EXHIBIT 10.38
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of the 4th day of December, 1996, between ULTEA,
LLC, a Wisconsin limited liability company ("Seller"), and
HEARTLAND FINANCIAL USA, INC., a Delaware corporation ("Buyer").
RECITALS
A. Seller owns various assets related to the purchase and
leasing of vehicles and equipment, and Seller wishes to transfer,
convey and assign substantially all of its properties, assets,
rights and business to Buyer, upon the terms and conditions set
forth in this Agreement.
B. Buyer wishes to purchase substantially all of the
properties, assets, rights and business of Seller and assume
certain obligations with respect thereto, upon the terms and
conditions set forth in this Agreement (the "Acquisition").
In consideration of the mutual covenants, representations
and warranties contained herein, the parties agree as follows:
AGREEMENTS
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. In addition to those terms
defined throughout this Agreement, the following terms, when used
herein, shall have the following meanings.
(a) "Affiliate" shall mean and include: (i) any
corporation, partnership, trust, person or other entity directly
or indirectly controlling, controlled by, or under common control
with, an individual or entity; or (ii) any officer, director or
holder or owner of any of the outstanding voting securities, of
an entity.
(b) "Business Day" shall mean any day except Saturday,
Sunday and any day on which Dubuque Bank and Trust Company,
Dubuque, Iowa, is authorized or required by law or other
government action to close.
(c) "Person" shall mean an individual, corporation,
partnership (including a business trust), joint stock company,
trust, unincorporated association, joint venture or other entity
or a government or any political subdivision or agency thereof.
(d) "Regulatory Authorities" shall mean any state or
federal governmental body or agency which under applicable
statutes and regulations: (i) has supervisory authority over
Buyer or Seller or its respective business or businesses; (ii) is
required to approve, or give its consent to the transactions
contemplated by this Agreement; or (iii) with which a filing must
be made in connection therewith, including in any case, the Board
of Governors of the Federal Reserve System.
Section 1.2 Principles of Construction. (a) In this
Agreement, unless otherwise stated or the context otherwise
requires, the following usages apply: (i) unless otherwise
provided herein, actions permitted, but not required, under this
Agreement may be taken at any time and from time to time in the
actor's sole discretion; (ii) in computing periods from a
specified date to a later specified date, the words "from" and
"commencing on" (and the like) mean "from and including," and the
words "to," "until" and "ending on" (and the like) mean "to, but
excluding"; (iii) headings are inserted for convenience of
reference only and are not a part of, nor shall they affect any
construction or interpretation of this Agreement; (iv) unless
otherwise specified, indications of time of day mean Dubuque,
Iowa, time; (v) all references to articles, sections, schedules
and exhibits are to articles, sections, schedules and exhibits in
or to this Agreement unless otherwise specified; (vi) references
to a statute shall refer to the statute and any successor
statute, and to all regulations promulgated under or implementing
the statute or successor, as in effect at the relevant time;
(vii) references to a governmental or quasi-governmental agency,
authority or instrumentality shall also refer to a regulatory
body that succeeds to the functions of the agency, authority or
instrumentality; (viii) "including" means "including, but not
limited to"; (ix) unless the context requires otherwise, all
words used in this Agreement in the singular number shall extend
to and include the plural, all words in the plural number shall
extend to and include the singular and all words in any gender
shall extend to and include all genders; and (x) any reference to
a document or set of documents in this Agreement, and the rights
and obligations of the parties under any such documents, shall
mean such document or documents as amended from time to time, and
any and all modifications, extensions, renewals, substitutions or
replacements thereof.
(b) All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted
accounting principles followed in the preparation of Seller's
financial statements.
Section 1.3 Seller Book of Schedules. The Seller Book of
Schedules referred to in this Agreement shall consist of the
agreements and other documentation described and referred to in
this Agreement with respect to Seller. The Seller Book of
Schedules has been delivered by Seller to Buyer and its counsel
not less than five Business Days prior to the date of this
Agreement.
ARTICLE 2
SALE AND PURCHASE OF ASSETS
Section 2.1 Purchased Assets. Subject to the terms and
conditions of this Agreement, Seller shall sell, transfer, assign
and deliver to Buyer at the time of the consummation of the
transactions contemplated by this Agreement (the "Closing"), free
and clear of all liens, claims or encumbrances whatsoever (other
than those liens and encumbrances securing the repayment of
obligations under the Credit Lines, as defined below), by such
bills of sale, assignments and other documents as may reasonably
be requested by counsel for Buyer, and Buyer agrees to purchase
and accept delivery from Seller, the Purchased Assets. Subject
to and except as specifically set forth in Section 2.2, the term
"Purchased Assets" shall mean all the assets, properties and
rights, tangible and intangible, of Seller, including the
following:
(a) all cash, cash equivalents, investments and securities
of Seller;
(b) all current and charged-off accounts receivable of
Seller;
(c) all inventories of Seller, whether in the possession of
Seller or to be delivered to Seller (collectively referred to as
"Inventory"), including raw materials, work in progress and
finished goods, set forth on Schedule 2.1(c) of the Seller Book
of Schedules, as adjusted for fluctuations between the date of
such schedule and the Closing based upon the increase and
decrease of Inventory in the ordinary course of business and
consistent with past practice during such period;
(d) all furniture, machinery, vehicles, equipment, fixtures
and all items of personal property owned by Seller (collectively
referred to as "Equipment"), including those shown on Schedule
2.1(d) of the Seller Book of Schedules;
(e) all real property, interest in real property (including
Seller's rights as lessee in Seller's offices located at 0000
Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx, pursuant to a lease between
Seller and Xxx Xxxxxxxxx (the "Office Lease")) and structures and
improvements located on such real property used in connection
with the business of Seller and all the easements and uses which
benefit such property;
(f) all contract rights of Seller, including all rights of
Seller under the Office Lease, insurance policies, contracts for
the lease of vehicles or equipment by Seller to its customers
(collectively, the "Lease Contracts"), the Credit Lines (as
defined below) and any other contracts listed on Schedule 2.1(f)
of the Seller Book of Schedules;
(g) all patents, trademarks, service marks, trade names and
copyrights, inventions, know-how, trade secrets, packaging, trade
dress, proprietary processes and formulae and other industrial
and intellectual property rights used in the operation of its
business as presently conducted, and all registrations and
applications for, and all goodwill associated with, any of the
foregoing (collectively referred to as "Intellectual Property"),
including those listed on Schedule 2.1(g) of the Seller Book of
Schedules;
(h) all books, files and records of Seller relating to its
business and operations, including property, production,
engineering, inventory, customer, vendor, purchasing and sales
records; computer programs; and such other records as Buyer may
require subsequent to the Closing in its conduct of the business
previously conducted by Seller;
(i) interest in and to each of the telephone numbers
assigned to Seller as of the Closing Date;
(j) all stationery; purchase orders; labels; shipping
material; catalogs, brochures, manuals and all other sales
materials or information; contract, proposal and other forms; art
work, photographs, graphic designs, signage and all other
advertising materials of Seller;
(k) the right, title and interest of Seller in and to the
corporate name "ULTEA" and all variants thereof, and any logos,
graphics or other associated symbols, and all goodwill associated
with any of the foregoing;
(l) all assignable licenses, permits, consents, approvals
and other governmental, quasi-governmental and private
authorizations, pertaining to the use of the Purchased Assets;
(m) all assignable manufacturer's and other guaranties,
warranties and associated rights, pertaining to the Purchased
Assets;
(n) all claims of Seller against others, whether or not
asserted and whether or not now existing or hereafter arising
(other than claims by Seller against Buyer under this Agreement
or arising out of either rights not assigned hereunder or
liabilities of Seller other than Assumed Liabilities); and
(o) all goodwill and going-concern value incident or
related to or connected with the business of Seller.
Section 2.2 Excluded Assets. The following (the
"Excluded Assets") shall be excluded from the Purchased Assets
being sold, transferred, assigned and delivered to Buyer pursuant
to the terms of this Agreement:
(a) all assets held by any employee benefit plan maintained
by Seller for the benefit of its employees;
(b) the corporate minute books and stock record books of
Seller and personnel, payroll and accounting records of Seller
(provided, however, that in the case of payroll, personnel and
accounting records, Buyer shall have access to such records if
such access is reasonably necessary);
(c) all proceeds of this Agreement;
(d) the tax returns and tax records of Seller and rights to
tax refunds if any; and
(e) all contract rights under contracts not shown on
Schedule 2.1(f).
Section 2.3 Assumed Liabilities. As of the Closing,
subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Seller, Buyer
shall assume:
(a) only those trade payables of Seller set forth on
Schedule 2.3 of the Seller Book of Schedules;
(b) any outstanding commercial loans and lines of credit,
provided that the proceeds thereof were used to purchase vehicles
and equipment for lease to Seller's customers and two vehicles
used by Seller's officers in the ordinary course of business (as
limited, the "Credit Lines");
(c) only to the extent that the same are incurred in
accordance with Article 8 of this Agreement, those trade payables
incurred by Seller after the date of Schedule 2.3 and created in
the ordinary course of Seller's business and consistent with past
practice; and
(d) the rights and obligations under those contracts listed
on Schedule 2.1.(f).
The liabilities and obligations of Seller to be assumed by Buyer
under this Section 2.3 are collectively referred to as the
"Assumed Liabilities." Nothing in this Agreement shall be
construed as creating any implication, covenant or commitment on
the part of Buyer that Buyer is assuming any of Seller's
liabilities or obligations except as specifically set forth in
this Section.
Section 2.4 Retained Liabilities. Nothing contained in
this Agreement is intended to, nor shall it, constitute or cause
Buyer to be a successor to Seller. Other than the Assumed
Liabilities, Buyer will not assume, undertake, accept or be bound
by or responsible for, and the Purchased Assets shall not be
subject to, and Seller will remain liable for, any liabilities,
payables, contracts, agreements, commitments or obligations of
Seller or its directors, officers or members, or the Affiliates
of any of the foregoing, whether due or to become due, absolute
or contingent, direct or indirect, asserted or unasserted, known
or unknown, xxxxxx or inchoate, including any of the following:
(a) any obligations or liabilities of Seller arising or
incurred after the date of this Agreement, including any
obligations of Seller to perform under any of the contracts of
Seller other than those specific obligations which arise under
the contracts listed on Schedule 2.1(f), which first arise and
accrue following the Closing;
(b) subject to the provisions of Section 5.1(b), any
obligations of Seller to perform under this Agreement and any
obligations incurred by Seller for legal and accounting fees
relating to this Agreement;
(c) any obligations or liabilities under any collective
bargaining agreements, any employment agreements (oral or
written) or any employee benefit plans or trusts;
(d) any obligations or liabilities of Seller to creditors
listed in Schedule 2.3 in amounts greater than those shown on
Schedule 2.3, except trade payables incurred by Seller after the
date of Schedule 2.3 and created in the ordinary course of
business, consistent with past practice and in accordance with
this Agreement;
(e) all liabilities for federal, state, local and foreign
taxes (including franchise, income, real property, sales, use,
excise, employment and other taxes) for any period ending prior
to the Closing Date (as defined below);
(f) any obligations owing to any employees or members of
Seller including accrued vacations and accrued sick time, monies
loaned by such employees or members to Seller, accrued salary
owed to any such employees and reimbursement of expenses advanced
by such employees; or
(g) any obligations or liabilities relating to or arising
from products sold or distributed prior to Closing (including
claims for breach of warranty or product liability, whether made
before or after Closing).
ARTICLE 3
BULK SALES AND SALES TAX
Section 3.1 Bulk Sales. It is the opinion of the parties
that the provisions of Chap. 406, Wis. Stats. relating to bulk
transfers is inapplicable to the transactions contemplated by
this Agreement. Notwithstanding the foregoing, Seller shall
indemnify and hold Buyer harmless of and from any and all
liability, claim or loss which Buyer may incur by reason of a
final determination that Chap. 406, Wis. Stats. was applicable to
the transactions contemplated by this Agreement.
Section 3.2 Sales Tax. Immediately prior to the Closing,
Seller shall surrender its sales tax permit so as to qualify for
the "occasional sales" tax exemption, and Seller shall be solely
responsible for any sales tax due upon the Closing.
ARTICLE 4
PURCHASE PRICE
Section 4.1 Purchase Price. (a) The purchase price for
the Purchased Assets shall be $388,332 (the "Purchase Price").
Buyer's obligation to pay the Purchase Price shall be satisfied
by the delivery to Seller at Closing certificates representing
the number of shares of Buyer's common stock (the "Common Stock")
that is equal to the quotient of $388,332 divided by the Average
Price (as defined below) as of the third business day prior to
the Closing Date. The parties have agreed that Schedule 4.1 of
the Seller Book of Schedules correctly sets forth the allocation
of the Purchase Price among the Purchased Assets.
(b) For purposes of this Agreement, the Average Price as of
any date (the "Determination Date") shall be equal to the
weighted average of the publicly reported per share selling
prices at which the last 3,000 shares of Common Stock were traded
in the open market immediately prior to the Determination Date.
(c) Seller represents and acknowledges that it:
(i) has received from Buyer a copy of its most recent
annual report on Form 10-K, quarterly report on Form 10-Q, proxy
statement and annual report to stockholders;
(ii) is acquiring the Common Stock pursuant to this
Agreement for its own account, except that Buyer acknowledges
that Seller may dissolve and liquidate its assets after the
Closing and accordingly distribute the Common Stock only to its
members listed on Schedule 6.2;
(iii) is aware, and will inform its members, that
Buyer's common stock to be issued pursuant to this Agreement will
not be registered with the Securities and Exchange Commission or
the securities regulatory authority of any state, and is being
offered pursuant to exemptions from the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act"),
and applicable state securities laws; and
(iv) knows, and has informed its members, that shares
of the Common Stock may not be sold or otherwise transferred
unless: (A) they are registered under the Securities Act and any
applicable state law; or (B) such sale or transfer is exempt from
such registration and Buyer has received an opinion of counsel
acceptable to it to the effect that such sale or transfer is so
exempt.
Section 4.2 Right to Sell. For a period of 30 days after
the Closing and upon receipt by Buyer of an irrevocable written
request, Buyer agrees to purchase from Seller or any of Seller's
members at the Average Price as of the date of Buyer's receipt of
such written request any shares of Common Stock originally issued
to Seller in connection with the transactions contemplated by
this Agreement. After such 30 day period and until the 180th day
after the Closing, and upon receipt by Buyer of an irrevocable
written request, Buyer agrees to purchase from Seller or any of
Seller's members at a price equal to the Average Price as of the
date of Buyer's receipt of such written request, less $0.50 per
share, any shares of Common Stock originally issued to Seller in
connection with the transactions contemplated by this Agreement.
Section 4.3 Payment of Unsatisfied Claims. On or after
the Closing Date, Seller shall pay all its liabilities and claims
against it as the same are made, or if disputed, after such
claims are settled or otherwise adjudicated excepting only the
Assumed Liabilities. Except with respect to Assumed Liabilities,
Buyer shall have absolutely no obligation to pay any claims
against Seller identified on the Creditor List or any other
claims.
ARTICLE 5
DELIVERIES AND DATE AND PLACE OF CLOSING
Section 5.1 Buyer's Deliveries at Closing. At the
Closing, Buyer shall deliver, or cause to be delivered, to Seller
the following items:
(a) certificates for the Common Stock to be delivered in
satisfaction of the Purchase Price;
(b) cash payments, subject to the following limits, to
reimburse Seller for professional fees actually incurred by
Seller in connection with the Acquisition of: (i) up to $6,500
for legal costs incurred for the negotiation and review of this
Agreement and related to the dissolution of Seller after the
Closing; and (ii) up to $1,500 for professional tax advice and
fees associated with the Acquisition, the preparation of Seller's
final tax return and the dissolution of Seller, provided,
however, that such reimbursable expenses shall be subject to
Buyer's final review and approval and shall be itemized and
accompanied by such further documentation as Buyer may reasonably
request;
(c) a copy of the articles of incorporation of Buyer
certified as of the Closing Date by the President or Secretary of
Buyer;
(d) a copy of the bylaws of Buyer certified as of the
Closing Date by the President or Secretary of Buyer;
(e) copies of resolutions of the board of directors of
Buyer authorizing and approving this Agreement and the
consummation of the Acquisition, certified as of the Closing Date
by the President or Secretary of Buyer;
(f) a certificate of the President of Buyer dated the
Closing Date certifying that: (i) all of the representations and
warranties of Buyer set forth in this Agreement are true and
correct with the same force and effect as if all of such
representations and warranties were made at the Closing Date; and
(ii) Buyer has performed or complied with all of the covenants
and obligations to be performed or complied with by Buyer under
the terms of this Agreement on or prior to the Closing Date; and
(g) such other documents as Seller or its counsel shall
reasonably request.
Section 5.2 Buyer's Additional Deliveries at Closing. At
the Closing and in consideration of the additional assistance
rendered and to be rendered to Buyer and Seller in connection
with the negotiation and consummation of the Acquisition, Buyer
shall deliver, or cause to be delivered, to the individuals named
below the following additional items:
(a) an Employment Agreement between Buyer and Xxxxx X.
Xxxxx, executed by Buyer and in the form attached hereto as
Exhibit A;
(b) an Employment Agreement between Buyer and Xxx X. Xxxxx,
executed by Buyer and in the form attached hereto as Exhibit B;
(c) a Buy-Sell Agreement among Buyer and Xxxxx X. Xxxxx and
Xxx X. Xxxxx, executed by Buyer and in the form attached hereto
as Exhibit C;
(d) cash payments to Xxxxx X. Xxxxx and Xxx X. Xxxxx in the
amounts of $30,231 and $12,526, respectively, representing
consulting fees; and
(e) a promissory note dated the Closing Date and executed
by Buyer made payable to Xxxxx X. Xxxxx, in the principal amount
of $52,000 and bearing interest at the annual rate of 8.25%, with
payments thereon to be made as follows: (i) up to $35,000 of
principal plus accrued interest on the first anniversary of the
Closing Date; and (ii) the remainder plus principal accrued
interest on the second anniversary of the Closing Date, provided,
however, that the payments of principal and interest on each of
the first and second anniversaries of the Closing Date shall be
subject to the satisfaction by Xx. Xxxxx of certain performance
standards to be mutually agreed upon between Buyer and Xx. Xxxxx
prior to the Closing Date, and provided further, that Buyer shall
be released from any further payments due under such promissory
note if Xx. Xxxxx terminates his employment with Buyer without
cause and any of Buyer's subsidiaries at any time before the
final maturity of such note.
Section 5.3 Seller's Deliveries at Closing. At the
Closing, Seller shall deliver, or cause to be delivered to Buyer
the following items:
(a) a copy of the certificate of limited liability company
of Seller certified as of the Closing Date by the President or
any Vice President of Seller;
(b) a certificate of the President or any Vice President of
Seller dated the Closing Date certifying a copy of the operating
agreement of Seller;
(c) copies of resolutions of the members of Seller
authorizing and approving this Agreement and the consummation of
the Acquisition and changing the name of Seller to another name
that is different from "ULTEA" or any name which is similar
thereto, certified as of the Closing Date by the President or any
Vice President of Seller;
(d) a certificate executed by the President and any Vice
President of Seller dated the Closing Date certifying that: (i)
all of the representations and warranties of Seller set forth in
this Agreement are true and correct with the same force and
effect as if all of such representations and warranties were made
at the Closing Date; and (ii) Seller has performed or complied
with all of the covenants and obligations to be performed or
complied with by Seller under the terms of this Agreement on or
prior to the Closing Date;
(e) an Employment Agreement between Buyer and Xxxxx X.
Xxxxx, originally executed by Xx. Xxxxx and in the form attached
hereto as Exhibit A;
(f) an Employment Agreement between Buyer and Xxx X. Xxxxx,
originally executed by Xx. Xxxxx and in the form attached hereto
as Exhibit B;
(g) a Buy-Sell Agreement among Buyer and Xxxxx X. Xxxxx and
Xxx X. Xxxxx, originally executed by Messrs. Xxxxx and Xxxxx and
in the form attached hereto as Exhibit C;
(h) an assignment of the Office Lease from Seller to Buyer
and the consent of the owner of such leased office space to the
assignment, in each case in a form reasonably acceptable to
Buyer;
(i) an assignment of each of the Credit Lines from Seller
to Buyer and the consent of the lender under such Credit Line to
the assignment, in each case in a form reasonably acceptable to
Buyer;
(j) an assignment of the Lease Contracts from Seller to
Buyer and, if necessary, the consent of the lessees under such
Lease Contracts to the assignment, in each case in a form
reasonably acceptable to Buyer;
(k) such other bills of sale, endorsements, consents,
assignments and other instruments of transfer and conveyance as
shall be necessary or appropriate in the judgment of Buyer
effectively to transfer, convey and assign the Purchased Assets
to Buyer; and
(l) such other documents as Buyer or its counsel shall
reasonably request.
Section 5.4 Post-Closing Deliveries and Actions. (a)
Immediately after Seller has taken the actions required to be
taken by Section 5.4(b) below, Buyer shall take all such actions
as may be necessary to qualify to do business in the State of
Wisconsin under the name "ULTEA."
(b) Within 15 Business Days after the Closing Date, Seller
shall take such actions as may be necessary to dissolve Seller.
Seller agrees to coordinate the timing of such filing with Buyer
so that Buyer's application for a certificate of qualification to
do business in the State of Wisconsin is filed immediately after
such certificate of amendment.
Section 5.5 Closing Date. Pursuant to the terms of this
Agreement, the Closing shall occur at the offices of Buyer at
0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxx, at 10:00 a.m. on the later of
January 31, 1997, or the fifth Business Day after the date on
which all necessary approvals are received from the Regulatory
Authorities and all required waiting periods have expired, or at
such other time or place as may be agreed to by Buyer and Seller.
The Acquisition shall be effective at 12:01 a.m. on the Closing
Date.
Section 5.6 Further Assurances. Seller shall, at any time
and from time to time after the Closing, upon the request of
Buyer, do, execute, acknowledge, deliver and file, or cause to be
done, executed, acknowledged, delivered or filed, all such
further acts, deeds, transfers, conveyances, assignments or
assurances as may be reasonably required for the better
transferring, conveying, assigning and assuring to Buyer, or for
the aiding and assisting in the collection of or reducing to
possession by Buyer, any of the Purchased Assets or for the
purpose of completing or effecting any of the other transactions
contemplated by this Agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer's execution of this Agreement and
consummation of the transactions contemplated herein, Seller
represents and warrants to Buyer as set forth in this Article,
with the express understanding that said representations and
warranties are material to and are being relied upon by Buyer,
notwithstanding any investigations conducted by Buyer.
Section 6.1 Organization. Seller: (a) is a limited
liability company duly organized, validly existing and in good
standing under the laws of the State of Wisconsin; (b) is duly
qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted or the
properties or assets owned or leased by it makes such
qualification necessary; and (c) has full power and authority,
corporate and otherwise, to own, operate and lease its properties
as presently owned, operated and leased, and to carry on its
business as it is now being conducted. Seller owns no voting
stock or equity securities of any corporation, association,
partnership or other entity.
Section 6.2 Capitalization; Stock Ownership. All of the
issued and outstanding member units of Seller are owned by its
members listed on Schedule 6.2 of the Seller Book of Schedules.
There are no options, warrants, rights, calls or commitments of
any character relating to any additional member units of Seller.
Section 6.3 Authority. Seller has the requisite power
and authority to enter into and perform its obligations under
this Agreement and the execution, delivery and performance of
this Agreement by Seller, and consummation by it of the
transactions contemplated hereby have been authorized by all
necessary action, corporate or otherwise, including the requisite
approval of Seller's board of directors and its members, and this
Agreement constitutes a legal, valid and binding obligation of
Seller enforceable in accordance with its terms except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization or other laws and subject to general principles of
equity.
Section 6.4 Effect of Agreement. Except as set forth on
Schedule 6.4, the execution, delivery and performance of this
Agreement by Seller and the consummation by it of the Acquisition
do not: (a) require the consent, waiver, order, registration,
qualification, approval, license or authorization of any Person
or Regulatory Authority; (b) violate, with or without the giving
of notice or the passage of time or both, in any material respect
any provision of law applicable to Seller; (c) conflict with or
result in a breach of any terms of its certificate of limited
liability company or bylaws or any mortgage, deed of trust,
license, indenture or other agreement or instrument, or any
order, judgment, decree, statute, regulation or other restriction
of any kind or character, to which Seller is a party or by which
any of Seller's assets may be bound; (d) give to others any right
to accelerate or terminate, or result in acceleration or
termination of, any such agreement or instrument; (e) result in
termination of any provision of any such agreement or instrument;
or (f) result in the creation of any lien, charge or encumbrance
upon any of the property or assets of Seller.
Section 6.5 Title and Properties. On the Closing Date,
Seller will have good and marketable title to all of the
Purchased Assets, free and clear of any and all mortgages, liens
(including mechanic's liens and similar liens for labor furnished
or materials supplied), pledges, security interests, title
retention arrangements, conditional sales arrangements, claims,
charges, set-offs, restrictions, options or rights to purchase,
lease or sublease, or other encumbrances ("Marketable Title").
Immediately after the Closing, the instruments of conveyance,
transfer and assignment to be delivered to Buyer pursuant hereto,
will vest in Buyer Marketable Title to the Purchased Assets. The
Purchased Assets are: (a) in good operating order and condition
and are not in need of repair or replacement; (b) performing
satisfactorily and are available for immediate use in the conduct
of the business and operations of Seller; and (c) all of the
properties, interests and assets held for use or used in
connection with the business or operations of Seller have been
and are sufficient to conduct such business and operations in the
manner heretofore conducted in the ordinary course of business.
Section 6.6 Litigation and Regulatory Matters. There are
no actions, suits or proceedings pending as of the date hereof in
which Seller is a named party. There is no action, suit,
proceeding, claim or formal written protest by any person or
agency, or any investigation or report by any Regulatory
Authority having jurisdiction over Seller or its business which
is pending or, to the best of the knowledge of Seller, threatened
against Seller or any of its officers or directors in their
capacities as such, or the assets, business or goodwill of
Seller. Seller further represents and warrants that it does not
know or have any reason to believe that there is any basis for
assertion against any of them of any material claims based upon
the wrongful action or inaction of Seller or any of its officers,
directors or employees. Seller is not subject to any outstanding
judgment, order, writ, injunction or decree of any court,
arbitration panel or other governmental authority.
Section 6.7 Insurance. Schedule 6.7 of the Seller Book
of Schedules lists and briefly describes the policies of
insurance owned or held by Seller. Each such policy is, and
Seller will use its best efforts to keep each such policy, in
full force and effect (except for any expiring policy which is
replaced by coverage at least as extensive) through the Closing
Date. All premiums due thereon on or prior to the Closing Date
have been paid when due.
Section 6.8 Defaults Under Agreements. Seller is not in
default or alleged to be in default under any loan or credit
agreement, conditional sales contract or other title retention
agreement or security agreement relating to money borrowed by
Seller or pursuant to which it leases to or from any Person real
or personal property or under any other instrument or obligation.
To the best of the knowledge of Seller, there is no material
default under such instruments by any other party thereto, nor is
there any event which with notice or lapse of time or both would
constitute a material default.
Section 6.9 Financial Statements and Reports. Seller has
delivered to Buyer copies of the Balance Sheets and the related
Statements of Income, Statements of Cash Flows and Statements of
Changes in Shareholders' Equity of Seller for the years since its
date of incorporation (collectively, the "Seller Financial
Statements"). The Seller Financial Statements are complete and
correct in all material respects and fairly present the financial
positions of Seller at the dates shown and the results of
operations for the periods covered. The Seller Financial
Statements are unaudited statements and have been prepared in
conformity with generally accepted accounting principles applied
on a consistent basis. The Seller Financial Statements do not
include any material assets or omit to state any material
liabilities, absolute or contingent, or other facts, which
inclusion or omission would render the Seller Financial
Statements misleading in any material respect.
Section 6.10 Regulatory Filings. Seller has filed in a
timely manner all required filings with all proper Regulatory
Authorities as necessary. All such filings with such Regulatory
Authorities were accurate and complete in all material respects
as of the dates of the filings, and no such filing made any
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made, in
the light of the circumstances under which they were made, not
misleading.
Section 6.11 Employees. Schedule 6.11 of the Seller Book
of Schedules lists or describes the following:
(a) All profit sharing, group insurance, hospitalization,
stock option, pension, retirement, bonus, deferred compensation,
stock bonus, stock purchase or other employee welfare or benefit
agreements, plans or arrangements established, maintained,
sponsored or undertaken by Seller for the benefit of its
officers, directors or employees, including each trust or other
agreement with any custodian or any trustee for funds held under
any such agreement, plan or arrangement (collectively, "Employee
Benefit Plans"), and, in respect to any of them, the latest
reports or forms, if any, filed with the Department of Labor and
Pension Benefit Guaranty Corporation under applicable law, any
current financial or actuarial reports and any currently
effective United States Internal Revenue Service private rulings
or determination letters obtained by or for the benefit of
Seller;
(b) All employment, consulting and agency contracts (except
for ordinary oral employment contracts with employees of Seller
creating at will employment relationships); and
(c) The name and annual salary of each officer, employee,
agent or representative of Seller, and the profit sharing, bonus
or other form of compensation (other than salary) paid or payable
by Seller, if any, or a combination of both to or for the benefit
of each such person in question for 1995 and 1996 and any
employment agreement or arrangement with respect to each such
person.
Seller has delivered to Buyer a copy of each document, plan
or contract listed and described in Schedule 6.11.
Section 6.12 Compliance with Applicable Law. Seller holds
all licenses, certificates, permits, franchises and rights from
all appropriate federal, state or other public authorities
necessary for the conduct of its business. Seller is not in
violation, nor has it violated, in any material respect any
applicable federal, state and local statutes, ordinances,
regulations or rules, and Seller is not presently charged with,
or under governmental investigation with respect to, any actual
or alleged material violations of any statute, ordinance,
regulation or rule. Seller is not the subject of any pending or
threatened material proceeding by any Regulatory Authority having
jurisdiction over its business, properties or operations.
Section 6.13 Interim Events. Except as otherwise
permitted hereunder or as set forth on Schedule 6.13 of the
Seller Book of Schedules, since February 20, 1996, Seller has
not:
(a) Suffered any material adverse change in its financial
condition or prospects, the operation or conduct of its business
and relations with customers, suppliers, employees or
representatives;
(b) Suffered any material damage, destruction or loss, to
any of its respective properties, including the Purchased Assets,
whether covered by insurance or not, or failed to maintain such
assets in good operating condition and repair;
(c) Granted or agreed to grant any increase in compensation
to its directors, officers or employees or increased the benefits
payable or to become payable under, or established or otherwise
made any changes in, any Employee Benefit Plan;
(d) Cancelled or compromised any debt or claim other than
in the ordinary course of business and consistent with past
practice;
(e) Entered into any transaction, contract or commitment
other than in the ordinary course of business and consistent with
past practice;
(f) Made any material change in any contract listed on
Schedule 2.1(f);
(g) Incurred any obligation or liability (fixed or
contingent) other than accounts payable, payroll liabilities, tax
obligations and other similar current obligations and
liabilities, in each case incurred in the ordinary course of
business and consistent with past practice;
(h) Conducted its business in any manner other than
substantially as it was being conducted;
(i) Leased, sold or otherwise disposed of any of its
assets, or leased, purchased or otherwise acquired from third
parties any assets, except in each case in the ordinary course of
business and consistent with past practice;
(j) Merged, consolidated or agreed to merge or consolidate
with or into any other entity, or acquired or agreed to acquire
any stock, equity interest or business of any other entity;
(k) Entered into any transaction for the borrowing or
loaning of monies, other than in the ordinary course of business
and consistent with past practice;
(l) Made any change in the accounting methods or accounting
practices followed by Seller which are outside the ordinary
course of business or inconsistent with past practice;
(m) Paid any dividends or made any other distributions to
its members;
(n) Made any amendment to its certificate of limited
liability company or bylaws; or
(o) Entered into any agreement, whether in writing or
otherwise, to take any of the actions described in the foregoing
items (a) through (p).
Section 6.14 Taxes. Seller has filed with the
appropriate governmental agencies all federal, state and local
income, franchise, excise, sales, use, real and personal property
and other tax returns and reports required to be filed by it.
Seller is not: (a) delinquent in the payment of any taxes shown
on such returns or reports or on any assessments received by it
for such taxes; (b) aware of any pending or threatened
examination for income taxes for any year by the Internal Revenue
Service or any state tax agency; (c) subject to any agreement
extending the period for assessment or collection of any federal
or state tax; or (d) a party to any action or proceeding nor has
any claim been asserted against it by any governmental authority
for assessment or collection of taxes. The federal income tax
liabilities of Seller have never been audited by the Internal
Revenue Service. Seller is not a party to any action or
proceeding by any governmental authority for assessment or
collection of taxes, nor, to the best of the knowledge of Seller,
is any such action or proceeding threatened against Seller.
Section 6.15 Compliance With Environmental Laws. There
are no actions, suits, investigations, liabilities, inquiries,
proceedings or orders involving Seller or any of its assets that
are pending or, to the knowledge of Seller, threatened, nor is
there any factual basis for any of the foregoing, as a result of
any asserted failure of Seller, or any predecessor thereof, to
comply (or the assertion of liability even if in compliance) with
any requirement of federal, state or local law, civil or common,
or regulation relating to hazardous, toxic or polluting
substances, or the protection of health or the environment. None
of the property in which Seller has an ownership interest is
contaminated with any such wastes or hazardous substances.
Section 6.16 Relationships. The relationship of Seller
with its employees, suppliers and customers is good, and Seller
has no reason to believe that any such employee, supplier or
customer intends to terminate or materially modify, or would
refuse to transfer to Buyer after the Closing Date, any such
relationship.
Section 6.17 Brokerage Commissions. All negotiations
relating to this Agreement and the transactions contemplated
herein have been and will be carried on by Seller directly with
Buyer, its counsel, accountants and other representatives in such
a manner so as not to give rise to any claim against Buyer for
any brokerage commission, finder's fee, investment advisor's fee
or other like payment in connection with the transactions
contemplated hereby. None of Seller or its members or anyone
acting on behalf of any of them has any liability to any broker,
finder or agent or has agreed to pay any brokerage commission or
financial advisory fees with respect to the transactions
contemplated by this Agreement.
Section 6.18 Disclosures. No representation or warranty
made herein by Seller and no written statement or certificate
given or to be given to Buyer by Seller pursuant to this
Agreement, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein
under the circumstances under which they were made not
misleading, and Seller has made, and will make in good faith
through the Closing, full disclosure of all material facts with
respect to Seller. Except as and to the extent reflected or
reserved against in the Seller Financial Statements for the year
ended December 31, 1995, Seller has no liabilities or
obligations, of any nature, secured or unsecured, (whether
accrued, absolute, contingent or otherwise) including any tax
liabilities due or to become due other than such liabilities as
have been incurred in the ordinary course and consistent with
past practice of Seller's business.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller's execution of this Agreement and
consummation of the transactions contemplated herein, Buyer
represents and warrants to Seller as set forth in this Article,
with the express understanding that said representations and
warranties are material to and are being relied upon by Seller,
notwithstanding any investigations conducted by Seller.
Section 7.1 Organization. Buyer: (a) is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware; (b) is duly qualified to do
business and is in good standing in each jurisdiction in which
the nature of the business conducted or the properties or assets
owned or leased by it makes such qualification necessary; and (c)
has full power and authority, corporate and otherwise, to own,
operate and lease its properties as presently owned, operated and
leased, and to carry on its business as it is now being
conducted.
Section 7.2 Authority. Buyer has the requisite power and
authority to enter into and perform its obligations under this
Agreement and the execution, delivery and performance of this
Agreement by Buyer and consummation by Buyer of the transactions
contemplated hereby have been authorized by all necessary action,
corporate or otherwise, and this Agreement constitutes a legal,
valid and binding obligation of Buyer enforceable in accordance
with its terms except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other laws and subject
to general principles of equity.
Section 7.3 Effect of Agreement. Other than as
contemplated by this Agreement, the execution, delivery and
performance of this Agreement by Buyer and consummation by it of
the Acquisition do not: (a) require the consent, waiver, order,
registration, qualification, approval, license or authorization
of any person, court, regulatory authority or other governmental
body; (b) violate, with or without the giving of notice or the
passage of time or both, in any material respect any provision of
law applicable to Buyer; (c) conflict with or result in a breach
of any terms of its certificate of incorporation or bylaws or any
mortgage, deed of trust, license, indenture or other agreement or
instrument, or any order, judgment, decree, statute, regulation
or other restriction of any kind or character, to which Buyer is
a party or by which any of Buyer's assets may be bound; (d) give
to others any right to accelerate or terminate, or result in
acceleration or termination of, any such agreement or instrument;
(e) result in termination of any provision of any such agreement
or instrument; or (f) result in the creation of any lien, charge
or encumbrance upon any of the property or assets of Buyer.
Section 7.4 Litigation and Regulatory Matters. There is
no action, suit, proceeding, claim or formal written protest by
any person or agency, or any investigation or report by any
regulatory authority having jurisdiction over Buyer or any of its
assets or businesses which is pending or, to the best of Buyer's
knowledge, threatened against Buyer or any of its officers or
directors in their capacities as such, or the assets, business or
goodwill of Buyer which would reasonably be expected to have a
material adverse effect on the consolidated financial condition,
assets or business of Buyer. Buyer further represents and
warrants that its does not know or have any reason to believe
that there is any basis for assertion against it of any material
claims based upon the wrongful action or inaction of Buyer or any
of its officers, directors or employees. Buyer is not subject to
any outstanding judgment, order, writ, injunction or decree of
any court, arbitration panel or other Regulatory Authority which
would reasonably be expected to have a material adverse effect on
the consolidated financial condition, assets or business of
Buyer.
Section 7.5 Brokerage Commissions. All negotiations
relating to this Agreement and the transactions contemplated
herein have been and will be carried on by Buyer directly with
Seller and its directors, officers and members in such a manner
so as not to give rise to any claim against any of them for any
brokerage commission, finder's fee, investment advisor's fee or
other like payment in connection with the transactions
contemplated hereby. Neither Buyer nor anyone acting on its
behalf has any liability to any broker, finder or agent or has
agreed to pay any brokerage commission or financial advisory fees
with respect to the transactions contemplated by this Agreement.
Section 7.6 Disclosures. No representation or warranty
made herein by Buyer and no written statement or certificate
given or to be given to Seller by Buyer pursuant to this
Agreement, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein
under the circumstances under which they were made not
misleading, and Seller has made, and will make in good faith
through the Closing, full disclosure of all material facts with
respect to Seller. Except as and to the extent reflected or
reserved against in the Buyer's audited financial statements for
the year ended December 31, 1995, as set forth in its 1995 annual
report to stockholders, Buyer has no material liabilities or
obligations, of any nature, secured or unsecured, (whether
accrued, absolute, contingent or otherwise) including any tax
liabilities due or to become due other than such liabilities as
have been incurred in the ordinary course and consistent with
past practice of Buyer's business.
ARTICLE 8
COVENANTS
Section 8.1 Allocation of Purchase Price. Seller and
Buyer each agree that the allocation of the Purchase Price set
forth on Schedule 4.1 is accurate and correct and further agrees
to submit Internal Revenue Service Form 8594, and any other
reports which may be required by the Internal Revenue Code of
1986, as amended, with respect to the Acquisition which shall
incorporate such allocation of the Purchase Price.
Section 8.2 Taxes. Each of Buyer and Seller agrees to
pay all such sales, transfer, use, gross receipts, registration
and similar taxes arising out of or in connection with the
transactions contemplated by this Agreement, as are payable by
such party under applicable law.
Section 8.3 Consents; Satisfaction of Conditions. Each
of the parties hereto will use all commercially reasonable
efforts: (a) to obtain the consents of all Persons and
Regulatory Authorities necessary to consummate the transactions
contemplated by this Agreement; (b) to ensure that the conditions
set forth in Article 9 are satisfied, insofar as such matters are
within the control of any of them; and (c) subject to the terms
and conditions herein provided, otherwise to use its reasonable
efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by
this Agreement.
Section 8.4 Supplemental Information. From time to time
prior to the Closing, Seller will promptly supply written
information to Buyer with respect to any matter hereafter arising
which, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described in the
Seller Book of Schedules.
Section 8.5 Information and Access. Buyer, its
representatives and agents shall, at all times during normal
business hours prior to the Closing Date, have full and
continuing access to the facilities, operations, records and
properties of Seller. Buyer, its representatives and agents may,
prior to the Closing Date, make or cause to be made such
reasonable investigation of the operations, records and
properties of Seller and of its financial and legal condition as
Buyer shall deem necessary or advisable to familiarize itself
with such records, properties and other matters; provided, that
such access or investigation shall not interfere unnecessarily
with the normal operations of Seller. Upon request, Seller will
furnish Buyer or its representatives or agents such financial and
operating data and other information reasonably requested by
Buyer and will permit Buyer, its representatives or agents to
discuss such information directly with any individual or firm
performing auditing or accounting functions for Seller, and such
auditors and accountants shall be directed to furnish copies of
any reports or financial information as developed to Buyer or its
representatives or agents. Seller shall give Buyer prior notice
of each meeting of its board of directors and any committees
thereof and a representative of Buyer shall be invited to attend
each such meeting as an observer. No investigation by Buyer
shall affect the representations and warranties made by Seller in
this Agreement.
Section 8.6 Conduct of Business. From the date of this
Agreement until the Closing, Seller shall carry on its business
diligently, in the ordinary course and consistent with past
practice and shall not make or institute any unusual or material
change in its methods of doing business without the prior written
consent of Buyer. Seller shall permit representatives of Buyer:
(a) to participate in meetings or discussions with officers and
employees of Seller in connection with employment opportunities
with Buyer after the Closing; and (b) to contact Persons having
dealings with Seller for the purpose of informing such Persons of
the progress of the Acquisition and the services to be offered by
Buyer after the Closing; Without limiting the generality of the
foregoing, Seller shall not cause or permit from the date of this
Agreement through the Closing any state of affairs, action or
omission described in Section 6.13 (a) through (p).
Section 8.7 Use of Proceeds. Except as otherwise
provided in this Agreement, Seller agrees that it will use the
proceeds from the sale of the Purchased Assets first to satisfy
all creditors and claimants of Seller known as of the Closing
Date (other than with respect to Assumed Liabilities) before any
other use or distribution thereof.
ARTICLE 9
CONDITIONS TO CLOSING
Section 9.1 Conditions Precedent to Obligations of Buyer.
The obligations of Buyer under this Agreement to consummate the
transactions contemplated hereby will be subject to the
satisfaction, at or prior to the Closing, of all of the following
conditions, any one or more of which may be waived at the option
of Buyer:
(a) The representations and warranties made by Seller in
this Agreement shall be true and correct in all material respects
on and as of Closing Date with the same effect as though such
representations and warranties had been made or given on and as
of the Closing Date, except for changes contemplated by this
Agreement, and except also for representations and warranties as
of a specified time other than the Closing Date, which shall be
true and correct in all material respects at such specified time.
(b) Seller shall have performed and complied with all of
its obligations under this Agreement which are to be performed or
complied with prior to or at the Closing.
(c) As of the Closing Date, Seller shall not have disposed
of any of the Purchased Assets subject to this Agreement, other
than as expressly permitted in writing by Buyer.
(d) All proceedings, corporate or other, to be taken by
Seller in connection with the transactions contemplated by this
Agreement, and all documents incident thereto, shall be
reasonably satisfactory in form and substance to counsel for
Buyer, and Seller shall have made available to Buyer for
examination the originals or true and correct copies of all
records and documents relating to the business and affairs of
Seller which Buyer may reasonably request in connection with said
transactions.
(e) This Agreement shall have been duly and validly
authorized by all necessary corporate action of Seller.
(f) Seller shall not be a party to, or to the best of the
knowledge of Seller, threatened by, any actions, suits,
proceedings, litigation or legal proceedings which, in the
reasonable opinion of Buyer, have or are likely to have a
material adverse effect on the financial condition, prospects,
assets or business of Seller and no action, suit, proceeding or
claim shall have been instituted, made or threatened by any
person relating to the validity or propriety of any of the
transactions contemplated by this Agreement.
(g) From the date hereof through the Closing, there shall
be and have been no material adverse change in the financial
condition, prospects, assets or business of Seller, and as of
October 31, 1996, Seller's membership equity shall have been no
less than $225,000. For purposes of this provision,
stockholders' equity shall be computed in accordance with
generally accepted accounting principles, consistently applied,
but excluding goodwill.
(h) Any consents or approvals required to be secured by
either party by the terms of this Agreement or otherwise
reasonably necessary in the opinion of Buyer to consummate the
transactions contemplated by this Agreement shall have been
obtained and shall be satisfactory to Buyer.
Section 9.2 Conditions Precedent to Obligations of
Seller. The obligations of Seller under this Agreement to
consummate the transactions contemplated hereby will be subject
to the satisfaction, at or prior to the Closing, of all the
following conditions, any one or more of which may be waived at
the option of Seller:
(a) The representations and warranties made by Buyer in
this Agreement shall be true and correct in all material respects
on and as of Closing Date with the same effect as though such
representations and warranties had been made or given on and as
of the Closing Date, except for changes contemplated by this
Agreement, and except also for representations and warranties as
of a specified time other than the Closing Date, which shall be
true and correct in all material respects at such specified time.
(b) Buyer shall have performed and complied with all of its
obligations under this Agreement which are to be performed or
complied with prior to or at the Closing.
(c) This Agreement shall have been duly and validly
authorized by the Board of Directors of Buyer.
ARTICLE 10
INDEMNITY
Section 10.1 Indemnification. (a) Seller hereby agrees
to indemnify and hold harmless Buyer and its directors, officers,
employees and other agents and representatives from and against
any and all liabilities, judgments, claims, settlements, losses,
damages, fees, liens, taxes, penalties, obligations and expenses,
including reasonable fees of counsel and other professional fees,
in excess, in the aggregate, of $10,000, actually incurred or
suffered by any such person arising from, by reason of or in
connection with: (i) any misrepresentation or breach of the
representations, warranties or agreements of Seller contained in
this Agreement; and (ii) any and all liabilities or obligations
of Seller other than the Assumed Liabilities.
(b) Buyer indemnifies and holds harmless Seller from and
against any and all liabilities, judgments, claims, settlements,
losses, damages, fees, liens, taxes, penalties, obligations and
expenses, including reasonable fees of counsel and other
professional fees, in excess, in the aggregate, of $10,000,,
actually incurred or suffered by any such person arising from, by
reason of or in connection with: (i) any misrepresentation or
breach of the representations, warranties or agreements of Buyer
contained in this Agreement; and (ii) the Assumed Liabilities.
Section 10.2 Procedure for Indemnification. (a) Any party
entitled to indemnification pursuant to this Article
("Indemnified Party") shall promptly give notice to the party
required by the Article to provide indemnification ("Indemnifying
Party") after obtaining knowledge of any claims against it
covered by the indemnification provided by this Article
("Claims") and, if such indemnity shall arise from the claim of a
third party, shall permit Indemnifying Party to assume the
defense, at Indemnifying Party's sole expense, of any such Claims
or any litigation resulting from such Claims, provided, however,
Indemnified Party shall not be required to permit Indemnifying
Party to assume the defense of any third party claim if time is
of the essence and which if not immediately paid, discharged or
otherwise complied with would, in the reasonable opinion of
Indemnified Party, have a material adverse affect Indemnified
Party, unless Indemnifying Party provides Indemnified Party with
reasonable assurance that Indemnified Party will not suffer such
material adverse effect by allowing Indemnifying Party to assume
such defense. The right of indemnification hereunder shall not
be affected by any failure of Indemnified Party to give such
notice or any delay by Indemnified Party in giving such notice
unless, and then only to the extent that, the rights and remedies
of Indemnifying Party shall have been prejudiced as a result of
the failure to give, or delay in giving, such notice. Failure by
Indemnifying Party to notify Indemnified Party of Indemnifying
Party's election to defend any such claim or action by a third
party within 30 days after notice thereof shall have been given
to Indemnifying Party shall be deemed a waiver by Indemnifying
Party of its right to defend such claim or action.
(b) If Indemnifying Party assumes the defense of such claim
by a third party or litigation resulting therefrom, as set forth
above, the obligation of Indemnifying Party hereunder as to such
claim shall include taking all steps necessary in the defense or
settlement of such claim or litigation resulting therefrom,
including, the retention of counsel satisfactory to Indemnified
Party, and holding Indemnified Party harmless from and against
any and all Claims caused by or arising out of any settlement
approved by Indemnifying Party, or any judgment in connection
with such claim or litigation resulting therefrom. Without the
prior written consent of Indemnified Party, Indemnifying Party
shall not, in the defense of such claim or any litigation,
consent to the entry of any judgment or enter into any settlement
or other compromise which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to
Indemnified Party of a release, in form reasonably satisfactory
to Indemnified Party, from all liability in respect of such claim
or litigation. Notwithstanding the foregoing, Indemnified Party
will be entitled: (i) to participate in the defense of such
claim or litigation; and (ii) subject to the limitations of any
contract of insurance, upon 30 days' prior written notice to
Indemnifying Party, to control and manage any defense, provided,
however, that if Indemnified Party has already approved of
counsel selected by Indemnifying Party, and unless such
participation or assumption of control and management of any
defense is as a result of the existence of legal defenses
available to Indemnified Party as described in the next
succeeding sentence, then any such participation or assumption of
control or management shall, unless approved by Indemnifying
Party, be at Indemnified Party's sole cost and expense, and if
Indemnified Party has assumed such control or management,
Indemnified Party shall thereafter be responsible for such claim
or litigation. If in any such action Indemnified Party shall
have reasonably concluded that there may be legal defenses
available to it which are different from or additional to those
available to Indemnifying Party, Indemnified Party shall have the
right to select separate counsel to assume such legal defenses
and to otherwise participate in the defense of such action on its
behalf.
(c) If Indemnifying Party does not elect to assume the
defense of any such claim by a third party or litigation
resulting therefrom, or if Indemnified Party assumes the defense
of such claim or litigation pursuant to its right described in
the proviso to the first sentence of paragraph (a) of this
Section, Indemnified Party may defend against such claim or
litigation in such manner as it deems appropriate, and, unless
Indemnifying Party shall deposit with Indemnified Party a sum
equivalent to the total amount demanded in such claim or
litigation plus Indemnified Party's estimate of the cost of
defending the same, Indemnified Party may settle such claim or
litigation on such terms as it reasonably deems appropriate and
Indemnifying Party shall, in accordance with the provisions
hereof, promptly reimburse Indemnified Party for the amount of
such settlement and for all losses and expenses incurred by
Indemnified Party in connection with the defense against or
settlement of such claim or litigation. Stockholders agree to
cooperate fully with Indemnified Party in the conduct of any
defense against any such claim.
(d) Indemnified Party shall be entitled to rely upon any
notice, certificate, affidavit, letter, document or other
communication which is believed by Indemnified Party to be
genuine and to have been signed and sent by Indemnifying Party
without further inquiry or investigation and to rely on
statements contained therein without further inquiry or
investigation.
Section 10.3 Election of Remedies. Nothing contained in
this Article shall be deemed an election of remedies under this
Agreement or limit in any way the liability of any Person under
any other agreement to which such Person is a party relating to
this Agreement or the transactions contemplated hereby.
Section 10.4 Expiration of Representations and Warranties
and Indemnification Rights. Notwithstanding anything contained
in this Agreement to the contrary, all representations and
warranties of either party shall expire on the third anniversary
of Closing and from and after the date of the third anniversary
of Closing neither party shall have any indemnification right or
claim against the other party by reason of or in any way
connected with the representations and warranties made in this
Agreement.
ARTICLE 11
TERMINATION
Section 11.1 Termination. This Agreement and the
transactions contemplated hereby may be terminated prior to the
Closing as follows:
(a) by Buyer, if the Closing shall not take place on or
before March 31, 1997, unless the Closing shall have failed to
occur as a result of the breach by Buyer of any of its
representations, warranties or covenants contained in this
Agreement;
(b) by Seller, if the Closing shall not take place on or
before March 31, 1997, unless the Closing shall have failed to
occur as a result of the breach by Seller of any of its
representations, warranties or covenants contained in this
Agreement; or
(c) by Buyer or Seller with the express written consent of
the other.
Section 11.2 Effect of Termination. In the event of the
termination of this Agreement pursuant to the preceding Section,
this Agreement shall forthwith become void and have no effect,
without any liability on the part of any party or its directors,
officers or members, except for any liability arising from such
party's breach or default under any covenant, agreement,
representation or warranty contained herein.
ARTICLE 12
MISCELLANEOUS
Section 12.1 Entire Agreement. This Agreement constitutes
the entire agreement among the parties hereto with respect to the
subject matter hereof and supersedes all other prior agreements
and understandings, both written and oral, among the parties or
any of them with respect to the subject matter hereof. This
Agreement may not be amended except by an instrument in writing
signed by each of the parties hereto. There are no
representations, warranties, understandings or agreements between
the parties other than as set forth herein. The parties may at
any time by mutual agreement: (a) extend the time for the
performance of any of the obligations or other acts of the
parties hereto; (b) waive any inaccuracies in the representations
and warranties contained herein or in any documents, certificate
or writing delivered pursuant hereto; or (c) waive compliance
with any of the agreements, covenants or conditions contained
herein. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed by such party.
Section 12.2 Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but this Agreement
shall not be assignable or delegable by any party hereto without
the prior written consent of the other party, provided, however,
that this Agreement may be assigned by Buyer to any wholly-owned
subsidiary corporation.
Section 12.3 Severability. Whenever possible, each
provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective
only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining
provisions of this Agreement unless the consummation of the
transactions contemplated hereby is adversely affected thereby.
Section 12.4 Survival of Representations, Covenants and
Agreements. All representations, warranties and covenants
contained herein shall survive the Closing, but shall expire on
the third anniversary of the Closing Date.
Section 12.5 Notices. All notices, requests and other
communications hereunder shall be in writing (which shall include
telecopier communication) and may be delivered by hand or
overnight express delivery service, mailed with first class
postage prepaid or telecopied if confirmed immediately thereafter
by also mailing a copy of any notice, request or other
communication by mail with first class postage prepaid:
(a) If to Seller, to:
ULTEA, LLC
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with copies to:
Xxxxxxx & Xxxxx, S.C.
000 X. Xxxxxxxxxx Xxxx, Xxx. 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx., Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to Buyer, to:
Heartland Financial USA, Inc.
0000 Xxxxxxx Xxxxxx
X. X. Xxx 000
Xxxxxxx, Xxxx 00000-0000
Attention: Xx. Xxxx X. Xxxxxxx
Executive Vice President and Chief
Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with copies to:
Barack, Xxxxxxxxxx, Xxxxxxxxxx & Xxxxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or to such other Person or place as Buyer shall furnish to Seller
or Seller shall furnish to Buyer in writing. Except as otherwise
provided herein, all such notices, requests or other
communications shall be effective: (i) if delivered by hand, when
delivered; (ii) if mailed in the manner provided in this Section,
five Business Days after deposit with the United States Postal
Service; (iii) if delivered by overnight express delivery
service, on the next Business Day after deposit with such
service; (iv) if by telecopier, on the next Business Day if also
confirmed by mail in the manner provided in this Section.
Section 12.6 Governing Law. All questions concerning the
construction, validity and interpretation of this Agreement, and
the performance of the obligations imposed by this Agreement
shall be governed by the internal laws of the State of Wisconsin
regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws.
Section 12.7 Interpretation. This Agreement shall be
construed as a whole in accordance with the fair meaning of its
language and, regardless of who is responsible for its original
drafting, shall not be construed for or against either party.
Section 12.8 Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed to be
an original, but all of which shall constitute one and the same
agreement.
Section 12.9 No Rights of Third Parties. Nothing
expressed or implied in this Agreement is intended or shall be
construed to confer upon or give any person or other Buyer or
Seller any rights or remedies under or by reason of this
Agreement or any transaction that this Agreement contemplates.
Section 12.10 Fees and Expenses. Each of the parties
hereto will pay its own fees and expenses, including those of
attorneys, accountants and other advisors.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers thereunto
duly authorized, all as of the date and year first above written.
ATTEST HEARTLAND FINANCIAL USA, INC.
By: /s/Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxx
------------------------- ------------------------
Xxxx X. Xxxxxxx Xxxx X. Xxxxxx
Executive Vice President President
ATTEST ULTEA, LLC
By: /s/ Xxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
------------------------ ------------------------
Xxx X. Xxxxx Xxxxx X. Xxxxx
Secretary President
LIST OF EXHIBITS
Exhibit A Form of Employment Agreement with Xxxxx X.
Xxxxx
Exhibit B Form of Employment Agreement with Xxx X.
Xxxxx
Exhibit C Form of Buy-Sell Agreement
LIST OF SCHEDULES
Schedule 2.1(c) Inventory
Schedule 2.1(d)
Furniture, Machinery,
Vehicles, Equipment and Other
Personal Property
Schedule 2.1(f) Contract Rights
Schedule 2.1(g) Intellectual Property
Schedule 2.3 Trade Payables
Schedule 4.1 Allocation of Purchase Price
Schedule 6.2 Members of Seller
Schedule 6.4 Effect of Agreement
Schedule 6.7 Insurance
Schedule 6.11 Employment
Agreements and Employee
Benefit Plans
Schedule 6.13 Interim Events
Exhibit A Form of Employment Agreement
with Xxxxx X. Xxxxx
Exhibit B Form of Employment Agreement
with Xxx X. Xxxxx
EXHIBIT C
BUY-SELL AGREEMENT
THIS BUY-SELL AGREEMENT (this "Agreement"), is made and
entered into as of the 24th day of December, 1996 (the "Effective
Date"), among HEARTLAND FINANCIAL USA, INC., a Delaware
corporation ("Heartland"), and XXX X. XXXXX and XXXXX X. XXXXX
(collectively, "Executives").
RECITALS
A. Effective as of the date of this Agreement, Heartland
has consummated the purchase of substantially all of the assets
of ULTEA, LLC, a Wisconsin limited liability company, related to
its business of purchasing and leasing of vehicles and equipment
(the "Business").
A. Heartland intends to operate the Business through a
wholly-owned subsidiary and Executives have entered into
employment agreements with such subsidiary and Heartland to
assist in such operations.
C. In connection with its acquisition of the Business and
the employment of Executives, Heartland has agreed to grant
Executives certain rights to purchase the Business if Heartland
decides in the future to sell the Business.
NOW, THEREFORE, in consideration of the premises, it is
agreed by and among the parties hereto as follows:
AGREEMENTS
Section 1. Right of First Refusal. If at any time
within five years after the date of this Agreement, Heartland
desires to sell the Business (the "Sale Decision"), Heartland
agrees that it shall first offer to sell the Business to
Executives.
Section 2. Sale Notice; Acceptable Sale Terms. If
Heartland has made the Sale Decision, and prior to the sale of
the Business to any person or entity other than Executives,
Heartland shall provide written notice to Executives of the Sale
Decision and of the cash price and other terms and conditions
that Heartland would find acceptable in connection with a sale of
the Business to Executives (the "Sale Notice"). Executives shall
have 45 days after the effective date of the Sale Notice within
which either to accept the terms and conditions of Heartland's
offer as set forth in the Sale Notice or to reach an agreement
with Heartland on other mutually acceptable terms and conditions
of a sale to Executives of the Business (in either case,
"Acceptable Sale Terms"). If Executives and Heartland shall not
have agreed upon Acceptable Sale Terms within such 45-day period,
this Agreement shall terminate and Heartland shall have no
further obligations to Executives hereunder.
Section 3. Sole Discretion. Each of Executives
acknowledges and agrees that any decision by Heartland with
respect to the Sale Decision or with respect to the acceptance of
any proposed terms and conditions of a sale of the Business to
Executives may be made by Heartland in its sole discretion and
shall not be subject to challenge by Executives pursuant to the
terms of this Agreement.
Section 4. General Provisions.
(a) Successors; Assignment. This Agreement shall be
binding upon and inure to the benefit of: (i) Executives only in
their individual and personal capacities and their rights
hereunder shall not be assignable by Executives nor shall their
personal representatives succeed to any of their rights
hereunder; and (ii) Heartland and its successors and assigns.
(b) Entire Agreement; Modifications. This Agreement
constitutes the entire agreement between the parties respecting
the subject matter hereof, and supersedes all prior negotiations,
undertakings, agreements and arrangements with respect thereto,
whether written or oral. Except as otherwise explicitly provided
herein, this Agreement may not be amended or modified except by
written agreement signed by each of Executives and Heartland.
(c) Governing Law. This Agreement shall be construed
and the legal relations of the parties hereto shall be determined
in accordance with the laws of the State of Iowa without
reference to the law regarding conflicts of law.
(d) Notices. Notices pursuant to this Agreement shall
be in writing and shall be deemed given when received; and, if
mailed, shall be mailed by United States first class mail,
postage prepaid; and if to Heartland, addressed to the principal
headquarters of Heartland, attention: President; or, if to
Executives, to the addresses set forth below Executives'
signatures on this Agreement, or to such other address as the
party to be notified shall have given to the other. If mailed,
any notice shall be deemed given five business days after deposit
with the United States Postal Service.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
/s/ Xxxxx X. Xxxxx /s/ Xxx X. Xxxxx
---------------------------- ----------------------------
XXXXX X. XXXXX XXX X. XXXXX
0000 Xxxxxxxxx Xxxx 0000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
---------------------------- ----------------------------
(Address) (Address)
HEARTLAND FINANCIAL USA, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------
Xxxx X. Xxxxxx
President
