EXHIBIT 10.2
WARRANTIES, REPRESENTATIONS,
INDEMNITY, AND TRADEMARK/TRADENAME AGREEMENT
This AGREEMENT (the "Agreement") is made as of the 1st day of April, 2002,
by and between XXXXXXXXXX INTERNATIONAL GROUP, INC., a Maine corporation with a
principal place of business in Falmouth, Maine (the "Buyer"); PRESTO LIFTS, INC,
a Rhode Island corporation with a principal place of business in Pawtucket,
Rhode Island ("Presto"), LONG REACH, INC., a Delaware corporation with a
principal place of business at Houston, Texas ("Long Reach") and TBM HOLDINGS,
INC., a Florida corporation with a principal place of business at Westport,
Connecticut ("TBM").
ARTICLE 1. GENERAL
1.1 Asset Purchase Agreement. This Agreement is entered into as
consideration to the Buyer in connection with the sale of certain Presto assets
to the Buyer pursuant to an Asset Purchase Agreement (the "Asset Purchase
Agreement") dated April 1, 2002 between the Buyer and Presto. All terms not
otherwise explicitly defined in this Agreement shall have the meaning ascribed
to them in the Asset Purchase Agreement.
1.2 Definitions. As used in this agreement, the following terms
shall have the following meanings:
(a) "Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under the Internal
Revenue Code of 1986, as amended (the "Code")), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use transfer, registration,
value added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
(b) "Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
ARTICLE 2. WARRANTIES AND REPRESENTATIONS
Presto, Long Reach and TBM each, jointly and severally, make the following
representations and warranties, which are true and correct on the date hereof,
and which shall be reaffirmed as true and correct as of the Closing Date,
subject, however, to any modifications otherwise permitted and approved in
writing by the Buyer:
2.1 Representations True. All representations made by Presto, Long Reach,
TBM or any Affiliate with respect to the Purchased Assets and/or the Presto
Business were true, accurate and complete when made, and no material changes
have occurred with respect to the same as of
the Closing, except for collection of accounts receivable, incurrence of
trade debt and sales of inventory, all in the ordinary course of the Presto
Business. Presto is a corporation duly organized and existing under the laws of
the State of Rhode Island with its principal place of business in Pawtucket,
Rhode Island. Long Reach is a corporation duly organized and existing under the
laws of the State of Delaware with its principal place of business in Houston,
Texas, TBM is a corporation duly organized and existing under the laws of the
State of Florida with its principal place of business in Westport, Connecticut.
2.2 Compliance with Laws. (a) To Presto's knowledge, all aspects of the
Presto Business and operations of Presto have, since May 15, 2000, been operated
in material compliance with all applicable federal, state and local laws,
ordinances, regulations, orders, policies and guidelines of all governmental
entities (including, without limitation, any and all employment laws, Tax laws,
land use laws, and federal, state and local environmental, health and safety
laws, and other laws in any way pertaining to the land, air, water or hazardous
materials or substances that are or could be applicable to the business of
Presto). Presto and affiliates have, since May 15, 2000, complied in all
material respects with all such laws, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand is now pending and Presto is not
aware of any basis for any such action. No notice has been served, filed or
commenced against Presto with respect to any such laws since May 15, 2000.
Presto shall pay any Tax that is due from it and which might otherwise become a
liability, in whole or in part, of the Buyer and shall file all Tax Returns that
are necessary to avoid having the Buyer become liable for any Tax that would
otherwise be due from Presto.
(b) To Presto's knowledge, and except as otherwise set forth in
Schedule 2.2 of this Agreement, all of the real estate owned, leased or
otherwise occupied by the Presto in connection with the Presto Business is
currently in compliance with all applicable environmental laws in all material
respects. Presto does not use, treat, store or dispose of, nor has it permitted
any other Person to use, treat, store or dispose of, whether temporarily or
permanently, any Hazardous Materials (as defined below) at, on or beneath the
premises owned, leased or otherwise occupied by the Presto in violation of any
law. Neither Presto nor TBM has any knowledge, after due inquiry, of the
presence, use, treatment, storage, release or disposal of any Hazardous
Materials at, on or beneath or upon any of the assets of Presto or any
properties leased or otherwise occupied by Presto which has created or might
reasonably be expected to create any liability of owners, operators or occupants
of such premises or of the Purchased Assets under any law or which would require
remediation or reporting to a governmental agency. No asbestos or
polychlorinated-biphenyls are contained in or stored on any assets of Presto or
any properties leased or otherwise occupied by Presto and there are no storage
tanks for petroleum or any other Hazardous Materials located in, on or under any
such assets or properties, other than above ground storage tanks in compliance
with applicable law.
2.3 Permits. To Presto's knowledge, and except as otherwise set forth in
Schedule 2.3 of this Agreement, Presto now has all permits, certificates,
licenses, franchises, approvals, consents and other authorizations required
under all applicable federal, state and local laws for the operation of the
Presto Business (the "Permits") and has provided the Buyer with a written list
of all such Permits. No notice has been issued, and, to the knowledge of Presto,
no investigation or review is pending or threatened by any governmental entity
(i) with respect to
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any alleged violation by Presto of any applicable law, ordinance,
regulation, order, policy or guideline of any governmental entity relating to
the business of Presto, or (ii) with respect to any alleged failure to have all
Permits, certificates, licenses, franchises, approvals and other authorizations
required in connection with or for the operation of the business of Presto.
2.4 Intangible Property. Presto has provided the Buyer with true and
complete copies of all patents, trademarks, service marks and franchises, all
applications for any of the foregoing and all permits, agreements and licenses
or other rights running to or from Presto relating to any of the Purchased
Assets and/or the Presto Business, or which are necessary for Presto to conduct
and operate its business as it is now being conducted. Except for the Rol-Lift
trademark, Presto owns or has the exclusive right to use all such patents,
trademarks, service marks, franchises, permits, agreements and licenses free
from any requirement of any past, present or future royalty payments, license
fees, charges or other payments, or conditions or restrictions whatsoever.
2.5 Warranties; Product Services. To Presto's knowledge, and except as
otherwise set forth in Schedule 2.5 of this Agreement, Presto has provided the
Buyer with copies of all warranties and product guarantees that it has issued or
by which it is bound. Except as previously disclosed in writing to the Buyer by
Presto there are no pending or, to the knowledge of Presto, threatened claims
which exceed $10,000 for any particular order with respect to any such warranty
or guaranty, and Presto has no liability with respect to any such warranty or
guaranty, whether known or unknown, absolute, accrued, contingent or otherwise,
and whether due or to become due in excess of $10,000 for any particular order.
To the best of Presto's knowledge, each product sold, leased, or delivered by
Presto has been in conformity with all applicable contractual commitments and
all express and implied warranties. To the best of Presto's knowledge, Presto
has no liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
any of them giving rise to any liability) arising out of any injury to
individuals or property as a result of the ownership, possession, or use of any
product sold, leased, or delivered by Presto, or any services provided by
Presto, which exceeds $10,000 for any particular order.
2.6 Contracts. Presto has previously disclosed to Buyer in writing a
list of all contracts, leases, and other agreements to which the Presto is
a party which in any way are used or intended to be used in connection with, or
are related to the Purchased Assets and/or the Presto Business, including, but
not limited to
(a) any agreement (or group of related agreements) for the purchase
or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services;
(b) any agreement concerning confidentiality or non-competition;
(c) any profit sharing, stock option, stock purchase, stock
appreciation, pension, deferred compensation, severance, employee
benefit plan, or other plan or arrangement for the benefit of its
current or former directors, officers, and employees;
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(d) any collective bargaining agreement;
(e) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis or providing
severance benefits;
(f) any employee handbooks and policies; and
(g) any other agreement (or group of related agreements) the
performance of which is material to the Purchased Assets or the
Presto Business.
Presto has delivered to the Buyer a correct and complete copy of each such
written agreement.
2.7 Employee Benefits. (a) Presto has provided the Buyer with copies of
all Employee Benefit Plans as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended, and any other plans which provide
benefits of any kind to employees of Presto, including, without limitation, sick
leave, vacation pay, severance pay, salary continuation for disability,
consulting or other compensation arrangements, retirement, deferred
compensation, bonus, incentive compensation, stock purchase, stock option,
health including hospitalization, medical and dental, life insurance and
scholarship programs maintained for the benefit of any present or former
employees of the Presto.
(b) Each Employee Benefit Plan has been administered in compliance
with its terms, and is in compliance in all material respects with the
applicable provisions of ERISA, the Code, and all other applicable laws
(including, without limitation, funding, filing, termination, reporting and
disclosure and continuation coverage obligations pursuant to Title V of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"));
(ii) Presto has made or provided for all contributions required under the terms
of such plans; and (iii) no "Employee Pension Benefit Plan" (as defined in
Section 3(2) of ERISA) has been the subject of a "reportable event" (as defined
in Section 4043 of ERISA) and there have been no "prohibited transactions" (as
described in Section 4975 of the Code or in Part 4 of Subtitle B of Title I of
ERISA) with respect to any such Employee Benefit Plan.
(c) Except to the extent that Long Reach and Presto share a major
medical and 401(k) plan, neither Presto nor any ERISA Affiliate maintains or has
ever maintained or been obligated to contribute to a "Multiemployer Plan" (as
such term is defined by Section 4001 (a)(3) of ERISA).
(d) With respect to each Employee Benefit Plan maintained by Presto
or any ERISA Affiliate: (i) no unsatisfied liabilities to participants, the IRS,
the United States Department of Labor ("DOL"), the PBGC or to any other person
or entity have been incurred as a result of the termination of any Employee
Benefit Plan; (ii) no Employee Pension Benefit Plan which is subject to the
minimum funding requirements of Part 3 of Subtitle B of Title I of ERISA or
subject to Section 412 of the Code has incurred any "accumulated funding
deficiency" within the meaning of Section 302 of ERISA or Section 412 of the
Code, and there has been no waived funding deficiency within the meaning of
Section 303 of ERISA or Section 412 of the Code; and
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(iii) there has been no event with respect to an Employee Pension Benefit
Plan which would require disclosure under Sections 4062(c), 4063(a) or 4041(e)
of ERISA.
(e) All reports and information required to be filed with the DOL,
IRS and PBGC or with plan participants and its beneficiaries with respect to
each Employee Benefit Plan have been filed, and all annual reports (including
Form 5500 series) of such Plans were certified without qualification by each
Plan's accountants and actuaries. Any annual reports which are not yet due but
are required to be filed with respect to a plan year which ended on or prior to
the Closing Date or with respect to current pan years shall be filed by the
Presto, when due.
(f) Neither Presto nor any ERISA Affiliate maintains any retiree
life and/or retiree health insurance plans which provide for continuing benefits
or coverage for any employee or any beneficiary of an employee after such
employee's termination of employment.
(g) All claims insured under Presto's health insurance plan and
disability insurance plan (if any) covering its employees have been properly
accrued.
2.8 Overtime, Back Wages, Vacation and Minimum Wages. No present or
former employee of Presto has any claim against Presto (whether under federal or
state law, any employment agreement or otherwise) on account of or for overtime
pay (other than overtime pay for the current payroll period), wages, salary or
commissions (for any period other than the current payroll period), vacation,
time off or pay in lieu of vacation or time off or any violation of any statute,
ordinance or regulations relating to minimum wages or maximum hours of work or
working conditions. Presto is current on all severance pay or other payments on
account of termination of any former employee.
2.9 Labor Disputes, Unfair Labor Practices. There is neither pending,
nor, to the knowledge of Presto, threatened, against Presto any labor dispute,
strike or work stoppage which affects or may affect the Presto Business, or
which may interfere with the continued operation thereof. Presto is not, nor has
it been, engaged in any unfair labor practices, and no unfair labor practice
complaints against Presto are pending before the National Labor Relations Board.
2.10 Consents. As requested by the Buyer, Presto shall use its best good
faith efforts to obtain the consent of any third party from whom consent must be
obtained in order to permit the conveyance of all of the Purchased Assets to the
Buyer. The Buyer and the Buyer's representatives shall be available to assist
Presto in obtaining the requested consents.
2.11 Full Access. The Buyer and its authorized representatives, upon
making prior arrangements with Presto, shall have full access at all reasonable
times to all premises and properties of Presto and to all books, records,
contracts, tax records and audit records held by Presto or its independent
accountants relating to the Presto Business. Such examination and investigation
shall not affect the warranties and representations of Presto and TBM contained
in this Agreement.
2.12 Authorization to Do Business. Presto is authorized to do
business the following jurisdictions and such authority is in full force and
effect as of the date of this Asset Purchase
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Agreement and will be in effect through the Closing: Rhode Island and
Texas. These jurisdictions constitute all jurisdictions where its activities may
require such authorization.
2.13 WARN Act. Presto has complied with all provisions of the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. xx.xx. 2101-2109, and all
applicable state, federal and local laws and regulations, and Presto shall take
all action necessary to ensure that the Buyer will not become liable under any
such Act, law or regulation as a result of or in connection with the transaction
contemplated in this Asset Purchase Agreement, or of the termination of the
employment of Presto employees resulting from the same.
ARTICLE 3. INDEMNIFICATION
3.1 By Presto, Long Reach and TBM. From and after the Closing Date,
Presto, Long Reach and TBM shall, jointly and severally, indemnify and hold
harmless the Buyer and the Buyer's officers, directors and employees from and
against any and all liabilities, claims, and/or costs, resulting from, related
to or arising out of liabilities and or claims, as and when sustained, which the
Buyer or its officers, stockholders, directors or employees may suffer or incur,
resulting from, related to, or arising out of any willful misrepresentation,
failure to disclose any material fact, breach of warranty, breach of guarantee,
or non-fulfillment of any of the respective agreements or covenants of Presto,
Long Reach and/or TBM in this Agreement or any related documents or from any
willful misrepresentation in or omission of material fact from any certificate,
financial statement, or from any other document furnished or to be furnished to
the Buyer hereunder or by Presto, Long Reach or TBM. Notwithstanding the
foregoing, neither Presto, Long Reach, nor TBM shall have any liability under
this ss. 3.1 for any liability, claims or costs to the extent that the same do
not, cumulatively, exceed the sum of $10,000.00 during any twelve (12) month
period
The foregoing indemnity shall extend to, but shall not be limited to, any
such liability, claim and cost which may be incurred by the Buyer, by any
officer, stockholder, director, or employee of the Buyer, as a result of any
willful act or omission of Presto, Long Reach, TBM, any Affiliate, or any of
their respective or joint officers, directors or employees, or agents,
notwithstanding any investigation made by the Buyer or any disclosure made by
Presto herein or otherwise.
3.2 Notice. Promptly after acquiring knowledge of any liability or claim,
against which Presto, Long Reach, and/or TBM has indemnified the Buyer, or as to
which any party may be liable, Presto, Long Reach, and TBM shall give to the
Buyer written notice thereof; provided, however, that failure to provide such
notice shall not relieve the indemnifying party of the obligation to indemnify
another party hereto if such indemnifying party has knowledge of the liability
or claim. Each indemnifying party shall, at its own expense, defend against the
contest any liability or claim, against which it has indemnified an indemnified
party, and each indemnifying party shall receive from the other party all
necessary and reasonable cooperation in said defense including, but not limited
to, the services of employees and former employees of the other party who are
familiar with the transactions out of which any such liability or claim may have
arisen. The indemnifying party shall have the right to control the defense of
any such proceeding unless it is relieved of its liability hereunder with
respect to such defense by the
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indemnified party. The indemnifying party shall have the right, at its
option, and, unless so relieved, to compromise, settle or defend, at its own
expense and by its own counsel, any such matter involving the asserted liability
of the indemnified party. In the event that the indemnifying party shall
undertake to compromise, settle or defend any such asserted liability, it shall
promptly notify the indemnified party of its intention to do so; provided,
however, in the event of a compromise or settlement, the indemnified party shall
have the right to approve any such compromise or settlement, which approval
shall not be unreasonably withheld. Furthermore, the indemnifying party shall
not enter into any compromise or settlement without obtaining the complete
release of the indemnified party. The indemnified party shall have the right to
participate in all aspects of the defense of any such liability or claim
(including attending meetings and obtaining and reviewing copies of all
documents) and may choose and retain, at its own cost and expense, separate
counsel in connection therewith; provided, however, if counsel retained by the
indemnifying party determines that there exists an actual or potential conflict
of interest between the indemnified party and the indemnifying parties with
respect to the defense of such liability or claim, then the reasonable fees and
disbursements of the separate counsel retained and chosen by the indemnified
party shall be borne by the indemnifying party. In the event that an
indemnifying party, after written notice from an indemnified party, fails to
take timely action to defend the same, the indemnified party shall have the
right to defend the same by counsel of its own choosing, but at the cost and
expense of the indemnifying party. No indemnified party shall have the right to
settle or compromise any claim without the written consent of the indemnifying
party, except that any indemnified party shall have the right to settle or
compromise any claim against it if it has given written notice thereof to the
indemnifying party and the indemnifying party has failed to take timely action
to defend the same.
3.3 Insurance Audits or Adjustments. Presto, Long Reach and TBM shall
jointly and severally be responsible for any adjustment to insurance premiums
for periods of insurance coverage prior to Closing. In the event that payment
for such adjustments is demanded of the Buyer after Closing, the Buyer shall be
entitled to make such payment, and Presto, Long Reach, and TBM shall be jointly
and severally liable to reimburse the Buyer therefor.
ARTICLE 4. TRADEMARKS AND TRADENAMES
4.1 Rol-Lift. At the Closing (as that term is defined in the Asset
Purchase Agreement), Presto shall, at no additional cost to Buyer, provide the
Buyer with a perpetual, royalty-free, exclusive license to use the "Rol-Lift"
name and trademark, and any similar names and trademarks, in connection with the
manufacture, marketing, sale, transfer, supply, distribution, or other
disposition of manual pallet trucks . Xxxxxxxxxx shall not receive the right to
use the Rol-Lift name or trademark in connection with any other product. If and
when a Rol-Lift line of lift tables is developed, the Buyer shall have the
exclusive right to manufacture such tables.
4.2 Presto. At or prior to the Closing (as that term is defined in the
Asset Purchase Agreement), Presto shall have taken all action necessary to
ensure that the Buyer will acquire, as part of the Purchased Assets (as that
term is defined in the Asset Purchase Agreement), all rights in the "Presto
Lifts" name and trademark and any similar or derivative names and trademarks, as
well as all other trademarks and tradenames that it has represented to the Buyer
that it owns.
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ARTICLE 5. MISCELLANEOUS
5.1 Survival of Representations and Warranties. All of the
representations, warranties, covenants and agreements contained in Agreement and
in any certificate, schedule, document, or other writing delivered pursuant
hereto have been relied upon and shall survive for a period of two (2) years
after the Closing.
5.2 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given upon receipt if it
is sent by facsimile, or reputable express courier, and addressed or otherwise
sent to the intended recipient as set forth below:
(a) If to Presto, Long Reach or TBM:
Xxxxxxx X. Xxxxxxxx
TBM Holdings, Inc.
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx, Esquire
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx
1251 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Fax (000) 000-0000
(b) If to the Buyer:
As provided in the Asset Purchase Agreement
Any party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address or facsimile number set forth
above using any other means (including personal delivery, messenger service,
ordinary mail, or electronic mail), but no such notice, request, demand, claim
or other communication shall be deemed to have been duly given unless and until
it actually is received by the intended recipient. Any party may change the
address or facsimile number to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.
5.3 Entire Agreement. This Agreement and the agreements and documents
referred to herein constitute the entire agreement of the parties with respect
to the transactions contemplated hereby and supersede all other agreements
between the parties, whether written or oral, with respect to such transactions.
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5.4 Binding Effect. This Agreement shall inure to the benefit of and
bind the parties hereto and their respective heirs, successors and assigns.
5.5 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other party; provided, however, that the Buyer may assign any or all of
its rights and interests, and delegate its duties and obligations, to one or
more corporations, limited liability companies, or other entities of which the
Buyer and/or the Buyer's shareholders collectively own a majority of the
outstanding equity interests.
5.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
5.7 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by each
of the parties hereto. No waiver by any party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
5.8 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
5.9 Knowledge Standard. For purposes of this Agreement, "knowledge" shall
mean the (a) actual knowledge of any of the persons set forth in Schedule 5.9 to
this Agreement, or (b) knowledge that such person could be expected to discover
or otherwise become aware of in the course of conducting a reasonably
comprehensive investigation concerning the existence of such fact or other
matter.
5.10 Applicable Law. This Agreement shall be construed under and
governed by the laws of the State of Maine.
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to
be executed as of the day and year first above written.
WITNESS: XXXXXXXXXX INTERNATIONAL
GROUP, INC.
______________________________ By:___________________________
Print Name: Xxxxx XxXxxxxx
Title: President
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PRESTO LIFTS, INC.
______________________________
By:___________________________
Print Name:
Title:
TBM HOLDINGS, INC.
______________________________ By:___________________________
Print Name:
Title:
LONG REACH, INC.
By:___________________________
Print Name:
Title:
