified
Stockholder or other person in connection with the ATC Stock;
(e) He or it fully understands that the Shares have not been registered
under the Securities Act of 1933, as amended (the "Act"), or under any state
securities acts as may
18
be applicable and are being delivered to him or it pursuant to an exemption
from registration under the Act;
(f) Purchaser's reliance upon such exemption is predicated upon each
Qualified Stockholder's representations and warranties contained in this
section;
(g) He or it fully understands that due to the unregistered status of
the ATC Stock, it will be subject to a prohibition imposed by law and regulation
on transfer, pledge or hypothecation during a one-year restriction period which
will prevent liquidation of the investment during such period, and the ATC Stock
may only be sold after such one-year restriction period upon compliance with
Rule 144, as promulgated by the Securities and Exchange Commission under the
Act;
(h) He or it has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of such an
investment;
(i) He or it is either an "accredited investor" within the meaning Rule
501 of Regulation D promulgated under the Act or represents and warrants that
each of the statements contained in subsections (h) and (i) are true with
respect to him or it;
(j) He or it has such knowledge and experience in financial and
business matters that he or it is capable of evaluating the merits and risks of
an investment in Purchaser and of making an informed investment decision; and
(k) He or it has had significant prior investment experience and
recognizes the speculative nature of this unregistered investment and the
additional risks resulting from the lack of liquidity attending unregistered,
restricted stock.
2.13 Loans to be Repaid
EWI has not made any loans to stockholders, officers, directors,
employees or any other affiliated person or entity other than the loans set
forth on Schedules 2.03, 2.07 or 2.13.
2.14 Fictitious Names
EWI has not done business or registered in any jurisdiction under any
name, other than its corporate name.
2.15 Absence of Undisclosed Liabilities
Except as set forth in the Schedules to this Agreement or on the
Closing Balance Sheet, EWI has no obligations or liabilities of any kind, fixed,
accrued or contingent,
19
including but not limited to, obligations to perform after the Closing under
contracts or other commitments which would adversely affect EWI's financial
condition or business.
2.16 Books and Records
Except as described in Schedule 2.16, the books and records of EWI,
including its corporate minute book, are in all material respects complete and
correct.
2.17 Completeness of Disclosure
No representation or warranty by Qualified Stockholders in this
Agreement contains or on the date of the Closing will contain any materially
untrue statement of a material fact or omits, or on the Closing Date will omit,
to state a material fact necessary to make the statements made not misleading.
III. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As a material inducement to Qualified Stockholders to enter into this
Agreement, Purchaser hereby makes the following representations and warranties:
3.01 Organization and Good Standing
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware with full power and authority
to enter into and perform each of the transactions contemplated by this
Agreement.
3.02 Execution and Performance Authorized
The execution, delivery and performance of this Agreement and all other
documents and Related Agreements contemplated hereunder have been duly approved
by Purchaser's board of directors, at Closing will have been executed and
delivered by Purchaser's duly authorized officers, such execution and delivery
and the consummation by Purchaser of the transactions contemplated hereunder
have been duly authorized by all necessary corporate action, and no further
action is required by law, its corporate charter, bylaws or otherwise to
authorize all action to be taken by Purchaser with respect to this Agreement and
the consummation of the transactions contemplated hereunder. The Agreement and
the other documents contemplated hereunder are binding and are enforceable
against Purchaser in accordance with their terms.
3.03 Absence of Litigation
Except as set forth on Schedule 3.03, there is no action, lawsuit,
proceeding or investigation of any kind or nature pending or threatened against
Purchaser before any
20
court, tribunal or administrative agency or board which Purchaser reasonably
expects, individually or in the aggregate, to materially and adversely affect
(i) Purchaser's solvency, (ii) its ability to perform hereunder, or (iii) to
render any one or more of the transactions contemplated hereunder void or
voidable.
3.04 No Other Default
The execution and delivery of this Agreement by Purchaser and the
consummation of the transactions contemplated hereunder will not conflict with
or violate or require any consent under and will not result in any breach or
termination of Purchaser's corporate articles, by-laws or minutes or any
agreement to which Purchaser is a party or by which any of its property is
subject or by which it is bound.
3.05 Permits and Filings
There is no requirement applicable to Purchaser to make any further
filing with, or to obtain any permit, authorization, consent or approval of any
governmental or other regulatory authority as a condition of the lawful
consummation of the transactions contemplated under this Agreement.
3.06 Absence of Lien
The monies and ATC Stock to be paid or delivered by Purchaser under
Section 1.01 shall be paid by Purchaser and received by Escrow Agent free and
clear of any lien, charge or encumbrance arising out of any agreement or
instrument to which Purchaser is subject or by which their properties are bound.
3.07 Solvency
At the Closing and after payment of the purchase price as required
under Section 1.01, Purchaser will be and will remain solvent under all
applicable federal and state laws and regulations. Purchaser also agrees that it
will not intentionally cause its business to be conducted in a manner that
results in its becoming insolvent; provided, however, that consistent with the
foregoing, this covenant shall not restrict the future business decisions of
Purchaser which relate to its or to EWI's business. Purchaser acknowledges that
EWI may require working capital in the short-term in order to continue
operations.
3.08 Corporate Documents
Purchaser has furnished to Qualified Stockholders its certificate of
incorporation and a certificate of good standing in Delaware dated within thirty
(30) days of the closing.
21
3.09 Purchase for Investment Purposes Only
Purchaser is acquiring the Shares from Qualified Stockholders for
investment purposes only and not with the view to the resale or distribution
thereof. Purchaser is an "accredited investor" under the regulations promulgated
under the Act. Purchaser has not received any representations or warranties from
EWI or Qualified Stockholders other than those contained in this Agreement and
the attached schedules and/or exhibits hereto. Purchaser represents and warrants
that it has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its investment. Purchaser
understands and acknowledges that the Shares have not been registered under the
Act or under any state securities acts as may be applicable and are being sold
to Purchaser pursuant to exemptions from registration under the Act and any
pertinent state securities acts. Qualified Stockholders' reliance upon such
exemption is predicated upon Purchaser's representations and warranties
contained herein. In this regard, Purchaser understands and agrees that there
may be affixed to the certificates representing the Shares a legend advising of
the unregistered, restricted nature of the Shares.
IV. COVENANTS
4.01 Insurance
Purchaser shall cause EWI to continue to carry insurance against risks
similar to that provided in EWI's insurance coverage as of the date of Closing
and with coverage limits not less than $2,000,000 and a deductible not greater
than $100,000.
4.02 Release by Qualified Stockholders
Each Qualified Stockholder agrees to release and waive all claims he or
it now has against EWI or the Shares for any past compensation, bonus,
distribution, dividend or other consideration or claim for payment from any
cause that may have otherwise been due such Qualified Stockholder at the time of
Closing, except to the extent such obligations are reaffirmed in this Agreement
or any Related Agreement.
4.03 Collection of Accounts Receivable
(a) Any EWI account receivable or work in process for which revenue is
recorded on the Closing Balance Sheet and warranted as collectible under Section
2.06(b), which has not been collected by Purchaser within six (6) months, shall
be deemed to be uncollected and uncollectible by Purchaser except as Purchaser
shall otherwise agree in writing. Accounts or work in process may also be deemed
uncollectible by agreement of the parties as provided in Section 5.03(b). All
uncollected accounts and work in process, net of reserves therefor, shall be
remedied by set-off under Section 1.03 (or if set-off is not available, then by
indemnification and repayment). Set-off shall be available to the
22
Purchaser for uncollected accounts or work in process at the earlier of: (i) six
(6) months after the Closing Date or (ii) such earlier time as the account is
agreed to be uncollectible by the Escrow Agent under this section. Upon such
remedy, the account shall be assigned to the Escrow Agent.
(b) Purchaser shall provide the Escrow Agent with a monthly aging
report of the purchased accounts receivable and work in process together with
contact log summary of problem accounts. If at any time Purchaser determines
that measures in addition to Purchaser's customary collection procedures (e.g.,
measures such as mechanics lien, legal action or referral to collection agency)
should be employed on a specific account to obtain collection, Purchaser shall
notify the Escrow Agent in writing of the measures proposed to be taken. If the
Escrow Agent agrees in writing that the proposed extraordinary measures should
be taken or if the Escrow Agent itself deems such action to be necessary without
notice from Purchaser, the Escrow Agent shall notify Purchaser in writing of its
agreement to such measures. The Escrow Agent's agreement to the employment of
extraordinary collection measures shall constitute its agreement to having the
cost of such measures first charged against the Excess Reserve for uncollectible
accounts and the remainder, if any, remedied by set-off or refund if set-off is
not available.
(c) At any time the parties may by mutual written agreement deem an
account uncollectible, Purchaser shall assign it to the Escrow Agent and charge
it off of the Excess Reserve and set off the remainder, if any, under Section
1.03 or make a claim for refund under Section 1.02. Upon written notice to
Purchaser, the Escrow Agent may request to have any account receivable which is
uncollected assigned to the Escrow Agent. Purchaser shall not unreasonably deny
such request. Such request by the Escrow Agent for assignment shall constitute
Qualified Stockholders' agreement to a charge against the Excess Reserve for
uncollectible accounts by such amount or, to the extent that the remaining
Excess Reserve balance is thereby exceeded, to a set-off or indemnity claim in
such excess amount, which Purchaser may exercise immediately.
4.04 Public Statements
Before the Escrow Agent or Qualified Stockholders or any of them shall
release any information concerning this Agreement or the transactions
contemplated by this Agreement which is intended for or may result in public
dissemination thereof, they shall cooperate with the Purchaser, shall furnish
drafts of all documents or proposed oral statements to the Purchaser for
comments, and shall not release any such statement or information without the
written consent of the Purchaser. Nothing contained herein shall prevent the
Escrow Agent or Qualified Stockholders from furnishing any information to any
governmental authority if required to do so by law.
23
4.05 Books, Records, Access to Information
(a) Each party shall provide to the other, with reasonable promptness
following a request in writing (not to exceed ten (10) business days), such
information and data with respect to EWI's business before the Effective Time
and this transaction as may from time to time be requested by the other party.
In the event either Purchaser or any Qualified Stockholder is required to
prepare audited statements or to produce or compile information for a government
agency which requires access to information or for any other reasonable purpose,
including the verification of any information provided to the other party
relative to this agreement, the parties agree to allow the other party
reasonable access to records, including the non-proprietary working papers of
the other party's accountants, and to provide reasonable cooperative assistance
in the preparation of reports, documents, etc. without charge except for
reimbursement of any actual, out-of-pocket expenses, exclusive of the cost of
in-house staff time. Notwithstanding the foregoing, in the event that a party is
or anticipates becoming a party to litigation, this Section 5.06 or any other
provision of this Agreement shall not be construed to require such party to
provide information to the other which could prevent such party from making a
bona fide claim of attorney/client privilege or such other privileges as may be
applicable with respect to such information.
(b) Neither party shall intentionally dispose of or destroy any of the
records of EWI in its possession except in conformity with the procedures set
forth in this section. If a party wishes to dispose of or destroy any of such
records, it shall first give thirty (30) days prior written notice to the other
party of the action it intends to take, and the other party shall have the
right, at its option and expense, upon prior written notice to the notifying
party within such 30-day period, to take possession of such affected records
within 30 days after the date of the notice of intent to take possession.
(c) Each party shall exercise reasonable care in the care, custody and
maintenance of the records of EWI in its possession. A party shall be
responsible for actual damage caused to the other party only as a result of its
negligence or intentionally wrongful act in maintaining the records. Neither
party shall have liability to the other party or any other person as a
consequence of the non-existence of any record or such party's inability to
locate any record unless the loss or destruction of the record is proven, by
clear and convincing affirmative evidence, to have been due to the allegedly
possessing party's negligence or intentionally wrongful act.
4.06 Transaction Costs and Expenses
The Purchaser on the one hand and Qualified Stockholders and/or EWI on
the other hand shall each pay their own respective costs incurred in connection
with this transaction including, without limitation, all legal, accounting,
auditing and appraisal fees in negotiating and preparing this Agreement and in
consummating, closing and carrying out
24
the transactions contemplated hereby. Any costs to be charged to EWI shall be
included on the Closing Balance Sheet.
4.07 Conduct of Business After Closing
Until such time as Purchaser has had the opportunity in accordance with
EWI's certificate of incorporation and by-laws to duly call and hold a general
or special meeting of the stockholders of EWI for the purpose of electing a new
board of directors, Perry agrees, as sole director and President of EWI, that,
without the written consent of Purchaser, he will:
(a) Take no action in respect of its business, assets or management
other than continuing to conduct business in the ordinary course;
(b) Issue no shares or other securities or make any distribution or
other like payment to any person or entity;
(c) Borrow any money;
(d) Sell any assets.
4.08 Delivery of Property
Purchaser and Qualified Stockholders shall each use their best efforts
to avoid opening mail or deliveries which rightfully belongs to the other and
shall turn over to the other any property received by the party, including
checks or money, belonging to the other within twenty-four hours after
determining its rightful ownership.
4.09 Related Agreements
Qualified Stockholders and Purchaser each agree to execute and deliver
at Closing the Related Agreements referenced in Section 7.01 which require
execution by them in accordance with their terms.
4.10 Continuing Cooperation, Reporting of Changes, Breaches and Status
The parties agree to cooperate in good faith following Closing to
secure to each other the benefits and performance to be provided by this
Agreement and to promptly execute such documents or instruments as shall be
reasonably requested by another party, without charge, to that end. At any time
or times on or after the Closing, Qualified Stockholders and Purchaser shall
execute, acknowledge, and deliver any and all further assurances, documents, and
instruments reasonably requested by the other in order to effectively convey the
Shares, the ATC Stock and all ownership thereof free and clear of
25
encumbrances or title defects except as expressly authorized herein and shall
take any other action consistent with the terms of this Agreement that may
reasonably be requested by the other party in order to effectuate the purposes
and intent hereof. The parties shall each promptly advise the other in writing
of (i) the occurrence of any event which renders any of the representations or
warranties set forth herein inaccurate in any material respect, and (ii) the
failure of the party to comply with or accomplish any of the covenants or
agreements set forth herein in any material respect.
4.11 Tax Returns
In consideration for its ability to utilize EWI's net operating losses
(subject to any limits thereon), Purchaser agrees to prepare and file all
required federal, state and local tax returns required for the period which
ended June 30, 1997.
4.12 ATC Acquisition Proposal
The parties acknowledge that Purchaser has received an offer for the
acquisition of any and all outstanding shares of the Purchaser's stock from a
group led by senior members of Purchaser's management and WPG Corporate
Development Associates V, L.P., a financial investor group, (collectively, the
"Offerors") pursuant to the terms and conditions of a proposed merger agreement
(the "Merger Agreement") in the form attached to the letter dated October 17,
1997 from Xxxxx, Xxxx & Xxxxx, L.L.C. to the Purchaser (as the same may be
negotiated and entered into by the Purchaser) (the "Acquisition Proposal"). If
(i) the tender offer contemplated in the Acquisition Proposal is consummated and
(ii) the persons listed on Schedule 1.01(b)(2) (the "ATC Stockholders") have not
been issued the ATC Stock, as provided for in this Agreement, prior to the
record date (the "Record Date") established for the merger contemplated in the
Acquisition Proposal, in lieu of issuing such shares of ATC Stock following the
Record Date, the Purchaser shall pay to each of the ATC Stockholders cash in an
amount per share equal to the amount paid per share to holders of Purchaser's
stock in connection with the consummation of the Acquisition Proposal. Such
price shall be paid to the Escrow Agent on the same schedule as payment is made
to the other holders of Purchaser's stock whose shares are being canceled in
connection with the merger contemplated in the Acquisition Proposal.
V. CONDITIONS PRECEDENT TO QUALIFIED STOCKHOLDERS' OBLIGATION TO CLOSE
The obligation of Qualified Stockholders to close and to perform the
covenants and actions required of them on the Closing Date shall be subject to
the satisfaction or waiver, on or prior to the Closing Date, of the following
conditions precedent:
26
5.01 Truth of Representations and Warranties
Purchaser's representations and warranties contained in this Agreement
shall be true in all material respects at and as of the Closing Date.
5.02 Performance
Purchaser shall have performed and complied in all material respects
with its obligations under this Agreement which are to be performed or complied
with by it prior to or on the Closing Date.
5.03 Documents
Purchaser shall provide to Escrow Agent all of the documents and shall
perform such acts as are prescribed in Section 7.03. Purchaser shall have
delivered to the Escrow Agent at or prior to the Closing such other documents
(including certificates of officers of Purchaser) as the Escrow Agent, the
Qualified Stockholders or their counsel may reasonably request in order to
enable the Qualified Stockholders to determine whether the conditions to their
obligations under this Agreement have been met and otherwise to carry out the
provisions of this Agreement.
5.04 Authorization
Any consent, approval, authorization, order or filing with any court or
governmental agency or administrative body required for the consummation of the
transactions contemplated by this Agreement shall have been obtained or made and
shall be in effect on the Closing Date.
5.05 Absence of Suit
No action, suit or proceeding before any court or any governmental or
regulatory authority shall have been commenced or threatened against Purchaser
or any of Purchaser's officers or directors, and no investigation by any
governmental or regulatory authority shall have been commenced, against
Purchaser or any affiliate, seeking to restrain, prevent or change the
transactions contemplated hereby or challenging the validity or legality of any
such transactions, or seeking damages in connection with any of such
transactions.
5.06 Payment of Purchase Price
Purchaser shall have tendered the cash and other consideration required
to be paid or delivered at closing under Section l.0l(b).
27
5.07 Documents
Qualified Stockholders shall have received all of the documents
required to be delivered to them pursuant to Section 7.03 and elsewhere in this
Agreement. Purchaser shall have delivered to the Qualified Stockholders at or
prior to the Closing such other documents (including certificates of officers of
Purchaser) as the Escrow Agent, the Qualified Stockholders or their counsel may
reasonably request in order to enable the Qualified Stockholders to determine
whether the conditions to their obligations under this Agreement have been met
and otherwise to carry out the provisions of this Agreement.
5.08 Opinion of Counsel
Purchaser shall have delivered to the Qualified Stockholders before
Closing the opinion of counsel to Purchaser, satisfactory to counsel for the
Qualified Stockholders.
5.09 Receipt of Approvals, Etc.
All material approvals, consents and/or waivers that are necessary to
effect the transactions contemplated hereby shall have been received.
5.10 Review of Proceedings
All actions, proceedings, instruments, and documents required to carry
out this Agreement or incidental thereto and all other related legal matters
shall be subject to the reasonable approval of the counsel to Qualified
Stockholders, and Purchaser shall have furnished such counsel such documents as
such counsel may have reasonably requested for the purpose of enabling him to
pass upon such matters.
5.11 Approval by Lenders
Unless exempted pursuant to Schedule 5.11, prior to Closing, Purchaser
shall have obtained written consent from its banks and the holders of its senior
secured notes for Purchaser to execute this Agreement and the Note.
5.12 No Governmental Action
There shall not have been any action taken, or any law, rule,
regulation, order, or decree proposed, promulgated, enacted, entered, enforced,
or deemed applicable to the transactions contemplated by this Agreement by any
federal, state, local, or other governmental authority or by any court or other
tribunal, including the entry of a preliminary or permanent injunction, which,
in the reasonable judgment of the Qualified Stockholders, (a) makes any of the
transactions contemplated by this Agreement illegal, (b) results in a delay in
the ability of the Qualified Stockholders to consummate any of the
28
transactions contemplated by this Agreement, (c) imposes material limitations on
the ability of Qualified Stockholders effectively to exercise their rights
hereunder or (d) otherwise prohibits, materially restricts, or delays
consummation of any of the transactions contemplated by this Agreement or
impairs the contemplated benefits to Qualified Stockholders of the transactions
contemplated by this Agreement.
VI. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
The obligation of the Purchaser to close and to perform the covenants
and actions required of it on the Closing Date are subject to the satisfaction
or waiver, on or prior to the Closing Date, of the following conditions
precedent:
6.01 Truth of Representations and Warranties
Qualified Stockholders' representations and warranties contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing Date as though such representations and warranties were made at and
as of the Closing Date.
6.02 Performance
As of the Closing, Qualified Stockholders and EWI shall have performed
and complied with all covenants and agreements and satisfied all conditions
required to be performed and complied with by any of them at or before the
Closing Date by this Agreement or any of the Related Agreements.
6.03 Absence of Suit
No action, suit or proceeding before any court or any governmental or
regulatory authority shall have been commenced or threatened against the
Qualified Stockholders, EWI, or any affiliate, associate, officer or director of
any of them, and no investigation by any governmental or regulatory authority
shall have been commenced, against Qualified Stockholders, EWI or any affiliate,
associate, officer or director of any of them, seeking to restrain, prevent or
change the transactions contemplated hereby, or challenging the validity or
legality of any such transactions, or seeking damages in connection with any of
such transactions.
6.04 Receipt of Approvals, Etc.
All material approvals, consents and/or waivers that are necessary to
effect the transactions contemplated hereby shall have been delivered to
Purchaser by Qualified Stockholders.
29
6.05 Authorization
Any consent, approval, authorization, order or filing with any court or
governmental agency or administrative body required for the consummation of the
transactions contemplated by this Agreement shall have been obtained or made by
the Qualified Stockholders or EWI, as appropriate, and shall be in effect on the
Closing Date.
6.06 Documents
Purchaser shall have received all of the documents required to be
delivered to it pursuant to Section 7.02 and elsewhere in this Agreement.
Qualified Stockholders shall have delivered to the Purchaser at or prior to the
Closing such other documents (including certificates of officers of Qualified
Stockholders or EWI) as the Purchaser may reasonably request in order to enable
the Purchaser to determine whether the conditions to their obligations under
this Agreement have been met and otherwise to carry out the provisions of this
Agreement.
6.07 Completion of Due Diligence Investigation
Purchaser shall have completed its investigation of EWI prior to the
Closing Date with Purchaser's accountants, attorneys and officers having been
afforded free access to perform due diligence investigations of the books,
records and operations of EWI and interviews with EWI's sales and project
management employees.
6.08 Opinion of Counsel
Qualified Stockholders shall have delivered to the Purchaser before
Closing the opinion of counsel to Qualified Stockholders, satisfactory to
counsel for the Purchaser.
6.09 Review of Proceedings
All actions, proceedings, instruments, and documents required to carry
out this Agreement or incidental thereto and all other related legal matters
shall be subject to the reasonable approval of the counsel to the Purchaser, and
Qualified Stockholders shall have furnished such counsel such documents as such
counsel may have reasonably requested for the purpose of enabling him to pass
upon such matters.
6.10 No Governmental Action
There shall not have been any action taken, or any law, rule,
regulation, order, or decree proposed, promulgated, enacted, entered, enforced,
or deemed applicable to the transactions contemplated by this Agreement by any
federal, state, local, or other governmental authority or by any court or other
tribunal including the entry of a
30
preliminary or permanent injunction, which, in the reasonable judgment of the
Purchaser, (a) makes any of the transactions contemplated by this Agreement
illegal, (b) results in a delay in the ability of the Purchaser to consummate
any of the transactions contemplated by this Agreement, (c) requires the
divestiture by the Purchaser of any of the Shares or of the assets or of a
material portion of the business of EWI or Purchaser, (d) imposes material
limitations on the ability of the Purchaser effectively to exercise full rights
of ownership of the Shares or (e) otherwise prohibits, restricts, or delays
consummation of any of the transactions contemplated by this Agreement or
impairs the contemplated benefits to the Purchaser of the transactions
contemplated by this Agreement.
6.11 Restricted Business
The percentages of EWI's gross revenues attributable to professional
services which EWI would be precluded from performing after Closing by law,
regulation or order shall not exceed such as Purchaser shall reasonably
determine will materially negatively affect the future viability and
profitability of EWI's business following Closing.
6.12 Personnel
EWI shall have secured on terms acceptable to Purchaser, including in
appropriate cases the securing of written employment agreements, the continuing
employment of the key employees of EWI listed on Schedule 6.12 attached hereto.
6.13 Execution of Related Agreements
Qualified Stockholders shall have executed and delivered to Purchaser
the Related Agreements referenced in Section 7.01 which by their terms require
such execution.
6.14 Repayment of Loans
Principal and interest on the loans identified in Schedule 2.13 owed to
EWI shall have been repaid at or prior to the Closing in full or the Purchaser,
in its sole discretion, shall have consented to arrangements for the repayment
thereof.
VII. CLOSING
7.01 Closing, Closing Date and Effective Time
The closing of the transactions contemplated hereunder (the "Closing")
shall take place at the office of Pepe & Hazard LLP at a.m. on November_, 1997
(the "Closing Date"). The effective time for the consummation of the
transactions contemplated in this Agreement to occur "at Closing" or "on the
Closing Date" shall be 12:00 a.m. EST on the Closing Date (the "Effective
Time").
31
7.02 Qualified Stockholders' Obligations at Closing
At or prior to the Closing, Qualified Stockholders shall deliver or
cause to be delivered to Purchaser, in form satisfactory to Purchaser, the
following:
(a) Stock certificates for all of the Shares duly assigned to
Purchaser.
(b) A release and satisfaction (or agreement to provide the same) of
each security interest, lien or encumbrance against any of the Shares except
those to which Purchaser has expressly consented in writing.
(c) A certificate of good standing for EWI issued within thirty (30)
days prior to the Closing Date by the Secretary of State of Connecticut.
(d) A certificate or certificates, executed by a duly authorized
officer of each Qualified Stockholder certifying that all representations and
warranties of Qualified Stockholders contained in this Agreement are true and
correct in all material respects in accordance with their terms at and as if
made as of the Closing Date, provided that such certificates will not be
required if this Agreement is executed by the Qualified Stockholders on the
Closing Date.
(e) A certificate as to the incumbency of officers and genuineness of
signatures covering all officers of EWI, the Escrow Agent or any Qualified
Stockholder executing any document delivered by any of them at the Closing.
(f) Resignations of all members of EWI's Board of Directors other than
Perry.
(g) Satisfactory evidence of the termination of all outstanding options
or rights to purchase the capital stock of EWI.
(h) All other schedules, certificates and other documents required by
this Agreement to be delivered by Qualified Stockholders on or before Closing.
7.03 Purchaser's Obligations at Closing
At or prior to the Closing, Purchaser shall deliver or cause to be
delivered to the Escrow Agent, in form satisfactory to Qualified Stockholders,
the following:
(a) The cash payable at Closing pursuant to Section 1.01(b)(1).
(b) The Note deliverable at Closing pursuant to Section 1.01(b)(2).
(c) An employment agreement by and between EWI and Perry.
32
(d) Its certificate, executed by an authorized officer, certifying that
all representations and warranties of Purchaser contained in this Agreement are
true and correct in all material respects in accordance with their terms at and
as if made as of the Closing Date, provided that such certificates will not be
required if this Agreement is executed by the Purchaser on the Closing Date.
(e) A certificate of good standing for Purchaser from the Secretary of
State of Delaware as of a date not more than thirty (30) days prior to the
Closing Date.
(f) A true copy of the minutes of the meeting of the Board of Directors
of Purchaser authorizing its execution, delivery and performance of this
Agreement, the Note and the ATC Stock.
(g) A certificate as to the incumbency of officers and genuineness of
signatures of all of the officers of Purchaser executing any document delivered
by Purchaser at the Closing.
(h) An instrument, effective at Closing, appointing a new agent for the
service of process in Connecticut for EWI who shall be designated in advance by
Purchaser.
(i) An instrument pursuant to which Purchaser assumes LTEISA's
obligations as Guarantor of certain performance bonds issued to EWI as set forth
on Schedule 7.03(i).
(j) Written consent from its banks and the holders of its senior
secured notes of its execution of this Agreement and of the Note.
(k) An Opinion of Purchaser's counsel substantially as to the matters
set forth in Schedule 7.03(k).
(1) All other schedules, certificates and other documents required by
this Agreement to be delivered by Purchaser on or before Closing.
VIII. MISCELLANEOUS
8.01 Brokerage Fees
Neither the Purchaser, EWI or any Qualified Stockholder has consented
to or authorized any broker or agent to act on its behalf, directly or
indirectly, as a broker or finder in connection with the transaction
contemplated by this Agreement. In the event any claim is made for a broker's or
finder's fee in connection with the transactions contemplated hereunder, the
party responsible for retaining or securing said broker or finder shall be
solely responsible for the payment of any broker's or finder's fees incurred
33
as a result thereof. Further, the responsible individuals shall indemnify the
other parties against any loss or liabilities by reason of such broker's or
finder's fees.
8.02 Further Actions
At any time and from time to time, each party agrees, at its or his
expense, to take such actions and to execute and deliver such documents as may
be reasonably necessary to effectuate the purposes of this Agreement.
8.03 Availability of Equitable Remedies
Since a breach of the provisions of this Agreement could not adequately
be compensated by money damages, either Purchaser or Qualified Stockholders
acting jointly shall be entitled, in addition to any other right or remedy
available to it, to a preliminary injunction and an injunction restraining such
breach or a threatened breach and to specific performance of any such provision
of this Agreement, and the parties hereby consent to the issuance of such an
injunction and to the ordering of specific performance without the requirement
of bond.
8.04 Survival
Except as otherwise provided herein, the covenants, agreements,
representations, and warranties contained in or made pursuant to this Agreement
shall survive the Closing and any delivery of the purchase price by the
Purchaser irrespective of any investigation made by or on behalf of any party
and shall continue until the later of (i) the Maturity Date specified in the
Note and (ii) the last date on which any necessary action is taken by a party in
connection with the resolution of a controversy under Section 1.03 pursuant to a
decision of the mediator.
8.05 Modification
The Agreement and the exhibits, schedules and Related Agreements hereto
set forth the entire understanding of the parties with respect to the subject
matter hereof, supersede all existing agreements among them concerning such
subject matter, and may be modified only by a written instrument duly executed
by each party.
8.06 Notices
All notices, elections, reports or other correspondence required or
permitted hereunder shall be in writing and deemed to have been properly given
or delivered when mailed by certified mail, postage prepaid, delivered by
overnight express courier, delivery fees prepaid, or transmitted by fax with
receipt confirmed, to the party to whom directed
34
at the below specified addresses or at such other address for which any party
shall give the other parties written notice:
If to EWI (prior to Closing):
Xx. Xxxxxxx X. Xxxxx, President
Environmental Warranty, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxxxxxx, XX 00000
Fax (000) 000-0000
If to Purchaser:
Xx. Xxxxxxxx X. Xxxxxx, Senior Vice President
ATC Group Services Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax (000) 000-0000
with a copy to:
Xxxxxxxxx X. Xxxxx, Esq.
Xxxxxx & Samor
0000 Xxxx Xxxx
X.X. Xxx 000
Xxxxxxxxx, XX 00000
If to Perry:
Xx. Xxxxxxx X. Xxxxx
00 Xxxx Xxxx Xxxx
Xxxx Xxxxxxxx, XX 00000
If to Preferred Shareholders:
Pepe & Hazard LLP
Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn.: Xxxxxxx X. Xxxxxx, Esq.
Any such notice shall be deemed given three days after deposit with the mail,
one day following delivery thereof to an overnight express courier or upon
receipt when sent by
35
confirmed fax. The address of a party may be changed in accordance with the
notice provisions of this section.
8.07 Waiver
Any waiver by any party of a breach of any provision of this Agreement
shall not operate as or be construed to be a waiver of any other breach of that
provision or of any breach of any other provision of this Agreement. The failure
of a party to insist upon strict adherence to any term of this Agreement on one
or more occasions will not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. Any waiver must be in writing.
8.08 Binding Effect
The provisions of this Agreement shall be binding upon and inure to the
benefit of the Purchaser, and its respective successors and assigns, and
Qualified Stockholders and their assigns, heirs, and personal representatives,
and shall inure to the benefit of the indemnitees and their respective
successors, assigns, heirs, and personal representatives.
8.09 No Third-Party Beneficiaries
This Agreement does not create, and shall not be construed as creating,
any rights enforceable by any person not a party to this Agreement (except as
provided in Section 8.08).
8.10 Severability; Reformation
If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
8.11 Headings
The headings of this Agreement are solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.
8.12 Governing Law
To the extent permitted by law, this Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut, without
giving effect to conflict of laws. To the maximum extent permitted by law, any
action or proceeding initiated by Purchaser, any Stockholder, the Escrow Agent,
any indemnitee or any other party claiming rights
36
under this agreement shall be brought in an appropriate state or federal court
in Hartford County, Connecticut, and any person claiming rights under this
agreement consents to the jurisdiction and proper venue of such forum.
8.13 Separate Counterparts
This Agreement is being executed in several identical counterparts,
each one of which shall be considered an original and all of which when taken
together shall constitute but one instrument.
8.14 Incorporation of Recital, Exhibits and Schedules
All exhibits, schedules and Related Agreements attached hereto are
incorporated herein by this reference and expressly made a part of this
Agreement.
8.15 Several Obligations
The representations, warranties, covenants, and agreements of EWI and
Qualified Stockholders in this Agreement are several.
8.16 Mediation
In the event there shall arise any dispute or claim in law or equity
arising out of this Agreement or any breach thereof or any resulting transaction
between the parties under this Agreement, the parties specifically agree that
such dispute shall be submitted to mediation pursuant to the provisions provided
in Section 1.03. Judgment of any award rendered by the mediator may be entered
in any court having jurisdiction thereof.
8.17 Opportunity to Cure
All parties to this agreement shall be afforded a period of ten (10)
days following notice thereof to cure any alleged breach of this agreement.
[The remainder of this page has been left blank intentionally.]
37
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38
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date of this day of , 1997.
ATC GROUP SERVICES INC.
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------
Xxxxxxxx X. Xxxxxx
Senior Vice President
CONNING INSURANCE CAPITAL
LIMITED PARTNERSHIP II
By: Conning & Company,
General Partner
/s/ Xxxx Xxxxxxx
-----------------------------
By: Xxxx Xxxxxxx
Senior Vice President
CONNING INSURANCE CAPITAL
INTERNATIONAL PARTNERS II
By: Conning & Company,
General Partner
/s/ Xxxx Xxxxxxx
-----------------------------
By: Xxxx Xxxxxxx
Senior Vice President
XXXXXXXXX & XXXXXXXX VENTURE
PARTNERS,LIMITED PARTNERSHIP
By: Xxxxx Point Partners,
General Partner
/s/ X. Xxxxxxxx
-----------------------------
By: a General Partner
LAWYERS TITLE ENVIRONMENTAL
INSURANCE SERVICES AGENCY,
INC.
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
By: Xxxxxxx X. Xxxxxxx
President
/s/ Xxxxxxx X. Xxxxx
-----------------------------
XXXXXXX X. XXXXX
The undersigned are executing this agreement with respect to the representations
found in Section 2.12 only:
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxx, Xx.
-----------------------------
Xxxxxxx X. Xxxxxx, Xx.
39
