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EXHIBIT 10.1
PRIMARY STOCK PURCHASE AGREEMENT
This PRIMARY STOCK PURCHASE AGREEMENT ("Primary Agreement"),
dated as of December 11, 1997, is entered into by and between Xxxxxx General
Corporation ("Xxxxxx"), a publicly traded California corporation and Xxxxx X.
Xxxxx, an individual, and Xxxxx Xxxxxxxx Grant ("Xxxxx Xxxxxxxx"), an
individual.
WITNESSETH:
WHEREAS, this Primary Agreement has been entered into
contemporaneously with the CONTINGENT STOCK PURCHASE AGREEMENT ("Contingent
Agreement") between Xxxxxx and Environmental Systems Corporation ("ESC") for the
purchase by Xxxxxx of all of the common stock of Advanced Tank Certification,
Inc. ("ATC") owned by ESC, that is, eight hundred and seventy (870) shares of
ATC Stock;
WHEREAS, ATC is a Tennessee corporation with its principal place
of business at 000 Xxxxxx Xxxx Xxxxx, Xxxxxxxxx, XX 00000;
WHEREAS, Xxxxx X. Xxxxx is the President and Chief Executive
Officer of ATC;
WHEREAS, Xxxxx Xxxxxxxx is the Secretary and Treasurer of ATC;
WHEREAS, no person other than Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx
is an officer of ATC;
WHEREAS, Xxxxx X. Xxxxx is the Chairman of the Board of Directors
of ATC;
WHEREAS, Xxxxx Xxxxxxxx is the Secretary of the Board of
Directors of ATC;
WHEREAS, no person other than Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx
is a member of the Board of Directors of ATC;
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WHEREAS, Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx jointly, after
consultation with one another have the authority to enter into agreements on
behalf of ATC;
WHEREAS, no one other than Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx has
any authority to enter into agreements on behalf of ATC;
WHEREAS, Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, and ESC own all of the
outstanding capital stock consisting of shares of common stock of ATC;
WHEREAS, the stock ownership of ATC is as follows:
Xxxxx Xxxxxxxx 5,583.9 Shares = 55.2199%
Xxxxx X. Xxxxx 3,658.2 Shares = 36.1764%
ESC 870.0 Shares = 8.6035%
TOTAL 10,112.1 Shares
WHEREAS, Xxxxxx desires to acquire all of said 10,112.1 shares
from Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, and ESC;
WHEREAS, Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx desire to sell their
respective shares of ATC stock to Xxxxxx;
WHEREAS, ESC has entered into a Contingent Agreement to sell its
eight hundred and seventy (870) shares of ATC stock to Xxxxxx;
WHEREAS, the Primary Agreement and the Contingent Agreement,
taken together, will convey all of the common stock of ATC to Xxxxxx;
WHEREAS, this Primary Agreement is wholly contingent upon the
Contingent Agreement being executed and performed. Otherwise, this Primary
Agreement shall be invalid, non-binding, unenforceable, and of no consequence;
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NOW, THEREFORE, in consideration of the premises and of the
respective representations, warranties, covenants, agreements and conditions
contained herein, the parties to this Primary Agreement hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
The terms set forth below in Article I shall have the meanings ascribed to them
below:
Affiliate: with respect to any person, means any person that
directly or indirectly controls, is controlled by or is under common control
with such person.
Applicable Law: means any and all federal, national, state,
regional, local, municipal or foreign laws, statutes, rules, regulations,
guidelines, ordinances, licenses, permits or judicial or administrative
decisions of any country, or any political subdivision, agency, commission,
official or court thereof having jurisdiction over Xxxxx X. Xxxxx, Xxxxx
Xxxxxxxx, or ATC.
Best Efforts: means a party's efforts in accordance with
reasonable commercial practice and without the incurrence of unreasonable
expense.
Business: means all of the business and operations conducted by
ATC.
Code: means the United States Internal Revenue Code of 1986, as
amended, or any amending or superseding Tax laws of the United States.
Environmental Law: means any applicable law (including common
law) regulating or prohibiting Releases into any part of the workplace or the
environment, or pertaining to the protection or improvement of natural resources
or wildlife, the environment or public and employee health and safety including,
without limitation, the Comprehensive
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Environmental Response, Compensation, and Liability Act ("CERCLA") (42 U.S.C.
Section 9601 et seq.), the Hazardous Materials Transportation Act (49 U. S.C.
Section 1801 et seq. ), the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), the Clean Water Act (33 U. S.C. Section 1251 et seq.),
the Clean Air Act (42 U.S.C. Section 7401 etseq.), the Toxic Substances Control
Act (15 U.S.C. Section 7401 et seq.), the Atomic Energy Act of 1954 (42 U.S.C.
Section 2014 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. Section 136 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.) ("OSHA") and the regulations promulgated pursuant
thereto, and any such applicable state or local statutes, and the regulations
promulgated pursuant thereto, as such laws have been and may be amended or
supplemented.
Hazardous Material: means any substance, material or waste which
is regulated pursuant to any Environmental Law by any public or governmental
authority in any jurisdiction in which ATC conducts business, or the United
States, including, without limitation, any material or substance which is
defined as a "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "contaminant," "toxic
waste," "toxic substance," " source material," "special nuclear material,"
"byproduct material," "high-level radioactive waste," "low-level radioactive
waste" or "spent nuclear material" under any provision of Environmental Law.
IRS: means the United States Internal Revenue Service.
Lien: means any lien, pledge, claim, charge, security interest,
mortgage or other encumbrance, option or other rights of any third person of any
nature whatsoever.
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Permit: means any and all federal, national, state, regional,
local, municipal or foreign licenses, permits, variances, waivers, riders,
registrations or any other governmental authorizations or approvals necessary or
appropriate for ATC to conduct its Business.
Person: means any individual, firm, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, government or agency or subdivision thereof or any other entity.
Regulation: means a United States Department of Treasury
regulation issued with respect to the Code.
Release: means any release, spill, effluent, emission, leaking,
pumping, pouring, emptying, escaping, dumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any property currently or formerly owned,
operated or leased by ATC.
Remedial Action: means all actions, including, without
limitation, any capital expenditures, lawfully required by a governmental entity
under any Environmental Law, or voluntarily undertaken to (a) clean up, remove,
treat, or in any other way ameliorate or address any Hazardous Materials or
other substance in the indoor or outdoor environment; (b) prevent the Release or
threat of Release, or minimize the further Release of any Hazardous Material so
it does not endanger or threaten to endanger the public or employee health or
welfare of the indoor or outdoor environment; (c) perform pre-remedial studies
and investigations or post-remedial monitoring and care pertaining or relating
to a Release; or (d) bring the applicable party into compliance with any
Environmental Law.
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Taxes: means all United States federal, state, county and local,
foreign and all other taxes, charges, fees, levies or other assessments,
including, without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, profit share, license,
lease, service, service use, value added, withholding, payroll, employment,
excise, estimated, severance, stamp, occupation, premium, real and personal
property, windfall profits, gains, capital stock, production, business and
occupation, disability, custom duties or other taxes of any kind whatsoever,
together with any interest, penalties, additions to tax, fines or other
additional amounts imposed thereon or related thereto, and the term "Tax" means
any one of the foregoing Taxes.
Tax Certificate: shall have the meaning set forth at Section
6.11.
Tax Returns: means all United States federal, local and state and
all foreign returns declarations, reports, estimates, information returns,
statements and other documents of, relating to, or required to be filed in
respect of, any and all Taxes.
ARTICLE II
PURCHASE AND SALE
Section 2.1 The Sale. Upon the terms and subject to the
conditions of this Agreement, at the Closing, as defined below under Article
III, Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx will sell, assign, transfer and deliver
their shares of ATC stock (the "Subject Shares") to Xxxxxx (together with a
stock power or powers executed in blank), and Xxxxxx will purchase and acquire
the Subject Shares from them.
Section 2.2 Purchase Price. The purchase price for all the
Subject Shares (the "Purchase Price") shall be $3,016,084.22. The Purchase Price
shall be paid by Xxxxxx at Closing
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by (i) wire transfer of $2,016,084.22 in immediately available funds to accounts
and in the allocation designated in writing by Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx
before Closing and (ii) delivery of shares of Common Stock of Xxxxxx ("Xxxxxx
Stock") valued at $1,000,000.00 as provided hereinafter.
(i) Wire Transfer. The $2,016,084.22 subject to wire transfer
shall be distributed as follows:
Xxxxx Xxxxxxxx: $1,218,078.98 shall be wire transferred
immediately to her credit pursuant to her accompanying instruction.
Xxxxx X. Xxxxx: $798,005.24 shall be wire transferred immediately
to his credit pursuant to his accompanying instruction.
(ii) Xxxxxx Stock. Pursuant to this Primary Agreement, Xxxxxx
Stock valued at $1,000,000.00, that is, 775,194 shares of Xxxxxx Stock shall be
part of the purchase price. Said 775,194 shares of Xxxxxx Stock shall be
allocated 60.418% to Xxxxx Xxxxxxxx and 39.582% to Xxxxx X. Xxxxx. The number of
shares of Xxxxxx Stock to be received by Xxxxx Xxxxxxxx shall be 468,357 shares.
The number of shares to be received by Xxxxx X. Xxxxx shall be 306,837 shares.
ARTICLE III
CLOSING
The closing of transactions contemplated hereby (the "Closing")
shall occur at such time, date and location as mutually agreed to by ESC and the
parties to the Primary Agreement (but in no event later than 11:00 a.m.,
December 22, 1997.)
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF XXXXX X. XXXXX AND XXXXX XXXXXXXX
Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx jointly and severally represent
and warrant to Xxxxxx the following:
Section 4.1 Organization and Good Standing of ATC. ATC is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has full corporate power and
authority to own, operate and lease its assets in the manner currently owned,
operated and leased by it and to carry on its business as now conducted. ATC is
duly qualified to do business as a corporation in all jurisdictions in which the
nature of its business requires such qualification and where the failure to do
so would have a material adverse effect on ATC. Schedule 4.1 is a complete list
of all jurisdictions in which ATC is currently licensed or qualified to transact
business as a foreign entity.
Section 4.2 Corporate Records. Copies of the certificate of
incorporation and by-laws of ATC have been delivered to Xxxxxx and are complete
and accurate as of the date hereof. The minute book and stock book of ATC have
been exhibited to Xxxxxx, and each is a complete and accurate record of the
material corporate actions of the stockholders and directors (and any committees
thereof) of ATC through the date hereof and all issuances, cancellations and
transfers of the capital stock thereof.
Section 4.3 Authorization. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx have
full power and authority to execute and deliver this Primary Agreement and the
exhibits and schedules hereto, to consummate the transactions contemplated
herein and to take all actions required to be taken by them pursuant to the
provisions hereof. This Primary Agreement and the exhibits hereto constitute
valid and binding obligations on Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx
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enforceable against them in accordance with the terms of this Primary Agreement,
except as such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditorso rights and general principles of equity.
Section 4.4 Non-Contravention. Except as set forth in Schedule
4.4, neither the execution and delivery of this Primary Agreement or any
documents executed in connection herewith, nor the consummation of the
transactions contemplated herein or therein, does or will violate, conflict
with, result in breach of or require notice or consent under any Applicable Law,
the charter or by-laws of ATC or any provision of any agreement or instrument to
which Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, or ATC is a party or result in the
creation of any Lien upon the capital stock, properties or assets of ATC. Except
as set forth in Schedule 4.4 no consent, approval exemption, authorization or
other action of, or notice to or filing with, any third party, court or
administrative or other governmental or regulatory body is required by Xxxxx X.
Xxxxx, Xxxxx Xxxxxxxx, or ATC to execute, deliver or perform this Primary
Agreement and to consummate the transactions contemplated herein and to take all
actions required to be taken by them pursuant to the provisions hereof.
Section 4.5 Validity. There are no pending or known threatened
judicial or administrative actions, proceedings or investigations which question
the validity of this Primary Agreement or any action taken or contemplated by
Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx in connection with this Primary Agreement.
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Section 4.6 Broker Involvement. Neither Xxxxx X. Xxxxx, Xxxxx
Xxxxxxxx, nor ATC has hired, retained or dealt with any broker or finder in
connection with the transactions contemplated by this Primary Agreement.
Section 4.7 Litigation. Except as set forth in Schedule 4.7,
there is no investigation, claim or proceeding or litigation of any type pending
or threatened involving ATC or that, to the best knowledge of Xxxxx X. Xxxxx or
Xxxxx Xxxxxxxx, would have an adverse effect on ATC, and there is no judgment,
order, writ, injunction or decree of any court, government, governmental agency
or arbitral tribunal against or involving ATC or that, to the knowledge of Xxxxx
X. Xxxxx and Xxxxx Xxxxxxxx, would have an adverse effect on ATC or Xxxxxx.
Section 4.8 Title to Shares. All of the outstanding ATC shares of
Common Stock were duly authorized for issuance and are validly issued, fully
paid and nonassessable, and none of such shares are held in treasury. Xxxxx X.
Xxxxx and Xxxxx Xxxxxxxx own, or will own prior to Closing, the Subject Shares
which are the subject of this Primary Agreement beneficially and of record, free
and clear of all Liens, and such shares are not, or will not be prior to
closing, subject to any agreements or understandings with respect to the voting
or transfer of any of the shares. There are no outstanding subscriptions,
options, convertible securities, warrants or calls of any kind issued or granted
by, or binding upon, Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx to purchase or otherwise
acquire or to sell or otherwise dispose of any security of or equity interest in
ATC. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx have the requisite legal right to sell,
assign and transfer the shares owned by each to Xxxxxx and will upon delivery of
a certificate or certificates representing such shares to Xxxxxx pursuant to the
terms hereof, transfer to Xxxxxx title to such shares, free and clear of any
Liens.
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Section 4.9 Contracts and Commitments. Schedule 4.9 lists all
agreements, leases, commitments, contracts, undertakings or understandings, oral
or written, to which ATC is a party as of the date of execution of this Primary
Agreement, including but not limited to trademark, trade name or patent license
agreements, service agreements, lease, purchase or sale agreements, supply
agreements, distribution or distributor agreements, purchase orders, customer
orders and equipment rental agreements, that are material to ATC and involve
consideration with value of $10,000 or more. ATC is not in breach of or default
under any agreement, lease, contract or commitment listed or of a type required
to be listed (without regard to the date thereof) in Schedule 4.9 (collectively,
the "Agreements"). Each Agreement is a valid, binding and enforceable agreement
of ATC and, to the knowledge of Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx after
reasonable investigation, enforceable except as such enforcement may be subject
to bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditorso rights and general principles of
equity. There has not occurred any breach or default under any Agreement on the
part of the other parties thereto, and no event has occurred which with the
giving of notice or the lapse of time, or both, would constitute a default under
any Agreement. There is no dispute between the parties to any Agreement as to
the interpretation thereof or as to whether any party is in breach or default
thereunder, and no party to any Agreement has indicated its intention to, or
suggested it may evaluate whether to, terminate any Agreement. ATC is not a
party to any covenant or obligation of any nature limiting the freedom of ATC to
compete in any line of business after the Closing. No notice has been given
under any lease to extend the term thereof beyond its current term.
Section 4.10 Taxes.
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(a) ATC and any affiliated, combined or unitary group of which
ATC is or was a member has (i) timely (taking into account any extension) filed
all Tax Returns required to be filed or sent with respect to any Taxes, (ii)
timely paid all Taxes (including estimated Taxes) that are due and payable for
which ATC may be liable, (iii) established reserves that are adequate for the
payment of all Taxes not yet due and payable with respect to the results of
operation of ATC through the Closing Date and (iv) complied in all respects with
all applicable laws, rules and regulations relating to the payment and
withholding of Taxes and has in all respects timely withheld from employee wages
and paid over to the proper taxing and other governmental authorities all
amounts required to be so withheld and paid over, based on the manner in which
ATC has classified its employees under the Fair Labor Standards Act and
Department of Transportation regulations.
(b) Schedule 4.10 sets forth any affiliated, consolidated,
combined, unitary or similar group Tax Return in which ATC is or has been a
member or is or has joined in the filing. Except to the extent being contested
in good faith, all deficiencies asserted as a result of such examinations have
been paid, fully settled or adequately provided for in accordance with GAAP. No
Tax audits or other administrative proceedings or court proceedings are
presently pending with regard to any Taxes for which ATC would be liable, and no
deficiency for any such Taxes has been proposed, asserted or assessed pursuant
to such examination against ATC by any taxing authority with respect to any
period.
(c) ATC has not executed or entered into with the IRS or any
other taxing authority (i) any agreement or other document extending or having
the effect of extending the period for assessments or collections of any Tax for
which ATC would be liable or (ii) a closing
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agreement pursuant to Section 7121 of the Code that relates to the assets or
operations of ATC other than the items noted on Schedule 4.10. There are no Tax
Liens upon any assets of ATC.
(d) ATC has not made an election under Section 341(f) of the Code
or agreed to have Section 341(f)(2) of the Code apply to any disposition of a
subsection (f) asset (as such term is defined in Section 341(f)(4) of the Code)
owned by ATC.
(e) ATC is not a party to, is not bound by, and has no obligation
under any Tax sharing agreement or similar agreement or arrangement.
Section 4.11 Title to Properties. Except as set forth in Schedule
4.11 hereto, ATC has good and indefeasible title to all of its assets, free and
clear of all Liens.
Section 4.12 Trademarks, Trade Names and Intellectual Property.
Schedule 4.12 contains an accurate and complete list of (a) all patents, pending
patent applications and invention memoranda owned by ATC or relating to the
Business of ATC, (b) all registered United States and foreign trademarks, trade
names and logos owned or used by ATC and all registrations thereof and (c) all
unregistered United States and foreign trademarks, trade names and logos used by
ATC. ATC has the right to use all trademarks, trade names, logos, patents,
pending patent applications and invention memoranda referred to herein. Except
as expressly set forth in Schedule 4.7 hereto, there is no known pending or
threatened action or claim that would impair any such right. Except as set forth
in Schedule 4.12 hereto, ATC believes it is the sole and exclusive owner of,
with all right, title and interest in and to, each item described in Schedule
4.12 and has sole and exclusive rights to the use thereof or to material covered
thereby.
Section 4.13 Financial Records; Budget. The unaudited financial
statements of ATC as of July 31, 1997 and for the year ended September 30, 1996
as set forth on Schedule
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4.13 (the "Financial Statements") are each accurate, complete, true and correct
in all material respects, were prepared in accordance with GAAP (except as set
forth therein), and fairly present in all material respects the financial
condition and results of operations of ATC. Schedule 4.13 sets forth the actual
monthly revenues of ATC for the twelve months ended July 31, 1997 from (i)
Statistical Inventory Reconciliation ("SIR") and (ii) tank testing. All
estimates set forth on Schedule 4.13 represent the good faith best estimates of
management of ATC. Schedule 4.13 also sets forth the number of tanks receiving
SIR services by ATC or for which agreements exist to provide SIR services by ATC
as of July 31, 1997 and the number of tanks tested by ATC in the twelve months
ended July 31, 1997.
Section 4.14 Condition of Assets and Inventory. Except as set
forth in Schedule 4.19, all the assets of ATC are in good, serviceable condition
and fit for the particular purposes for which they are used in the business of
ATC, subject only to normal maintenance requirements and normal wear and tear
reasonably expected in the ordinary course of business.
Section 4.15 Liabilities. Except as set forth in Schedule 4.15 or
in the financial statements and notes thereto referred to in Section 4.13 there
is no existing, contingent or, to the knowledge of Xxxxx X. Xxxxx or Xxxxx
Xxxxxxxx after reasonable investigation, material threatened liability,
obligation, Lien or claim of any nature (absolute, accrued, contingent or
otherwise) that relates to or has been or may be asserted against ATC.
Section 4.16 Employees and Related Matters.
(a) Set forth on Schedule 4.16 is a complete list of all
employees of ATC, listing the title or position held, base salary, any
commissions or other compensation paid or payable in 1996 or 1997 as reflected
on such Schedule, all employee benefits received by such employees
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and any other terms of any oral or written agreement between any such employee
and ATC that will proximately cause a detriment to Xxxxxx. Xxxxx X. Xxxxx and
Xxxxx Xxxxxxxx have heretofore delivered to Xxxxxx true and correct copies of
each management or employment contract or contract for personal services and a
complete description of any other presently material understanding or commitment
between ATC and any officer, consultant, director, employee or independent
contractor.
(b) ATC is not a party to any collective bargaining agreement or
labor contract.
(c) ATC has taken all necessary actions to comply with the Worker
Adjustment and Retraining Notification Act (The "WARN Act") through the Closing
Date, to the extent it is subject to such Act, and Xxxxxx shall not have any
disclosure or announcement obligations under the WARN Act as a result of the
transaction contemplated by this Primary Agreement.
Section 4.17 No Material Change. There has been no material
adverse change in the business, results of operations, assets or financial
position of ATC from July 31, 1997 to and including the date this representation
is made, and no event has occurred which could be expected to lead to or cause
such material adverse change.
Section 4.18 Compliance With Law. ATC is not in violation of any
provision of Applicable Law, including any Environmental Law, and ATC has not
received any notice of any alleged violation of such Applicable Law, which in
either case would result in a material adverse effect on ATC.
Section 4.19 Tangible Personal Property. All of the fixtures,
machinery and equipment reflected in the Financial Statements and/or used in
connection with the Business of ATC are in the possession and under the
operating control of ATC ("Tangible Personal
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Property"). Except as set forth in Schedule 4.19 hereto, no item of tangible
Personal Property requires repairs in excess of $2,500.00 to be in good,
serviceable condition and fit for the particular purpose for which it is
currently used, subject only to normal maintenance requirements and normal wear
and tear reasonably expected in the ordinary course of business.
Section 4.20 Insurance. Schedule 4.20 contains a list of all
insurance policies of ATC or relating to the conduct of the Business and the
status of prepayments. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx have heretofore
delivered to Xxxxxx a copy of all such policies. Such policies are in full force
and effect, and ATC is not in default under any of them.
Section 4.21 Government Licenses, Permits and Related Approvals.
Schedule 4.21 sets forth a list of all Permits required for the conduct of
Business by ATC, all of which are in full force and effect and are not being
violated in any manner which would have a material adverse effect on ATC.
Section 4.22 Distributed Products. Schedule 4.22 sets forth a
complete listing of all products (a) distributed by ATC (and the manufacturer
thereof and the person, if different, for whom ATC distributes such product) or
(b) manufactured or sold by ATC and distributed by others (and the name of such
distributor). Such Schedule also sets forth the terms of each such distribution
arrangement. ATC has full right to distribute all products referred to in clause
(a) of this Section.
Section 4.23 Safety Reports. Schedule 4.23 sets forth a complete
listing of all insurance loss runs, workerso compensation reports and claims,
safety citations and reports, OSHA reports and all documents respecting ATC and
relating to any of the foregoing since January 1, 1994.
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Section 4.24 Transactions with Certain Persons. Except for
transactions with a value of less than $10,000.00, and except as set forth in
Schedule 4.24 ATC has not, directly or indirectly, (i) purchased, leased or
otherwise acquired any property or obtained any services from, or (ii) sold,
leased or otherwise disposed of any property, or (iii) furnished any services
to: (a) Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, ESC, any officer, or director or
shareholder of ESC, or (b) any person, firm or corporation which, directly or
indirectly, alone or together with others, controls, is controlled by, or is
under common control with Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx. Except as set forth
in Schedule 4.24 ATC does not owe any amount to, or have any contract with or
commitment to, any of its shareholders, directors, officers, employees or
consultants (other than compensation for current services not yet due and
payable and reimbursement of expenses arising in the ordinary course of business
not in excess of $10,000.00 in the aggregate), and none of such persons owes any
amount to ATC.
Section 4.25 Accounts Receivable. Except as set forth in Schedule
4.25 as of July 31, 1997 all the accounts receivable of ATC were valid, genuine
and subsisting, arose out of bona fide sales and deliveries of goods,
performance of services or other business transactions in the ordinary course of
business, were owned free and clear and not subject to any Lien, and were
current and collectible, except for approximately $10,000.00 of "bad debt."
Section 4.26 Studies, Etc. Schedule 4.26 sets forth a compete
list of all studies, reports, plans, analyses or similar documents of a material
nature (whether prepared by Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, or ATC or others) in
the possession or control of Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx or ATC relating to
safety, the environment, Hazardous Material, intellectual property,
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markets, competitors, strategic planning, product liability, warranties or
otherwise relating directly to ATC.
Section 4.27 Disclosure. All schedules to this Primary Agreement
are complete and accurate in all material respects or will be on the Closing
Date. No representation or warranty by Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx in this
Primary Agreement, or in any schedule or exhibit to this Primary Agreement, or
in any statement or certificate or other document furnished to Xxxxxx by Xxxxx
X. Xxxxx or Xxxxx Xxxxxxxx, contains or will contain any untrue statement of a
material fact or omits or will omit a material fact necessary to make the
statements therein not misleading, except for such facts as are not known and
could not reasonably have been known by Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx.
Section 4.28 Employee Benefits.
(a) The term "ATC Plan" shall mean any stock purchase, stock
option, pension, profit-sharing, retirement, bonus, deferred compensation,
incentive compensation, commission, severance or termination pay,
hospitalization, medical, dental, disability, life or other insurance, or
supplemental unemployment benefits plan or agreement or policy or contract or
other insurance, or supplemental unemployment benefits plan or agreement or
policy or contract or other arrangement that is or ever has been maintained or
contributed to by ATC for the purpose of providing employment-related
compensation or benefits to any current or former officer, consultant, director,
annuitant, employee, retiree or independent contractor of ATC or members of a
person's family (other than directorso and officerso liability policies),
whether or not insured, including without limitation "employee benefit plans" as
defined in the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the rules and regulations thereunder.
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(b) As of the Closing Date, no ATC Plan is or has been (i)
covered by Title IV of ERISA, (ii) subject to the minimum funding requirements
of Section 412 of the Code, (iii) a "multi-employer plan" as defined in Section
3(37) of ERISA, (iv) subject to Section 4063 or 4064 of ERISA, or (v) a
voluntary employeeso beneficiary association within the meaning of Code Section
501(c)(9).
(c) ATC has no commitment or obligation to establish or adopt any
new or additional plans or other arrangements that would constitute an ATC Plan
if adopted, or to increase materially the benefits under any existing ATC Plan.
Schedule 4.28 sets forth true and correct copies of the following:
(i) Each written ATC Plan and all amendments thereto as of
the date hereof;
(ii) A complete written description of each other ATC Plan;
(iii) All current summary Plan descriptions provided to
employees regarding the ATC Plans;
(iv) Each trust agreement and annuity contract (or any other
funding instruments), and each insurance contract, pertaining to any of the ATC
Plans, including all amendments to such documents to the date hereof;
(v) The most recent IRS Form 5500 for any ATC Plan and
schedules thereto; and
(vi) The most recent determination letter issued by the IRS
with respect to any ATC Plan qualified under section 401(a) of the Code.
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(d) Each ATC Plan is in compliance with the provisions of all
applicable laws, rules and regulations, including, without limitations, ERISA
and the Code. No person is known to Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx to have
engaged in any prohibited transaction (within the meaning of Section 4975 of the
Code or Section 406 of ERISA) that could subject ATC to liability.
(e) All contributions and premiums required of ATC by any legal
requirement or by the terms of any ATC Plan or any contract relating thereto
have been timely made (without regard to any waivers granted with respect
thereto) or accrued. All obligations of ATC with respect to each ATC Plan have
been paid or performed.
(f) Except as provided in Schedule 4.28 no ATC Plan provided for
medical, life insurance or health benefits or death benefits after an employee's
termination of employment (including retirement) except for continuation
coverage required pursuant to Section 4980B of the Code and Part 6 of Title I of
ERISA and the regulations thereunder.
(g) ATC has no obligation to make any payments that would be
"excess parachute payments" under Section 280G of the Code. Except as set forth
on Schedule 4.28 consummation of the transactions contemplated by this Primary
Agreement will not (A) entitle any current or former employee of ATC to
severance pay, employment compensation or any other payment, benefit or award
(whether under an ATC Plan or otherwise) or (B) accelerate the time of payment
or vesting, or increase the amount of any benefit, award (including stock
options, restricted stock and similar awards) or compensation due any such
employee or former employee.
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(h) There are no known pending, threatened or anticipated claims
or proceedings against any ATC Plan, the assets of any ATC Plan or ATC, or the
Plan administrator or fiduciary of any ATC Plan with respect to the operation of
any such Plan (other than routine, uncontested benefit claims), and there are no
known facts or circumstances that could form the basis for any such claim or
proceeding.
Section 4.29 Environmental Matters.
(a) The operations of ATC have been and, as of the Closing Date,
will be, in compliance with all Environmental Laws in all material respects;
(b) ATC has obtained and will, as of the Closing Date, maintain
all Permits and has made and will, as of the Closing Date, make all material
filings, reports and notices required under applicable Environmental Law in
connection with the operation of its Business;
(c) As of the date hereof, ATC is not subject to any outstanding
written orders, contracts or agreements with any governmental entity or other
person respecting (i) Environmental Law, (ii) Remedial Action, (iii) any Release
or threatened Release of Hazardous Material or (iv) an assumption of
responsibility for environmental claims of another entity;
(d) ATC has not received any written communication alleging, with
respect to any such party, a material violation of or material liability under
any Environmental Law or requesting, with respect to any such party, information
with respect to an investigation pursuant to CERCLA or any other Environmental
Law;
(e) ATC has no known material contingent liability in connection
with the Release of any Hazardous Material into the indoor or outdoor
environment (whether on-site or off-site) or employee or third-party exposure to
Hazardous Materials;
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(f) The operations of ATC involving the generation,
transportation, treatment, storage or disposal of hazardous waste, as defined
and regulated under 40 C.F.R. parts 260-270 or any state equivalent, are in
compliance with applicable Environmental Laws in all material respects; and
(g) Except as described on Schedule 4.29 there is not now, nor,
to the best knowledge of Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx as of the date hereof,
has there ever been, on or in any property owned, operated, leased or under
option by ATC or for which ATC has assumed responsibility for material
environmental claims, any of the following: (i) any underground storage tanks or
surface impediments, (ii) any on-site disposal of solid waste or Hazardous
Materials, (iii) any asbestos-containing materials or (iv) any polychlorinated
biphenyls.
Section 4.30 Conduct of the Business. Since July 31, 1997, ATC
has complied with the provisions set forth below:
(a) ATC has operated its Business in the ordinary course;
(b) Except as set forth in Schedule 4.30, neither ATC, Xxxxx X.
Xxxxx nor Xxxxx Xxxxxxxx has (i) granted or agreed to grant any bonuses to any
employee, officer, director, representative or agent of ATC, (ii) granted any
general increase in the rates of salaries or compensation of employees,
officers, directors, representatives or agents of ATC, (iii) provided for any
new pension, retirement or other employment benefits to any employee, officer,
director, representative or agent of ATC or any increase in any existing
benefits, (iv) terminated or amended in any material respect or provided for any
material increase in benefits under any ATC Plan or (v) executed any employment
agreement, severance arrangement, consulting
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arrangement, sales agency agreement, representation agreement or distribution
agreement with any employee, officer, director, representative or agent of ATC;
(c) ATC has not amended its certificate of incorporation or
by-laws and neither Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, nor ATC has entered into any
merger or consolidation agreement involving ATC or its assets;
(d) Neither Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, nor ATC has
authorized for issuance, issued, sold, delivered or agreed or committed to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any
capital stock of any class or any other securities or equity equivalents of ATC
or amended any of the terms of any such securities or agreements;
(e) ATC has not sold, assigned or disposed of any of its material
assets or properties, tangible or intangible, or incurred or assumed any
liabilities or entered into any sale/leaseback or similar transaction, except
for sales and dispositions made, or liabilities incurred, in the ordinary course
of business consistent with past practices;
(f) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx have used their best
efforts to (i) maintain and preserve the Business, (ii) retain ATC's employees
and (iii) maintain ATC's relationships with customers, suppliers and others;
(g) ATC has not assumed, guaranteed, endorsed or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other person or made any loans, advances or capital
contributions to or investments in any other person; and
(h) Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, and ATC have not implemented
or adopted (i) any change in ATC's accounting methods or principles or the
application thereof (including
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depreciation lives) or (ii) any material change in ATC's tax methods or
principles or the application thereof (including depreciation lives).
Section 4.31 Representations Regarding the Xxxxxx Stock. With
regard to the Xxxxxx Stock that will be issued to Xxxxx X. Xxxxx and Xxxxx
Xxxxxxxx, each represents and warrants that:
(a) He or she is acquiring such Xxxxxx Stock for his or her own
account, for investment and not with a view to distribution thereof, and such
Xxxxxx Stock will not be sold or distributed in violation of the Securities Act
or applicable state law or the rules and regulations under either. Xxxxx X.
Xxxxx and Xxxxx Xxxxxxxx understand that such Xxxxxx Stock has not been
registered under the Securities Act or applicable state securities laws by
reason of the reliance by Xxxxxx on an exemption from the registration
requirements of the Securities Act, and applicable state securities laws, and
that such securities must be held indefinitely unless a subsequent disposition
thereof is registered under the Securities Act and applicable state laws or is
exempt from registration. The financial condition of Xxxxx X. Xxxxx and Xxxxx
Xxxxxxxx is such that they are able to bear all risks of holding such Xxxxxx
Stock for an indefinite period of time. They have been afforded an opportunity
to ask questions of and receive answers from Xxxxxx and from persons authorized
to act on Xxxxxx'x behalf, concerning the terms and conditions of the
acquisition of such Xxxxxx Stock. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx have
investigated the acquisition of such Xxxxxx Stock to the extent they deem
necessary or desirable, and Xxxxxx has provided them with the assistance in
connection therewith that they requested. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx are
capable of evaluating the merits and risks of the
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acquisition of Xxxxxx Stock and of making an informed investment decision with
respect thereto.
(b) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx acknowledge and agree that
the certificates for the Xxxxxx Stock acquired by them shall be endorsed with
substantially the following legend:
"The securities evidenced hereby have not been registered under
the Securities Act of 1933 or applicable state securities laws
and may not be sold, transferred, assigned, offered, pledged, or
otherwise distributed for value unless there is an effective
registration statement under such Act and such laws covering such
securities or the Company receives an opinion of counsel
reasonably acceptable to the Company stating that such sale,
transfer, assignment, offer, pledge, or other distribution for
value is exempt from the registration and prospectus delivery
requirements of such Act and such laws."
Section 4.32 Representations Regarding ATC. Xxxxx X. Xxxxx and
Xxxxx Xxxxxxxx have not engaged in a fraud or deceit upon Xxxxxx, in connection
with the sale of the Subject Shares to Xxxxxx.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF XXXXXX
Section 5.1 Corporate Status and Good Standing. Xxxxxx is a
corporation duly organized, validly existing and in good standing under the laws
of California, with full corporate power and authority under its articles of
incorporation and by-laws to conduct its business as the same exists on the date
hereof and on the Closing Date.
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Section 5.2 Authorization. Xxxxxx has full corporate power and
authority under its articles of incorporation and by-laws, and all necessary
corporate action has been taken to authorize it, to execute and deliver this
Primary Agreement, and the exhibits and schedules hereto, to consummate the
transactions contemplated herein and to take all actions required to be taken by
it pursuant to the provisions hereof or thereof, and each of this Primary
Agreement and the exhibits hereto constitutes the valid and binding obligation
of Xxxxxx enforceable against Xxxxxx in accordance with its terms, except as
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium, or other similar laws now or hereafter in effect relating to
creditorso rights and general principles of equity.
Section 5.3 Non-Contravention. Neither the execution and delivery
of this Primary Agreement and the schedules and exhibits hereto, nor the
consummation of the transactions contemplated herein or therein, does or will
violate, conflict with or result in breach of or require notice or consent under
any Applicable Law, the charter or by-laws of Xxxxxx or any provision of any
agreement or instrument to which Xxxxxx is a party or result in the creation of
any Lien upon the capital stock, property or assets of Xxxxxx, such that there
would be a material adverse effect on any benefit to Xxxxx X. Xxxxx or Xxxxx
Xxxxxxxx hereunder. Except as set forth in Schedule 5.3, no consent, approval,
exemption, authorization or other actions of, or notice to or filing with, any
third party, court or administrative or other governmental or regulatory body is
required by Xxxxxx to execute, deliver or perform this Primary Agreement and to
consummate the transactions contemplated herein and to take all actions required
to be taken by it pursuant to the provisions hereof.
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Section 5.4 Validity. There are no pending or threatened judicial
or administrative actions, proceedings or investigations which question the
validity of this Primary Agreement or any action taken or contemplated by Xxxxxx
in connection with this Primary Agreement.
Section 5.5 Broker Involvement. Xxxxxx has not hired, retained or
dealt with any broker or finder in connection with the transactions contemplated
by this Primary Agreement.
Section 5.6 Litigation. There is no investigation, claim or
proceeding or litigation of any type pending or threatened involving Xxxxxx and
Xxxxxx is unaware of any judgment, order, writ, injunction, or decree of any
court, government or governmental agency or arbitral tribunal against or
involving Xxxxxx, that would have a material adverse effect on any benefit to
Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx hereunder.
Section 5.7 Information Regarding Xxxxxx. Xxxxxx is in compliance
with its reporting obligations under the Securities Exchange Act of 1934, as
amended. Schedule 5.7 hereto and Xxxxxx'x Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1997, taken as a whole, do not contain and will not
at the Closing contain any untrue statement of a material fact, and do not omit
and will not at the Closing omit a material fact necessary to make the
statements therein not misleading, except for such facts as are not known and
could not reasonably have been known by Xxxxxx.
Section 5.8 Disclosure of Information. Xxxxxx further
acknowledges that it shall conduct such investigation of ATC, its assets,
liabilities, operations and financial conditions, prior to the Closing, as it
deems necessary and advisable for purposes of making the purchase contemplated
by this Agreement. Except to the extent of the express representations,
warranties
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and agreements contained in this Agreement, Xxxxxx is purchasing the
Subject Shares in reliance upon its own investigation of ATC. Xxxxxx agrees and
acknowledges that it is experienced in the statistical inventory reconciliation
business and precision tightness testing business and has the knowledge and
ability to conduct a full investigation of ATC and to evaluate ATC's business,
operations, financial conditions, assets and liabilities. Xxxxxx expressly
represents and warrants that it has not relied on any projections or
representations (oral or written) except as set forth in this Agreement and the
schedules thereto, including without limitation Schedule 5.8.
Section 5.9 Restricted Securities. Xxxxxx understands that the
Subject Shares are characterized as "restricted securities" under the United
States federal securities laws and that under such laws and applicable rules and
regulations promulgated thereunder the Subject Shares may be resold without
registration under the Securities Act of 1933, as amended (the "Act") only in
certain circumstances. Xxxxxx understands that the certificates evidencing the
Subject Shares may contain a legend restricting transfer as provided under the
Act and applicable rules and regulations promulgated thereunder.
ARTICLE VI
ADDITIONAL AGREEMENTS AND COVENANTS
Section 6.1 Other Offers. From and after the date hereof until
Closing, Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall not, directly or indirectly,
(a) solicit, enter into or conduct discussions related to, initiate or knowingly
encourage any offer or proposal for, or give any indication of interest in,
directly or indirectly, a merger or business combination involving ATC or the
acquisition of an equity interest in, or a substantial portion of the assets of,
ATC or (b) unless required by law, regulation or judicial compulsion, disclose
any non-public information
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relating to ATC or the Business of ATC, or afford access to the properties,
books or records of ATC, to any person.
Section 6.2 Public Announcements. Prior to Closing, neither party
shall make any public announcement or issue any press release with respect to
this Primary Agreement or the transaction provided for herein without the prior
written consent of the other party, unless, on written advice of counsel, Xxxxxx
or Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx determine the release is required to comply
with applicable federal securities laws.
Section 6.3 Further Assurances. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx
each shall execute, acknowledge and deliver or cause to be executed,
acknowledged and delivered to Xxxxxx, such assignments or other instruments of
transfer, assignment and conveyance, in form and substance reasonably
satisfactory to Xxxxxx, on advice of their respective counsel, as shall be
necessary to vest in Xxxxxx all of the right, title and interest in and to their
ATC shares free and clear of all Liens, charges, encumbrances, rights of others,
mortgages, pledges or security interest, and any other document reasonably
requested by Xxxxxx in connection with this Primary Agreement. Xxxxx X. Xxxxx,
Xxxxx Xxxxxxxx, and Xxxxxx each agree that, from time to time, whether before,
at or after the Closing Date, they will execute and deliver such further
instruments and take such other action as may be reasonably necessary to carry
out the purposes and intent of this Primary Agreement.
Section 6.4 Covenant Against Competition. As an essential
consideration for the obligations of the parties under this Primary Agreement,
Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx hereby agree and covenant, that, for a period
of five years following the Closing Date (the "Non-Competition Period"), they
will not, neither within any county in the United States in which
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Xxxxxx is then conducting business, nor within any foreign country in which
Xxxxxx is then conducting business, directly or indirectly, compete with Xxxxxx
by carrying on a business that is substantially similar to any business
presently being conducted by Xxxxxx or by serving as an officer, director,
employee, consultant, agent or similar capacity for such a business. Without
limiting the generality of the foregoing, Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx
shall not, during the Non-Competition Period, solicit, accept or take away any
customer or employee of Xxxxxx. If Xxxxxx believes Xxxxx X. Xxxxx or Xxxxx
Xxxxxxxx has violated the provisions hereof, Xxxxxx shall have the right to seek
relief from any court of competent jurisdiction. The parties acknowledge that
money damages alone will not provide adequate compensation in the event of a
breach of the covenants of this Section. Therefore, the parties agree that in
addition to all remedies available at law, in equity or under this Primary
Agreement, Xxxxxx shall be entitled to seek injunctive relief for the
enforcement of this covenant. The parties agree that the covenants in this
Section are reasonable with respect to their duration, scope and geographical
area. If, at the time of enforcement of this Section, a court should hold that
the restrictions herein are unreasonable under the circumstances then existing
or otherwise, the parties agree that the maximum duration, scope or geographical
area legally permissible under such circumstances will be substituted for the
duration, scope or area stated herein.
Section 6.5 Governmental Filings. As promptly as practicable
after the execution of this Primary Agreement, each party shall, in cooperation
with the other, file any reports or notifications that may be required to be
filed by it under applicable law and shall furnish to the other all such
information in its possession as may be necessary for the completion of the
reports or notifications to be filed by the other.
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Section 6.6 Access to Information. Prior to Closing, Watson may
make such investigation of the Business and properties of ATC as Xxxxxx may
desire and, upon reasonable notice, Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, and ATC
shall give to Watson and its counsel, accountants and other representatives
reasonable access, during normal business hours until the Closing, to the
property, books, commitments, agreements, records, and files of ATC and of Xxxxx
X. Xxxxx and Xxxxx Xxxxxxxx related to ATC, and Xxxxx X. Xxxxx and Xxxxx
Xxxxxxxx shall furnish to Watson during that period all copies of documents and
information concerning the Business of ATC as Xxxxxx may reasonably request,
subject to applicable law. Watson shall hold, and shall cause its counsel,
accountants and other agents and representatives to hold, all such information
and documents in confidence. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx will cooperate
with Xxxxxx'x transition planning for the acquisition by providing access to key
executives of ATC.
Prior to Closing, Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx may make such
investigation of the business and properties of Xxxxxx as they may desire and,
upon reasonable notice, Watson shall give to Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx
and their respective counsel, accountants and other representatives reasonable
access, during normal business hours until the Closing, to the property, books,
commitments, agreements, records, and files of Xxxxxx, and Xxxxxx shall furnish
to Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx during that period all copies of documents
and information concerning the business of Xxxxxx as they may reasonably
request, subject to applicable law. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall
hold, and shall cause their respective counsel, accountants and other agents and
representatives to hold, all such information and documents in confidence.
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Section 6.7 Use of Name. Except as mutually agreed upon, Xxxxx X.
Xxxxx and Xxxxx Xxxxxxxx shall eliminate, and cease and desist from, any use of
any designation indicating an affiliation with ATC immediately following
Closing.
Section 6.8 Other Action. Each of the parties shall use its best
efforts to cause the fulfillment at the earliest practicable date but, in any
event, prior to the Closing Date of all conditions to their respective
obligations to consummate the transactions under this Primary Agreement.
Section 6.9 Cooperation with Financing and Financial Reporting.
Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx acknowledge and understand that in the event
Xxxxxx conducts certain offerings of its securities or is subject to reporting
requirements under the Exchange Act, Xxxxxx may be required to obtain certain
information relating to ATC or the Business, including, but not limited to,
audited or unaudited financial statements of ATC, and disclose such information
in registration statements and other documents filed with the Securities and
Exchange Commission under the federal securities laws or in disclosure documents
given investors in certain securities offerings. Xxxxx X. Xxxxx and Xxxxx
Xxxxxxxx agree to use their best efforts to cooperate fully and promptly, and
shall cause their Affiliates, accountants, counsel and other agents and
representatives to cooperate fully and promptly, with Xxxxxx in connection
therewith.
Section 6.10 Consents. Each party will cooperate with the other
and proceed, as promptly as is practicable, to seek to obtain all necessary
consents and approvals set forth in Schedule 4.4 or Schedule 5.3, and to
endeavor to comply with all other legal or contractual requirements for or
preconditions to the execution and consummation of this Primary Agreement.
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Section 6.11 Tax Certificate. On or before the Closing Date,
Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx will provide to Xxxxxx a certificate ("Tax
Certificate") that sets forth the following information as of the date for each
particular item of information which is as close to the Closing Date as is
reasonably practicable:
(a) The following information shall be provided in accordance
with the reporting of such information on the most recently filed Tax Return for
each such Tax:
(i) The adjusted basis for Tax purposes of the assets of ATC,
and
(ii) The amounts of the net operating loss, net capital loss,
foreign Tax credit and Tax credit carry forwards, the overall foreign losses and
the foreign Taxes paid or accrued in excess of the applicable foreign Tax credit
limitations of or allocable to ATC;
(b) All current consents and elections with respect to Taxes of
or with respect to ATC that have been filed with any taxing authority;
(c) All taxable periods for which the income and franchise Tax
Returns of or with respect to ATC are open; and
(d) All Tax partnerships in which ATC is a member.
Section 6.12 Liability for Taxes.
(a) ATC is presently current and at Closing will still be current
in its obligations to taxing authorities. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx
shall be liable for, and shall defend, indemnify and hold Xxxxxx harmless
against, (i) any Taxes incurred, but not paid, by ATC for any taxable period
ending on or before the Closing Date, and (ii) any transfer or sales Taxes
arising from the transactions contemplated in this Agreement.
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(b) After Closing Xxxxxx and its Affiliates (including ATC, an
Affiliate wholly owned by Xxxxxx) shall be responsible for timely preparing and
filing with the appropriate taxing authorities all Tax Returns.
(c) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall cooperate with Xxxxxx
and shall make available all necessary records and timely take all action
necessary to allow Xxxxxx to file, or prepare and file, as the case may be, the
Tax Returns described in this paragraph (including, without limitation,
providing or causing to be provided to Xxxxxx any powers of attorney which
Xxxxxx shall request for purposes of filing any such Tax Returns). Such Tax
Returns shall be prepared on a basis consistent with those prepared with respect
to ATC for taxable periods ending on or before the Closing Date, unless
otherwise required by law.
(d) In the event that ATC or Xxxxxx receives a Tax refund or Tax
credit with respect to any prior tax return filed by or on behalf of ATC for a
period ending at or prior to the Closing, Xxxxxx shall promptly thereafter pay
to Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx an amount equal to such refund or credit;
and such payment shall be allocated 60.418% to Xxxxx Xxxxxxxx and 39.582% to
Xxxxx X. Xxxxx.
Section 6.13 Cooperation and Exchange of Information. The parties
will provide each other with such cooperation and information as they may
reasonably request of each other in preparing or filing any Tax Return, amended
Tax Return or claim for refund, in determining a liability or a right to refund
or in conducting any audit or other proceeding, in respect of Taxes imposed on
the parties or their respective Affiliates. Xxxxxx will preserve and retain all
Tax Returns, schedules, work papers and other documents relating to any such Tax
Returns, claims, audits or other proceedings until the expiration of the
statutory period of limitations (including
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extensions) of the taxable periods to which such documents relate and until the
final determination of any payments which may be required with respect thereto.
Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx and their representatives shall be entitled to
make copies of any such books and records as they shall deem necessary. Any
information obtained pursuant to this Section 6.13 shall be kept confidential,
except as may be otherwise necessary in connection with the filing of Tax
Returns or claims for refund or in conducting any audit or other proceeding.
Section 6.14 Conflict. In the event of a conflict between the
provisions of Sections 6.12 or 6.13 and any other provision of this Primary
Agreement, the provisions of this Article VI shall control.
Section 6.15 Registration of Xxxxxx Stock. Xxxxx X. Xxxxx and
Xxxxx Xxxxxxxx shall have the "piggyback" registration rights set forth in
Schedule 6.15 hereto with respect to the Xxxxxx Stock.
Section 6.16 Maintenance of Professional Liability Insurance.
Xxxxxx shall maintain ATC's current professional liability insurance or a
replacement policy reasonably acceptable to Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx
for a period of not less than three years from the Closing.
ARTICLE VII
EXTENT AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS; INDEMNIFICATION
Section 7.1 Indemnification of Xxxxxx.
(a) Subject to the limitations set forth in Section 7.1(b) below,
Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx jointly and severally agree to defend,
indemnify and hold harmless Xxxxxx
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(including its officers, directors, employees and agents and Affiliates) from
and against, any and all judgments including reasonable and necessary expenses
(including reasonable and necessary attorneyso fees) ("Claim") against Xxxxxx,
any Affiliate of Xxxxxx, or ATC, as a direct result of (i) any error,
inaccuracy, breach or misrepresentation in any of the representations and
warranties made by or on behalf of Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx in this
Primary Agreement or in any certificate or other instrument delivered by them in
connection with this Primary Agreement (including the Schedules hereto), or (ii)
any violation or breach or default by Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx under the
terms of this Primary Agreement, (iii) any act or omission occurring, or
condition or circumstances existing, prior to the Closing, or any condition or
circumstances caused by any act or omission occurring prior to the Closing, by
Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx or ATC or otherwise with respect to Xxxxx X.
Xxxxx and Xxxxx Xxxxxxxx or ATC, (iv) the past or present presence, release,
remediation or clean-up of, or exposure to, Hazardous Material relating to or
located on, within or under any assets owned, leased or used by Xxxxx X. Xxxxx
and Xxxxx Xxxxxxxx or ATC, or (v) any product liability, strict liability or
other claims concerning (A) products sold or services provided by Xxxxx X. Xxxxx
and Xxxxx Xxxxxxxx or ATC prior to the Closing or (B) inventory owned by Xxxxx
X. Xxxxx and Xxxxx Xxxxxxxx or ATC at the Closing. Except as set forth in
Section 7.1(b), the obligation of Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx to indemnify
Xxxxxx pursuant to this Section 7.1 shall be limited to two years after the
Closing, except that any obligation relating to environmental or tax claims
shall be limited to three years. Notwithstanding the foregoing, Xxxxx X. Xxxxx
and Xxxxx Xxxxxxxx shall have no duty to indemnify Xxxxxx for a Claim unless and
until the amount to be indemnified by them for one or more Claims aggregates at
least $10,000.00.
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(b) The obligation to indemnify set forth in Section 7.1(a) shall
be limited to the value of the Xxxxxx Stock then subject to the escrow
contemplated by the Escrow Agreement entered into at the Closing pursuant to
Section 8.1(h) of this Primary Agreement, except that the obligation to
indemnify shall be unlimited as to time or amount in the event of Claims
resulting from the fraud or deceit by Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx.
Section 7.2 Indemnification of Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx.
Xxxxxx agrees to indemnify and hold harmless Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, and
ATC (including ATC officers, directors, employees and agents) from and against,
any and all Claims incurred by Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, ATC or Xxxxxx as
a result of (a) any error, inaccuracy, breach or misrepresentation in any of the
representations and warranties made by or on behalf of Xxxxxx in this Primary
Agreement or in any certificate or other instrument delivered by or on behalf of
Xxxxxx in connection with this Primary Agreement (including the Schedules
hereto), (b) any violation or breach by Xxxxxx of or default by Xxxxxx under the
terms of this Primary Agreement, (c) any act or omission occurring, or condition
or circumstances existing, after the Closing, or any condition or circumstances
caused by an act or omission occurring after the Closing, by Xxxxxx or ATC or
otherwise with respect to Xxxxxx or ATC, (d) the post-Closing presence, release,
remediation or clean-up of, or exposure to, Hazardous Material relating to or
located on, within or under any assets owned, leased or used by Xxxxxx or ATC,
or (e) any product liability, strict liability or other claims concerning (i)
products sold or services provided by Xxxxxx or ATC after the Closing or (ii)
inventory owned by Xxxxxx at the Closing and inventory acquired by Xxxxxx or ATC
after the Closing. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall be entitled to
recover their reasonable and necessary attorneyso fees and litigation expenses
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incurred in connection with successful enforcement of their rights under this
Section. Xxxxxx'x obligation to indemnify Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx
pursuant to this Section 7.2 shall be limited to $1,000,000.00 and shall be (i)
limited to two years with respect to clauses (a) and (b) and (ii) shall be
unlimited as to time with respect to clauses (c), (d) and (e). The obligation to
indemnify shall be unlimited as to time or amount in the event of Claims
resulting from the fraud or deceit by Xxxxxx.
Section 7.3 Survival. The representations, warranties and
covenants of the parties to this Primary Agreement and in any certificate or
instrument delivered in connection herewith shall be continuing and shall
survive the Closing for the period(s) of time set forth in Sections 7.1 and 7.2
above, (the period during which the representations and warranties shall survive
being referred to herein with respect to such representations and warranties as
the "Survival Period"), but shall thereafter terminate and be of no further
force and effect unless a written notice asserting a claim shall have been made
pursuant to this Article VII within the Survival Period with respect to such
matter. Any claim for indemnification of a Claim made during the Survival Period
shall remain in effect for purposes of such indemnification notwithstanding such
Claim may not be resolved within the Survival Period.
Section 7.4 Indemnification Procedures. All claims for
indemnification under this Agreement shall be asserted and resolved as follows:
(a) A party claiming indemnification under this Primary Agreement
(an "Indemnified Party") shall with reasonable promptness (i) notify the party
from whom indemnification is sought (the "Indemnifying Party") of any
third-party claim or claims asserted against the Indemnified Party ("Third Party
Claim") for which indemnification is sought and (ii)
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transmit to the Indemnifying Party a copy of all papers served with respect to
such claim (if any) and a written notice ("Claim Notice") containing a
description in reasonable detail of the nature of the Third Party Claim, an
estimate of the amount of damages attributable to the Third Party Claim to the
extent feasible (which estimate shall not be conclusive of the final amount of
such Claim) and the basis of the Indemnified Party's request for indemnification
under this Agreement.
Within 15 days after receipt of any Claim Notice ("the Election
Period"), the Indemnifying Party shall notify the Indemnified Party whether the
Indemnifying Party disputes its potential liability to the Indemnified Party
with respect to such Third Party Claim and, if the Indemnifying Party does not
dispute its potential liability to the Indemnified Party with respect to such
Third Party Claim, whether the Indemnifying Party elects to defend the
Indemnified Party with respect to such Third Party Claim.
If the Indemnifying Party does not dispute its potential
liability to the Indemnified Party within the Election Period and notifies the
Indemnified Party that it elects to defend such Third Party Claim, the
Indemnifying Party shall control negotiations toward resolution of such claim
without necessity of litigation, and if litigation ensues, to defend the same
with counsel reasonably acceptable to both parties, at the Indemnifying Party's
expense, and the Indemnified Party shall extend reasonable cooperation in
connection with such defense. The Indemnified Party shall be entitled to elect
to participate in, but not to control, the defense of any Third Party Claim
resulting in litigation, at its own cost and expense. However, if the parties to
any suit or proceeding shall include the Indemnifying Party as well as the
Indemnified Party, then the Indemnifying Party and the Indemnified Party shall
use their best efforts to resolve the real or
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potential conflicts inherent in the suit or proceeding. If resolution cannot be
reached on this issue, then resort to Arbitration consistent with Section 7.5 of
this Primary Agreement shall occur.
If the Indemnifying Party does not dispute its potential
liability to the Indemnified Party within the Election Period and the
Indemnifying Party fails to assume control of the negotiations prior to
litigation or to defend such action within a reasonable time, the Indemnified
Party shall be entitled, but not obligated, to assume control of such
negotiations or defense of such action, and the Indemnifying Party shall be
liable to the Indemnified Party for its expenses reasonably incurred or amounts
paid in connection therewith.
If the Indemnifying Party disputes its potential liability to the
Indemnified Party within the Election Period or does not elect to defend such
Third Party Claim, then the Indemnified Party shall be entitled to assume
control of such negotiations or defense of action and the liability for the
expense thereof, as well as any liability with respect to such Third Party
Claim, shall be determined as provided in Section 7.5 below.
If the Indemnifying Party fails to notify the Indemnified Party
within the Election Period that the Indemnifying Party elects to defend the
Indemnified Party pursuant to the preceding paragraph, or if the Indemnifying
Party elects to defend the Indemnified Party but fails to defend or settle the
Third Party Claim as herein provided, then the Indemnified Party shall have the
right to defend, at the sole cost and expense of the Indemnifying Party (if the
Indemnified Party is entitled to indemnification hereunder), the Third Party
Claim by all appropriate proceedings, which proceedings shall be promptly and
vigorously prosecuted by the Indemnified Party to a final conclusion or settled.
The Indemnified Party shall have full control
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of such defense and proceedings. Notwithstanding the foregoing, if the
Indemnifying Party has delivered a written notice to the Indemnified Party to
the effect that the Indemnifying Party disputes its potential liability to the
Indemnified Party under this Article VII and if such dispute is resolved in
favor of the Indemnifying Party, the Indemnifying Party shall not be required to
bear the costs and expenses of the Indemnified Party's defense pursuant to this
Section or of the Indemnifying Party's participation therein at the Indemnified
Party's request, and the Indemnified Party shall reimburse the Indemnifying
Party in full for all reasonable and necessary costs and expenses of such
litigation. The Indemnifying Party may participate in, but not control, any
defense or settlement controlled by the Indemnified Party pursuant to this
Section, and the Indemnifying Party shall bear its own costs and expenses with
respect to such participation.
Neither the Indemnifying Party nor the Indemnified Party shall
settle, compromise, or make any other disposition of any Third Party Claim which
would or might result in any liability to the Indemnified Party or the
Indemnifying Party under this Article VII without the written consent of such
other party. Such consent shall be reasonably given.
(b) In the event any Indemnified Party should have a claim
against any Indemnifying Party hereunder that does not involve a Third Party
Claim, the Indemnified Party shall transmit to the Indemnifying Party a written
notice (the "Indemnity Notice") describing in reasonable detail the nature of
the claim, an estimate of the amount of damage attributable to such claim to the
extent feasible (which estimate shall not be conclusive of the final amount of
such claim) and the basis of the Indemnified Party's request for indemnification
under this Primary Agreement. If the Indemnifying Party does not notify the
Indemnified Party within 30 days from its receipt of the Indemnity Notice that
the Indemnifying Party disputes such claim,
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the claim specified by the Indemnified Party in the Indemnity Notice shall be
deemed a liability of the Indemnifying Party hereunder.
Section 7.5 Arbitration of Disputes. If the Indemnifying Party
disputes, either as to the amount or liability, that any claim described in a
Claim Notice or an Indemnity Notice, as the case may be, is covered by such
Indemnifying Party's covenant to indemnify contained in this Article VII, then
the Indemnifying Party and the Indemnified Party agree to promptly negotiate in
good faith to resolve their differences and to mutually agree upon an amount, if
any, owed to the Indemnified Party by the Indemnifying Party hereunder. If the
Indemnifying Party and the Indemnified Party fail to agree within 30 days
thereafter, the dispute shall be resolved by binding and final arbitration of a
single arbitrator mutually agreed to by Xxxxxx and Xxxxx X. Xxxxx and Xxxxx
Xxxxxxxx conducted in Lakewood, Colorado in accordance with the rules of
commercial arbitration of the American Arbitration Association. The prevailing
party in any such arbitration proceeding shall be entitled to attorney's fees
and other out-of-pocket expenses reasonably and necessarily incurred in
connection with such proceeding, the amounts of which shall be contained in the
award of the arbitrator. Notwithstanding the foregoing, a court judgment which
has not been successfully appealed shall be determinative as to the amount of a
Claim.
Section 7.6 Offset for Insurance Recoveries. Any insurance
recovery by an Indemnified Party with respect to a Claim shall offset against
the amount of indemnification obligation with respect to such Claim which
otherwise would be owed pursuant to Section 7.1 or 7.2.
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Section 7.7 General. THE COVENANTS AND AGREEMENTS ENTERED INTO
PURSUANT TO THIS PRIMARY AGREEMENT TO BE PERFORMED AFTER THE CLOSING SHALL
SURVIVE THE CLOSING WITHOUT LIMITATION, EXCEPT AS STATED IN THIS ARTICLE VII.
THE INDEMNIFICATION OBLIGATIONS UNDER THIS ARTICLE VII SHALL APPLY REGARDLESS OF
WHETHER ANY CLAIM RESULTS SOLELY OR IN PART FROM THE ACTIVE, PASSIVE OR
CONCURRENT NEGLIGENCE OF THE INDEMNIFIED PARTY PRIOR TO THE CLOSING DATE. ALL
ORAL REPRESENTATIONS, WARRANTIES AND COVENANTS AND AGREEMENTS MADE BY THE
PARTIES SHALL NOT BE DEEMED MERGED INTO ANY INSTRUMENTS OR AGREEMENTS DELIVERED
IN CONNECTION WITH THE CLOSING OR OTHERWISE IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY.
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ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 Conditions Precedent to Obligations of Xxxxxx. The
obligation of Xxxxxx to consummate the purchase under this Primary Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions (any or all of which may be waived by Xxxxxx):
(a) All representations and warranties of Xxxxx X. Xxxxx and
Xxxxx Xxxxxxxx contained in this Primary Agreement including all Schedules to
this Agreement shall be true and correct in all respects at and as of the time
of the Closing with the same effect as though made again at, and as of, that
time, except such as will not have a material adverse effect and except such as
would not reasonably be expected to have a material adverse effect on the
ability of Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx to perform their obligations under
this Primary Agreement;
(b) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall have performed and
complied in all material respects with all obligations and covenants required by
this Primary Agreement to be performed or complied with by them prior to or at
the Closing;
(c) Xxxxxx shall have been furnished with a certificate, dated
the Closing Date, executed by Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx certifying to
the fulfillment of the conditions specified in Sections 8.1 (a) and 8.1 (b)
hereof;
(d) No provision of any Applicable Law shall prohibit, and there
shall not be in effect any injunction, restraining order or decree issued by a
court of competent jurisdiction or any governmental body that shall prohibit the
consummation of this Primary Agreement
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and there shall be no action or proceeding pending or threatened seeking any
such injunction, order or decree;
(e) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall have received all
consents, approvals and permits to execute this Primary Agreement and to
consummate the transactions contemplated hereby; and
(f) Xxxxxx shall be furnished with an opinion of counsel to Xxxxx
X. Xxxxx and Xxxxx Xxxxxxxx and ATC, as to the due execution and delivery of
this Primary Agreement and the documents delivered by Xxxxx X. Xxxxx and Xxxxx
Xxxxxxxx at Closing and substantially as to the matters set forth in the first
sentence of Section 4.1 hereof.
(g) Xxxxxx shall have entered into employment agreements with
each of Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx and Xxxxx Xxxxx in substantially the form
of Exhibits A, B, and C hereto, respectively.
(h) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall have entered into an
escrow agreement with Xxxxxx in substantially the form of Exhibit D hereto.
Section 8.2 Conditions Precedent to Obligations of Xxxxx X. Xxxxx
and Xxxxx Xxxxxxxx. The obligation of Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx to
consummate the sale under this Primary Agreement is subject to the fulfillment,
prior to or at the Closing, of each of the following conditions (any or all of
which may be waived by Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx):
(a) All representations and warranties of Xxxxxx contained in
this Agreement, including all Schedules to this Primary Agreement, shall be true
and correct in all respects at and as of the time of the Closing with the same
effect as though made again at, and as of, that time,
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except such as will not have a material adverse effect and except such as would
not reasonably be expected to have a material adverse effect on Xxxxxx'x ability
to perform its obligations under this Primary Agreement;
(b) Xxxxxx shall have performed and complied in all material
respects with all obligations and covenants required by this Primary Agreement
to be performed or complied with by Xxxxxx prior to or at the Closing;
(c) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall have been furnished
with a certificate, dated the Closing Date, executed by an authorized officer of
Xxxxxx certifying to the fulfillment of the conditions specified in Sections 8.2
(a) and 8.2 (b) hereof; and
(d) No provision of any Applicable Law shall prohibit, and there
shall not be in effect any injunction or restraining order issued by a court of
competent jurisdiction in any action or proceeding against, the consummation of
this Primary Agreement.
(e) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall be furnished with an
opinion of counsel to Xxxxxx, as to the due execution and delivery of this
Primary Agreement and the documents delivered by Xxxxxx at Closing and
substantially as to the matters set forth in the first sentence of Section 5.1.
(f) Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx and Xxxxx Xxxxx shall have
entered into employment agreements with Xxxxxx in substantially the form of
Exhibits A, B and C hereto, respectively.
ARTICLE IX
ACTIONS TO BE TAKEN AT CLOSING
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Section 9.1 Actions to be Taken by Xxxxx X. Xxxxx and Xxxxx
Xxxxxxxx at the Closing. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall take the
following actions at the Closing:
(a) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall deliver to Xxxxxx
copies certified by ATC's Secretary of resolutions duly adopted by the board of
directors of ATC authorizing and approving the execution and delivery of this
Primary Agreement, including the exhibits and schedules hereto, and the
consummation of the transactions contemplated herein;
(b) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall endorse and deliver
to Xxxxxx the stock certificates representing their ATC shares;
(c) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall deliver the
certificate referred to in Section 8.1(c);
(d) Xxxxxx shall have been furnished with a legal opinion as
provided in Section 8.1(f) hereof;
(e) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall have delivered to
Xxxxxx a letter of resignation from each noncontinuing officer and director of
ATC;
(f) Each of Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx and Xxxxx Xxxxx shall
execute and deliver to Xxxxxx his or her employment agreement attached hereto as
Exhibits A, B and C, respectively; and
(g) Each of Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall execute and
deliver to Xxxxxx the escrow agreement attached hereto as Exhibit D.
Section 9.2 Actions to be Taken by Xxxxxx at the Closing. Xxxxxx
shall take the following actions at the Closing:
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(a) Xxxxxx shall deliver to Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx a
copy certified by its Secretary of resolutions duly adopted by the board of
directors of Xxxxxx authorizing and approving the execution and delivery of this
Primary Agreement, including the exhibits and scheduled hereto, and the
consummation of the transactions contemplated herein;
(b) Xxxxxx shall make the payment of funds specified for payment
at Closing under Section 2.2;
(c) Xxxxxx shall deliver the officer's certificate referred to in
Section 8.2(c);
(d) Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall have been furnished
with a legal opinion as provided in Section 8.2(e);
(e) Xxxxxx shall execute and deliver the employment agreements
attached hereto as Exhibits A, B and C; and
(f) Xxxxxx shall execute and deliver the escrow agreement
attached hereto as Exhibit D.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Termination.
(a) This Primary Agreement may be terminated at any time prior to
the Closing:
(i) By mutual written agreement executed by the Parties; or
(ii) By Xxxxxx, in its sole discretion, in the event that
Xxxxxx discovers prior to the Closing that the representations and/or warranties
of Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx contained in this Primary Agreement contain
a material misrepresentation or omission; or
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(iii) By Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx, in the sole
discretion of either, in the event Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx discovers
prior to the Closing that the representations and/or warranties of Xxxxxx
contained in this Primary Agreement contain a material misrepresentation or
omission.
(b) Upon termination of this Primary Agreement, none of the
parties nor any other person shall have liability or further obligation arising
out of this Primary Agreement except for Xxxxxx'x liability to Xxxxx Xxxxxxxx
for expenses and obligations incurred by her in anticipation of her required
relocation to the Denver, Colorado area, and any liability resulting from the
breach of this Primary Agreement prior to termination. However, the provisions
of Sections 10.2, 10.3, 10.9 and 10.11 shall continue to apply.
Section 10.2 Confidentiality; Publicity; Books and Records.
(a) None of the parties nor any Affiliate will, directly or
indirectly, disclose or provide to any other person any non-public information
of a confidential nature concerning the other party (including ATC) or their
business or operations, except as is required in governmental filings or
judicial, administrative or arbitration proceedings. In the event that a party
or its Affiliate becomes legally required to disclose any such information in
any governmental filings or judicial, administrative or arbitration proceedings,
that party shall, and shall cause such Affiliate to, provide the other party
with prompt notice of such requirements so that the other party may seek a
protective order or other appropriate remedy. In the event that such protective
order or other remedy is not obtained, the disclosing party shall, and shall
cause such Affiliate to, furnish only that portion of the information that the
disclosing party or such Affiliate, as the case may be, is legally required to
disclose and such disclosure shall not result in
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any liability hereunder unless such disclosure was caused by or resulted from a
previous disclosure by the other party which was not permitted by this Primary
Agreement, or by that certain Confidentiality Agreement between the parties
dated as of July 22, 1996. Subject to applicable securities law or stock
exchange requirements, the parties hereto will promptly advise, and obtain the
approval of, the other parties before issuing any press release with respect to
this Primary Agreement or the transactions contemplated hereby.
(b) If the parties fail to Close the acquisition of shares
contemplated in this Primary Agreement, each party shall, and shall cause its
officers, directors, employees, representatives and agents (the
"Representatives") to return all copies of the other party's confidential
non-public information in its possession or in the possession of its
Representatives, and destroy all copies of any analyses, compilations, studies
or other documents prepared by that party or its Representatives or for its use
containing or reflecting any such information.
For purposes of this Primary Agreement, non-public information of
a confidential nature shall not include any information which (i) at the time of
disclosure or thereafter is generally available to and known by the public
(other than as a result of a disclosure directly or indirectly by a party, its
Affiliate or its Representatives), (ii) was available to a party on a
non-confidential basis from a source other than the other party, its Affiliate
or Representatives, provided that such source is not and was not directly or
indirectly bound by a confidentiality agreement with the non-disclosing party,
its Affiliate or Representatives with respect to that information or (iii) has
been independently acquired or developed by the other party, its Affiliate or
Representatives, without violating any obligations under this Primary Agreement,
or that certain Confidentiality Agreement between the parties dated as of July
22, 1996.
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(c) For a period of five years after the Closing Date, Xxxxxx
will preserve and retain the books and records of ATC and make such books and
records available at the then current administrative headquarters of Xxxxxx to
Xxxxx X. Xxxxx, Xxxxx Xxxxxxxx, and their employees and agents upon reasonable
notice and at reasonable times at the requesting entity's cost and expense, it
being understood that Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx shall be entitled at
Xxxxxx'x cost and expense to make copies of any such books and records as shall
be reasonably necessary.
Section 10.3 Expenses. Xxxxxx shall pay its respective expenses,
including the fees and disbursements of its respective counsel in connection
with the negotiation, preparation and execution of this Primary Agreement and
the consummation of the transactions contemplated herein.
Section 10.4 Entire Agreement. This Primary Agreement, including
all schedules and exhibits hereto, constitutes the entire agreement of the
parties and supersedes any prior oral or written agreements with respect to the
subject matter hereof, and may not be modified, amended or terminated except by
a written instrument specifically referring to this Primary Agreement signed by
all the parties hereto.
Section 10.5 Waivers and Consents. All waivers and consents given
hereunder shall be in writing. No waiver by any party hereto of any breach or
anticipated breach of any provision hereof by any other party shall be deemed a
waiver of any other contemporaneous, preceding or succeeding breach or
anticipated breach, whether or not similar.
Section 10.6 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been received only if
and when (a) personally delivered
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(b) if mailed, on the third day after mailing, by United States mail, first
class, postage prepaid, by certified mail, return receipt requested, addressed
in each case as follows (or to such other address as may be specified by like
notice) or (c) delivered by overnight courier or facsimile:
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(i) If to Xxxxxx, to:
Xxxxxx General Corporation
c/o USTMAN Industries, Inc.
00000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: President
(ii) If to Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx, to:
Xxxxx Xxxxx
c/o ATC, Inc.
000 Xxxxxx Xxxx Xxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Section 10.7 Successors and Assigns. This Primary Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors, legal representatives and assigns. No third party except
Xxxxx Xxxxx shall have any rights hereunder.
Section 10.8 Performance. Xxxxx X. Xxxxx and Xxxxx Xxxxxxxx agree
to cause ATC to perform all its obligations and agreements under this Primary
Agreement.
Section 10.9 Choice of Law; Section Headings: Table of Contents.
This Primary Agreement shall be governed by the internal laws of the State of
Colorado (without regard to the choice of law provisions thereof). The section
headings and any table of contents contained in this Primary Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Primary Agreement.
Section 10.10 Counterparts. This Primary Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original and all of which together shall be deemed to be one and the same
instrument.
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Section 10.11 Jurisdiction and Venue. Xxxxx X. Xxxxx, Xxxxx
Xxxxxxxx, and Xxxxxx hereby consent to personal jurisdiction in any action
brought with respect to this Primary Agreement and the transactions contemplated
hereunder in any federal or state court in Jefferson County, Colorado and agree
that service of process may be accomplished pursuant to Section 10.6 above.
Section 10.12 Severability. The invalidity or unenforceability of
any provision of this Primary Agreement shall not affect the validity or
enforceability of any other provision of this Primary Agreement which shall
remain in full force and effect.
Section 10.13 Assignment. This Primary Agreement and each party's
rights hereunder may not be assigned without the prior written consent of the
other parties; but no such assignment shall relieve the assigning party of any
of its obligations under this Primary Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
--------------------------------------------
XXXXX X. XXXXX, individually and as President of ATC
--------------------------------------------
XXXXX XXXXXXXX, individually and as Secretary
and Treasurer of ATC
XXXXXX GENERAL CORPORATION
By:
----------------------------------------------
XXX X. XXXX, President
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