EXHIBIT 10.8
AGREEMENT
FOR SALE AND PURCHASE
OF BUSINESS ASSETS
This AGREEMENT (the "Agreement"), dated the 18th day of
August, 1997, is entered into 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"); XXXXX TECHNOLOGY CORPORATION, a Delaware
corporation with its principal office at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx
Xxxxx, XX 00000 ("Xxxxx"); BCM ENGINEERS INC., a Delaware corporation with its
principal office at One Plymouth Meeting, Plymouth Meeting, PA 19462 ("BCMD");
BCM ENGINEERS INC., a Pennsylvania corporation with its principal office at One
Plymouth Meeting, Plymouth Meeting, PA 19462 ("BCMP"); BCM ENGINEERS INC., an
Alabama corporation with its principal office at 00 Xxxxx Xxxxx Xxxxxx, Xxxxx
000, Xxxxxx, XX 00000 ("BCMA"); and BCM ENGINEERS INC., a West Virginia
corporation with its principal office at One Plymouth Meeting, Plymouth Meeting,
PA 19462 ("BCMWV") (Xxxxx, BCMD, BCMP, BCMA, and BCMWV are collectively referred
to as the "Sellers").
The Purchaser desires to purchase certain
business assets of Sellers in exchange for cash and other consideration as
hereinafter provided, and Sellers desire to effect such asset purchase through
sale in accordance with the covenants and terms of this Agreement.
I. SALE AND PURCHASE OF ASSETS
1.01 Basic Terms of Sale and Purchase of Assets
On the basis of the representations, warranties, covenants and
agreements in this Agreement and subject to the terms and conditions of this
Agreement:
(a) At Closing, Sellers agree to sell, convey, assign, deliver
and transfer to Purchaser, and Purchaser agrees to acquire, accept and purchase
from Sellers, all of the properties and assets of Sellers, tangible and
intangible, personal, real and mixed, known or unknown, vested or contingent,
which constitute Sellers' Engineering Division (the "Engineering Division"),
which includes all of the assets of Sellers based in or out of Sellers'
Burlington, New Jersey, Dallas, Texas, Fairhope, Alabama, Fort Xxxxxx, Florida,
Gulfport, Mississippi, Jackson, Mississippi, Meridian, Mississippi, Mobile,
Alabama, Modesto, California, Norristown, Pennsylvania, Panama City, Florida,
Pascagoula, Mississippi, Pittsburgh, Pennsylvania, Pleasanton, California,
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Pocono Summit, Pennsylvania, Sandia Laboratories, New Mexico, and Washington,
D.C., offices and Sellers' assets used primarily by or associated primarily with
the Engineering Division at Sellers' Plymouth Meeting, Pennsylvania, Livonia,
Michigan, and Mt. Prospect, Illinois offices. The Engineering Division consists
of the operations of Sellers engaged in the functions of (i) testing, (ii)
consulting, (iii) engineering, (iv) design, (v) project management and (vi)
training. For purposes of defining what assets are to be conveyed as assets of
the Engineering Division under this 1.01(a), the Engineering Division does not
include the operations and assets, regardless of function or service fields, of
Sellers' Denver, Colorado and Porter, Indiana offices. The assets to be sold and
purchased under this Agreement are all of the Engineering Division assets of all
of the Sellers (the Engineering Division assets to be purchased by Purchaser
from Sellers, whether or not itemized below, are collectively referred to as the
"Purchased Assets"). The Purchased Assets do not include those assets of Sellers
excluded by 1.01(d). The Purchased Assets include, but are not necessarily
limited to:
(1) All of the Engineering Division's supply inventory,
including but not limited to field supplies, laboratory supplies,
office supplies, processing supplies, labeling supplies, packing and
shipping materials and selling and promotional materials.
(2) All of Seller's right, title and interest in the
telephone and fax numbers set forth on Schedule 1.01(a)(2). Purchaser
shall have the exclusive right to apply for changes in such numbers or
in their location.
(3) All of the Engineering Division's fixed assets,
including all furniture, fixtures, vehicles, office, field and
production equipment, including computer equipment, and inventory
(Schedule 1.01(a)(3) sets forth a substantially complete list of all
fixed assets of the Engineering Division).
(4) All of Sellers' interest in real property leases which
are assumed as Assumed Liabilities (as defined in 1.02) ("Assumed
Premises Leases") and all rights to pre-payments, deposits and
leasehold improvements pertaining to the Assumed Premises Leases. The
Assumed Premises Leases are listed on Scheduled 1.02. Sellers' real
property leases other than Assumed Premises Leases are referred to as
"Non-Assumed Premises Leases."
(5) All right, title and interest in and to all of the
Engineering Division's customer contracts and agreements, whether
written or oral ("Customer Contracts") and customer business
arrangements and relationships. At Closing, Sellers shall deliver all
of the Customer Contracts by surrendering
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possession of them to Purchaser at closing at their then current
location.
(6) All right, title and interest in (i) all subcontracts of
the Engineering Division (the "Subcontracts"); and (ii) all contracts
of the Engineering Division other than Customer Contracts or
Subcontracts which are assumed by Purchaser as Assumed Liabilities by
inclusion on Schedule 1.02 ("Assumed Contracts").
(7) All of Sellers' right, title, and interest in the names
"BCM Engineers Inc.," "BCM," and any other names or any customarily
utilized portion or abbreviation thereof, either alone or in
conjunction with other words, utilized as business names by Sellers
primarily in connection with the Engineering Division's operations; and
all right, title and interest in any trademarks, logos, service marks,
the goodwill associated therewith and all registrations and
applications in connection with such names. As set forth with
particularity in 4.09(d), Xxxxx also grants Purchaser a one (1) year
limited license to use the names "Xxxxx Technology Corporation,"
"Reidel Environmental Services Inc.," and "Canonie Environmental
Services Corp." on a transitional basis to enable Purchaser to use,
obtain the benefits from, including payment, and effect the transfer
of, the Purchased Assets. Purchaser agrees to indemnify Xxxxx pursuant
to 1.03 for Third Party Claims against Sellers arising from Purchaser's
use of such names or for any breach by Purchaser of the limitations on
use contained in 4.09(d).
(8) At Sellers' election, either originals or copies of the
business records of the Engineering Division, including all such
business records of Sellers pertaining to the Purchased Assets or the
Assumed Liabilities as Purchaser reasonably determines are necessary to
enable Purchaser to obtain possession of and title to the Purchased
Assets, to realize the value of and benefits from the Purchased Assets,
to carry out its obligations under the Assumed Liabilities and to
conduct the business associated with the Purchased Assets and Assumed
Liabilities ("Records"). The Records include (but are not necessarily
limited to) documents of title, accounting records, job files,
invoices, correspondence, sales records, technical records, customer,
records and other data and records relating to sales, customers, the
Purchased Assets and the Assumed Liabilities, and include those which
exist on paper, on film, tape, videotape or other storage media and on
any and all electronic media such as computer hard drives, diskettes or
magnetic tape. The Records do not include any of the financial records
of Sellers or records not primarily related to the Engineering
Division, but Purchaser shall have access to such records under 4.06.
Sellers shall deliver the Records located at premises which are Assumed
Premises Leases
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at Closing (as defined in 6.01) at their then current location and the
Records located at Sellers' other offices or premises promptly as such
times, from time to time, after Closing and at Purchaser's sole
expense, as records in Sellers' possession are reasonably determined by
Purchaser to constitute Records as defined in this section. In
conjunction with the delivery of the Closing ED Financial Statements,
Sellers shall deliver to Purchaser a copy of the job and financial
accounting computer systems back-up tapes for the Engineering division
as of the Effective time.
(9) All of Sellers' right, title, interest or proprietary
interest claims in and to any patents or unpatented proprietary
technology or processes primarily used by or sold or licensed to third
parties by the Engineering Division (listed on Schedule 1.01(a)(9)).
(10) All of Sellers' right, title, interest or proprietary
interest claims in and to all copyrights used primarily by or sold or
licensed to third parties by the Engineering Division (listed on
Schedule 1.01(a)(10)) and all reports, forms, archives, data bases,
studies, methods, research, technical and other books, manuals, videos,
scripts, recordings, training materials, journals, handbooks, and all
other intellectual property in whatever form primarily used by the
Engineering Division, whether or not copyrighted or proprietary to
Sellers.
(11) All of Sellers' right, title, interest or proprietary
interest claims in and to any and all business or technical computer
software associated primarily with, primarily used by or sold by the
Engineering Division and all system manuals and supporting materials
related to such software (each such software system is listed on
Schedule 1.01(a)(11)); provided that any such software for which any
Seller is obligated to pay royalties, lease payments or license fees or
which contains assignability restrictions shall be acquired by
Purchaser only to the extent assumed as an Assumed Liability.
(12) Sellers' complete Engineering Division customer list(s),
prospect contract list(s) or log(s), order backlog and proposals
outstanding and under development. At Closing, Sellers shall deliver
their list(s) or data base(s) of all known past (within previous three
years) and current Engineering Division customers or clients and the
Engineering Division's sales prospect contact list(s), data base(s) or
log(s), to the extent that such lists, data bases or logs are presently
stored and available on Sellers' current data management systems,
whether manual or electronic. At Closing, Sellers will also provide as
Schedule 1.01(a)(12) a detail of its order backlog. This schedule will
include the customer's
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name, project name, order amount, amount billed to date and backlog
amount.
(13) Sellers' vendor list applicable to the Engineering
Division and all of Sellers' right, title and interest in contracts
with vendors which are assumed by Purchaser as Assumed Liabilities.
(14) All accounts receivable and all unbilled work in process
(whether or not such work in process has been booked as revenue or
included on any schedule) attributable to services performed by or
contracts of the Engineering Division, including associated retainages.
The aging report of accounts receivable recorded on the Interim ED
Balance Sheet (see 2.03) shall be provided at Closing as Schedule
1.01(a)(14)(i). An aging report of the work in process recorded on the
Interim ED Balance Sheet shall be provided at Closing as Schedule
1.01(a)(14)(ii). Final aging reports of both accounts receivable and
work in process, current to the Effective Time and including all
accounts receivable and work in process recorded on the Closing ED
Balance Sheet, shall be delivered in connection with the Closing ED
Financial Statements (see 1.01(b)(4) and 2.03).
(15) All deposits, bonds, bond collateral, proceeds, refunds,
and prepaid expenses (including any refunds thereof) associated with
the Purchased Assets, the Assumed Premises Leases, the Assumed
Equipment Leases or the Assumed Liabilities (listed on Schedule
1.01(a)(15)).
(16) All of Sellers' right, title and interest in those
specific personal property leases assumed as Assumed Liabilities
("Assumed Equipment Leases").
(17) To the extent assignable, all licenses, permits,
accreditations, registrations, approvals and the like of governmental
agencies and other licensing or accrediting entities used exclusively
or primarily by the Engineering Division.
(18) The real estate set forth on Schedule 1.01(a)(18) to the
extent that Purchaser accepts the conveyance thereof following its
environmental due diligence with respect thereto (the "Purchased Real
Estate"). Upon Purchaser's request after Closing, Sellers will deliver
a recordable special warranty deed for each parcel of Purchased Real
Estate.
(19) All right to the Sellers' lock box no. 35053 maintained
with Chase Manhattan Bank of New York for receipt and deposit of the
Engineering Division's collections, proceeds and other cash receipts.
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(20) The Xxxxxx Bank claim.
Sellers agree to use their best efforts to provide complete
information on the schedules provided for in this 1.01(a) on the date
provided. However, the omission of any item shall not operate to
exclude the omitted item from the sale, delivery and assignment thereof
(except in those cases where the asset is to be acquired only to the
extent a coupled liability is to be assumed as an Assumed Liability in
which case it will be deemed included only if the liability is
specifically assumed as an Assumed Liability), and the omission of any
item shall abridge neither Sellers' obligation to deliver possession
and title thereto nor Purchaser's obligation to pay the purchase price
provided Purchaser acquires actual possession and beneficial ownership
of the omitted item.
(b) As consideration for the Purchased Assets and the other
promises, agreements, warranties, and covenants hereof, the Purchaser shall:
(1) Pay to Xxxxx at Closing the sum of Five Million Four
Hundred Twenty-Five Thousand Five Hundred Thirty-Nine Dollars
($5,425,539). Such payment shall be paid by wire transfer of
immediately available funds to the accounts in the amounts specified by
Sellers in Schedule 1.01(b)(1).
(2) At closing, deliver to Xxxxx a six (6) month conditional,
non-negotiable promissory note in the form of Exhibit 1.01(b)(2) (the
"Note") evidencing Purchaser's obligation to pay to Xxxxx the sum of
Two Million Seven Hundred Fifty Thousand Dollars ($2,750,000), with no
interest thereon, payable on the date seven (7) days after the date six
(6) months after the Closing Date (the seven day delay is to enable the
parties to settle the accounts receivable and work in process
collection adjustment set forth below). The Note shall be subject to
the condition that Purchaser shall have available to it the right of
set-off against payments to be made under the Note in accordance with
the provisions of 1.04, including specifically the right of set-off for
uncollected accounts receivable and work in process (see 2.06 and 4.01)
and for any other purpose for which the right of set-off may be
exercised under 1.04, but not including any right of set-off for any
overstatement of Adjusted Equity Value on the Interim ED Balance Sheet
(including any reduction in Adjusted Equity Value which occurs between
the Interim ED Balance Sheet and the Closing ED Balance Sheet) which
shall be adjusted in accordance with 1.01(b)(3), (4) and (5). Purchaser
acknowledges that the Note will be assigned to Sellers' senior lender,
The Chase Manhattan Bank, pursuant to a collateral assignment of even
date herewith, subject to Purchaser's set-off rights in 1.04 hereof.
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(3) Conditionally assume at Closing those Closing ED Balance
Sheet liabilities of the Sellers related to the Engineering Division,
in an aggregate amount not to exceed Four Million Three Hundred One
Thousand Dollars ($4,301,000), which are set forth on Schedule
1.012(b)(3) (the "Assumed Balance Sheet Liabilities"). The aggregate
amount of, and the specific liabilities included in, the Assumed
Balance Sheet Liabilities shall be adjusted, and Scheduled 1.01(b)(3)
shall be revised accordingly, to reflect the difference between the
Adjusted Equity Value of the Engineering Division on the Interim and
Closing ED Balance Sheets in accordance with 1.01(b)(4).
(4) Within ten (10) days following the Closing Date, Sellers
shall provide to Purchaser the Closing ED Financial Statements (as
defined in 2.03). Any disagreements between Purchaser and Sellers
concerning the Engineering Division's final Adjusted Equity Value as
shown on the Closing ED Balance Sheet shall be resolved in accordance
with 2.03(c) during the twenty (20) day period thereafter. At such time
as the Closing ED Balance Sheet has been finally determined between the
parties within thirty (30) days after Closing, a final adjustment to
the amount of Assumed Balance Sheet Liabilities to be assumed under
1.01(b)(3) shall be made and Schedule 1.01(b)(3) shall be amended to
reflect such adjustment, equal to the amount, if any, by which the
Engineering Division's Adjusted Equity Value as of the Effective Time
as set forth on the finally determined Closing ED Balance Sheet exceeds
or is less than the warranted Adjusted Equity Value set forth on the
Interim ED Financial Statements, net of any set-off for such purpose
taken by Purchaser against the Short Term Note under 1.01(b)(5). If the
Engineering Division's Adjusted Equity Value as of the Effective Time
is less than the Interim ED Balance Sheet value, the aggregate amount
of Assumed Balance Sheet Liabilities assumed by Purchaser shall be
reduced by such difference less any amount which Purchaser has elected
to take as a set-off for such purpose against the Short Term Note as
provided in 1.01(b)(5)(B). If the Adjusted Equity Value is greater than
the Interim ED Balance Sheet value, the aggregate amount of Assumed
Balance Sheet Liabilities assumed by Purchaser shall be increased by
such difference. Purchaser shall have the right to select which Closing
ED Balance Sheet liabilities are added to or deleted from Schedule
1.01(b)(3) to reflect the adjustment effected by this paragraph.
Purchaser shall be given credit for any Assumed Balance Sheet
Liabilities which it discharges prior to the amendment of Schedule
1.01(b)(3).
(5) At Closing, deliver to Xxxxx a thirty (30) day
conditional, non-negotiable promissory note in the form of Exhibit
1.01(b)(5) (the "Short Term Note") evidencing Purchaser's obligation to
pay to Xxxxx the sum of Two Hundred Thousand Dollars ($200,000), with
interest thereon at
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the Chase Manhattan Bank prime rate as of the Closing Date, payable on
the date thirty (30) days after the Closing Date. The Short Term Note
shall be subject to the condition that Purchaser shall have available
to it the right of set-off against payments to be made under the Short
Term Note for:
(A) Any payment which Purchaser elects to make on
behalf of Sellers of any liability of the Engineering
Division: (i) which is not set forth as an account payable of
the Engineering Division on Schedule 1.01(b)(5) (Schedule
1.01(b)(5) is the ledger of trade accounts payable included as
liabilities of the Engineering Division recorded on the
Interim ED Balance Sheet); (ii) which is not an Assumed
Liability; and (iii) which Sellers do not pay within seven (7)
days after being requested by Purchaser in writing to do so in
accordance with 4.14; or
(B) The amount, if any, by which the Engineering
Division's Adjusted Equity Value as of the Effective Time as
set forth on the finally determined Closing ED Balance Sheet
is less than the Interim ED Balance Sheet value, determined in
accordance with 1.01(b)(4), to the extent that Purchaser
elects to take such adjustment as a set-off against the Short
Term Note instead of a reduction in Assumed Balance Sheet
Liabilities.
Purchaser acknowledges that the Short Term Note will be
assigned to Sellers' senior lender, The Chase Manhattan Bank, pursuant
to a collateral assignment of even date herewith, subject to
Purchaser's set-off rights in this 1.01(b)(5).
(c) The purchase price shall be allocated to the Purchased
Assets by agreement of the parties as set forth on Schedule 1.01(c),
with final adjustments to conform to the Closing ED Balance Sheet made
by agreement between the parties within 45 days after Closing.
(d) The Purchased Assets will not include the following
(collectively, the "Excluded Assets"):
(1) All cash bank accounts or cash equivalents of
Sellers on hand on the Closing Date, except as provided in
1.01(a)(15).
(2) All insurance policies of the Sellers, in respect
of the Purchased Assets or otherwise.
(3) Sellers' interest in that certain Technical
Services Agreement dated May 1, 1993, between Schlumberger
Technology Corporation and Canonie Environmental Services
Corp., including the right of any proceeds, accounts
receivable, claims for payment or other rights arising from or
related to such agreement.
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(4) All rights of Sellers arising from or related to
the lawsuit filed in the Superior Court of California, County
of Alemeda, Case No. V-013711-1 against Locus Technologies,
Xxxx Xxxxxxxxx and other unidentified defendants.
(5) Any permits, licenses, agreements, leases,
instruments, contracts and contract rights which would be
Purchased Assets but for this 1.01(d)(5), but which require
the consent, approval, novation or waiver of a third person if
the transfer of such would constitute a breach of such
contract or a violation of any law and if such consent,
approval, novation or waiver is not obtained, provided,
however, that the benefits of any such agreement, lease,
instrument, contract or contract right, including the right to
payment arising therefrom, shall nevertheless constitute
Purchased Assets to the extent that such benefits can be
afforded to Purchaser by means of the covenants set forth in
4.09, 6.02(1) and 7.02 or any other covenant of this Agreement
whose purpose is to assure to Purchaser the benefits of the
Purchased Assets for which Purchaser is paying the
consideration provided for in this Agreement.
(6) All of Seller's assets of every type and
description which are not primarily used by or related to the
Engineering Division.
(7) All real estate owned or leased by Sellers except
for any: (i) owned real estate expressly itemized on Schedule
1.01(a)(18) as a Purchased Asset; or (ii) interests in leased
real estate which are Assumed Premises Leases.
(8) All claims of Sellers, including those related to
the Engineering Division, arising prior to the Effective Time,
except for the Xxxxxx Bank claim (the "Retained Claims").
(9) All rights in former accounts receivable of the
Engineering Division which were charged off prior to the
Effective Time.
(10) Deposits, pre-payments, fixtures, and tenant
improvements associated with Non-Assumed Leases.
(11) Records related to Sellers' pending or threatened
litigation, proceedings, investigations or claims.
(12) All of Sellers' recorded goodwill.
(13) Sellers' computer network equipment and licensed
network software, including those components used by the
Engineering Division prior to Closing.
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(14) All of Sellers' leased real and personal
properties other than those assumed by Purchaser as Assumed
Premises or Assumed Equipment Leases.
1.02 Liabilities of Seller and Purchaser
(a) Purchaser has not, and shall not be construed to have,
assumed, adopted or taken over any obligations, debts, liabilities or
responsibilities of Sellers whatsoever, including (but not limited to)
liabilities for local, state or federal taxes, except for: (i) the liabilities
itemized on Schedule 1.02; (ii) the Assumed Balance Sheet Liabilities set forth
on Schedule 1.01(b)(3) as adjusted; and (iii) such future (i.e. post-Effective
Time) performance as is obligated under the terms and conditions of those
Customer Contracts or Subcontracts which constitute Purchased Assets
(collectively the "Assumed Liabilities"). Purchaser shall use its diligent
efforts to secure the assignment to Purchaser or novation of contracts which are
Assumed Liabilities. Purchaser shall be free to seek the amendment or
renegotiation of terms of Customer Contracts, Subcontracts or Assumed
Liabilities in its sole discretion provided that Purchaser shall indemnify
Sellers from any adverse effect on Sellers arising from such actions. Purchaser
shall cooperate with Sellers in attempting to obtain the release and waiver or
settlement of claims of parties under the Customer Contracts in favor of Sellers
for any damages or losses alleged to have been incurred by such parties arising
from performance prior to the Effective Time. Notwithstanding Purchaser's
acceptance of a Customer Contract and the obligation of future performance,
Sellers, as their interests are defined by such contracts or by law (which shall
not be altered or enlarged with respect to third parties by virtue of this
Agreement), shall retain responsibility and liability, except as such are
expressly assumed as Assumed Liabilities, for all obligations, performance and
liability due, occurring or accruing under all Customer Contracts or
Subcontracts prior to the Effective Time, with Purchaser assuming all
responsibility and liability for obligations and performance due and performed
after the Effective Time and all liabilities arising out of such post-Effective
Time performance.
(b) Except for the Assumed Liabilities, Sellers agree, jointly
and severally, to retain or assume full liability and responsibility for
satisfaction of all of Sellers' debts or liabilities of any kind, whether known
or unknown, fixed or contingent, including any and all liability for trade
payables and other accounts payable, federal, state or local taxes, employment
taxes, tort or contract claims, and employee compensation, benefits or claims.
(c) The disclosure by Sellers of any liability or any item or
matter that creates a liability in the future on the schedules to this Agreement
or otherwise shall not result in an assumption by, or shifting to, Purchaser of
liability with respect to such matter
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except to the extent that Purchaser has expressly agreed to the assumption of
such liability as an Assumed Liability.
1.03 Indemnity Against Liabilities, etc.
(a) Sellers, jointly and severally, agree to indemnify and
hold harmless the Purchaser, its subsidiaries, their employees and their
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) as and when incurred
arising out of or based upon any breach of any representation,
warranty, covenant, or agreement of Sellers or any person other than
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, deficiencies, damages,
settlements, set-offs, liens, liabilities, and legal and other expenses
(including reasonable attorneys' fees) as and when incurred arising (i)
out of the Purchased Assets or the business associated therewith prior
to the Effective Time except to the extent expressly assumed by
Purchaser as Assumed Liabilities or (ii) out of or based upon the acts,
omissions, contractual performance or conduct of the business of
Sellers whether before or after the Effective Time, except to the
extent expressly assumed by purchaser as Assumed Liabilities; and
(3) Any loss, damage or cost for which Sellers or any of them
have agreed to indemnify Purchaser under any provision of this
Agreement or any Related Agreement.
(b) Purchaser agrees to indemnify and hold harmless Sellers,
their affiliated corporations, their employees and their 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) 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, deficiencies,
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damages, settlements, set-offs, liens, liabilities, and reasonable
legal and other expenses (including reasonable attorneys' fees) as and
when incurred arising (i) out of the Purchased Assets or the business
associated therewith after the Effective time, except for Sellers'
debts or liabilities not expressly assumed by Purchaser as Assumed
Liabilities; (ii) out of or based upon the acts, omission, contractual
performance or conduct of the business of Purchaser whether before or
after the Effective Time; or (iii) out of the Assumed Liabilities after
the Effective Time; and
(3) Any loss, damage or cost for which Purchaser has agreed to
indemnify Sellers or any of them under any provision of this Agreement
or any Related Agreement.
(c) If any party to be indemnified hereunder (the
"indemnitee") receives notice of the assertion of any claim or of the
commencement of any action or proceeding by any entity who is not a party to
this Agreement or an affiliate of such party (a "Third Party Claim") against
such indemnitee, against which any person or entity that may be required to
provide indemnification therefor under this Agreement (the "indemnitor"), the
indemnitee will give such indemnitor reasonably prompt written notice thereof
after receipt of such notice of such Third Party Claim in reasonable detail, and
will indicate the estimated amount, if reasonably practicable, of the loss that
has been or may be sustained by the indemnitee. The indemnitor will have the
right to participate in or, by written notice to the indemnitee no later than
thirty (30) calendar days after receipt of the above-described notice of such
Third Party Claim, to elect to assume the defense of such Third Party Claim at
such indemnitor's own expense and by such indemnitor's own counsel, and the
indemnitee will cooperate in good faith in such defense. If within the 30
calendar days set forth in this paragraph, an indemnitee receives written notice
from an indemnitor that such indemnitor has elected to assume the defense of any
Third Party Claim, the indemnitor will not be liable for any legal expenses
subsequently incurred by the indemnitee in connection with the defense thereof
(except as provided in this paragraph or paragraph (d) or (f) below). The
indemnitee will, however, have the right to participate in the defense of any
Third Party Claim assisted by counsel of its own choosing at its own expense. If
the indemnitee has not received written notice within such thirty (30) calendar
day period that the indemnitor has elected to assume the defense of such Third
Party Claim, the indemnitee may, at its option, elect to settle, subject to
paragraphs (e) and (f), or assume such defense, assisted by counsel of its own
choosing, the cost of which shall constitute an indemnified loss.
(d) An indemnitor shall not be entitled to control, and the
indemnitee shall be entitled to have sole control over, the defense or
settlement of any claim against such indemnitee to the extent
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that (i) such claim seeks an order, injunction or other equitable relief against
the indemnitee which if successful, could reasonably be expected to materially
interfere with the business, operations, assets or condition (financial or
otherwise) of the indemnitee or (ii) such claim arises out of a Customer
Contract and seeks recovery against both Sellers and Purchaser under
circumstances subjecting the claim to liability and indemnity apportionment
under paragraph (j)(1) of this section, in which event indemnitor and indemnitee
shall have control over their respective defenses.
(e) Without the prior written consent of the other,
indemnitor will not enter into any settlement of any Third Party Claim or cease
to defend against such claim, if pursuant to or as a result of such settlement
or cessation: (i) injunctive or other equitable relief would be imposed against
the indemnitee; or (ii) such settlement or cessation would lead to liability or
create any financial or other obligation on the part of the indemnitee for which
it is not entitled to or is unlikely to receive full indemnification hereunder
(exclusive of the Indemnity Deductible, or any portion thereof). Indemnitor
shall not consent to the entry of any judgment or enter into any settlement that
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to each indemnitee of a release from all liability in respect of such
claim.
(f) If a firm offer is made to settle a Third Party Claim and
either indemnitor or indemnitee desires to accept and agree to such offer, such
party will given written notice to the other to that effect. If the other party
fails to consent to such firm offer within 30 calendar days after its receipt of
notice, the party desiring to so settle may continue to contest or defend such
Third Party Claim and, in such event: (i) if the party desiring to settle is the
indemnitor, the maximum liability of the indemnitor as to such Third Party claim
will not exceed the amount of such settlement offer, plus costs and expenses
paid or incurred by the indemnitee through the end of such 30-day period to the
extent otherwise indemnifiable hereunder; or (ii) if the party desiring to
settle is the indemnitee, the indemnitee is participating in the defense of such
Third Party Claim at its cost and the final judgment or settlement is equal to
or greater than the firm offer, the indemnitee's costs and expenses incurred
after such 30-day period shall constitute an indemnified loss.
(g) Any claim by an indemnitee for indemnification other than
indemnification against a Third Party Claim (a "Direct Claim") will be asserted
by giving the indemnitor reasonably prompt written notice thereof, and the
indemnitor will have a period of 15 calendar days within which to respond in
writing to such Direct Claim. If the indemnitor does not so respond within such
15 calendar day period, the indemnitor will be deemed to have rejected such
claim, in which event the indemnitee will be free to pursue
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such remedies as may be available to the indemnitee under this Agreement.
(h) With regard to claims for which indemnification is payable
hereunder, such indemnification shall be paid by the indemnitor promptly upon
(i) the entry of a judgment against the indemnitee and the expiration of any
applicable appeal period; (ii) the entry of an unappealable judgment of final
appellate decision against the indemnitee; or (iii) a settlement permitted under
1.03. In the event that the indemnitee has taken a provisional set-off against
amounts due to the indemnitor for the indemnified claim pursuant to 1.04(c) and
the amount finally determined to be payable as provided in this paragraph is
less than the amount so set-off, the excess shall thereupon be payable to the
indemnitor together with interest on such excess at the Chase Bank prime rate
quoted for the date on which the payment against which the set-off was taken
would have otherwise been due. This provision shall not apply to Purchaser's
set-off rights against the Note for uncollected accounts receivable and work in
process and against the Short Term Note for Purchaser's payment of unscheduled
accounts payable under 1.01(b)(5) which shall be governed by 1.04 and
1.01(b)(5), respectively, and shall be finally determined in accordance with the
procedure set forth for resolution of accounting issues in 2.03.
(i) If the Purchaser is the indemnitee, payment of an
indemnification claim shall first be made by a set-off against the principal
amount of the Note remaining unpaid, subject to paragraphs (j)(3) and (5) of
this section.
(j) The parties' respective indemnity obligations hereunder
shall be further subject to the following:
(1) In the event any contracting party of a Customer Contract
(other than Purchaser) asserts any claim for damages, failure or
inadequacy of performance, breach of warranty or breach of contract
relating to the Customer Contract and such claim is founded on
allegations of breach of contract, negligence or other legal fault of
both a Seller and Purchaser, then, and in that event, Purchaser and
Sellers indemnification obligations contained herein shall apply only
to the extent of their respective actual comparative negligence or
other legal fault as determined by the dispute resolution procedures
set forth in this Agreement, by a court or by agreement of the parties.
A determination of liability on the part of Purchaser based upon the
assignment or novation to, or undertaking of performance by, Purchaser
of any Customer Contract or based upon successor liability or similar
theory shall not constitute legal fault of the Purchaser, it being the
intention of this section to apportion liability to the party whose act
or omission was actually responsible for creating the liability.
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(2) Except with respect to claims arising from performance
under Customer Contracts prior to closing or claims of breach of any
contract by any Seller prior to Closing, rights to indemnification
pursuant to 1.03(a) hereof shall survive Closing for a period of thirty
(30) months. Rights to indemnification for claims arising from any
Seller's performance under any Customer Contract or breach of contract
by any Seller prior to Closing shall survive for a period of six (6)
years after the date of the making of the contract. All such
non-excepted claims for indemnification hereunder shall be forever
barred unless made by notifying the Sellers in writing of such claim
within the time period set forth in this paragraph.
(3) The Sellers' and Purchaser's respective indemnity
obligations hereunder shall be limited to: (i) individual losses,
claims, etc. having a value of $2,500.00 or more (an "Indemnified
Claim"); and (ii) losses, claims, etc. after the first $100,000.00, in
the aggregate, of Indemnified Claims (the "Indemnity Deductible"), in
which event only the aggregate amount of Indemnified Claim(s) in excess
of the Indemnity Deductible shall be subject to indemnification
hereunder. Sellers shall not be responsible for any loss or claim to
the extent that a reserve exists therefor on the Closing ED Balance
Sheet and remains available. The following are not subject to either
the Indemnified Claim threshold or the Indemnity Deductible and are
covered from the first dollar over the reserved amount: (iii) Sellers'
warranty that accounts receivable and recorded work in process recorded
on the Closing ED Balance Sheet, net of reserves, will be collected as
specified in 2.06(a); (iv) Sellers' warranty that there are no unearned
xxxxxxxx or receipts net of reserves for such purpose as set forth in
2.06(a) and 2.07(b); (v) Sellers' warranty that both the Interim and
Closing Balance Sheets correctly stated tangible net equity for the
Engineering Division as of the Effective Time; (vi) Sellers' warranty
that Hazardous Materials have been removed from the Assumed Premises
Leases and Purchased Real Estate prior to Closing; (vii) Sellers'
covenants to pay unrecorded accounts payable of the Engineering
Division under 4.14 and to pay insurance premiums under 4.12; and
(viii) Purchaser's covenant to make payments required in the ordinary
course under Assumed Balance Sheet Liabilities or leases assumed as
Assumed Liabilities.
(4) The terms "loss" or "cost" as used in 1.03(a) include
corrective services performed by Purchaser (including its
subcontractors) to remedy a deficiency in Sellers' performance under
any contract for the performance of services by a Seller to the extent
that Purchaser reasonably determines: (i) that such corrective services
are in fact necessary to remedy a defective performance by a Seller;
and (ii) that Purchaser
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must perform such corrective services in order to preserve its
relationship with (x) any customer under a Customer Contract or other
engagement for services having remaining xxxxxxxx of $20,000 or more in
excess of the cost of such corrective services, (y) any pre-existing
customer from which Purchaser accrued revenue in excess of $30,000
within the previous year or (z) any customer from which the Engineering
Division accrued more than $50,000 in revenue in either of the two
years prior to Closing. corrective services performed by Purchaser at
the request of Sellers shall not be subject to any threshold.
(5) The maximum aggregate liability of the Sellers for
indemnification under this Agreement and set-offs under 1.04 and
1.01(b)(5), exclusive of liability covered by Sellers' insurance
coverage for any indemnified claim, shall be equal to Two Million Seven
Hundred Fifty Thousand Dollars ($2,750,000) (the "Maximum Aggregate
Indemnity Amount"), and the obligations of the Sellers for
indemnification hereunder will terminate when the Maximum Aggregate
Liability Amount has been paid or set-off, except that if Purchaser
exercises set-off rights against the Note and the Short Term Note in
excess of $1,250,000 in the aggregate for uncollected accounts
receivable and work in process and for payments of unrecorded accounts
payable, the maximum aggregate liability of the Sellers for
indemnification shall nevertheless be equal to $1,500,000 for other
indemnified matters regardless of the amount set-off for the foregoing
purposes.
(6) To the extent that an indemnitee actually receives
proceeds of insurance or any other recovery of amounts claimed as an
indemnified loss or cost hereunder, the indemnification obligation of
the indemnifying party shall be reduced to the extent of the net
insurance proceeds or other recovery received by the indemnitee. If the
amount of any indemnifiable loss at any time subsequent to the making
of a payment in respect thereof (an "indemnity Payment") is reduced by
recovery, settlement or otherwise under or pursuant to any insurance
coverage, or pursuant to any claim, recovery, settlement or payment,
the amount so received will be promptly repaid by the indemnitee to the
indemnitor, together with interest thereon from the date of payment
thereof at a rate equal to the then current prime rate.
(7) Upon making any Indemnity Payment, the indemnitor will, to
the extent of such Indemnity Payment, be subrogated to all rights of
the indemnitee against any third party that is not an affiliate of the
indemnitee in respect of the loss to which the Indemnity Payment
relates. Without limiting the generality or effect of any other
provision hereof, each such indemnitee and indemnitor will duly execute
upon request all
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instruments which fairly reflect, and are reasonably necessary to
evidence and perfect, the above-described rights.
(8) Sellers and Purchaser, or any indemnitee claiming under
them, shall each give the other prompt notice as provided in this
section 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.
(9) The indemnity agreements contained in this Agreement shall
inure only to the benefit of Purchaser and Sellers, respectively (and
their respective subsidiaries, affiliates employees and successors 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.
(k) Notwithstanding any other provision contained in this
Agreement to the contrary, neither Sellers nor Purchaser shall have any
liability to the other or to any other indemnitee under this Agreement, or under
any Related Agreement, document or instrument delivered pursuant to this
Agreement, or in connection with the transactions contemplated hereby or
thereby, for any indirect, consequential or incidental damages of any kind or
nature. The following shall not constitute indirect, consequential or incidental
damages: (i) amounts that an indemnitee is required to pay to a Third Party even
if such amounts are for indirect, incidental or consequential damages sustained
by such Third Party; or (ii) attorneys' fees and defense costs and expenses for
which a right to indemnification is provided in this 1.03.
(l) The indemnification obligation of an indemnitor shall be
adjusted so as to give credit to the indemnitor for any tax benefits available
to the indemnitee by virtue of or as a result of the matter for which the
indemnitee is being indemnified (net of tax detriments resulting to the
indemnitee by virtue of such indemnification).
(m) Purchaser and Sellers each agree that the remedies
provided to each party in this 1.03 shall be the sole and exclusive remedies of
such party (or any person claiming by or through such party) for breach,
misrepresentation or default by the other party under or with respect to this
Agreement or any Related Agreement except for the following: (i) the parties
shall be entitled to equitable remedies with respect to matters where an
equitable remedy is
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provided in this Agreement or where such relief is available under principles
of equity generally; and (ii) the parties shall not be limited as to remedy
under circumstances constituting fraud in the inducement.
1.04 Rights 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, subject to the
procedures of this 1.04, to set off against, and withhold from, any payment
otherwise due to Sellers under the Note: (i) the amount of any account
receivable or work in process which is a Purchased Asset and is determined to be
uncollected pursuant to 2.06(a) and 4.01; (ii) any amount for which Purchaser is
entitled to an indemnification payment as provided in 1.03 (subject to the
limitations of 1.03(j)(3) and 1.03(j)(5)); and (iii) as provided in paragraph
(c) below. In-kind goods or services provided by Purchaser for which Purchaser
would be entitled to set off if paid by Purchaser in money shall be valued at
Standard Rates (as defined in 4.11).
(b) Without limiting such other rights as they may have at law
or equity or by agreement, Sellers shall have the right, subject to the
procedures of this 1.04, to set off against, and withhold from, any payment
otherwise due to Purchaser under this Agreement or under any Related Agreement
any amount for which Sellers are entitled to an indemnification payment under
1.03 (subject to the limitations of 1.03(j)(3) and 1.03(j)(5)); and (iii) as
provided in paragraph (c) below. In-kind goods or services provided by a Seller
for which Sellers would be entitled to set off if paid by Sellers in money shall
be valued at Standard Rates (as defined in 4.11).
(c) Subject to the procedures set forth below, but only with
respect to Third Party Claims, it shall not be necessary that a Third Party
Claim or a threatened Third Party Claim has resulted in actual damage to a party
having set-off rights under this section for the party to exercise its set-off
rights under this section, but rather such party shall have the right to
provisionally withhold payment to cover the future effects of any Third Party
Claim or threatened Third Party Claim pending actual conclusion of the matter,
provided that the party asserting the right of set-off for a threatened Third
Party Claim shall have produced sufficient objective evidence of facts and
sufficient supporting legal authority for a competent, experienced attorney to
conclude that:
(1) A written notice of the claim or threatened claim has been
received by the party seeking to withhold;
(2) Either the loss-threatening event has occurred or there is
a substantial probability that it will occur;
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(3) There is a substantial probability that the occurrence or
probable occurrence will cause a loss;
(4) An action to hold the party liable for the loss could
withstand a motion to dismiss or a motion for summary judgment;
(5) There is a substantial probability that the loss,
including associated attorneys' fees and costs of defense, will be as
great as the amount asserted for set-off;
(6) Either there is a substantial issue as to whether an
available insurance policy provides coverage for the claim or 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; and
(7) If the set-off is not asserted at the present time,
insufficient funds will remain subject to set-off following the next
payment to enable the asserting party to protect its interests.
If (i) any of the above findings becomes no longer true, (ii)
a formal proceeding has not been commenced with respect to such Third-Party
Claim within one (1) year after the notice of intent to set off, (iii)
settlement negotiations are not actively in progress to resolve such Third Party
Claim after one (1) year from the notice of intent to set off, or (iv) such loss
or damage does not in fact occur, then upon the earlier to occur of such events
such party shall then pay the withheld amount to the other party together with
interest on such amount from the payment due date at the Chemical Bank prime
rate in effect on the due date for such payment.
(d) Purchaser may not set off any amounts under this section
except to the extent that any reserve recorded on the Closing Balance Sheet for
such liability or class of liabilities is not available or is inadequate to
cover the asserted amount.
(e) If the parties have a dispute involving the exercise of
set-off rights, including any issue as to insurance coverage or liability
exposure, then within ten (10) days, Sellers and Purchaser shall confer in good
faith in an effort to resolve the dispute. If the parties are unable to agree
within thirty (30) days after the issue is first asserted, then such issue shall
be submitted to non-binding mediation as provided in 7.15. Pending agreement or
determination of a charge against available reserves and/or a set-off, the
amount asserted for set-off may be withheld by the asserting party (subject to
the provisions of paragraph (c) above) and shall not constitute a breach or
default under this Agreement, provided that the withholding is reasonable as to
amount and is undertaken in good faith with a reasonable belief as to the
entitlement to the set-off.
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II. REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Purchaser to enter into this
Agreement, Sellers represent and warrant to Purchaser as follows:
2.01 Organization and Qualification
(a) Sellers are each corporations which are validly existing
under the laws of their state of incorporation with the full corporate power and
authority to enter into contracts, to sell their assets and to perform the other
agreements and covenants as provided in this agreement. Sellers are authorized
to do business and are in good standing in each jurisdiction in which the
Engineering Division maintains an office or is required to be qualified except
where the failure to be so qualified could not reasonably be expected to have a
material adverse effect on the Engineering Division. Schedule 2.01(a) lists each
such jurisdiction in which the Engineering Division maintains an office and
Sellers are authorized to do business. Sellers will not be, as a result of
executing and performing this Agreement and related agreements, in violation or
breach of, or in default with respect to, any term of their respective
certificates of incorporation, by-laws or other charter documents.
(b) Sellers have no subsidiary or affiliated corporations or
entities other than those listed on Schedule 2.01(b).
2.02 Capitalization and Shareholder Action
Except as set forth on Schedule 2.02, the stock or equity
interests of Sellers are not encumbered or restricted in any way or subject to
any agreement that will interfere with this transaction, affect Purchaser's
title to or beneficial use of the Purchased Assets or subject Purchaser to
liability to any stockholder. Stockholder approval of this sale of assets either
has been duly obtained prior to Closing or is not required by law or under
Sellers' respective certificates or articles of incorporation or by-laws.
2.03 Financial Condition
(a) Sellers have delivered to the Purchaser and attached
hereto as Schedule 2.03 true and correct copies of the following: (i) audited
balance sheets, statements of income, statements of retained earnings, and
statements of cash flow of Xxxxx or its predecessors for the fiscal year ended
February 28, 1995, and the seven months ended September 30, 1995; (ii) unaudited
balance sheet, statement of income, statement of retained earnings and statement
of cash flow of Xxxxx for the fiscal year ended September 30, 1996; (iii)
unaudited selected balance sheet accounts and statements of income for the
Engineering Division for the twelve
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(12) months ended September 30, 1996; (iv) unaudited selected balance sheet
accounts and statements of income for the Engineering Division for the ten (10)
months ended July 31, 1997 (the "Interim ED Financial Statements"). Within ten
(10) days following the Closing Date, Sellers shall provide (v) final unaudited
selected balance sheet accounts ("Closing Balance Sheet") and statements of
income, retained earnings and cash flows of Sellers for the period beginning
October 1, 1996, and ending on the Effective Time (the "Closing Financial
Statements"); and (vi) final unaudited balance sheet ("Closing ED Balance
Sheet") and statements of income, retained earnings and cash flows of the
Engineering Division for the period beginning October 1, 1996, and ending on the
Effective Time (the "Closing ED Financial Statements").
(b) The Xxxxx financial statements referred to in 2.03 have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved. The balance sheet
and financial statements of the Engineering Division have been prepared
consistent with the accounting principles used in preparing the financial
statements of Xxxxx for contemporaneous periods and are representative of
stand-alone financial statements except as follows: corporate costs were not
allocated; there were no footnote disclosures; intercompany accounts were
excluded; common area maintenance was excluded; cash was excluded; shutdown
expenses for Norristown laboratory facility were excluded; $542,000 of accounts
payable was excluded in exchange for the addition of a $542,000 employment
agreement liability; legal expenses were excluded. Purchaser and Sellers have
agreed to the value for fixed assets on the Interim ED Balance Sheet, and there
shall be no post-Closing adjustment for fixed assets.
(c) Purchaser's in-house and independent accountants shall be
afforded free and full access to the non-proprietary working papers and records
used by Sellers' independent accountants and the working papers and records used
by Sellers' in-house accountants in conducting their audits and in preparing
their audited financial statements and unaudited Interim and Closing Financial
Statements. If there is a difference of opinion between the two accounting firms
as to the general acceptability of any of the accounting principles followed in
connection with preparing or reviewing the unaudited Interim or Closing ED
Financial Statements, the respective accountants shall immediately confer in an
effort to resolve such differences. If the firms are unable to resolve a
difference involving Closing Financial Statements delivered after Closing, the
difference shall be resolved by submitting the dispute to a third firm of
accountants who shall summarily decide the issue following a conference among
the three firms at which the parties' respective accounting firms shall each be
afforded the opportunity to present its position and the evidence supporting
such position.
2.04 Tax and Other Liabilities
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(a) Sellers have filed all payroll and other federal, state,
local and foreign tax returns required to be filed by them and have duly paid
the trust portion of all employee-related taxes and have duly paid or
established adequate reserves for the proper payment of all taxes and other
governmental charges which may in any way result in a Lien on or claim against
the Purchased Assets or on Purchaser's other assets or a liability or claim of
liability against Purchaser for such taxes. Except for any specifically Assumed
Liabilities for taxes, Purchaser shall incur no liability, cost or expense in
connection with Sellers' federal, state, local or employee-related taxes,
including any cost or expense arising from investigations, audits, proceedings
or actions taken by taxing authorities.
(b) Sellers have paid or will pay all Sellers' expenses, taxes
(except sales taxes), and other liabilities, resulting from the preparation of,
or the transactions contemplated by, this Agreement. These costs will not be
assumed by Purchaser except to the extent they are included on the Closing ED
Balance Sheet and expressly assumed as Assumed Balance Sheet Liabilities.
(c) Except for the Assumed Liabilities, Sellers retain and
Purchaser will incur no liability as a result of environmental conditions
associated with any acts, omissions, or real property ownership, leasing or use
by Sellers prior to the Effective Time.
2.05 Litigation and Claims
(a) Except as set forth on Schedule 2.05: (i) there is no
material litigation, arbitration, claim, governmental or other proceeding
(formal or informal), or investigation pending or, to the knowledge of Sellers,
threatened (or any basis therefor known to Sellers) which, if adversely
determined, could reasonably be expected to have a material adverse effect on
the Engineering Division or the Purchased Assets; (ii) within the last two
years, the Engineering Division has not been subject to any union activity or
organized labor dispute; (iii) Sellers are not in violation of, or in default
with respect to, any law, rule, regulation, order, judgment, or decree,
including any environmental laws or regulations which could reasonably be
expected to have a material adverse effect on the Engineering Division taken as
a whole. Schedule 2.05 shall set forth, among other matters, all past (previous
three years) and current material citations, violations, fines, judgments,
decrees, orders, consent decrees or orders, and 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, licensing or labor law
or regulation or out of alleged deficiencies, negligence, intentionally wrongful
act or breach of contract in the performance of services known to Sellers.
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(b) Purchaser will incur no liability, loss or cost as a
result of claims, proceedings or litigation arising from Sellers' alleged acts
or omissions.
2.06 Accounts Receivable and Properties
(a) All accounts receivable and work in process of the
Engineering Division recorded on the Closing Balance Sheet are set forth on the
agings delivered in connection with the Closing Financial Statements, will have
arisen from valid transactions in the ordinary course of Sellers' business and
will be collected by Purchaser, net of reserves for uncollectible accounts,
within six (6) months of the Closing Date utilizing reasonable and customary
collection procedures (i.e. measures such as legal action, referral to outside
collection agency or mechanics lien shall not be required of Purchaser to
conform to this standard). All accounts receivable and work in process of the
Engineering Division recorded on the Closing ED Balance Sheet were fully earned
as of the Effective Time, net of the reserve for xxxxxxxx in excess (no account
receivable or work in process entry represents a prebilling except to the extent
an allowance is reserved for it). 4.01 sets forth certain covenants of the
parties with respect to the collection of accounts receivable.
(b) Except as disclosed on Schedule 2.06(b), each physical
asset whose value is recorded on the Closing ED Balance Sheet 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).
(c) Except as noted on Schedule 2.06(c), no parcel of the
Purchased Real Estate nor any property covered by any Assumed Premises Lease is
encumbered by any liability arising from the presence of Hazardous Materials or
pollutants on such property. Purchaser will incur no liability as a result of
environmental conditions associated with any Purchased Real Estate, Assumed
Premises Lease, or real property ownership, leasing or use by Sellers prior to
the Effective Time.
2.07 Contracts and Other Instruments
(a) The Customer Contracts delivered at Closing pursuant to
1.01(a)(5) are all of the Customer Contracts of the Engineering Division.
Schedule 2.07(a) or the other schedules to this Agreement set forth a true and
correct listing of all material contracts, other than Customer Contracts and
contracts with subcontractors, to which any Seller is a party for the use or
benefit of the Engineering Division, including material leases and licenses and
all supply, distribution, agency, financing or other arrangements and
understandings. Any of the foregoing not
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disclosed on the other schedules to this Agreement are listed on Schedule
2.07(a). For purposes of this 2.07(a) only, "material contract" means a
contract, including Customer Contracts, which provides for the provision or
purchase of goods or services in excess of $20,000 per annum or requires
performance by Seller for a period of more than twelve months. With respect to
Customer Contracts, "material arrangement or understanding" includes any
relationship between Seller and any customer or group of related customers,
whether formalized by binding written contract or not, from which Sellers
derived more than $50,000 in the twelve months preceding the Closing Date.
Neither Sellers nor, to Sellers' knowledge, any other party to any material
contract, agreement, instrument, lease, or license is now or is expected by
Sellers as of Closing to be in the future in violation or breach of, or in
default with respect to complying with, any material provision thereof, and to
Sellers' knowledge, each such material 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 disclosed on Schedule 2.07(a). Neither any Seller nor, to Sellers'
knowledge, any other party to any material contract, arrangement or
understanding has given notice of termination or taken any action inconsistent
with the continuance of such material contract, arrangement or understanding.
(b) Except for situations disclosed on Schedule 2.07(b) and
for the cost of correction of which an adequate reserve is or will be recorded
on the Closing ED Balance Sheet as a liability: all services rendered and
products supplied by the Engineering Division prior to the Effective Time have
been in conformity with the scope of performance defined by the contract or
arrangement, and to the reasonable satisfaction of the customer; no curative or
corrective work, replacements or payments are necessary to render such
performance legally or contractually sufficient; and all costs for performance
completed prior to Closing shall have been duly recorded as liabilities on the
Closing ED Balance Sheet. Xxxxxxxx by Sellers on each Customer Contract to be
acquired by Purchaser as a Purchased Asset shall not, as of the Effective Time,
have constituted a greater percentage of total allowable xxxxxxxx under such
contract than the percentage of work performed prior to the Effective Time shall
have constituted of total work to be performed under such contract.
(c) Sellers enjoy peaceful and undisturbed possession under
all Assumed Premises Leases and licenses under which the Engineering Division is
operating. No Seller is a party to or bound by any contract, agreement,
instrument, lease, license, arrangement, or understanding, or subject to any
charter or other restriction, which, to the knowledge of Sellers, could
reasonably be expected to have a material and adverse affect on the Purchased
Assets or the operations or business of the Engineering Division. Sellers have
no contract, agreement, lease, license, arrangement, or
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understanding related to, or which could reasonably be expected to have a
material adverse effect upon, the Purchased Assets or Purchaser's title thereto
or the operations of the Engineering Division with, any shareholder, any
director, officer, or employee of any Seller, or any other corporation or
enterprise in which any Seller, or any shareholder, any director, officer, or
employee of any Seller, has a five percent (5%) or greater equity or voting or
other substantial interest, other than such contracts and agreements as so
listed and specified on Schedule 2.07(c). There exists no contract, agreement,
right or understanding material to the business of the Engineering Division
which is in the name of any principal, officer, director, shareholder or any
other person or entity other than a Seller except as disclosed and so identified
on Schedule 2.07(c).
(d) The backlog schedule provided as Schedule 1.01(a)(12) is
correct to Sellers' knowledge as of the Effective Time, and, to Sellers'
knowledge, the backlog items listed on such schedule all represent actual
commitments by customers for the performance of services by the Engineering
Division which are either actual contractual commitments or actual written or
verbal communications of commitment received by a Seller from the customers to
hire a Seller for the performance of such services in such amounts as are shown
on the schedule.
2.08 Employees and Employee Liabilities
Except for the Assumed Liabilities and as provided in 4.04
hereof, Purchaser will not incur any liability to any governmental authority, to
any third person (including employee benefit plans of Sellers or to or on behalf
of Sellers' employees, any of which arise out of the employees' employment with
Sellers, out of the employees' participation in any employee benefit plans of
Sellers or out of Sellers' acts or omissions (as distinguished from Purchaser's
acts or omissions, including without limitation its decision to hire or not hire
any particular employee of Sellers), 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; for employee-related
taxes; for personal injury or property damage; or for discrimination,
harassment, or wrongful discharge under federal, state or local laws.
2.09 Patents, Trademarks, Copyrights, etc.
Sellers neither own, nor have pending or are licensed under
any patent, patent application, trademark, trademark application, trade name,
service xxxx, copyright, franchise, or other intangible property or asset used
by or sold or licensed to others by the Engineering Division and material to the
Engineering Division's operations ("Intangibles"), other than as described in
the
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Schedules to 1.01(a) or on Schedule 2.09, all of which are in good standing
and uncontested. Except as disclosed on such schedules, no person other than
Sellers owns any interest in any such Intangible.
2.10 Questionable Payments and Activities
Except to the extent assumed as an Assumed Liability,
Purchaser will not be subject to any action, proceeding or liability or any
debarment or other limitation on bidding or contracting and will not incur any
costs in connection with ethics or contractor integrity rehabilitation programs
as a result of any investigation or proceeding by a governmental agency based
upon any bribe, ethics violation, or improper conduct by Sellers or persons for
whose acts or omissions Sellers are responsible.
2.11 Authority to Sell
Sellers have all requisite corporate power and authority to
execute, deliver, and perform this Agreement. All necessary corporate
proceedings of Sellers, including all shareholder notice and approvals required
by law or the certificates or articles of incorporation or by-laws of Sellers,
have been or as of the Closing Date will have been duly taken to authorize the
execution, delivery, and performance of this Agreement by Sellers. This
Agreement has been duly authorized, executed, and delivered by Sellers,
constitutes the legal, valid, and binding obligation of Sellers, and is
enforceable as to them in accordance with its terms, except as enforceability
may be limited by applicable equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditor's rights generally. No consent, authorization, approval, order,
license, certificate, or permit of or from, or declaration or filing with, any
governmental authority, court or other tribunal or entity or individual is
required by Sellers for the execution, delivery, or performance of this
Agreement by them. The execution, delivery, and performance of this Agreement
will not materially violate or result in a breach of any term of the certificate
of incorporation, by-laws or other charter document of any Seller or violate,
result in a breach of, or conflict with any law, rule, regulation, order,
judgment, or decree binding on any Seller or to which any of their operations,
business, properties, or assets are subject.
2.12 Fictitious Names
Schedule 2.12 sets forth each fictitious name utilized by
Sellers within the past two years.
2.13 Absence of Undisclosed Liabilities
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Except as set forth in the schedules to this Agreement or the
Closing ED Balance Sheet, Sellers have no obligations or liabilities of any
kind, fixed, accrued or contingent which would materially affect the value of
the Purchased Assets or Purchaser's title to the Purchased Assets or the
business associated therewith.
2.14 Assets Free and Clear of Liens
Except as set forth on Schedule 2.14, Sellers have, prior to
Closing, good title to all of the Purchased Assets, free and clear of all liens,
mortgages, security interests, pledges, charges, encumbrances, shareholders'
agreements, or claims (collectively, "Liens"). Except for the Assumed
Liabilities or as set forth on Schedule 2.14, at Closing the Purchased Assets
will be free and clear of all Liens, and Sellers will have procured and
delivered at or prior to the Closing proof of release and satisfaction of each
and every Lien which is not assumed as an Assumed Liability or, but only to the
extent that Purchaser consents in writing thereto at or prior to Closing,
Sellers will have procured the written agreement of the holder of any such Lien
to so release its Lien(s) as soon as the preparation and filing of the release
can be completed, not to exceed ten (10) days after the Closing. Upon the
Closing, Purchaser will have good title to the Purchased Assets, free and clear
of all Liens except those expressly assumed as Assumed Liabilities.
2.15 Hazardous Materials - Lab and Field Samples
Prior to the Effective Time, Sellers have disposed of or moved
to locations which are not Assumed Premises Leases or Purchased Real Estate: (i)
all hazardous substances, pollutants or contaminants (as those terms are defined
in 42 U.S.C. 9601 or under any similar, applicable state or local law); (ii) all
petroleum wastes; (iii) all asbestos-containing materials, except for those
incorporated in building materials in premises; (iv) all obsolete, discarded or
off-specification laboratory or other commercially packaged chemicals or nuclear
source materials (but not unconsumed laboratory chemicals, nuclear source
materials which are components of equipment or other commercially packaged
supplies conveyed as Purchased Assets and currently used in the Engineering
Division's business); and (v) all laboratory or field samples upon which work
has been completed prior to Closing (collectively "Hazardous Materials"). The
foregoing warranty applies to all Hazardous Materials which, if not so disposed
of or moved (vi) would be located in or on the Purchased Real Estate or in
premises to be assumed by Purchaser under the Assumed Premises Leases or (vii)
would be in the possession of the Engineering Division; or for which (viii) the
Engineering Division could be held responsible for the care, custody or
disposal.
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III. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As a material inducement to Sellers to enter into this
Agreement, Purchaser represents and warrants as follows:
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, and duly qualified
to engage in business in the state of Pennsylvania, with full power and
authority to enter into and perform each of the transactions contemplated by
this Agreement.
3.02 Execution and Performance Authorized
This Agreement and all other documents and agreements
contemplated hereunder have been duly executed and delivered by the Purchaser,
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, by-laws 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, except as enforceability may be limited by applicable equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws affecting the enforcement of creditors' rights generally.
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 court, tribunal or administrative agency or board
which might, individually or in the aggregate, materially and adversely (i)
affect Purchaser's solvency or its ability to perform hereunder, or (ii) 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, except for the agreements set forth on Schedule
3.04 for which Purchaser has obtained such waivers or consents as are required
by such agreements.
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3.05 Permits and Filings
There is no requirement applicable to Purchaser to make any
filing with, or to obtain any permit, authorization, consent or approval of any
third party or 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
Except for the conditions specified elsewhere in this
Agreement, the monies to be paid by Purchaser under 1.01 shall be paid by
Purchaser and received by Sellers 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 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 the Purchased Assets or the business associated
therewith.
3.08 Corporate Documents
Purchaser has furnished to Sellers its certificate of
incorporation and a certificate of good standing in Delaware and a good standing
certificate evidencing Purchaser's qualification as a foreign corporation in
good standing in Pennsylvania, each dated within thirty (30) days of the
Closing.
3.09 Disclosure of Discovered Facts
Prior to Closing, Purchaser shall have disclosed to Sellers
the existence of any facts discovered by Purchaser in the course of its due
diligence which would render any of Sellers' representations or warranties
materially untrue as of Closing.
IV. COVENANTS
In addition to the other covenants of this Agreement, Sellers
and Purchaser agree as follows:
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4.01 Collection of Accounts Receivable
(a) In the event that any account receivable or work in
process which is a Purchased Asset and subject to 2.06(a) has not been collected
by Purchaser within six (6) months, Purchaser may deem such account receivable
or work in process to be uncollectible and transfer such account receivable or
work in process to Sellers by written notice within seven (7) days after the end
of such six (6) month period. Accounts or work in process may also be deemed
uncollectible by agreement of the parties as provided in 4.01(c) and shall
thereupon be transferred to Sellers. Purchaser may recover from the Sellers the
amount of any such uncollected accounts and work in process, net of the reserve
for such purpose on the Closing ED Balance Sheet, by set-off against the Note
under 1.04.
(b) Purchaser shall provide Sellers 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 Sellers in writing of the measures proposed to be taken. If Sellers agree
in writing that the proposed extraordinary measures should be taken or if
Sellers themselves deem such action to be necessary without notice from
Purchaser, Sellers shall notify Purchaser in writing of their agreement to such
measures. Sellers' agreement to the taking of extraordinary collection measures
shall constitute their agreement to having the reasonable cost of such measures
actually incurred, first charged against the reserve for uncollectible accounts
and the excess, if any, set off under 1.04.
(c) At any time the parties may by mutual written agreement
deem an account uncollectible, Purchaser shall re-assign it to Sellers and
charge it off of available reserves and set off the excess, if any. Purchaser
shall not unreasonably deny such request. Such request by Sellers for
reassignment shall constitute Sellers' agreement to a reduction in the reserve
for uncollectible accounts by such amount or, to the extent that the remaining
reserve balance is thereby exceeded, to a set-off in such excess amount, which
Purchaser shall exercise at the time of its payment on the Note.
(d) Purchaser agrees to use its best efforts to xxxx all work
in process which is a Purchased Asset as soon as is possible under the contract
giving rise to the work in process and within the administrative capabilities of
Purchaser in the transition after Closing. Within 30 days after Closing,
Purchaser shall deliver an opening ledger of work in process xxxxxxxx which
documents amount billed on each account, amounts charged off as unbillable and
amounts for which billing is not yet possible or has not yet been completed.
Within 10 days after its receipt of such ledger, Sellers shall object to any of
Purchaser's determinations that all
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or a portion of any work in process account is not billable or is not yet able
to be billed.
(e) The parties agree to confer in good faith to resolve any
disputes concerning the covenants set forth in 4.01, and if a dispute cannot be
so resolved, to follow the procedure set forth in 2.03(c) for resolution of
disputes involving accounting issues to determine the matter.
4.02 Public Statements
Before Sellers or Purchaser 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 other party hereto and shall furnish drafts of all documents
or proposed oral statements for comments, and shall not release any such
information without the written consent of the other party hereto. Nothing
contained herein shall prevent Purchaser or Sellers from making any release or
furnishing any information if required to do so by law or regulation, but even
in such case, the other party shall be given notice of the release and an
opportunity to comment on the contents.
4.03 Non-Competition
(a) In consideration of the payments to be made and the
Purchaser's other covenants hereunder, Sellers agree to strictly abide by the
following covenants. Sellers agree that for a period of two (2) years after
Closing, they will not:
(1) Non-Competition. Within the regulated zone, either
directly or indirectly, perform for hire services in the same fields in
which the Engineering Division has been engaged or own, or participate
in, be employed by, or serve as a consultant or other agent or
contractor to or for any business or enterprise, other than Purchaser,
engaged in such fields of services in which the Engineering Division
has been engaged, without the express written consent of Purchaser. The
"regulated zone" means all area within one hundred miles of the city
limits of an Engineering Division office as listed in 1.01(a) during
the year prior to Closing. The "fields in which the Engineering
Division has been engaged" means the service types and functions with
respect thereto performed by the Engineering Division within the two
(2) year period prior to Closing, including (but are not necessarily
limited to) the functions set forth in 1.01(a). Notwithstanding the
foregoing, Sellers shall not be precluded from performing the following
services in the regulated zone: (i) turn-key remediation design and
construction contracts; or (ii) after giving at least five (5) days
prior written notice to Purchaser, sole source contracts for clients
which were, prior
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to Closing, clients of the Sellers' operations other than the
Engineering Division and were not actively solicited by Sellers for
such contract in violation of (4) (i.e. the client was the initiator of
the request for Sellers to perform such services on a sole source
basis). Furthermore, in the event of an acquisition by any of the
Sellers of, the acquisition of any of the Sellers by, or a merger of
any of the Sellers with another entity providing services in the fields
in which the Engineering Division has been actively engaged
(individually or collectively "M&A Transaction"), nothing herein shall
prevent the Sellers or such entity from continuing to provide such
services in the regulated zone, provided that to the extent that the
acquired or acquiring entity does not maintain an office within the
regulated zone as of the closing of such M&A Transaction, neither the
Sellers nor any such entity shall establish an office within the
regulated zone within the two (2) year period following Closing.
(2) Non-Disclosure. Use for their benefit, or disclose,
communicate or divulge to, or use for the direct or indirect benefit
of, any person, firm, association or company other than Purchaser or
its affiliates, any information regarding the business methods,
business policies, procedures, techniques, research or development
projects or results, trade secrets, customers or clients or any other
confidential information relating to or dealing with the business
operations of the Engineering Division. The covenants in this clause
(2) shall not apply to (i) information that is generally known in the
industry, (ii) information that is in the public domain not as a result
of the violation of the Sellers' undertakings herein, or (iii) any
disclosure or use required by law or court order.
(3) Non-Solicitation - Employees. Either directly or
indirectly, for themselves or any person or entity other than
Purchaser, hire, or induce or attempt to influence to terminate his
employment, any employee or former employee of the Engineering Division
to which Purchaser extended an offer of employment conforming to 4.04.
An "employee" shall be considered a "former employee" for a period of
one (1) year following termination of employment with the Engineering
Division, Purchaser or Purchaser's subsidiaries or affiliates.
(4) Non-Solicitation - Customers. Directly or indirectly on
behalf of themselves or any third party, make any sales contact with,
or solicit or accept business from, any customer or prospective
customer of the Engineering Division for the purpose of securing a
commitment from such customer or prospect to purchase services in the
fields in which the Engineering Division has been engaged, unless such
customers were also customers of any entity involved in M&A Transaction
with Sellers.
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(5) Use of Names. Except for the benefit of Purchaser or its
subsidiaries or affiliates, use the names included as Purchased Assets
by 1.01(a)(7).
(b) Except as otherwise defined in this section or as the
context otherwise plainly requires, terms used in this section shall have the
same meaning as elsewhere in this Agreement. Undefined terms shall have their
ordinary meaning.
(1) The term "participate in" means "directly or indirectly,
for their own benefit or for, with, or through any other person or
entity, own, manage, operate, control, loan money to, give money to, or
participate in the ownership (except as a non-controlling owner of less
than 5% of the stock of a publicly-held corporation), management,
operation, or control of, or be connected as a director, officer,
employee, partner, consultant, agent, independent contractor, or
otherwise with, or acquiesce in the use of their names in."
(2) The term "customer" means any entity with whom Sellers had
entered into a contract or engagement, either written or oral, for the
performance of a service by the Engineering Division or from whom
Sellers recorded revenue for Engineering Division services, within the
two (2) year period prior to Closing.
(3) The term "customer prospect" means any person or entity
who had a potential need for services of a type provided by the
Engineering Division (i) to whom Sellers submitted a written proposal
for either specific services by the Engineering Division or for a
master or general services arrangement with the Engineering Division
within the two (2) years prior to Closing or (ii) with whom the
Engineering Division, within the two (2) years prior to Closing,
developed or maintained a business relationship or about whom Sellers
acquired knowledge of its desire to purchase Engineering Division
services.
(4) The term "indirectly" includes, but is not limited to,
means such as acting through or on behalf of, assisting, arranging,
encouraging, making a loan or gift to, owning or having an ownership
interest in (except for passive investments in publicly traded
securities of less than five percent of the outstanding voting stock
of) or entering into a partnership or similar arrangement with.
(5) The term "turn-key" means a contract where the contractor
is required by the terms of the contract to undertake all of the
services of design and construction of a remediation system as a
condition of entering into the contract.
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(6) The term "sole source" means a contract which is awarded
to Sellers on the basis of a relationship which pre-existed the
decision to award such contract to Sellers and which was offered to
Sellers alone because of such relationship on a non-competitive basis.
(c) Sellers agree that the restrictive covenants of this 4.03
are reasonable in scope and duration and are necessary to protect the bona fide
confidential business information purchased by Purchaser from Sellers and to
protect the value for Purchaser of the Purchased Assets, the associated good
will, and Purchaser's employee, customer and business relationships. Sellers
agree that the Engineering Division has either had offices or has actively and
substantially performed services throughout the entire United States and that
the regulated zone limiting the applicability of (a) hereof is therefore a
necessary and reasonable coverage area. Sellers expressly agree that the
customer list and other customer and business information purchased by Purchaser
as Purchased Assets are proprietary, and they agree that a breach of any of
these provisions will cause immediate and irreparable harm for which money
damages alone will not be an adequate remedy and that Purchaser shall have
available to it, in addition to any other remedies available by law, equitable
remedies, including the remedies of specific performance, preliminary injunction
and injunction, to compel performance of and to enjoin the breach or threatened
breach of the provisions of this section, without the necessity of proof of
immediate and irreparable harm and of providing any injunction bond.
(d) If any restrictive covenant contained in this 4.03 shall
be deemed by a court or arbitrator to be invalid, illegal, or unenforceable
under the laws of any jurisdiction by reason of the extent, duration, or
geographical scope thereof or otherwise, the balance of this section shall
remain in effect in such jurisdiction and the entire agreement shall remain in
effect in all jurisdictions in which such provision is lawful and enforceable.
If any such provision is unenforceable as to any circumstance, it shall
nevertheless remain applicable to all other circumstances. Sellers and Purchaser
agree that the court or arbitrator shall be authorized to reform such provision
by reducing such extent, duration, geographical scope, or other provision
hereof, or otherwise modifying or limiting such provision to the minimum extent
necessary to render such provision enforceable, and in its reformed form such
restriction shall be enforceable in the manner contemplated hereby.
4.04 Hiring of Engineering Division Employees
(a) Effective as of the Closing, the Purchaser shall offer
employment, on an "at will" basis, at their then current rates of base pay and
employment status to all employees who are employed by the Sellers in the
Engineering Division listed on Schedule 4.04
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("Offerees"). Such Offerees who accept employment with the Purchaser shall be
referred to herein as the "Hired Employees." Purchaser shall provide the Hired
Employees the same benefits and benefit options, including health insurance
coverage, provided to the other employees of Purchaser. Purchaser's health plan
shall not impose any limitation or exclusion with respect to any pre-existing
condition that affects coverage for the Hired Employees or their spouses or
dependents, and Purchaser shall make such coverage available to all of the Hired
Employees, spouses and dependents who were eligible as of the Closing Date to
receive such coverage under Sellers' plan. In addition, Purchaser shall provide
to the Hired Employees the same benefits provided to Purchaser's other
employees. Subject to the preceding two sentences, Purchaser may modify, alter
or terminate any of the terms and conditions of employment of the Hired
Employees. Nothing in this Agreement shall prevent the Purchaser from
terminating the employment of any Hired Employee at any time after the Closing
Date. Purchaser represents to Seller that it does not intend to implement a
"plant closing" or a "mass layoff", as those terms are defined in the Worker
Adjustment and Retraining Notification Act ("WARN"), in respect of the
Engineering Division within 150 days after the Closing Date. Purchaser further
agrees to assume responsibility for giving any and all notices required by WARN
and to assume liability for any alleged failure to give a WARN Notice.
(b) The Sellers agree to cause the release of the Hired
Employees from any contractual provision with the Sellers which would impair the
utility of such employees' services to Purchaser or which would impose upon such
employees any monetary or other obligation to the Sellers which otherwise would
be occasioned by the termination of such employees' employment or relationship
including, without limitation, any agreements of noncompetition or
confidentiality.
(c) At the Closing, Purchaser shall assume all liabilities of
Sellers to the extent included in the Assumed Balance Sheet Liabilities relating
to the payment of all accrued but unpaid overtime, vacation and holiday pay,
sick pay and short-term disability pay of the Hired Employees, regardless of
whether such individuals are actively at work on the Closing Date or are on a
leave of absence. For purposes of this Agreement the term "leave of absence"
shall include medical leave of absence, military leave of absence and workers'
compensation leave of absence. Effective as of the Closing Date, Purchaser shall
assume liability for all post-Closing claims (including, without limitation,
claims arising under the health care continuation coverage requirements of
Section 4980B of the Code and Sections 601 through 608 of ERISA) which are
properly payable with respect to the Hired Employees under each of Purchaser's
benefit plans, including without limitation, all life insurance, medical,
dental, accident and disability plans, programs, policies or arrangements.
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(d) Purchaser shall offer all Hired Employees the option to
participate from and after the Closing Date in Purchaser's 401(k) plan
("Purchaser's Plan") on the same terms as Purchaser's other employees. Purchaser
shall permit all Hired Employees who were participants in the Xxxxx
Environmental Technologies Corporation Profit-sharing and 401(k) Plan ("Sellers'
Plan") as of the day immediately preceding the Closing Date to roll over their
shares in Sellers' Plan into Purchaser's Plan. Purchaser's Plan shall, for
purposes of vesting and eligibility, recognize all service of Hired Employees
that was recognized under Sellers' 401(k) Plan as of the day immediately
preceding the Closing Date.
(e) Following the Closing Date, the Sellers shall take such
action as may be necessary to cause the account balances of all Hired Employees
in the BCM Engineers Inc. Employee Stock Ownership and Profit Sharing Plan to be
distributed pursuant to the terms of such plan, and Purchaser shall permit Hired
Employees to roll over such distributions into Purchaser's Plan to the extent
such rollover is allowable under Purchaser's Plan.
4.05 Transaction Costs and Expenses
Except as otherwise expressly agreed herein, Sellers and
Purchaser shall each bear and pay all of their respective costs, fees, expenses
and taxes incurred in connection with bringing about this transaction including,
without limitation, all legal, accounting, auditing and appraisal fees in
negotiating and preparing the documents and in consummating, closing and
carrying out the transactions contemplated hereby. Any costs to be charged to
the Engineering Division shall be included on the Closing ED Balance Sheet.
4.06 Information, Books and Records
(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 the Engineering Division
business before the Effective Time and/or the Purchased Assets as may from time
to time be requested by the other party. In the event either Purchaser or
Sellers are required or desire to prepare audited statements for any reasonable
purpose including the desire to verify any information provided to the other
party relative to this Agreement or in connection with future financings or
transactions desired by either party, the parties agree to allow the other party
reasonable access to documents and records, including the non-proprietary
working papers of the other party's accountants, subject to standard hold
harmless agreements which may be required by such accountants, and to provide
reasonable cooperative assistance in the preparation of reports, documents, etc.
(including the signing of management representation letters and the like)
without charge except for reimbursement of any actual, out-of-pocket expenses,
exclusive of the cost of in-
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house staff time. Notwithstanding the foregoing, in the event that a party is or
anticipates becoming a party to litigation, neither this 4.06 nor any other
provision of this Agreement shall 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 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 and records of Sellers pertaining to the
Engineering Division or the Purchased Assets in its possession. A party shall be
responsible for actual damage caused to the other party only as a result of its
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
nonexistence 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
intentionally wrongful act.
4.07 Addresses, Mail and Deliveries
Purchaser shall have the right to receive and open for
inspection any mail or deliveries received at any of its offices, including any
office that is an Assumed Premises Lease, which is addressed to any name in
which the Engineering Division did business prior to Closing or to any person
who was an employee or former employee of the Engineering Division or which
otherwise reasonably appears to potentially contain Purchased Assets or
correspondence or documents which would customarily be received by the owner of
the Purchased Assets unless it is clear from the envelope that the contents
relate to the business of Sellers other than the Engineering Division or are
personal in nature. Purchaser and Sellers agree to cooperate in good faith to
achieve the prompt delivery to each other of mail and deliveries, to use their
best efforts to avoid opening mail or deliveries which rightfully belong to the
other and to turn over to the other any property, including checks or money,
belonging to the other within three (3) days after determining its rightful
ownership. Purchaser shall have the exclusive right to apply for change of
address, change of telephone numbers or location of telephone numbers applicable
to
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the purchased names or Purchased Assets. Sellers agree to execute and return
to Purchaser within three (3) days after receipt thereof such assignment or
consent forms as Purchaser requests to effect such changes of address, telephone
number location or telephone numbers.
4.08 Related Agreements
Sellers and Purchaser each agree to execute and deliver at
Closing the Related Agreements to which they are a party referenced in 5.01.
4.09 Assignment of Agreements - Benefits of Ownership to be
Provided Where Assignment or Novation Not Possible
(a) Sellers shall use their best efforts to attempt to secure
(and to assist Purchaser in securing) all consents and approvals required to
effect the assignment of the Customer Contracts and other agreements to be
transferred to Purchaser hereunder. Use of best efforts shall not require
Sellers to pay funds to third parties for their agreement to provide such a
consent. Sellers agree that, upon the written request of Purchaser, they will
execute and return to Purchaser each and every assignment, consent to assignment
or novation, or other document reasonably necessary to effect the transfer or
execution of any Customer Contract or other contract, asset or benefit to be
conveyed hereunder within two (2) business days after receipt of such document.
Sellers' covenant in this regard shall be absolute and not subject to any right
of non-performance for any reason, including breach by Purchaser, and Sellers
expressly acknowledge and agree: (i) that this covenant is of critical
importance to Purchaser; (ii) that its breach will cause Purchaser immediate and
irreparable harm for which money damages alone will be difficult of
ascertainment and inadequate; and (iii) that in the event of a breach hereof,
Purchaser shall be entitled to immediate equitable relief in the form of an
emergency, preliminary injunction or decree on a summary basis for specific
performance or mandatory injunction without any requirement for the posting of
any bond or undertaking or proof of immediate and irreparable harm.
(b) Sellers agree that, as of the Closing Date, they will
appoint and authorize one or more persons to execute after Closing assignments,
novations, consents to assignment and other documents necessary to effect the
transfer of contracts, the Purchased Assets or the benefits thereof to Purchaser
in cases where such documents, in addition to those executed and delivered at
Closing, are required by a customer, a title registration officer or other third
party as a condition of permitting the transfer or conferring the benefit.
Sellers shall provide such persons the corporate seals of Sellers to be used for
the purpose of executing transfer documents. Sellers will promptly notify
Purchaser in writing of any changes
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from time to time in the identity of the persons so authorized. If the persons
appointed under this section are employees of Purchaser or its affiliate,
Purchaser shall indemnify Seller pursuant to 1.03 for any damage caused to
Sellers as a result of such appointed persons' acts or omissions.
(c) With respect to any Customer Contract, Subcontract or
Assumed Liability which Sellers and Purchaser are not able to promptly obtain a
consent to assign or novate, which are otherwise not capable of assignment or
novation or which Purchaser is precluded from performing on a stand-alone basis
because of a transitional licensing issue, Purchaser shall nevertheless be
deemed to be entitled to all beneficial interest in such Customer Contract,
Subcontract, or Assumed Liability as against Sellers, and Sellers shall use
their best efforts to: (i) subcontract such Customer Contract or Assumed
Liability to Purchaser on the same terms and conditions as the original (except
that Sellers shall retain all pre-closing liability as provided in 1.02 except
as assumed as an Assumed Liability); and/or (ii) cooperate in any reasonable and
lawful arrangement to provide to the Purchaser all the benefits of such Customer
Contract or Assumed Liability, such as (but not limited to) re-hiring such of
Purchaser's employees on a part-time, temporary basis as are necessary to
perform such contractual obligations on Purchaser's behalf, provided Purchaser
pays all Sellers' direct costs and expenses associated with such re-hiring and
work and assumes and indemnifies Sellers against all direct costs and liability
associated with such re-hiring and performance of services. Similarly, Purchaser
shall cooperate with Sellers to ensure that Sellers receive the benefit of the
assumption of the Assumed Liabilities by Purchaser.
(d) Sellers hereby grant to Purchaser a one-year limited
license to use the names "Xxxxx Technology Corporation," "Reidel Environmental
Services Inc.," and "Canonie Environmental Services Corp." on a transitional
basis to enable Purchaser to use, obtain the benefits from (including payment),
and effect the transfer of, the Purchased Assets. Sellers authorize Purchaser to
endorse checks payable to any of these names where the check is delivered in
payment of amounts due under a Customer Contract, an account receivable or work
in process, any deposit, bond, bond collateral, proceeds, refund, or prepaid
expenses which are Purchased Assets. Purchaser agrees to strictly restrict its
use of such names to the minimum extent necessary to achieve the purposes set
forth in this section. Purchaser shall not conduct any sales or marketing
activities under such licensed names. Purchaser agrees to indemnify Xxxxx
pursuant to 1.03 for Third Party Claims against Sellers arising from Purchaser's
use of such names or for any breach by Purchaser of the limitations on use
contained in 4.09(d).
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4.10 Reserves and Allowances
To the extent such reserves or allowances are assumed as
Assumed Balance Sheet Liabilities, Purchaser shall be obligated to make payments
or reimbursements to or on behalf of Sellers for amounts recorded on the Closing
ED Balance Sheet as reserves or allowances for anticipated expenses or
liabilities. Such payments shall be paid by Purchaser up to the recorded amount
of the reserve or allowance upon presentation of vendor invoices or proof of
payment approved in writing by a person designated by Sellers in writing as
authorized to submit invoices for such purpose on Sellers' behalf. Purchaser
shall have no liability to Sellers as a result of paying any expense so
approved. Purchaser's payment or reimbursement of expenses covered by Seller's
reserves or allowances which are Assumed Balance Sheet Liabilities shall not be
construed as any indication whatsoever that Purchaser has assumed liability for
Sellers' debts, liabilities or administrative responsibility, either for the
specific class covered by such reserve or in general, beyond the amount of the
recorded reserve except as such are themselves assumed specifically as Assumed
Liabilities.
4.11 Standard Rates
Whenever any goods or services are provided or procured by
Sellers or Purchaser to correct or remedy the other party's breach, default, or
deficiency of performance under any representation, warranty, or covenant of
this Agreement, such goods or services shall be valued at Purchaser's or
Sellers' Standard Rates, respectively. "Standard Rates" means the rate which
Purchaser or Sellers would charge an ordinary commercial customer for the
particular class of services being performed or the retail market price for
goods supplied. Such rates shall not exceed the rates which similar firms would
charge for such goods or services in the location in which they are being
delivered.
4.12 Insurance after Closing
Sellers shall either: (i) for a three (3) year period after
Closing, maintain in full force and effect, and timely pay all premiums on, each
policy of insurance in effect prior to Closing which was written on a claims
made basis or procure other policies of equal coverage and financial strength
covering such three (3) year period in order to ensure coverage for a three year
period of claims or losses arising from Sellers' alleged professional or other
acts, omissions and negligence; or (ii) prior to the Closing or prior to the
expiration of any policy referred to in (i), procure an extended reporting
period under such policy which shall not expire sooner than the date three (3)
years after the Closing Date. Such insurance shall have limits of not less than
$2,000,000 per occurrence and $5,000,000 in the aggregate with a deductible not
to exceed $150,000. Purchaser shall be named as an additional
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insured under each such policy. At Closing and thereafter, Sellers shall deliver
certificates evidencing the continuing existence and adequacy of the insurance
required by this section and, on request by Purchaser, a copy of each such
policy.
4.13 Successor Payroll Issues
Purchaser shall be the successor employer to Sellers, with
respect to the Hired Employees, for purposes of post-Closing FICA taxes and
reporting, FUTA taxes and reporting, and corresponding state payroll laws and
regulations. Purchaser agrees to perform the obligations of a successor employer
for such taxes and reporting purposes and will indemnify, defend and hold
Sellers harmless from and against any and all liabilities or obligations arising
out of Purchaser's election to be treated as a successor employer for such
purposes or its failure to perform or properly perform all of Purchaser's
obligations as a successor employer of Sellers for the purposes set forth in
this section, including but not limited to completing accurately and completely
all Forms 941, 940, W-2 and W-3 related to obligations accruing after Closing
required of Purchaser in its status as successor employer. Sellers shall perform
such obligations for pre-Closing accruals. This section shall not be construed
to imply that Purchaser is liable as a successor employer or otherwise as a
successor to Sellers for any purpose except for the limited purposes set forth
in this section.
4.14 Unrecorded Payables
The parties anticipate that Sellers will incur trade payables
in the ordinary course after Closing which relate to goods delivered to or
services performed for the Engineering Division prior to Closing but which were
not recorded on Schedule 1.01(b)(5) and the Interim ED Balance Sheet because of
non-receipt of invoice or delay in Sellers' internal routing and recording of
such payables. Sellers agree that prompt payment of certain of accounts payable
that are from utility services (including telephone) or from vendors,
subcontractors or suppliers of direct materials related to purchased accounts
receivable or work in process (the "Payables in Process") are of material
importance to Purchaser, and Sellers accordingly agree to either: (i) pay any
Payable in Process within seven (7) days after receipt; or (ii) provide notice
to Purchaser within seven (7) days of Sellers' receipt of such Payable in
Process and of its intention not to pay it within seven (7) days. If Purchaser
then requests Sellers to pay such Payable in Process, Sellers shall use their
best efforts to pay the same within seven (7) days. If Sellers are unable to, or
otherwise do not, so pay, Purchaser shall be authorized to pursue its rights
under 1.01(b)(5), and if such remedy is not available, its other rights and
remedies under this Agreement. Any dispute between the parties under this
section or 1.01(b)(5) shall be resolved as provided in 2.03(c).
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V. RELATED AGREEMENTS
5.01 Related Agreements
The following related agreements (the "Related Agreements")
shall be executed at Closing by the applicable parties:
(a) The Xxxxx Non-Competition Agreement between Xxxxx Xxxxx
and Purchaser.
(b) The Joint Services Agreement providing for the joint
occupancy of shared premises and temporary access to information, data
processing, computer systems and other services which were, prior to
Closing, used by both the Engineering Division and Sellers' other
operations.
(c) Audit Representation Letter Agreements of Xxxxx Xxxxx,
Xxxxxx Xxxxxxxx and X. X. Xxxxxx pursuant to which Xx. Xxxxx, Xx.
Xxxxxxxx and Xx. Xxxxxx will each agree to provide a standard
representation of liabilities and contingent liabilities letter in
connection with any audit which Purchaser elects to perform or
auditor's consent which Purchaser requires.
VI. CLOSING
6.01 Closing, Closing Date and Effective Time
The closing of the transactions contemplated hereunder took
place at 3:00 p.m. on August 19, 1997, at the offices of Xxxxx Technology
Corporation, at One Plymouth Meeting, Plymouth Meeting, PA. 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 August 20, 1997
(the "Effective Time").
6.02 Sellers' Obligations at Closing
At or prior to the Closing, Sellers shall deliver or cause to
be delivered to Purchaser, in form reasonably satisfactory to Purchaser, the
following:
(a) A Xxxx of Sale and Assignment substantially in the form
set forth in Exhibit 6.02(a), sufficient to effect and evidence the
transfer, conveyance and delivery of the Purchased Assets.
(b) A fully executed assignment of each Assumed Premises
Lease.
(c) The fully executed Xxxxx Non-Competition Agreement between
Purchaser and Xxxxx Xxxxx and the Audit Representations Letter
Agreements of Xxxxx Xxxxx, Xxxxxx Xxxxxxxx and X. X. Xxxxxx.
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(d) A certificate of title duly assigned and a xxxx of sale
for each vehicle which is a Purchased Asset.
(e) A fully executed UCC-3 in the case of security interests
governed by the Uniform Commercial Code and, in other cases, a fully
executed release and satisfaction of each security interest, lien or
encumbrance against any of the Purchased Assets except: (i) those for
which Purchaser has expressly assumed in full as an Assumed Liability
either the obligation underlying such security interest or the
responsibility for obtaining the release of such interest or (ii) as
provided in 2.14.
(f) Certificates of insurance naming Purchaser as an
additional insured evidencing the insurance policy(ies) under 4.12.
(g) A resolution of Sellers' Board of Directors authorizing
the execution, delivery and performance of this Agreement and all
Related Agreements by Sellers, to the extent they are parties thereto.
(h) Fully executed appointment or appointments of one or more
officers or agents to act on behalf of Sellers to execute assignments
and novations of contracts as provided in 4.09(b).
(i) An opinion of counsel to Sellers, satisfactory to counsel
for the Purchaser.
(j) All material approvals, consents and/or waivers that are
necessary to effect the transactions contemplated hereby.
(k) Such other documents (including certificates of officers
of Sellers) 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.
(l) All other schedules, certificates and other documents
required by this Agreement to be delivered on or before Closing.
(m) At any time or times on or after the Closing, Sellers
shall execute, acknowledge, and deliver any and all further assurances,
documents, and instruments reasonably requested by Purchaser in order
to effectively convey the Purchased Assets and all ownership of such
assets free and clear of encumbrances or title defects except as
expressly authorized herein and shall take all other actions consistent
with the terms of this Agreement that may reasonably be requested by
Purchaser in order to effectuate the purposes and intent hereof.
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6.03 Purchaser's Obligations at Closing
At or prior to the Closing, Purchaser shall deliver or cause
to be delivered to Sellers, in form reasonably satisfactory to Sellers, the
following:
(a) The cash payable at Closing under 1.01(b)(1).
(b) The Note deliverable at Closing under 1.01(b)(2).
(c) The Short Term Note deliverable at Closing under
1.01(b)(5).
(d) A resolution of the Board of Directors of Purchaser
authorizing its execution, delivery and performance of this Agreement.
(e) An opinion of counsel to Purchaser, satisfactory to
counsel for the Sellers.
(f) All material approvals, consents and/or waivers that are
necessary to effect the transactions contemplated hereby.
(g) Such other documents (including certificates of officers
of Purchaser) as the Sellers may reasonably request in order to enable
the Sellers to determine whether the conditions to their obligations
under this Agreement have been met and otherwise to carry out the
provisions of this Agreement.
(h) At any time or times on or after the Closing, Purchaser
shall execute, acknowledge, and deliver any and all further assurances,
documents, and instruments reasonably requested by Sellers in order to
effectively convey or assure payment for the Purchased Assets and shall
take any other action consistent with the terms of this Agreement that
may reasonably be requested by Sellers in order to effectuate the
purposes and intent hereof.
VII. MISCELLANEOUS
7.01 Brokerage Fees
(a) Sellers acknowledge that The Environmental Financial
Consulting Group, Inc. ("EFCG") acted as a broker for Sellers relative to this
transaction, and Sellers further acknowledge that they are obligated to pay EFCG
a commission for such services. Sellers agree to pay such amounts and to hold
Purchaser harmless from any liability for the obligation to pay such finders fee
to EFCG.
(b) Except for such brokerage arrangement specified in (a),
neither the Purchaser nor Sellers have consented to or authorized any broker, or
third party to act on its behalf, directly or
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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 other than that described in (a) 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 as a result thereof. Further, the
responsible party shall indemnify the other party against any loss or
liabilities by reason of such broker's or finder's fees.
7.02 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 transfer of the assets
hereunder and the purposes of this Agreement.
7.03 Availability of Equitable Remedies
Since a breach of the provisions of this Agreement could not
adequately be compensated by money damages and would cause immediate and
irreparable harm, either party shall be entitled, either before or after the
Closing, in addition to any other right or remedy available to it, to 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 to compel performance hereof without proof of immediate and
irreparable injury or uniqueness of the assets to be conveyed or without the
necessity of the posting of a bond for such relief.
7.04 Survival
Except as otherwise provided herein, the covenants,
agreements, representations, and warranties contained in, made or undertaken
pursuant to this Agreement or any Related Agreement are (i) material, (ii) have
been relied upon by the party to whom given, irrespective of any investigation
made by or on behalf of such party, (iii) shall survive the Closing and any
delivery of the purchase price by the Purchaser and Purchased Assets by Sellers,
and (iv) shall not merge in the performance of any obligation by any party to
this Agreement or any Related Agreement.
7.05 Entire Agreement - 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.
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7.06 Notices
All notices, elections, payments, reports or other
correspondence required or permitted hereunder shall be in writing and deemed to
have been properly given or delivered when personally delivered, mailed by
certified mail or delivered by a nationally recognized overnight express
courier, postage or delivery fees prepaid, to the party to whom directed at the
below specified addresses:
A. If to Sellers:
Xxxxxx X. Xxxxxxx
President and CEO
The Xxxxx Technology Corporation
One Plymouth Meeting
Plymouth Meeting, PA 19462
with a copy sent in one of the prescribed manners to:
Xxxx X. Xxxxx, Esq.
Xxxxx, Day, Xxxxxx & Xxxxx
0000 XxxXxxxx Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
B. If to Purchaser:
Xx. Xxxxx X. Xxxxx, President
ATC Group Services Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
with a copy sent in one of the prescribed manners to:
Xxxx Xxxxx, Esq.
ATC Group Services Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000-0000
Any such notice shall be deemed given at the time of personal delivery, three
days after deposit with the mail or one day following deposit with an overnight
express courier. The address of a party may be changed in accordance with the
notice provisions of this section.
7.07 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
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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.
7.08 Binding Effect
The provisions of this Agreement shall be binding upon and
inure to the benefit of Sellers, Purchaser, and their respective successors and
assigns, and shall inure to the benefit of the indemnitees and their respective
successors, assigns, heirs, and personal representatives.
7.09 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 7.08).
7.10 Separability
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 unless the result
thereof would result in an unjust modification of the balance of rights and
obligations hereunder.
7.11 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.
7.12 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 Delaware
without giving effect to conflict of laws. Each of the parties hereby consents
to the jurisdiction of the courts of the state of Delaware, agrees to submit to
service therefrom and waives any claim it may have as to forum non conveniens in
connection with any action brought in the state of Delaware.
7.13 Separate Counterparts
This Agreement is being executed in several identical
counterparts, each one of which shall be considered an original and
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all of which when taken together shall constitute but one instrument.
7.14 Incorporation of Recitals, Exhibits and Schedules
All exhibits, schedules and Related Agreements attached hereto
are incorporated herein by reference and expressly made a part of this
Agreement.
7.15 Mediation
Except in cases where the remedy of preliminary injunction is
reasonably sought by a party because of the irreparability and immediacy of the
harm alleged to be caused or threatened, 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
and if such dispute cannot be resolved through negotiation or, in the case of
those matters to be resolved under this Agreement by the procedure specified for
settlement of accounting and collection related issues in 2.03(c), the parties
agree that such dispute shall be submitted to non-binding mediation under the
Commercial Mediation Rules of the American Arbitration Association before
resorting to litigation. The mediation shall be held in Dover, Delaware before a
single mediator selected by the American Arbitration Association.
7.16 Non-Working Dates
When any date on which payment or any other performance is due
under this agreement falls on a Saturday, Sunday or national holiday, such
payment or performance shall be due on the next business day following such
date.
7.17 Opportunity to Cure
All parties to this Agreement shall be afforded a period of
ten (10) days following written notice thereof to cure any alleged breach of
this Agreement unless the loss threatened by such breach is of such gravity to
require immediate action.
VIII. DEFINED WORDS AND PHRASES
8.01 Convention for Definition of Terms
Words used in this Agreement shall have their ordinary meaning
unless specifically defined in this Agreement. Where a word or phrase appears in
quotation marks within parentheses (whether or not listed in 8.02), the word or
phrase in quotation marks shall have the meaning throughout this Agreement
(unless a more limited scope is specified or is obvious from the context)
defined by the
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definition immediately preceding and in apposition to the quoted word or
phrase. Most (but not all) defined words or phrases are delineated as such by
the use of capitalized first letters.
8.02 Certain Definitions
(a) Unless otherwise expressly stated in a particular case,
the term "including" shall mean "including, but not limited to."
(b) Unless otherwise expressly stated in a particular case,
the term "knowledge of the Sellers" means the knowledge of an officer, director,
regional manager or branch manager of Xxxxx or of any director, regional officer
or regional or branch manager of any Seller other than Xxxxx.
(c) Unless otherwise expressly stated in a particular case,
the term "Sellers" means the "Sellers, jointly and severally."
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date set forth in the opening paragraph hereof.
ATC GROUP SERVICES INC. XXXXX TECHNOLOGY CORPORATION
By /s/ Xxxxxxxx X Xxxxxx By /s/ Xxxxxx X. Xxxxxxx
---------------------- ----------------------
Xxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxx
Senior Vice President President and CEO
BCM ENGINEERS INC., Delaware BCM ENGINEERS INC., Alabama
By /s/ Xxxxxxx X. Xxxxxxxx By /s/ Xxxxxxx X. Xxxxxxxx
------------------------ ------------------------
BCM ENGINEERS INC., Penn. BCM ENGINEERS INC., West V.
By /s/ Xxxxxxx X. Xxxxxxxx By /s/ Xxxxxxx X. Xxxxxxxx
------------------------ ------------------------
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