STOCK PURCHASE AGREEMENT
by and among
The Randers Group Incorporated,
a Delaware corporation
(as "Buyer")
AND
Thermo TerraTech Inc.,
a Delaware corporation
(as "Seller")
regarding the purchase and sale of
The Xxxxxx Group Inc.,
a Delaware corporation
("Xxxxxx Group")
Entered into September 19,1997
PAGE
STOCK PURCHASE AGREEMENT
Agreement entered on September 19, 1997, by and among by and
between THERMO TERRATECH INC., a Delaware corporation (the
"Seller") and THE RANDERS GROUP INCORPORATED, a Delaware
corporation (the "Buyer"). The Buyer and the Seller are referred
to collectively herein as the "Parties."
RECITALS:
WHEREAS, the Seller owns in the aggregate 100% of the issued
and outstanding shares of the capital stock of The Xxxxxx Group
Inc., a Delaware corporation ("Xxxxxx Group");
WHEREAS, Xxxxxx Group owns 100% of the issued and
outstanding shares of the capital stock of Thermo Consulting &
Design Inc., a Delaware corporation, and 100% of the issued and
outstanding shares of the capital stock of CarlanKillam
Consulting Group Inc., a Florida corporation;
WHEREAS, this Agreement contemplates a transaction in which
the Buyer will purchase from the Seller, and the Seller will sell
to the Buyer, all of the outstanding capital stock of Xxxxxx
Group for shares of stock in the Buyer.
AGREEMENT:
Now, therefore, in consideration of the premises and the
mutual promises herein made, and in consideration of the
representations, warranties, and covenants herein contained, the
Parties agree as follows.
1. Definitions.
"Accredited Investor" has the meaning set forth in
Regulation D promulgated under the Securities Act.
"Adverse Consequences" means all actions, suits,
proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, amounts paid in
settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including court costs and reasonable
attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the
meaning of Code Sec. 1504, or any similar group defined under a
similar provision of state, local or foreign law.
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"AMEX" means the American Stock Exchange.
"Applicable Rate" means the corporate base rate of interest
announced from time to time by First Chicago NBD Corporation, Xxx
Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, XX 00000.
"Base Purchase Price" has the meaning set forth in Section
2.2 below.
"Basis" means any past or present fact, situation,
circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or
transaction that forms or could form the basis for any specified
consequence.
"Buyer" means The Randers Group Incorporated, a Delaware
corporation.
"Closing" has the meaning set forth in Section 2.3 below.
"Closing Date" has the meaning set forth in Section 2.3
below.
"Closing Balance Sheet has the meaning set forth in Section
2.2 below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the United States Securities and Exchange
Commission.
"Commission Filings" has the meaning set forth in Section
3.2.7 below.
"Confidential Information" means any information concerning
the businesses and affairs of Xxxxxx Group and its Subsidiaries
that is not already generally available to the public.
"Controlled Group of Corporations" has the meaning set forth
in Code Sec. 1563.
"Disclosure Schedule" has the meaning set forth in Section 4
below.
"Employee Benefit Plan" means any (A) nonqualified deferred
compensation or retirement plan or arrangement which is an
Employee Pension Benefit Plan, (B) qualified defined contribution
retirement plan or arrangement which is an Employee Pension
Benefit Plan, (C) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including
any Multiemployer Plan), or (D) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
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"Employee Pension Benefit Plan" has the meaning set forth in
ERISA Sec. 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in
ERISA Sec. 3(1).
"Environmental, Health, and Safety Laws" means the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Resource Conservation and Recovery Act of 1976,
and the Occupational Safety and Health Act of 1970, each as
amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof)
concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws
relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface
water, ground water, or lands or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Extremely Hazardous Substance" has the meaning set forth in
Sec. 302 of the Emergency Planning and Community Right-to-Know
Act of 1986, as amended.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Financial Statement" has the meaning set forth in Section
4.7 below.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"Indemnified Party" has the meaning set forth in Section 8.4
below.
"Indemnifying Party" has the meaning set forth in Section
8.4 below.
"Intellectual Property" means (A) all inventions (whether
patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (B) all trademarks,
service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptations, derivations,
and combinations thereof and including all goodwill associated
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therewith, and all applications, registrations, and renewals in
connection therewith, (C) all copyrightable works, all
copyrights, and all applications, registrations, and renewals in
connection therewith, (D) all mask works and all applications,
registrations, and renewals in connection therewith, (E) all
trade secrets and confidential business information (including
ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), (F) all computer
software (including data and related documentation), (G) all
other proprietary rights, and (H) all copies and tangible
embodiments thereof (in whatever form or medium).
"Xxxxxx Group" means The Xxxxxx Group Inc., a Delaware
corporation.
"Xxxxxx Group Share" means any share of the voting common
stock, non-voting common stock and preferred stock of Xxxxxx
Group.
"Knowledge" means actual knowledge after reasonable
investigation.
"Liability" means any liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for
Taxes.
"Most Recent Balance Sheet" means the balance sheet
contained within the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth
in Section 4.7 below.
"Most Recent Fiscal Month End" has the meaning set forth in
Section 4.7 below.
"Most Recent Fiscal Year End" has the meaning set forth in
Section 4.7 below.
"Multiemployer Plan" has the meaning set forth in ERISA Sec.
3(37).
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with
respect to quantity and frequency).
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
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"Person" means an individual, a partnership, a corporation,
an association, a joint stock company, a trust, a joint venture,
an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Prohibited Transaction" has the meaning set forth in ERISA
Sec. 406 and Code Sec. 4975.
"Reportable Event" has the meaning set forth in ERISA Sec.
4043.
"RGI Convertible Securities" has the meaning set forth in
Section 3.2.6 below.
"RGI Options" has the meaning set forth in Section 3.2.6
below.
"RGI Shares" means the shares of RGI Stock being issued to
Seller pursuant to this Agreement.
"RGI Stock" means the common stock, $0.0001 par value per
share, of The Randers Group Incorporated, a Delaware corporation.
"Securities Act" means the Securities Act of 1933, as
amended.
"Securities Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (A)
mechanic's, materialmen's, and similar liens, (B) liens for Taxes
not yet due and payable or for Taxes that the taxpayer is
contesting in good faith through appropriate proceedings, (C)
purchase money liens and liens securing rental payments under
capital lease arrangements, and (D) other liens arising in the
Ordinary Course of Business and not incurred in connection with
the borrowing of money.
"Seller" means Thermo TerraTech Inc., a Delaware
corporation.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the
common stock or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors.
"Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental
(including taxes under Code Sec. 59A), customs duties, capital
stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added,
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alternative or add-on minimum, estimated, or other tax of any
kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim
for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any
amendment thereof.
"Third Party Claim" has the meaning set forth in Section 8.4
below.
2. Purchase and Sale of Xxxxxx Group Shares.
2.1 Basic Transaction. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from
the Seller, and the Seller agrees to sell to the Buyer, all of
its Xxxxxx Group Shares for the consideration specified below in
Section 2.2.
2.2 Purchase Consideration. The Buyer shall deliver to the
Seller at the Closing 103,569,600 fully paid and non-assessable
shares of RGI Stock as the "Base Purchase Price." The parties
acknowledge and agree that the number of shares of RGI Stock to
be delivered at the Closing in payment of the Base Purchase Price
represents the audited book value of Xxxxxx Group as of March 29,
1997, divided by $0.625 per share of RGI Stock so issued.
Promptly following the Closing Date, but in any event no later
than 45 days thereafter, Buyer will prepare a draft combined
balance sheet for Xxxxxx Group and its Subsidiaries as of the
Closing Date (the "Closing Balance Sheet"). Seller will review
the Closing Balance Sheet and provide Buyer with any objections
thereto within 30 days after Seller's receipt thereof. If Seller
does not object within such 30-day period, then the Closing
Balance Sheet shall be deemed to be accepted by Seller and shall
become final. If Seller does object to the Closing Balance Sheet,
then the Parties will use best efforts to resolve any such
objections within 30 days. If the Parties are unable to resolve
such objections within such 30-day period, then any disputed
items will be resolved by an accounting firm designated jointly
by the Parties and the Closing Balance Sheet shall be finalized
in accordance with the determination of such firm. Upon
finalization of the Closing Balance Sheet as provided above, the
Base Purchase Price shall either be (a) increased by the amount,
if any, by which the book value of Xxxxxx Group and its
Subsidiaries as shown on the Closing Balance Sheet exceeds such
book value as of March 29, 1997; or (b) decreased by the amount,
if any, by which the book value of Xxxxxx Group and its
Subsidiaries as of March 29, 1997 exceeds such book value as of
March 29, 1997. Any such adjustment to the Base Purchase Price
shall be settled in shares of RGI Stock, valued, in either case,
at $0.625 per share.
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2.3 The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place
at the offices of XxXxxxx & Xxxxx, PLC, in Grand Rapids, MI,
commencing at 9:00 a.m. local time on the second business day
following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to
actions the respective Parties will take at the Closing itself)
or such other date as the Buyer and the Seller may mutually
determine (the "Closing Date").
2.4 Deliveries at the Closing. At the Closing, (A) the
Seller will deliver to the Buyer the various certificates,
instruments, and documents referred to in Section 7.1 below, (B)
the Buyer will deliver to the Seller the various certificates,
instruments, and documents referred to in Section 7.2 below, (C)
the Seller will deliver to the Buyer stock certificates
representing all of its Xxxxxx Group Shares, endorsed in blank or
accompanied by duly executed assignment documents, and (D) the
Buyer will deliver to the Seller the RGI Stock specified in
Section 2.2 above.
3. Representations and Warranties Concerning the Transaction.
3.1 Representations and Warranties of the Seller. The
Seller represents and warrants to the Buyer that the statements
contained in this Section 3.1 are correct and complete as of the
date of this Agreement and will be correct and complete as of the
Closing Date (as though made then and as though the Closing Date
were substituted for the date of this Agreement throughout this
Section 3.1) with respect to itself, except as set forth in Annex
I attached hereto.
3.1.1 Organization of Seller. The Seller is a
corporation, the Seller is duly organized, validly existing, and
in good standing under the laws of the jurisdiction of its
incorporation.
3.1.2 Authorization of Transaction. The Seller has
full corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of
the Seller, enforceable in accordance with its terms and
conditions. The Seller need not give any notice to, make any
filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
3.1.3 Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Seller is
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subject or, any provision of its charter or bylaws or (B)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or
other arrangement to which the Seller is a party or by which it
is bound or to which any of its assets is subject. The
transactions contemplated by this Agreement have been approved by
all requisite corporate action of the Seller.
3.1.4 Brokers' Fees. The Seller has no Liability or
obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this
Agreement for which the Buyer could become liable or obligated.
3.1.5 Investment. The Seller (A) understands that the
RGI Stock has not been, and will not be, registered under the
Securities Act, or under any state securities laws, and is being
offered and sold in reliance upon federal and state exemptions
for transactions not involving any public offering, (B) is
acquiring the RGI Stock solely for its own account for investment
purposes, and not with a view to the distribution thereof, (C) is
a sophisticated investor with knowledge and experience in
business and financial matters, (D) has received certain
information concerning the Buyer and has had the opportunity to
obtain additional information as desired in order to evaluate the
merits and the risks inherent in holding the RGI Stock, (E) is
able to bear the economic risk and lack of liquidity inherent in
holding the RGI Stock, and (F) is an Accredited Investor.
3.1.6 Xxxxxx Group Shares. The Seller holds of record
and owns beneficially 100 Xxxxxx Group Shares, free and clear of
any restrictions on transfer (other than any restrictions under
the Securities Act and state securities laws), Taxes, Security
Interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. The Xxxxxx Group
Shares owned by Seller represent 100% of the issued and
outstanding capital stock of Xxxxxx Group. The Seller is not a
party to any option, warrant, purchase right, or other contract
or commitment that could require the Seller to sell, transfer, or
otherwise dispose of any capital stock of Xxxxxx Group (other
than this Agreement). The Seller is not a party to any voting
trust, proxy, or other agreement or understanding with respect to
the voting of any capital stock of Xxxxxx Group.
3.2 Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Seller that the statements
contained in this Section 3.2 are correct and complete as of the
date of this Agreement and will be correct and complete as of the
Closing Date (as though made then and as though the Closing Date
were substituted for the date of this Agreement throughout this
Section 3.2), except as set forth in Annex II attached hereto.
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3.2.1 Organization of the Buyer. The Buyer is a
corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation.
3.2.2 Authorization of Transaction. The Buyer has
full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform
its obligations hereunder except that the approval of Buyer's
shareholders is required to list the RGI Shares to be issued to
the Seller on AMEX. This Agreement constitutes the valid and
legally binding obligation of the Buyer, enforceable in
accordance with its terms and conditions. The Buyer need not give
any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this
Agreement.
3.2.3 Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is
subject or any provision of its charter or bylaws or (B) conflict
with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or
other arrangement to which the Buyer is a party or by which it is
bound or to which any of its assets is subject.
3.2.4 Brokers' Fees. The Buyer has no Liability or
obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this
Agreement for which the Seller could become liable or obligated.
3.2.5 Investment. The Buyer (A) understands that the
Xxxxxx Group Shares have not been, and will not be, registered
under the Securities Act, or under any state securities laws, and
is being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering,
(B) is acquiring the Xxxxxx Group Shares solely for its own
account for investment purposes, and not with a view to the
distribution thereof, (C) is a sophisticated investor with
knowledge and experience in business and financial matters, (D)
has received certain information concerning Xxxxxx Group and has
had the opportunity to obtain additional information as desired
in order to evaluate the merits and the risks inherent in holding
the Xxxxxx Group Shares, (E) is able to bear the economic risk,
and (F) is an Accredited Investor.
3.2.6 Capitalization of Buyer. The authorized capital
stock of the Buyer consists of (i) 30,000,000 shares of RGI
Stock, of which 14,115,682 shares are issued and outstanding.
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Section 3.2 of the Disclosure Schedule sets forth a complete and
accurate list of (i) all holders of options, warrants and other
rights to purchase shares of RGI Stock (collectively, "RGI
Options"), indicating the type and number of shares subject to
each such RGI Option, and the exercise price, vesting status and
termination date of each such RGI Option, and (ii) all holders of
any notes or other securities that are or may be convertible into
RGI Stock (collectively, "RGI Convertible Securities"). All of
the issued and outstanding shares of RGI Stock are, and all
shares of RGI Stock that may be issued in connection with this
Agreement, upon the exercise of any RGI Options, or upon the
exercise or conversion of any RGI Convertible Securities, will
be, upon such issuance, duly authorized, validly issued, fully
paid, nonassessable and free of all preemptive rights. Except as
set forth in Section 3.2 of the Disclosure Schedule, there are no
outstanding or authorized shares of capital stock or other
securities or options, warrants, rights, agreements or
commitments to which the Buyer is a party or which are binding
upon the Buyer providing for the issuance, disposition or
acquisition of any of its capital stock or other securities.
There are no outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to the Buyer. There
are no agreements, voting trusts, proxies, or understandings with
respect to the voting or registration under the Securities Act,
of any shares of any capital stock of the Buyer to which the
Buyer is party. The Buyer is not party to any agreements, voting
trusts, proxies, or understandings with respect to the voting or
registration under the Securities Act of any shares of any
capital stock of the Buyer. All of the issued and outstanding
shares of RGI Stock and other outstanding securities of the Buyer
were issued in compliance with applicable federal and state
securities laws. No repurchase of capital stock by the Buyer (i)
violated the Buyer's Certificate of Incorporation or Bylaws or
any laws, rules or regulations applicable to the Buyer or (ii)
caused any breach of any agreement to which the Buyer is or was a
party. The RGI Stock is listed for trading in the Emerging
Company Marketplace of AMEX and, to the Knowledge of the Buyer,
no proceedings to delist such RGI Stock have been commenced or
are contemplated by AMEX.
3.2.7 Buyer's SEC Documents. Buyer has provided
Seller with access to true and complete copies of each document
(including exhibits, but excluding exhibits incorporated by
reference) filed by Buyer with the Commission since January 1,
1995 (as such documents have since the time of their filing been
amended, the "Commission Filings"), which are all documents
(other than preliminary material) that the Buyer was required to
file with the Commission since such date. As of their respective
dates, the Commission Filings complied in all material respects
with the requirements of the Securities Act and/or the Exchange
Act, as the case may be, and the rules and regulations of the
Commission thereunder applicable to such Commission Filings and
none of the Commission Filings when filed contained any untrue
statement of a material fact or omitted to state a material fact
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required to be stated therein or necessary to make the statements
therein, at the time in light of the circumstances under which
they were made, not misleading. The financial statements of the
Buyer included in the Commission Filings complied as to form in
all material respects with applicable accounting requirements and
with published rules and regulations of the Commission with
respect thereto, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated therein
or in the notes thereto or, in the case of the unaudited
statements, as permitted by the rules of the Commission) and
fairly present (subject, in the case of the unaudited statements,
to normal recurring audit adjustments) the consolidated financial
position of the Buyer and its consolidated subsidiaries as at the
dates thereof and the consolidated results of their operations
and cash flows for the periods then ended.
3.2.8 Prior Representations of Buyer. Except as
expressly modified hereby, all representations and warranties
made by Buyer to Seller in an agreement dated May 12, 1997,
regarding the purchase of certain shares of RGI Stock from
certain shareholders of Buyer remain true and correct in all
material respects as of the date of this Agreement.
4. Representations and Warranties Concerning Xxxxxx Group and
Its Subsidiaries. The Seller represents and warrants to the
Buyer that the statements contained in this Section 4 are correct
and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this
Agreement throughout this Section 4), except as set forth in the
disclosure schedule delivered by the Seller to the Buyer on the
date hereof and initialed by the Parties (the "Disclosure
Schedule"). Nothing in the Disclosure Schedule shall be deemed
adequate to disclose an exception to a representation or warranty
made herein, however, unless the Disclosure Schedule identifies
the exception with reasonable particularity and describes the
relevant facts in reasonable detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a
copy) of a document or other item shall not be deemed adequate to
disclose an exception to a representation or warranty made herein
(unless the representation or warranty has to do with the
existence of the document or other item itself). The Disclosure
Schedule will be arranged in paragraphs corresponding to the
lettered and numbered paragraphs contained in this Section 4.
4.1 Organization, Qualification, and Corporate Power. Each
of Xxxxxx Group and its Subsidiaries is a corporation duly
organized, validly existing, and in good standing under the laws
of the jurisdiction of its incorporation. Each of Xxxxxx Group
and its Subsidiaries is duly authorized to conduct business and
is in good standing under the laws of each jurisdiction where
such qualification is required. Each of Xxxxxx Group and its
Subsidiaries has full corporate power and authority and all
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licenses, permits, and authorizations necessary to carry on the
businesses in which it is engaged and in which it presently
proposes to engage and to own and use the properties owned and
used by it. The Seller has made available to the Buyer correct
and complete copies of the charter and bylaws of each of Xxxxxx
Group and its Subsidiaries (as amended to date). The minute books
(containing the records of meetings of the stockholders, the
board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record
books of each of Xxxxxx Group and its Subsidiaries are correct
and complete. None of Xxxxxx Group and its Subsidiaries is in
default under or in violation of any provision of its charter or
bylaws.
4.2 Capitalization. The authorized capital stock of Xxxxxx
Group consists of 1,000 shares of common stock, par value of
$0.01 per share. There is no other capital stock of Xxxxxx Group
authorized for issuance and these shares collectively constitute
the total issued and outstanding share capital of the Xxxxxx
Group. All of the issued and outstanding Xxxxxx Group Shares have
been duly authorized, are validly issued, fully paid, and
nonassessable, and are held of record by the Seller. There are no
outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require either Xxxxxx Group
or its Subsidiaries to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to Xxxxxx Group or
its Subsidiaries. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the
capital stock of Xxxxxx Group or its Subsidiaries.
4.3 Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any of Xxxxxx
Group and its Subsidiaries is subject or any provision of the
charter or bylaws of any of Xxxxxx Group and its Subsidiaries or
(B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument,
or other arrangement to which any of Xxxxxx Group and its
Subsidiaries is a party or by which it is bound or to which any
of its assets is subject (or result in the imposition of any
Security Interest upon any of its assets). None of Xxxxxx Group
and its Subsidiaries needs to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
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4.4 Brokers' Fees. None of Xxxxxx Group and its
Subsidiaries has any Liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
4.5 Title to Assets. Xxxxxx Group and its Subsidiaries
have good and marketable title to, or a valid leasehold interest
in, the properties and assets used by them, located on their
premises, or shown on the Most Recent Balance Sheet or acquired
after the date thereof, free and clear of all Security Interests,
except for properties and assets disposed of in the Ordinary
Course of Business since the date of the Most Recent Balance
Sheet.
4.6 Subsidiaries. Section 4.6 of the Disclosure Schedule
sets forth for each Subsidiary of Xxxxxx Group its name and
jurisdiction of incorporation. All of the issued and outstanding
shares of capital stock of each Subsidiary of Xxxxxx Group have
been duly authorized and are validly issued, fully paid, and
nonassessable. One of Xxxxxx Group and its Subsidiaries holds of
record and owns beneficially all of the outstanding shares of
each Subsidiary of Xxxxxx Group, free and clear of any
restrictions on transfer (other than restrictions under the
Securities Act and state securities laws), Taxes, Security
Interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. There are no
outstanding or authorized options, warrants, purchase rights,
conversion rights, exchange rights, or other contracts or
commitments that could require any of Xxxxxx Group and its
Subsidiaries to sell, transfer, or otherwise dispose of any
capital stock of any of its Subsidiaries or that could require
any Subsidiary of Xxxxxx Group to issue, sell, or otherwise cause
to become outstanding any of its own capital stock. There are no
outstanding stock appreciation, phantom stock, profit
participation, or similar rights with respect to any Subsidiary
of Xxxxxx Group. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of any
capital stock of any Subsidiary of Xxxxxx Group. None of Xxxxxx
Group and its Subsidiaries controls directly or indirectly or has
any direct or indirect equity participation in any corporation,
partnership, trust, or other business association which is not a
Subsidiary of Xxxxxx Group.
4.7 Financial Statements. Prior to the date hereof, Seller
has delivered to Buyer the following financial statements
(collectively the "Financial Statements"): (A) audited
consolidated and unaudited consolidating balance sheets and
statements of income, changes in stockholders' equity, and cash
flow as of and for the fiscal years ended April 1, 1995, March
30, 1996, and March 29, 1997 (the "Most Recent Fiscal Year End")
for Xxxxxx Group and its Subsidiaries; and (B) unaudited
consolidated and consolidating balance sheets and statements of
income, changes in stockholders' equity, and cash flow (the "Most
Recent Financial Statements") as of and for the three months
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ended June 28, 1997 (the "Most Recent Fiscal Month End") for
Xxxxxx Group and its Subsidiaries. The Financial Statements
(including the notes thereto) have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of Xxxxxx
Group and its Subsidiaries as of such dates and the results of
operations of Xxxxxx Group and its Subsidiaries for such periods,
are correct and complete, and are consistent with the books and
records of Xxxxxx Group and its Subsidiaries (which books and
records are correct and complete); provided, however, that the
Most Recent Financial Statements are subject to normal year-end
adjustments (which will not be material individually or in the
aggregate) and lack footnotes and other presentation items.
4.8 Events Subsequent to Most Recent Fiscal Year End.
Since the Most Recent Fiscal Year End, there has not been any
material adverse change in the business, financial condition,
operations, results of operations, or future prospects of any of
Xxxxxx Group and its Subsidiaries. Without limiting the
generality of the foregoing, since that date:
(i) none of Xxxxxx Group and its Subsidiaries has
sold, leased, transferred, or assigned any of its assets,
tangible or intangible, other than for a fair consideration in
the Ordinary Course of Business;
(ii) none of Xxxxxx Group and its Subsidiaries has
entered into any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses)
involving more than $50,000 and outside the Ordinary Course of
Business;
(iii) no party (including any of Xxxxxx Group and its
Subsidiaries) has accelerated, terminated, modified, or canceled
any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than
$50,000 to which any of Xxxxxx Group and its Subsidiaries is a
party or by which any of them is bound;
(iv) none of Xxxxxx Group and its Subsidiaries has
imposed any Security Interest upon any of its assets, tangible or
intangible;
(v) none of Xxxxxx Group and its Subsidiaries has made
any capital expenditure (or series of related capital
expenditures) involving more than $50,000 and outside the
Ordinary Course of Business;
(vi) none of Xxxxxx Group and its Subsidiaries has
made any capital investment in, any loan to, or any acquisition
of the securities or assets of, any other Person (or series of
related capital investments, loans, and acquisitions) involving
more than $50,000;
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(vii) none of Xxxxxx Group and its Subsidiaries has
issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for borrowed
money or capitalized lease obligation either involving more than
$25,000 singly or $50,000 in the aggregate;
(viii) none of Xxxxxx Group and its Subsidiaries has
delayed or postponed the payment of accounts payable and other
Liabilities outside the Ordinary Course of Business;
(ix) none of Xxxxxx Group and its Subsidiaries has
canceled, compromised, waived, or released any right or claim (or
series of related rights and claims) either involving more than
$50,000 or outside the Ordinary Course of Business;
(x) none of Xxxxxx Group and its Subsidiaries has
granted any license or sublicense of any rights under or with
respect to any Intellectual Property outside the Ordinary Course
of Business;
(xi) there has been no change made or authorized in
the charter or bylaws of any of Xxxxxx Group and its
Subsidiaries;
(xii) except in connection with the issuance of 100
Xxxxxx Group Shares to Seller upon the incorporation of the
Xxxxxx Group in September of 1997, none of Xxxxxx Group and its
Subsidiaries has issued, sold, or otherwise disposed of any of
its capital stock, or granted any options, warrants, or other
rights to purchase or obtain (including upon conversion,
exchange, or exercise) any of its capital stock;
(xiii) none of Xxxxxx Group and its Subsidiaries has
declared, set aside, or paid any dividend or made any
distribution with respect to its capital stock (whether in cash
or in kind) or redeemed, purchased, or otherwise acquired any of
its capital stock;
(xiv) none of Xxxxxx Group and its Subsidiaries has
experienced any material damage, destruction, or loss (whether or
not covered by insurance) to its property;
(xv) none of Xxxxxx Group and its Subsidiaries has
made any loan to, or entered into any other transaction with, any
of its directors, officers, and employees outside the Ordinary
Course of Business;
(xvi) none of Xxxxxx Group and its Subsidiaries has
entered into any employment contract or collective bargaining
agreement, written or oral, or modified the terms of any existing
such contract or agreement;
(xvii) none of Xxxxxx Group and its Subsidiaries has
granted any increase in the base compensation of any of its
15
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directors, officers, and employees outside the Ordinary Course of
Business;
(xviii) none of Xxxxxx Group and its Subsidiaries has
adopted, amended, modified, or terminated any bonus,
profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other
Employee Benefit Plan);
(xix) none of Xxxxxx Group and its Subsidiaries has
made any other change in employment terms for any of its
directors, officers, and employees outside the Ordinary Course of
Business;
(xx) none of Xxxxxx Group and its Subsidiaries has
made or pledged to make any charitable or other capital
contribution outside the Ordinary Course of Business;
(xxi) there has not been any other material
occurrence, event, incident, action, failure to act, or
transaction outside the Ordinary Course of Business involving any
of Xxxxxx Group and its Subsidiaries; and
(xxii) none of Xxxxxx Group and its Subsidiaries has
committed to any of the foregoing.
4.9 Undisclosed Liabilities. None of Xxxxxx Group and its
Subsidiaries has any Liability (and, to the Knowledge of Seller,
there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rise to any Liability), except
for (A) Liabilities set forth in the Most Recent Financial
Statements, including the notes thereto, and (B) Liabilities
which have arisen after the date of the Most Recent Financial
Statements in the Ordinary Course of Business (none of which
results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law).
4.10 Legal Compliance. Each of Xxxxxx Group, its
Subsidiaries, and their respective predecessors, has complied
with all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them
alleging any failure so to comply.
4.11 Tax Matters.
4.11.1 Each of Xxxxxx Group and its Subsidiaries has
filed all Tax Returns that it was required to file. All such Tax
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PAGE
Returns were correct and complete in all respects. All Taxes owed
by any of Xxxxxx Group and its Subsidiaries (whether or not shown
on any Tax Return) have been paid. None of Xxxxxx Group and its
Subsidiaries currently is the beneficiary of any extension of
time within which to file any Tax Return. No claim has ever been
made by an authority in a jurisdiction where any of Xxxxxx Group
and its Subsidiaries does not file Tax Returns that it is or may
be subject to taxation by that jurisdiction. There are no
Security Interests on any of the assets of any of Xxxxxx Group
and its Subsidiaries that arose in connection with any failure
(or alleged failure) to pay any Tax.
4.11.2 Each of Xxxxxx Group and its Subsidiaries has
withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third
party.
4.11.3 The Seller does not expect any authority to
assess any additional Taxes for any period for which Tax Returns
have been filed. There is no dispute or claim concerning any Tax
Liability of any of Xxxxxx Group and its Subsidiaries either (A)
claimed or raised by any authority in writing or (B) as to the
Seller and the directors and officers (and employees responsible
for Tax matters) of Xxxxxx Group and its Subsidiaries has
Knowledge based upon personal contact with any agent of such
authority. The Seller has made available to the Buyer correct and
complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or
agreed to by any of Xxxxxx Group and its Subsidiaries since April
1, 1995.
4.11.4 None of Xxxxxx Group and its Subsidiaries has
waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to a Tax assessment or
deficiency.
4.11.5 None of Xxxxxx Group and its Subsidiaries has
filed a consent under Code Sec. 341(f) concerning collapsible
corporations. None of Xxxxxx Group and its Subsidiaries has made
any payments, is obligated to make any payments, or is a party to
any agreement that under certain circumstances could obligate it
to make any payments that will not be deductible under Code Sec.
280G. None of Xxxxxx Group and its Subsidiaries has been a United
States real property holding corporation within the meaning of
Code Sec. 897(c)(2) during the applicable period specified in
Code Sec. 897(c)(1)(A)(ii). Each of Xxxxxx Group and its
Subsidiaries has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Code
Sec. 6662. None of Xxxxxx Group and its Subsidiaries is a party
to any Tax allocation or sharing agreement. None of Xxxxxx Group
and its Subsidiaries (A) has been a member of an Affiliated Group
filing a consolidated federal income Tax Return (other than a
17
PAGE
group the common parent of which was Xxxxxx Group) or (B) has any
Liability for the Taxes of any Person (other than any of Xxxxxx
Group and its Subsidiaries) under Treas. Reg. Section 1.1502-6
(or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.
4.11.6 The unpaid Taxes of Xxxxxx Group and its
Subsidiaries (A) did not, as of the Most Recent Fiscal Month End,
exceed the reserve for Tax Liability (rather than any reserve for
deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) and (B) do not
exceed that reserve as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice
of Xxxxxx Group and its Subsidiaries in filing their Tax Returns.
4.12 Real Property.
4.12.1 Section 4.12.1 of the Disclosure Schedule lists
and describes briefly all real property that any of Xxxxxx Group
and its Subsidiaries owns. With respect to each such parcel of
owned real property:
(i) the identified owner has good and marketable
title to the parcel of real property, free and clear of any
Security Interest, easement, covenant, or other restriction,
except for installments of special assessments not yet delinquent
and recorded easements, covenants, and other restrictions which
do not impair the current use, occupancy, or value, or the
marketability of title, of the property subject thereto;
(ii) there are no pending or, to the Knowledge of
Seller, threatened condemnation proceedings, lawsuits, or
administrative actions relating to the property or other matters
affecting materially and adversely the current use, occupancy, or
value thereof;
(iii) the legal description for the parcel
contained in the deed thereof describes such parcel fully and
adequately, the buildings and improvements are located within the
boundary lines of the described parcels of land, are not in
violation of applicable setback requirements, zoning laws, and
ordinances (and none of the properties or buildings or
improvements thereon are subject to "permitted non-conforming
use" or permitted non-conforming structure" classifications), and
do not encroach on any easement which may burden the land, and
the land does not serve any adjoining property for any purpose
inconsistent with the use of the land, and the property is not
located within any flood plain or subject to any similar type
restriction for which any permits or licenses necessary to the
use thereof have not been obtained;
(iv) all facilities have received all approvals
of governmental authorities (including licenses and permits)
18
PAGE
required in connection with the ownership or operation thereof
and have been operated and maintained in accordance with
applicable laws, rules, and regulations;
(v) there are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to
any party or parties the right of use or occupancy of any portion
of the parcel of real property;
(vi) there are no outstanding options or rights
of first refusal to purchase the parcel of real property, or any
portion thereof or interest therein;
(vii) there are no parties (other than Xxxxxx
Group and its subsidiaries) in possession of the parcel of real
property, other than tenants under any leases disclosed in
Section 4.12.1 of the Disclosure Schedule who are in possession
of space to which they are entitled;
(viii) all facilities located on the parcel of
real property are supplied with utilities and other services
necessary for the operation of such facilities, including gas,
electricity, water, telephone, sanitary sewer, and storm sewer,
all of which services are adequate in accordance with all
applicable laws, ordinances, rules, and regulations and are
provided via public roads or via permanent, irrevocable,
appurtenant easements benefiting the parcel of real property; and
(ix) each parcel of real property abuts on and
has direct vehicular access to a public road, or has access to a
public road via a permanent, irrevocable, appurtenant easement
benefiting the parcel of real property, and access to the
property is provided by paved public right-of-way with adequate
curb cuts available.
4.12.2 Section 4.12.2 of the Disclosure Schedule lists
and describes briefly all real property leased or subleased to
any of Xxxxxx Group and its Subsidiaries. The Seller has made
available to the Buyer correct and complete copies of the leases
and subleases listed in Section 4.12.2 of the Disclosure Schedule
(as amended to date). With respect to each lease and sublease
listed in Section 4.12.2 of the Disclosure Schedule:
(i) the lease or sublease is legal, valid,
binding, enforceable, and in full force and effect;
(ii) the lease or sublease will continue to be
legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions
contemplated hereby;
(iii) no party to the lease or sublease is in
breach or default, and no event has occurred which, with notice
19
PAGE
or lapse of time, would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(iv) no party to the lease or sublease has
repudiated any provision thereof;
(v) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(vi) with respect to each sublease, the
representations and warranties set forth in subsections (i)
through (v) above are true and correct with respect to the
underlying lease;
(vii) none of Xxxxxx Group and its Subsidiaries
has assigned, transferred, conveyed, mortgaged, deeded in trust,
or encumbered any interest in the leasehold or subleasehold;
(viii) all facilities leased or subleased
thereunder have received all approvals of governmental
authorities (including licenses and permits) required in
connection with the operation thereof and have been operated and
maintained in accordance with applicable laws, rules, and
regulations;
(ix) all facilities leased or subleased
thereunder are supplied with utilities and other services
necessary for the operation of said facilities; and
(x) to the Knowledge of the Seller, the owner of
the facility leased or subleased has good and marketable title to
the parcel of real property, free and clear of any Security
Interest, easement, covenant, or other restriction, except for
installments of special easements not yet delinquent and recorded
easements, covenants, and other restrictions which do not impair
the current use, occupancy, or value, or the marketability of
title, of the property subject thereto.
4.13 Intellectual Property.
4.13.1 Xxxxxx Group and its Subsidiaries own or have
the right to use pursuant to license, sublicense, agreement, or
permission all Intellectual Property necessary or desirable for
the operation of the businesses of Xxxxxx Group and its
Subsidiaries as presently conducted and as presently proposed to
be conducted. Each item of Intellectual Property owned or used by
any of Xxxxxx Group and its Subsidiaries immediately prior to the
Closing hereunder will be owned or available for use by Xxxxxx
Group or the Subsidiary on identical terms and conditions
immediately subsequent to the Closing hereunder. Each of Xxxxxx
Group and its Subsidiaries has taken all action deemed reasonably
necessary or desirable to maintain and protect each item of
Intellectual Property that it owns or uses.
20
PAGE
4.13.2 None of Xxxxxx Group and its Subsidiaries has
interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of third
parties, and none of the Seller, Xxxxxx Group, or its
Subsidiaries has ever received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that any of
Xxxxxx Group and its Subsidiaries must license or refrain from
using any Intellectual Property rights of any third party). To
the Knowledge of any of Seller, no third party has interfered
with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of any of Xxxxxx
Group and its Subsidiaries.
4.13.3 The Seller has made available to the Buyer
correct and complete copies of each patent or registration which
is pending or which has been issued to any of Xxxxxx Group and
its Subsidiaries with respect to any of its Intellectual
Property, and each license, agreement, or other permission which
any of Xxxxxx Group and its Subsidiaries has granted to any third
party other than in the Ordinary Course of Business with respect
to any of its Intellectual Property. The Seller has made
available to the Buyer correct and complete copies of all written
documentation evidencing ownership and prosecution (if
applicable) of each such item. Section 4.13.3 of the Disclosure
Schedule identifies each trade name or unregistered trademark
used by any of Xxxxxx Group and its Subsidiaries in connection
with any of its businesses. With respect to each item of
Intellectual Property:
(i) Xxxxxx Group and its Subsidiaries possess all
right, title, and interest in and to the item, free and clear of
any Security Interest, license, or other restriction;
(ii) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(iii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or,
to the Knowledge of Seller is threatened which challenges the
legality, validity, enforceability, use, or ownership of the
item; and
(iv) none of Xxxxxx Group and its Subsidiaries
has ever agreed to indemnify any Person for or against any
interference, infringement, misappropriation, or other conflict
with respect to the item.
4.13.4 Section 4.13.4 of the Disclosure Schedule
identifies each item of Intellectual Property that any third
party owns and that any of Xxxxxx Group and its Subsidiaries uses
pursuant to license, sublicense, agreement, or permission granted
other than in the Ordinary Course of Business. The Seller has
made available to the Buyer correct and complete copies of all
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PAGE
such licenses, sublicenses, agreements, and permissions (as
amended to date). With respect to each item of Intellectual
Property required to be identified in Section 4(m)(iv) of the
Disclosure Schedule:
(i) the license, sublicense, agreement, or
permission covering the item is legal, valid, binding,
enforceable, and in full force and effect;
(ii) the license, sublicense, agreement, or
permission will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms
following the Closing;
(iii) no party to the license, sublicense,
agreement, or permission is in breach or default, and no event
has occurred which with notice or lapse of time would constitute
a breach or default or permit termination, modification, or
acceleration thereunder;
(iv) no party to the license, sublicense,
agreement, or permission has repudiated any provision thereof;
(v) with respect to each sublicense, the
representations and warranties set forth in subsections (i)
through (iv) above are true and correct with respect to the
underlying license;
(vi) the underlying item of Intellectual Property
is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;
(vii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or,
to the Knowledge of Seller, is threatened which challenges the
legality, validity, or enforceability of the underlying item of
Intellectual Property; and
(viii) none of Xxxxxx Group and its Subsidiaries
has granted any sublicense or similar right with respect to the
license, sublicense, agreement, or permission.
4.13.5 To the Knowledge of Seller, none of the
transactions contemplated by this Agreement will interfere with,
infringe upon, misappropriate, or otherwise come into conflict
with, any Intellectual Property rights of third parties as a
result of the continued operation of its business as presently
conducted and as presently proposed to be conducted.
4.13.6 The Seller has no Knowledge of any new
products, inventions, procedures, or methods of manufacturing or
processing that any competitors or other third parties have
developed which reasonably could be expected to supersede or make
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obsolete any product or process of any of Xxxxxx Group and its
Subsidiaries.
4.14 Tangible Assets. Xxxxxx Group and its Subsidiaries
own or lease all buildings, machinery, equipment, and other
tangible assets necessary for the conduct of their businesses as
presently conducted and as presently proposed to be conducted.
Each such tangible asset is free from material defects, has been
maintained in accordance with normal industry practice, is in
good operating condition and repair (subject to normal wear and
tear), and is suitable for the purposes for which it presently is
used and presently is proposed to be used.
4.15 [Not used.]
4.16 Contracts. The Seller has made available to the Buyer
a correct and complete copy of each written agreement identified
below to which Xxxxxx Group and its Subsidiaries is a party and a
written summary setting forth the terms and conditions of each
oral agreement that would be required to be identified below were
such agreement in written form:
(i) any agreement (or group of related agreements) for
the lease of personal property to or from any Person providing
for lease payments in excess of $10,000 per annum;
(ii) any agreement (or group of related agreements) for
the purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or
receipt of services, the performance of which will extend over a
period of more than one year, result in a material loss to any of
Xxxxxx Group and its Subsidiaries, or involve consideration in
excess of $10,000;
(iii) any agreement concerning a partnership or joint
venture;
(iv) any agreement (or group of related agreements)
under which it has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money, or any capitalized lease
obligation, in excess of $10,000 or under which it has imposed a
Security Interest on any of its assets, tangible or intangible;
(v) any agreement concerning confidentiality or
noncompetition;
(vi) any agreement with any of the Seller and its
Affiliates (other than Xxxxxx Group and its Subsidiaries);
(vii) any profit sharing, stock option, stock
purchase, stock appreciation, deferred compensation, severance,
or other plan or arrangement for the benefit of its current or
former directors, officers, and employees;
23
PAGE
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any
individual on a full-time, part-time, consulting, or other basis
providing annual compensation in excess of $10,000 or providing
severance benefits;
(x) any agreement under which it has advanced or
loaned any amount to any of its directors, officers, and
employees outside the Ordinary Course of Business;
(xi) any agreement under which the consequences of a
default or termination could have a material adverse effect on
the business, financial condition, operations, results of
operations, or future prospects of any of Xxxxxx Group and its
Subsidiaries; or
(xii) any other agreement (or group of related
agreements) the performance of which involves consideration in
excess of $10,000.
With respect to each such agreement listed above: (A) the
agreement is legal, valid, binding, enforceable, and in full
force and effect; (B) the agreement will continue to be legal,
valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby; (C) no party is in breach or default, and no
event has occurred which with notice or lapse of time would
constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (D) no
party has repudiated any provision of the agreement.
4.17 Notes and Accounts Receivable. All notes and accounts
receivable of Xxxxxx Group and its Subsidiaries are reflected
properly on their books and records, are valid receivables
subject to no setoffs or counterclaims, are current and
collectible, and will be collected in accordance with their terms
at their recorded amounts, subject only to the reserve for bad
debts set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) as adjusted for the passage of
time through the Closing Date in accordance with the past custom
and practice of Xxxxxx Group and its Subsidiaries.
4.18 Powers of Attorney. There are no outstanding powers
of attorney executed on behalf of any of Xxxxxx Group and its
Subsidiaries.
4.19 Insurance. Section 4.19 of the Disclosure Schedule
sets forth the following information with respect to each
insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond
and surety arrangements) to which any of Xxxxxx Group and its
Subsidiaries has been a party, a named insured, or otherwise the
beneficiary of coverage at any time within the past three years,
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PAGE
other than insurance coverage provided to Xxxxxx Group and its
Subsidiaries by the umbrella coverage of Thermo Electron
Corporation, the ultimate parent entity of Seller:
(i) the name, address, and telephone number of the
agent;
(ii) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and
amount (including a description of how deductibles and ceilings
are calculated and operate) of coverage; and
(v) a description of any retroactive premium
adjustments or other loss-sharing arrangements.
With respect to each such insurance policy to which any of Xxxxxx
Group and its Subsidiaries is a party, a named insured or a
beneficiary: (A) the policy is legal, valid, binding,
enforceable, and in full force and effect; (B) the policy will
continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of
the transactions contemplated hereby; (C) neither any of Xxxxxx
Group and its Subsidiaries nor any other party to the policy is
in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred
which, with notice or the lapse of time, would constitute such a
breach or default, or permit termination, modification, or
acceleration, under the policy; and (D) no party to the policy
has repudiated any provision thereof. Each of Xxxxxx Group and
its Subsidiaries has been covered during the past five years by
insurance in scope and amount customary and reasonable for the
businesses in which it has engaged during the aforementioned
period. Section 4.19 of the Disclosure Schedule describes any
self-insurance arrangements affecting any of Xxxxxx Group and its
Subsidiaries.
4.20 Litigation. Neither Xxxxxx Group nor any of its
Subsidiaries is a party to any action, suit, proceeding, hearing,
or investigation which, to the Knowledge of Seller, could result
in any material adverse change in the business, financial
condition, operations, results of operations, or future prospects
of Xxxxxx Group and its Subsidiaries, taken as a whole. The
Seller has no reason to believe that any such action, suit,
proceeding, hearing, or investigation may be brought or
threatened against any of Xxxxxx Group and its Subsidiaries.
4.21 Contractual Commitments. The services Xxxxxx Group
and its Subsidiaries have provided their customers have been in
conformity with all applicable contractual commitments, and none
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of Xxxxxx Group and its Subsidiaries has any Liability (and, to
the Knowledge of Seller, there is no Basis for any present or
future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them giving rise to
any Liability) for damages in connection therewith, subject only
to the reserve for claims set forth in the Most Recent Financial
Statements, including the notes thereto, as adjusted for the
passage of time through the Closing Date in accordance with the
past custom and practice of Xxxxxx Group and its Subsidiaries.
4.22 [Not used.]
4.23 Employees. To the Knowledge of Seller, no executive,
key employee, or group of employees has any plans to terminate
employment with any of Xxxxxx Group and its Subsidiaries. None of
Xxxxxx Group and its Subsidiaries is a party to or bound by any
collective bargaining agreement, nor has any of them experienced
any strikes, grievances, claims of unfair labor practices, or
other collective bargaining disputes. None of Xxxxxx Group and
its Subsidiaries has committed any unfair labor practice. The
Seller has no Knowledge of any organizational effort presently
being made or threatened by or on behalf of any labor union with
respect to employees of any of Xxxxxx Group and its Subsidiaries.
4.24 Employee Benefits.
4.24.1 Section 4.24.1 of the Disclosure Schedule lists
each Employee Benefit Plan that any of Xxxxxx Group and its
Subsidiaries maintains or to which any of Xxxxxx Group and its
Subsidiaries contributes. With respect to each such Employee
Benefit Plan:
(i) Each such Employee Benefit Plan (and each
related trust, insurance contract, or fund) complies in form and
in operation in all respects with the applicable requirements of
ERISA, the Code, and other applicable laws.
(ii) All required reports and descriptions
(including Form 5500 Annual Reports, Summary Annual Reports,
PBGC-1's, and Summary Plan Descriptions) have been filed or
distributed appropriately with respect to each such Employee
Benefit Plan. The requirements of Part 6 of Subtitle B of Title I
of ERISA and of Code Sec. 4980B have been met with respect to
each such Employee Benefit Plan which is an Employee Welfare
Benefit Plan.
(iii) All contributions (including all employer
contributions and employee salary reduction contributions) which
are due have been paid to each such Employee Benefit Plan which
is an Employee Pension Benefit Plan and all contributions for any
period ending on or before the Closing Date which are not yet due
have been paid to each such Employee Pension Benefit Plan or
accrued in accordance with the past custom and practice of Xxxxxx
Group and its Subsidiaries. All premiums or other payments for
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all periods ending on or before the Closing Date have been paid
with respect to each such Employee Benefit Plan which is an
Employee Welfare Benefit Plan.
(iv) Each such Employee Benefit Plan which is an
Employee Pension Benefit Plan meets the requirements of a
"qualified plan" under Code Sec. 401(a) and has received, within
the last two years, a favorable determination letter from the
Internal Revenue Service.
(v) The market value of assets under each such
Employee Benefit Plan which is an Employee Pension Benefit Plan
(other than any Multiemployer Plan) equals or exceeds the present
value of all vested and nonvested Liabilities thereunder
determined in accordance with PBGC methods, factors, and
assumptions applicable to an Employee Pension Benefit Plan
terminating on the date for determination.
(vi) The Seller has delivered to the Buyer
correct and complete copies of the plan documents and summary
plan descriptions, the most recent determination letter received
from the Internal Revenue Service, the most recent Form 5500
Annual Report, and all related trust agreements, insurance
contracts, and other funding agreements which implement each such
Employee Benefit Plan.
4.24.2 With respect to each Employee Benefit Plan that
any of Xxxxxx Group, its Subsidiaries, and the Controlled Group
of Corporations which includes Xxxxxx Group and its Subsidiaries
maintains or ever has maintained or to which any of them
contributes, ever has contributed, or ever has been required to
contribute:
(i) No such Employee Benefit Plan which is in
Employee Pension Benefit Plan (other than any Multiemployer Plan)
has been completely or partially terminated or been the subject
of a Reportable Event as to which notices would be required to be
filed with the PBGC. No proceeding by the PBGC to terminate any
such Employee Pension Benefit Plan (other than any Multiemployer
Plan) has been instituted or, to the Knowledge of Seller,
threatened.
(ii) There have been no Prohibited Transactions
with respect to any such Employee Benefit Plan. No Fiduciary has
any Liability for breach of fiduciary duty or any other failure
to act or comply in connection with the administration or
investment of the assets of any such Employee Benefit Plan. No
action, suit, proceeding, hearing, or investigation with respect
to the administration or the investment of the assets of any such
Employee Benefit Plan (other than routine claims for benefits) is
pending or, to the Knowledge of Seller, threatened. The Seller
has no Knowledge of any Basis for any such action, suit,
proceeding, hearing, or investigation.
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(iii) None of Xxxxxx Group and its Subsidiaries
has incurred, and none of the Seller and the directors and
officers (and employees with responsibility for employee benefits
matters) of Xxxxxx Group and its Subsidiaries has any reason to
expect that any of Xxxxxx Group and its Subsidiaries will incur,
any Liability to the PBGC (other than PBGC premium payments) or
otherwise under Title IV of ERISA (including any withdrawal
Liability) or under the Code with respect to any such Employee
Benefit Plan which is an Employee Pension Benefit Plan.
4.24.3 None of Xxxxxx Group, its Subsidiaries, and the
other members of the Controlled Group of Corporations that
includes Xxxxxx Group and its Subsidiaries contributes to, ever
has contributed to, or ever has been required to contribute to
any Multiemployer Plan or has any Liability (including withdrawal
Liability) under any Multiemployer Plan.
4.24.4 None of Xxxxxx Group and its Subsidiaries
maintains or ever has maintained or contributes, ever has
contributed, or ever has been required to contribute to any
Employee Welfare Benefit Plan providing medical, health, or life
insurance or other welfare-type benefits for current or future
retired or terminated employees, their spouses, or their
dependents (other than in accordance with Code Sec. 4980B).
4.25 Guaranties. None of Xxxxxx Group and its Subsidiaries
is a guarantor or otherwise is liable for any Liability or
obligation (including indebtedness) of any other Person.
4.26 Environment, Health, and Safety.
4.26.1 Each of Xxxxxx Group, its Subsidiaries, and
their respective predecessors and Affiliates has complied with
all Environmental, Health, and Safety Laws, and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them
alleging any failure so to comply. Without limiting the
generality of the preceding sentence, each of Xxxxxx Group, its
Subsidiaries, and their respective predecessors and Affiliates
has obtained and been in compliance with all of the terms and
conditions of all permits, licenses, and other authorizations
which are required under, and has complied with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables which are
contained in, all Environmental, Health, and Safety Laws.
4.26.2 None of Xxxxxx Group and its Subsidiaries has
any Liability (and none of Xxxxxx Group, its Subsidiaries, and
their respective predecessors and Affiliates has handled or
disposed of any substance, arranged for the disposal of any
substance, exposed any employee or other individual to any
substance or condition, or owned or operated any property or
facility in any manner that could form the Basis for any present
or future action, suit, proceeding, hearing, investigation,
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PAGE
charge, complaint, claim, or demand against any of Xxxxxx Group
and its Subsidiaries giving rise to any Liability) for damage to
any site, location, or body of water (surface or subsurface), for
any illness of or personal injury to any employee or other
individual, or for any reason under any Environmental, Health,
and Safety Law.
4.26.3 All properties and equipment used in the
business of Xxxxxx Group, its Subsidiaries, and their respective
predecessors and Affiliates have been free of asbestos, PCB's,
methylene chloride, trichloroethylene,
1,2-trans-dichloroethylene, dioxins, dibenzofurans, and Extremely
Hazardous Substances.
4.26.4 Seller has made available to Buyer:
(i) all industrial hygiene surveys prepared by or
on behalf of Xxxxxx Group and its Subsidiaries since January 1,
1992, to the extent reasonably available from the records of
Xxxxxx Group and its Subsidiaries;
(ii) summaries of all epidemiological or
toxicological studies conducted by or on behalf of Xxxxxx Group
and its Subsidiaries since January 1, 1992, to the extent
reasonably available from the records of Xxxxxx Group and its
Subsidiaries;
(iii) all occupational safety and health reports
filed with governmental agencies or instrumentalities by or on
behalf of Xxxxxx Group and its Subsidiaries since January 1,
1992, to the extent reasonably available from the records of
Xxxxxx Group and its Subsidiaries;
(iv) annual summaries of workers compensation
liabilities of Xxxxxx Group and its Subsidiaries since January 1,
1992, to the extent reasonably available from the records of
Xxxxxx Group and its Subsidiaries;
(v) all citations, notices of violations, orders,
consent orders, administrative or judicial enforcement
proceedings from governmental agencies or instrumentalities with
respect to health or safety matters currently pending against
Xxxxxx Group and its Subsidiaries;
(vi) all medical surveillance programs currently
provided for employees involved with raw materials and products
(including waste products) used or produced, to the extent
reasonably available from the records of Xxxxxx Group and its
Subsidiaries;
(vii) a list of each accident or event which has
resulted in, or may result in, a claim against Xxxxxx Group and
its Subsidiaries that personal injury, property damage or
economic loss was caused by Xxxxxx Group or its Subsidiaries or
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PAGE
involved any employee of Xxxxxx Group or its Subsidiaries in his
or her capacity as an employee, to the extent reasonably
available from the records of Xxxxxx Group and its Subsidiaries;
and
(viii) a list of all claims (other than health
and dental claims) filed and currently pending under the
insurance policies listed pursuant to Schedule 4.19 (including,
in their aggregate amount, employee benefit claims other than
health or dental insurance claims).
4.27 Backlog. As of June 30, 1997, Xxxxxx Group's and its
Subsidiaries' backlog of binding purchase orders was at least
$47,196,926. To the Knowledge of any of the Seller, Xxxxxx Group
and its Subsidiaries, such orders and commitments, together with
any quotations for work which are outstanding at this time,
contain, in the aggregate, terms and conditions that are
consistent with the practices of Xxxxxx Group and its
Subsidiaries in the ordinary course of business prior to the
Closing Date.
4.28 Government Contracts. None of Xxxxxx Group or its
Subsidiaries has been suspended or debarred from bidding on
contracts or subcontracts with any Governmental Entity and no
such suspension or debarment has been initiated or, to the
Knowledge of Seller, threatened. The consummation of the
transactions contemplated by this Agreement will not result in
any such suspension or debarment. To the Knowledge of Seller,
none of Xxxxxx Group or its Subsidiaries has been audited or
investigated and is not now being audited or investigated by the
U.S. Government Accounting Office, the U.S. Department of Defense
or any of its agencies, the Defense Contract Audit Agency, the
U.S. Department of Justice, the Inspector General of any U.S.
Governmental Entity, any similar agencies or instrumentalities of
any foreign Governmental Entity, or any price contractor with a
Governmental Entity nor has any such audit or investigation been
threatened. To the Knowledge of Seller, there is no valid basis
for (A) the suspension or debarment of Xxxxxx Group or any of its
Subsidiaries from bidding on contracts or subcontracts with any
Governmental Entity or (B) any claim pursuant to an audit or
investigation by any of the entities named in the foregoing
sentence. Xxxxxx Group and its Subsidiaries have no agreements,
contracts or commitments which require it to obtain or maintain a
security clearance with any Governmental Entity.
4.29 Banking Facilities. Seller has made available to
Buyer a true, correct and complete list of: (A) each bank,
savings and loan or similar financial institution at which Xxxxxx
Group and its Subsidiaries has an account, safety deposit box,
line of credit or credit facility and the numbers of the accounts
or safety deposit boxes maintained by Xxxxxx Group and its
Subsidiaries thereat and details, including terms, of any line of
credit or credit facility; and (B) the names of all persons
authorized to draw on each such account or to have access to any
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PAGE
such safety deposit box facility, together with a description of
the authority (and conditions thereof, if any) of each such
person with respect thereto.
4.30 Certain Business Relationships with Xxxxxx Group and
Its Subsidiaries. Neither the Seller nor any of its Affiliates
has been involved in any business arrangement or relationship
with any of Xxxxxx Group and its Subsidiaries within the past 12
months (other than in the Ordinary Course of Business), and none
of the Seller and its Affiliates owns any asset, tangible or
intangible, which is used in the business of any of Xxxxxx Group
and its Subsidiaries.
4.31 Disclosure. The representations and warranties
contained in this Section 4 do not contain any untrue statement
of a material fact or omit to state any material fact necessary
in order to make the statements and information contained in this
Section 4 not misleading.
5. Pre-Closing Covenants. The Parties agree as follows with
respect to the period between the execution of this Agreement and
the Closing.
5.1 General. Each of the Parties will use its best efforts
to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth
in Section 7 below).
5.2 Covenants of Seller.
5.2.1 Notices and Consents. The Seller will cause
each of Xxxxxx Group and its Subsidiaries to give any notices to
third parties, and will cause each of Xxxxxx Group and its
Subsidiaries to use its best efforts to obtain any third-party
consents, that the Buyer reasonably may request in connection
with the matters referred to in Section 4.3 above. Each of the
Parties will (and the Seller will cause each of Xxxxxx Group and
its Subsidiaries to) give any notices to, make any filings with,
and use its best efforts to obtain any authorizations, consents,
and approvals of governments and governmental agencies in
connection with the matters referred to in Section 3.1.2, and
Section 4.3 above.
5.2.3 Operation of Business. The Seller will not
cause or permit any of Xxxxxx Group and its Subsidiaries to
engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business. Without
limiting the generality of the foregoing, the Seller will not
cause or permit any of Xxxxxx Group and its Subsidiaries to (A)
declare, set aside, or pay any dividend or make any distribution
with respect to its capital stock or redeem, purchase, or
otherwise acquire any of its capital stock, or (B) otherwise
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PAGE
engage in any practice, take any action, or enter into any
transaction of the sort described in Section 4.8 above.
5.2.4 Preservation of Business. The Seller will cause
each of Xxxxxx Group and its Subsidiaries to keep its business
and properties substantially intact, including its present
operations, physical facilities, working conditions, and
relationships with lessors, licensors, suppliers, customers, and
employees.
5.2.5 Full Access. The Seller will permit, and the
Seller will cause each of Xxxxxx Group and its Subsidiaries to
permit, representatives of the Buyer to have full access at all
reasonable times, and in a manner so as not to interfere with the
normal business operations of Xxxxxx Group and its Subsidiaries,
to all premises, properties, personnel, books, records (including
Tax records), contracts, and documents of or pertaining to each
of Xxxxxx Group and its Subsidiaries.
5.2.6 Notice of Developments. The Seller will give
prompt written notice to the Buyer of any material adverse
development causing a breach of any of the representations and
warranties in Section 4 above. The Seller will cause each of
Xxxxxx Group and its Subsidiaries will give prompt written notice
to the others of any material adverse development causing a
breach of any of his or its own representations and warranties in
Section 3 above. No disclosure by Seller, Xxxxxx Group or its
Subsidiaries pursuant to this Section 5.2.6, however, shall be
deemed to amend or supplement Annex I, Annex II, or the
Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant, unless specifically
agreed to in writing by Buyer.
5.2.7 Exclusivity. The Seller will not (and the
Seller will not cause or permit any of Xxxxxx Group and its
Subsidiaries to) (A) solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities,
or any substantial portion of the assets of, any of Xxxxxx Group
and its Subsidiaries (including any acquisition structured as a
merger, consolidation, or share exchange) or (B) participate in
any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. The Seller will vote
its Xxxxxx Group Shares in favor of any such acquisition
structured as a merger, consolidation, or share exchange. The
Seller will notify the Buyer immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the
foregoing.
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5.3 Covenants of Buyer.
5.3.1 Notices and Consents. The Buyer will give any
notices to third parties, and will obtain any third-party
consents, that the Seller reasonably may request in connection
with the matters referred to in Section 3.2.3 above. Buyer will
give any notices to, make any filings with, and use its best
efforts to obtain any authorizations, consents, and approvals of
governments and governmental agencies in connection with the
matters referred to in Section 3.2.2.
5.3.3 Operation of Business. The Buyer and its
Subsidiaries will not engage in any practice, take any action, or
enter into any transaction outside the Ordinary Course of
Business. Without limiting the generality of the foregoing, the
Buyer and its Subsidiaries will not (A) declare, set aside, or
pay any dividend or make any distribution with respect to its
capital stock or redeem, purchase, or otherwise acquire any of
its capital stock, or (B) otherwise engage in any practice, take
any action, or enter into any transaction of the sort described
in Section 4.8 above.
5.3.4 Preservation of Business. The Buyer and its
Subsidiaries will keep their business and properties
substantially intact, including their present operations,
physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, customers, and employees.
5.3.5 Full Access. The Buyer will permit
representatives of the Seller to have full access at all
reasonable times, and in a manner so as not to interfere with the
normal business operations of Buyer and its Subsidiaries, to all
premises, properties, personnel, books, records (including Tax
records), contracts, and documents of or pertaining to each of
Buyer and its Subsidiaries.
5.3.6 Notice of Developments. The Buyer will give
prompt written notice to the Seller of any material adverse
development causing a breach of any of the representations and
warranties in Section 3.2 above. No disclosure by Buyer pursuant
to this Section 5.3.6, however, shall be deemed to amend or
supplement any Annex, Disclosure Schedule or to prevent or cure
any misrepresentation, breach of warranty, or breach of covenant,
unless specifically agreed to in writing by Seller.
5.3.7 Listing of RGI Stock. Promptly after the date
hereof, the Buyer shall take all action necessary in accordance
with applicable law to convene a meeting of its shareholders to
be held for the purpose of approving the listing of the shares of
RGI Stock to be issued to the Seller for trading upon AMEX in
accordance with Section 712 of AMEX's Listing Standards, Policies
and Requirements (or any other applicable provisions thereof). In
connection with such meeting, the Buyer's Board of Directors
shall recommend to the Buyer's shareholders the approval of the
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PAGE
listing of such shares of RGI Stock pursuant to this Agreement.
The Buyer shall use all reasonable efforts to obtain all votes
and approvals of its shareholders necessary for the listing of
such shares of RGI Stock and all related matters required under
the Delaware Business Corporation Act, and its Certificate of
Incorporation and By-laws. The Seller hereby agrees to vote all
of the shares of RGI Stock held by it as of the record date of
any such meeting in favor of the listing of such share of RGI
Stock and all such related matters.
6. Post-Closing Covenants. The Parties agree as follows with
respect to the period following the Closing.
6.1 General. In case at any time after the Closing any
further action is necessary or desirable to carry out the
purposes of this Agreement, each of the Parties will take such
further action (including the execution and delivery of such
further instruments and documents) as any other Party reasonably
may request, all at the sole cost and expense of the requesting
Party (unless the requesting Party is entitled to indemnification
therefor under Section 8 below).
6.2 Litigation Support. In the event and for so long as
any Party actively is contesting or defending against any action,
suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand in connection with (A) any transaction
contemplated under this Agreement or (B) any fact, situation,
circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving any of
Xxxxxx Group and its Subsidiaries, each of the other Parties will
cooperate with him or it and his or its counsel in the contest or
defense, make available their personnel, and provide such
testimony and access to their books and records as shall be
necessary in connection with the contest or defense, all at the
sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to
indemnification therefor under Section 8 below).
6.3 Transition. The Seller will not take any action that
is designed or intended to have the effect of discouraging any
lessor, licensor, customer, supplier, or other business associate
of any of Xxxxxx Group and its subsidiaries from maintaining the
same business relationships with Xxxxxx Group and its
Subsidiaries after the Closing as it maintained with Xxxxxx Group
and its Subsidiaries prior to the Closing. The Seller will refer
all customer inquiries relating to the businesses of Xxxxxx Group
and its Subsidiaries to the Buyer from and after the Closing.
6.4 Confidentiality. The Seller will treat and hold as
such all of the Confidential Information, refrain from using any
of the Confidential Information except in connection with this
Agreement, and deliver promptly to the Buyer or destroy, at the
request and option of the Buyer, all tangible embodiments (and
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PAGE
all copies) of the Confidential Information which are in its
possession. In the event that the Seller is requested or required
(by oral question or request for information or documents in any
legal proceeding, interrogatory, subpoena, civil investigative
demand, or similar process) to disclose any Confidential
Information, the Seller will notify the Buyer promptly of the
request or requirement so that the Buyer may seek an appropriate
protective order or waive compliance with the provisions of this
Section 6.4. If, in the absence of a protective order or the
receipt of a waiver hereunder, the Seller is, on the advice of
counsel, compelled to disclose any Confidential Information to
any tribunal or else stand liable for contempt, the Seller may
disclose the Confidential Information to the tribunal; provided,
however, that the disclosing Seller shall use his or its best
efforts to obtain, at the request of the Buyer, an order or other
assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed
as the Buyer shall designate. The foregoing provisions shall not
apply to any Confidential Information which is generally
available to the public immediately prior to the time of
disclosure.
6.5 RGI Stock. Each certificate of RGI Stock delivered to
Seller will be imprinted with a legend substantially in the
following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. TRANSFER
OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE MADE ONLY
PURSUANT TO APPLICABLE EXEMPTIONS (IF ANY) UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
7. Conditions to Obligation to Close.
7.1 Conditions to Obligation of the Buyer. The obligation
of the Buyer to consummate the transactions to be performed by it
in connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth in
Section 3.1 and Section 4 above shall be true and correct in all
material respects at and as of the Closing Date;
(ii) the Seller shall have performed and complied with
all of its covenants hereunder in all material respects through
the Closing;
(iii) Xxxxxx Group and its Subsidiaries shall have
procured all of the third party consents specified in Section 5.2
above;
(iv) no action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or
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PAGE
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by
this Agreement, (B) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation, (C) affect
adversely the right of the Buyer to own Xxxxxx Group Shares and
to control Xxxxxx Group and its Subsidiaries, or (D) affect
adversely the right of any of Xxxxxx Group and its Subsidiaries
to own its assets and to operate its businesses (and no such
injunction, judgment, order, decree, ruling, or charge shall be
in effect);
(v) the Seller shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified
above in Section 7.1(i)-7.1(iv) is satisfied in all respects;
(vi) the Parties, Xxxxxx Group, and its Subsidiaries
shall have received all authorizations, consents, and approvals
of governments and governmental agencies, if any, referred to in
Section 3.1.2, Section 3.2, and Section 4.3 above; and
(vii) all actions to be taken by the Seller in
connection with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby
will be reasonably satisfactory in form and substance to the
Buyer.
The Buyer may waive any condition specified in this Section 7.1
if it executes a writing so stating at or prior to the Closing.
7.2 Conditions to Obligation of the Seller. The obligation
of the Seller to consummate the transactions to be performed by
it in connection with the Closing is subject to satisfaction of
the following conditions:
(i) the representations and warranties set forth in
Section 3.2 above shall be true and correct in all material
respects at and as of the Closing Date;
(ii) the Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through
the Closing;
(iii) no action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by
this Agreement or (B) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation (and no
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PAGE
such injunction, judgment, order, decree, ruling, or charge shall
be in effect);
(iv) the Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions specified
above in Section 7.2(i)-7.2(iii) is satisfied in all respects;
(v) the Parties, Xxxxxx Group, and its Subsidiaries
shall have received all authorizations, consents, and approvals
of governments and governmental agencies, if any, referred to in
Section 3.1.2, Section 3.2.2, and Section 4.3 above; and
(vi) all actions to be taken by the Buyer in
connection with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby
will be reasonably satisfactory in form and substance to the
Seller.
The Seller may waive any condition specified in this Section 7.2
if they execute a writing so stating at or prior to the Closing.
8. Remedies for Breaches of This Agreement.
8.1 Survival of Representations and Warranties. All of the
representations and warranties of the Seller contained in Section
4.1-4.10 and Section 4.12-4.31 shall survive the Closing
hereunder (even if the Buyer knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing)
and continue in full force and effect for a period of two years
thereafter. All of the other representations and warranties of
the Parties contained in this Agreement (including the
representations and warranties of the Seller contained in Section
4.11 above) shall survive the Closing (even if the damaged Party
knew or had reason to know of any misrepresentation or breach of
warranty at the time of Closing) and continue in full force and
effect forever thereafter (subject to any applicable statutes of
limitations).
8.2 Indemnification Provisions for Benefit of the Buyer.
8.2.1 In the event the Seller breaches (or in the
event any third party alleges facts that, if true, would mean the
Seller has breached) any of its representations, warranties, and
covenants contained herein (other than the covenants in Section
2.1 above and the representations and warranties in Section 3.1
above), and, if there is an applicable survival period pursuant
to Section 8.1 above, provided that the Buyer makes a written
claim for indemnification against the Seller pursuant to Section
10.8 below within such survival period, then the Seller agrees to
indemnify the Buyer from and against the entirety of any Adverse
Consequences the Buyer may suffer through and after the date of
the claim for indemnification (including any Adverse Consequences
the Buyer may suffer after the end of any applicable survival
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period) resulting from, arising out of, relating to, in the
nature of, or caused by the breach (or the alleged breach);
provided, however, that the Seller shall not have any obligation
to indemnify the Buyer from and against any Adverse Consequences
resulting from, arising out of, relating to, in the nature of, or
caused by the breach (or alleged breach) of any representation or
warranty of the Seller contained in Section 4.1 - 4.10 and
Section 4.12 - 4.31 above until the Buyer has suffered Adverse
Consequences by reason of all such breaches (or alleged breaches)
in excess of a $100,000 aggregate threshold (at which point the
Seller will be obligated to indemnify the Buyer from and against
all such Adverse Consequences relating back to the first dollar).
8.2.2 In the event Seller breaches (or in the event
any third party alleges facts that, if true, would mean the
Seller has breached) any of its covenants in Section 2.1 above or
any of its representations and warranties in Section 3.1 above,
and, if there is an applicable survival period pursuant to
Section 8.1 above, provided that the Buyer makes a written claim
for indemnification against the Seller pursuant to Section 10.8
below within such survival period, then the Seller agrees to
indemnify the Buyer from and against the entirety of any Adverse
Consequences the Buyer may suffer through and after the date of
the claim for indemnification (including any Adverse Consequences
the Buyer may suffer after the end of any applicable survival
period) resulting from, arising out of, relating to, in the
nature of, or caused by the breach (or the alleged breach).
8.2.3 The Seller agrees to indemnify the Buyer from
and against the entirety of any Adverse Consequences the Buyer
may suffer resulting from, arising out of, relating to, in the
nature of, or caused by any Liability of any of Xxxxxx Group and
its Subsidiaries for the unpaid Taxes of any Person (other than
any of Xxxxxx Group and its Subsidiaries) under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or
otherwise.
8.3 Indemnification Provisions for Benefit of the Seller.
In the event the Buyer breaches (or in the event any third party
alleges facts that, if true, would mean the Buyer has breached)
any of its representations, warranties, and covenants contained
herein, and, if there is an applicable survival period pursuant
to Section 8.1 above, provided that the Seller makes a written
claim for indemnification against the Buyer pursuant to Section
10.8 below within such survival period, then the Buyer agrees to
indemnify the Seller from and against the entirety of any Adverse
Consequences the Seller may suffer through and after the date of
the claim for indemnification (including any Adverse Consequences
the Seller may suffer after the end of any applicable survival
period) resulting from, arising out of, relating to, in the
nature of, or caused by the breach (or the alleged breach).
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8.4 Indemnification Ceiling Amount. In no event will the
total amount payable by either Seller or Buyer pursuant to
Section 8.2 or Section 8.3 exceed an amount equal to the Base
Purchase Price for the Xxxxxx Shares.
8.5 Matters Involving Third Parties.
8.5.1 If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party
Claim") which may give rise to a claim for indemnification
against any other Party (the "Indemnifying Party") under this
Section 8, then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; provided, however, that no
delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
8.5.2 Any Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim with
counsel of its choice reasonably satisfactory to the Indemnified
Party so long as (A) the Indemnifying Party notifies the
Indemnified Party in writing within 30 days after the Indemnified
Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and
against the entirety of any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in
the nature of, or caused by the Third Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the
Indemnifying Party will have the financial resources to defend
against the Third Party Claim and fulfill its indemnification
obligations hereunder, (C) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable
relief, (D) settlement of, or an adverse judgment with respect
to, the Third Party Claim is not, in the good faith judgment of
the Indemnified Party, likely to establish a precedential custom
or practice materially adverse to the continuing business
interests of the Indemnified Party, and (E) the Indemnifying
Party conducts the defense of the Third Party Claim actively and
diligently.
8.5.3 So long as the Indemnifying Party is conducting
the defense of the Third Party Claim in accordance with Section
8.5.2 above, (A) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim, (B) the Indemnified Party will
not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (not to be
withheld unreasonably), and (C) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written
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consent of the Indemnified Party (not to be withheld
unreasonably).
8.5.4 In the event any of the conditions in Section
8.5.2 above is or becomes unsatisfied, however, (A) the
Indemnified Party may defend against, and consent to the entry of
any judgment or enter into any settlement with respect to, the
Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or
obtain any consent from, any Indemnifying Party in connection
therewith), (B) the Indemnifying Parties will reimburse the
Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable
attorneys' fees and expenses), and (C) the Indemnifying Parties
will remain responsible for any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim
to the fullest extent provided in this Section 8.
8.6 Determination of Adverse Consequences. The Parties
shall take into account the time cost of money (using the
Applicable Rate as the discount rate) in determining Adverse
Consequences for purposes of this Section 8.
9. Termination.
9.1 Termination of Agreement. Certain of the Parties may
terminate this Agreement as provided below:
(i) the Buyer and the Seller may terminate this
Agreement by mutual written consent at any time prior to the
Closing;
(ii) the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing in
the event the Seller has breached any material representation,
warranty, or covenant contained in this Agreement in any material
respect, the Buyer has notified the Seller of the breach, and the
breach has continued without cure for a period of 15 days after
the notice of breach; and
(iii) the Seller may terminate this Agreement by
giving written notice to the Buyer at any time prior to the
Closing in the event the Buyer has breached any material
representation, warranty, or covenant contained in this Agreement
in any material respect, the Seller has notified the Buyer of the
breach, and the breach has continued without cure for a period of
15 days after the notice of breach.
9.2 Effect of Termination. If any Party terminates this
Agreement pursuant to Section 9.1 above, all rights and
obligations of the Parties hereunder shall terminate without any
Liability of any Party to any other Party (except for any
Liability of any Party then in breach).
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10. Miscellaneous.
10.1 Press Releases and Public Announcements. No Party
shall issue any press release or make any public announcement
relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the Buyer and the
Seller; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable
law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party
will use its best efforts to advise the other Parties prior to
making the disclosure).
10.2 No Third-Party Beneficiaries. This Agreement shall
not confer any rights or remedies upon any Person other than the
Parties and their respective successors and permitted assigns.
10.3 Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement
among the Parties and supersedes any prior understandings,
agreements, or representations by or among the Parties, written
or oral, to the extent they related in any way to the subject
matter hereof.
10.4 Succession and Assignment. This Agreement shall be
binding upo n and inure to the benefit of the Parties named
herein and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of his or its
rights, interests, or obligations hereunder without the prior
written approval of the Buyer and the Seller.
10.5 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original
but all of which together will constitute one and the same
instrument.
10.6 Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Agreement.
10.7 Notices. All notices, requests, demands, consents and
other communications which are required or permitted hereunder
shall be in writing, and shall be deemed given when actually
received or if earlier, two days after deposit with the U.S.
postal authorities, certified or registered mail, return receipt
requested, postage prepaid or two days after deposit with an
internationally recognized air courier or express mail, charges
prepaid, addressed as follows:
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If to the Buyer:
The Randers Group Incorporated
000 X. Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
With a copy to:
XxXxxxx & Bowie, P.L.C.
0000 Xxxxxx Xxxxxx Xxxxx
00 Xxxxxx Xxxxxx, XX
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Shape, Esq.
If to the Seller:
Thermo TerraTech Inc.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: President
With a copy to:
Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
or to such other address as any party hereto may designate in
writing to the other parties, specifying a change of address for
the purpose of this Agreement.
10.8 Governing Law. This Agreement shall be governed by
and construed in accordance with the domestic laws of the State
of Delaware without giving effect to any choice or conflict of
law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
10.9 Amendments and Waivers. No amendment of any provision
of this Agreement shall be valid unless the same shall be in
writing and signed by the Buyer and the Seller. No waiver by any
Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant hereunder or affect in any way
any rights arising by virtue of any prior or subsequent such
occurrence.
10.10 Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or
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PAGE
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
10.11 Expenses. Each of the Parties, Xxxxxx Group, and its
Subsidiaries will bear its own costs and expenses (including
legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. The Seller
agrees that none of Xxxxxx Group and its Subsidiaries has borne
or will bear any of the Seller's costs and expenses (including
any of their legal fees and expenses) in connection with this
Agreement or any of the transactions contemplated hereby.
10.12 Construction. The Parties have participated jointly
in the negotiation and drafting of this Agreement. In the event
an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal,
state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. The word "including" shall mean
including without limitation. The Parties intend that each
representation, warranty, and covenant contained herein shall
have independent significance. If any Party has breached any
representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the
fact that the Party is in breach of the first representation,
warranty, or covenant.
10.13 Incorporation of Exhibits, Annexes, and Schedules.
The Exhibits, Annexes, and Schedules identified in this Agreement
are incorporated herein by reference and made a part hereof.
10.14 Specific Performance. Each of the Parties
acknowledges and agrees that the other Party would be damaged
irreparably in the event any of the provisions of this Agreement
are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees
that the other Parties shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court
of the United States or any state thereof having jurisdiction
over the Parties and the matter, in addition to any other remedy
to which they may be entitled, at law or in equity.
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IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
THE RANDERS GROUP INCORPORATED,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Its
President
the "Buyer"
THERMO TERRATECH INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx,
Its President and CEO
the "Seller"
AA972690034
