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EXHIBIT 10.51
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE ("Agreement") is made as of this 25th
day of February, 1997
BETWEEN:
Rural/Metro Corporation, a Delaware corporation
("Purchaser")
-and-
Xxxxxx X. Xxxxxx, Xx., an individual ("Xxxxxx"),
Xxxxxxx XxXxxxxx, Xxxxx Xxxxxx,
and Xxxx Xxxxxx
(collectively, the "Vendors"
and individually a "Vendor")
RECITALS:
WHEREAS, the Vendors own and control all the issued and outstanding shares
of the stock of Southwest General Services, Inc., an Arizona corporation (the
"Company");
AND WHEREAS, the Vendors desire to sell and the Purchaser desires to
purchase all of the said issued and outstanding shares of the stock of the
Company owned by the Vendors all upon and subject to the terms and conditions
hereinafter set forth;
NOW THEREFORE, in consideration of the premises and the mutual agreements
and covenants herein contained (the adequacy of which consideration as to each
of the parties hereto is hereby mutually admitted), the parties hereto hereby
covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 DEFINITIONS - Whenever used in this Agreement, unless there is something in
the subject matter or context inconsistent therewith, the following words and
terms shall have the respective meanings ascribed to them as follows:
(a) "Agreement" means this Agreement of Purchase and Sale and all
instruments supplemental hereto or in amendment or confirmation
hereof;
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(b) "Business" means the business presently carried on by the Company
consisting of the provision of emergency and non-emergency medical
transportation services and related billing and management services;
(c) "Business Day" means a day other than a Saturday, Sunday or any day on
which the principal commercial banks located in Phoenix, Arizona are
not open for business during normal banking hours;
(d) "Closing" means the completion of the sale to and purchase by the
Purchaser of the Purchased Shares hereunder by the transfer and
delivery of documents of title thereto and the payment of the purchase
price therefore as contemplated herein;
(e) "Closing Date" means the earlier of April 15, 1997 or five (5)
business days following the satisfaction or waiver of all conditions
precedent to this transaction, or such other date as the Parties may
mutually agree in writing;
(f) "Closing Time" means 10 o'clock a.m., Phoenix, Arizona local time, on
the Closing Date, or such other time on the Closing Date as the
Parties may agree;
(g) "Employment Agreement" means the employment agreement to be entered
into by and between Xxxxxx and Purchaser at the Closing, as
contemplated by the Agreement of Purchase and Sale of even date
herewith pertaining to SW General, Inc., an Arizona corporation.
(h) "Financial Statements" means the unaudited financial statements of the
Company, including a balance sheet as of December 31, 1996, and an
operating statement for the twelve (12) month period then ended;
copies of which are annexed as Schedule "A" hereto;
(i) "Parties" means, collectively, the Vendors and the Purchaser, and
"Party" means any one of them;
(j) "Person" means any individual, corporation, partnership, limited
liability company, trust or unincorporated association or similar
entity, and pronouns have a similarly extended meaning;
(k) "Purchase Price" means the purchase price to be paid by the Purchaser
to the Vendors for the Purchased Shares as provided in Section 2.1
hereof;
(l) "Purchased Shares" means all the issued and outstanding common shares
of the stock of the Company;
(m) "Southwest Companies" means, collectively, the Company, Southwest
Ambulance of Casa Grande, Inc., Medical Emergency Devices and Services
(MEDS), Inc., and SW General, Inc.
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Terms defined in the preamble, recitals and body of this Agreement shall have
the same meanings herein as are ascribed thereto in the preamble, recitals and
body.
1.2 GENDER AND NUMBER - Words importing the singular include the plural and vice
versa; words importing gender include all genders.
1.3 ENTIRE AGREEMENT - This Agreement, including the Schedules and Exhibits
hereto, together with the agreements, certificates, and other documents and
instruments to be delivered pursuant hereto, constitute the entire agreement
between the Parties pertaining to the subject matter hereof and supersede all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties and there are no warranties, representations or other
agreements between the Parties in connection with the subject matter hereof
except as specifically set forth herein and therein.
1.4 WAIVERS, ETC. - No supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the Party to be bound
thereby. No waiver of any of the provisions of this Agreement, in whole or in
part, shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
1.5 OTHER WORDS AND PHRASES - In this Agreement, unless otherwise expressly
provided (i) the words "hereof", "herein", "hereto" and "hereunder" and words of
similar import refer to this Agreement as a whole and not to the particular
Article, Section, Subsection, paragraph or other subdivision, and (ii) all
references to designated "Articles", "Sections", "Subsections", "paragraphs" or
other subdivisions are to the designated Articles, Sections, Subsections,
paragraphs and other subdivisions of this Agreement.
1.6 HEADINGS - The Article and Section headings contained herein are included
solely for convenience of reference, are not intended to be full or accurate
descriptions of the content thereof and shall not be considered part of this
Agreement.
1.7 APPLICABLE LAW - This Agreement and the rights, obligations and relations of
the Parties shall be governed by and construed in accordance with the laws of
the State of Arizona and the federal laws of the United States applicable
therein.
1.8 ACCOUNTING TERMS - All accounting terms shall have the meanings ascribed to
them in accordance with generally accepted accounting principles consistently
applied, and all references to "generally accepted accounting principles" shall
be deemed to be, unless otherwise specified, reference to accounting principles
which are generally accepted in the United States.
1.9 SCHEDULES AND APPENDICES - The following are the schedules and appendices
attached to and incorporated in this Agreement by reference and deemed to be an
integral part hereof:
Schedule "A" - Financial Statements
Schedule "B" - Authorized and Issued Share Capital, Share Ownership, and
Purchase Price Allocation for each of the Vendors
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Schedule "C" - [Intentionally Omitted]
Schedule "D" - [Intentionally Omitted]
Schedule "E" - Operating Licenses
Schedule "F" - Undisclosed Liabilities, Guaranties and Indemnities
Schedule "G" - Absence of Changes
Schedule "H" - Unusual Transactions
Schedule "I" - Liens, Charges and Encumbrances
Schedule "J" - Real Property Leases and Owned Real Property
Schedule "K" - Vehicular Equipment Owned or Leased
Schedule "L" - Revenue Contracts
Schedule "M" - Contracts to Purchase Goods/Services
Schedule "N" - Employment Contracts, Collective Agreements, Pension or
Similar Plans, Unfair Labor Practice Complaints
Schedule "O" - Litigation
Schedule "P" - Employees over $40,000
Schedule "Q" - Insurance Policies
Schedule "R" - Intellectual Property
Schedule "S" - Third Party Approvals
Schedule "T" - Environmental Matters
Schedule "U" - Subsidiaries and Affiliates
Schedule "V" - Bank Accounts
Schedule "W" - Purchaser's Disclosure Schedule
Appendix "J" - Certain Real Estate Representations and Warranties
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ARTICLE 2
PURCHASE AND SALE
2.1 PURCHASE PRICE - At the Closing Time, the Vendors shall sell and the
Purchaser shall purchase the Purchased Shares for an aggregate purchase price of
Six Million, Five Hundred Thousand Dollars ($6,500,000), all of which shall be
paid in immediately available funds at the Closing. The cash consideration shall
be allocated amongst the Vendors as set forth in Schedule "B" hereto.
2.2 ACTION BY VENDORS AND PURCHASER AT THE CLOSING TIME -
(a) Delivery of Certificates by the Vendors, etc. - The Vendors shall
transfer and deliver to the Purchaser at the Closing stock
certificates representing all the Purchased Shares duly endorsed in
blank for transfer or accompanied by irrevocable stock transfer powers
of attorney duly executed in blank, in either case by the holders of
record thereof, free and clear of all liens, claims, rights, charges,
encumbrances and security interests of whatsoever kind and nature. The
Vendors shall take such steps as shall be necessary to cause the
Company to enter the Purchaser or its nominee upon the books of the
Company as the holder of the Purchased Shares and to issue one or more
share certificates to the Purchaser representing the Purchased Shares;
(b) Payment to Vendors - At the Closing, the Purchaser shall pay to the
Vendors the Purchase Price of Six Million, Five Hundred Thousand
Dollars ($6,500,000) by wire transfer according to the wire
instructions provided to the Purchaser by the Vendors prior to the
Closing.
(c) Delivery of Other Documents - The Vendors and Purchaser shall deliver
all such other documents at the Closing as contemplated herein.
2.3 [INTENTIONALLY OMITTED]
2.4 PLACE OF CLOSING - The Closing shall take place at the Closing Time at the
offices of X'Xxxxxx, Cavanagh, Anderson, Xxxxxxxxxxxxx & Xxxxxxxx, P.A., One E.
Camelback Road, Suite 1100, Phoenix, Arizona or at such other place as may be
agreed upon by the Vendors and the Purchaser.
2.5 TAX TREATMENT - The acquisition of the Company shall be a purchase of stock
which is intended to be treated as a purchase of assets pursuant to an election
under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended (the
"Code").
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF VENDORS - To induce Purchaser to enter
into this Agreement and to perform its obligations hereunder, and with full
knowledge that Purchaser will rely thereon, the Vendors hereby represent and
warrant, jointly and severally, to the Purchaser the truth, accuracy and
completeness of the following:
(a) Enforceability of Obligations - This Agreement and each of the other
agreements referenced herein to which one or more Vendors is a party
have been duly executed and delivered by each of such Vendors, and
each of the Agreement and such other agreements constitutes a valid
and binding obligation of each of the Vendors enforceable against each
of them in accordance with its terms.
(b) Right to Sell - The Vendors:
(i) are the sole beneficial owners of the Purchased Shares
(which shares constitute all of the issued and outstanding
shares of the stock of the Company); and
(ii) are the holders of record of all the Purchased Shares (which
shares constitute all of the issued and outstanding shares
of the stock of the Company) and have good and marketable
title to, and rightful possession of, all of the Purchased
Shares free and clear of any liens, claims, rights, charges,
encumbrances, security interests of whatsoever kind and
nature or rights of others (other than the rights of the
Purchaser hereunder) and no Person (other than the Purchaser
hereunder) has any agreement, option or any rights capable
of becoming an agreement or option for the acquisition of
the Purchased Shares or any other shares in the Company.
(c) Licenses, Registrations and Compliance - The Company is registered,
licensed or otherwise qualified as a corporation to do business in
each jurisdiction in which the nature of its business or the property
owned or leased by it makes such registration, licensing or other
qualification necessary, and such registrations, licenses or
qualifications (as the case may be) are in good standing. The Company
is not in violation in any material respect of any applicable laws,
regulations, orders, rules, decrees, ordinances, licenses or operating
authorities. The licenses and operating authorities issued by federal,
state or local authorities to the Company, copies of which are
attached hereto as Schedule "E" (the "Operating Licenses"), comprise
all the material licenses, permits and operating authorities held in
respect of the Business. The Operating Licenses are all of the
material operating authorities necessary or reasonably required for
the carrying on of the Business as presently conducted and the
ownership and use of its assets, property, and premises. Except as
described in Schedule "E" and subject to applicable regulations and
policies of the Arizona Department of Health Services, the Operating
Licenses are not subject to review or notification and there is no
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litigation, arbitration or other proceeding pending or threatened
which would materially and adversely affect the use of the Operating
Licenses by the Business or which may result in the revocation,
cancellation, suspension or any materially adverse modification of any
of such Operating Licenses.
(d) Organization and Valid Existence - The Company is duly incorporated
and organized, validly existing and in good standing under the laws of
the State of Arizona, and has all necessary corporate power, authority
and capacity to own and lease its property and assets and to carry on
the Business as presently conducted by it. Each of the Vendors has the
full right, power, authority and capacity to execute and deliver this
Agreement and the other agreements referenced herein to which any such
Vendor is a party, to consummate the transactions contemplated hereby
and thereby, and to fully and timely perform its obligations hereunder
and thereunder.
(e) Capitalization - The authorized capital stock of the Company and the
total number of shares of the Company's capital stock presently issued
and outstanding are as set forth on Schedule "B". All issued and
outstanding common shares of the Company have been duly authorized and
validly issued, are fully paid and non-assessable, and are free of
pre-emptive rights.
(f) Financial Statements - Copies of the Financial Statements are each
true, complete and correct and have been prepared on an accrual basis
from the books and records of the Company, in accordance with
generally accepted accounting principles applied on a basis consistent
with that of the preceding periods. The Financial Statements each
fairly present in all material respects a true, accurate and complete
statement of the financial condition, assets, liabilities and results
of operations of the Company as of the dates and for the periods set
forth therein.
(g) Absence of Undisclosed Liabilities - Except as fully disclosed on
Schedule "F" hereto, the Company has no liabilities or obligations,
fixed or contingent, accrued or unaccrued that are not fully and
properly reflected, or adequately reserved against, on the December
31, 1996 balance sheet of the Company included in the Financial
Statements, excepting only those liabilities and obligations incurred
by the Company in the ordinary course of its business between the date
of such balance sheet and the Closing Date, none of which liabilities
is individually or are collectively material, incurred in violation of
this Agreement, or would require accrual and/or disclosure under
generally accepted accounting principles.
(h) Guaranties and Indemnities - Schedule "F" hereto contains a true,
complete and correct list of all contracts and agreements pursuant to
which the Company has guaranteed or indemnified any debt, liability or
obligation of any other person or entity, including, without
limitation, any Vendor (including, without limitation, the execution
of any document obligating the Company with respect to any performance
or other bond), or pursuant to which the Company has pledged or
otherwise encumbered any of its assets. Except as disclosed in
Schedule "F" hereto, the Company is not indebted to any Vendor, nor is
any Vendor indebted
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to the Company in any amount for any purpose. Except as disclosed in
Schedule "F" hereto, the Company has not agreed to give any guaranty
of indebtedness or other obligations of third parties or made any
other commitment by which the Company is, or is contingently,
responsible for such indebtedness or other obligation.
(i) Tax Matters - The Company has duly and timely filed all federal,
state, county and local income, franchise, capital, sales or use,
excise, fuel, escheatment, property or other tax returns, reports or
filings required by any law or regulation to be filed by it and has
duly paid all taxes, assessments and reassessments, and all other
taxes, duties, governmental charges, penalties, interest and fines due
and payable by it on or before the date hereof.
The federal, state, county and local income tax returns of the Company
provided to Purchaser are accurate in all respects.
There are no actions, suits, proceedings, inquiries, investigations or
claims of any nature or kind whatsoever now pending or, to the best
knowledge of Vendors, after due inquiry, threatened, against the
Company with respect to any such returns or reports, or any such
taxes, or any matters under discussion with any federal, state,
county, local or other authority relating to such taxes.
The Company has not received from any authority any assessment,
reassessment or notice of underpayment of any taxes or other penalty
or charges and no such notice is reasonably to be expected.
There is no misrepresentation that is attributable to wilful default
or fraud in tax returns of the Company previously filed.
No consents extending or waiving the time limited for reassessment of
any taxes, duties, governmental charges, penalties, interest or fines,
or any statutes of limitations related thereto have been filed with
respect to the Company for any fiscal year.
The Company has withheld from each payment made to any of its
officers, directors, former directors, and employees and former
employees the amount of all taxes and other deductions (including
without limitation, income taxes, unemployment, disability, and other
required taxes and contributions) required to be withheld and has paid
the same together with the employer's share of same, if any (to the
extent required to be paid so no such amount is past due), to the
proper tax or other receiving officers within the prescribed times and
has filed, in complete and accurate form, all information and other
returns required pursuant to any applicable legislation within the
prescribed times.
The provision made for current and deferred taxes included in the
Financial Statements is sufficient for the payment of all accrued and
unpaid federal, state, county and local income, franchise, capital,
sales or use, excise, fuel, escheatment, property or other taxes,
assessments and reassessments, duties, governmen-
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tal charges, penalties, interest and fines of, and payable by, the
Company, whether or not disputed, for the period ended the date
thereof and for all periods prior thereto.
(j) Absence of Changes - Except as disclosed on Schedule "G" hereto, since
December 31, 1996 there has not been:
(i) any change in the condition or operations of the business,
assets, financial condition, or otherwise of the Company
other than changes in the ordinary and normal course of
business, none of which has been materially adverse; or
(ii) any damage, destruction or loss, labor trouble or other
event, development or condition of any character (whether or
not covered by insurance) materially and adversely affecting
the business, financial condition, assets, properties or
business prospects of the Company.
(k) Absence of Unusual Transactions - Except as disclosed on Schedule "H",
the Company has not, other than with respect to affiliated entities of
the Company being acquired by the Purchaser on the Closing Date, since
December 31, 1996:
(i) transferred, assigned, sold or otherwise disposed of any
assets, granted a lien, security interest, mortgage or other
encumbrance in any assets, or cancelled any debts or claims
except only in each case in the ordinary and usual course of
business or to the extent such assets, liens, security
interests, mortgages, encumbrances, debts or claims do not
individually or in the aggregate exceed $20,000 (when added
to any dispositions, grants, or cancellations by the other
Southwest Companies);
(ii) incurred or assumed any obligation or liability which
individually or in the aggregate exceeds $100,000 (fixed or
contingent), except those listed in Schedule "F" hereto and
except unsecured current obligations and liabilities
incurred in the ordinary and normal course of business which
individually or in the aggregate do not exceed $100,000;
(iii) discharged or satisfied any lien or encumbrance, or paid any
obligation or liability (fixed or contingent) other than
liabilities included in the Financial Statements and
liabilities incurred since the date thereof in the ordinary
and normal course of business;
(iv) declared or made any payment of any dividend or other
distribution in respect of any shares of its stock as
applicable, or purchased or redeemed any such shares
thereof, or effected any subdivision, consolidation or
reclassification of any such shares;
(v) suffered or been threatened with any material adverse change
in its business or financial condition, business activities,
or business prospects,
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including, without limiting the generality of the foregoing,
the existence or threat of any labor dispute, or any
material adverse change in, or loss of, any material
relationship between the Company and any of its customers,
suppliers or key employees, or entered into any commitment
or transaction not in the ordinary and usual course of
business where such commitment or transaction is or would be
material in relation to the Company;
(vi) made any general wage or salary increases in respect of
personnel which it employs, other than increases in the
ordinary and normal course of business, nor hired any
employee who shall have an annual salary in excess of
$70,000; or
(vii) authorized or agreed or otherwise become committed to do any
of the foregoing.
(l) Title to Properties - Except as disclosed in Schedules "I" and "J"
hereto, the Company has good and marketable title to all its
respective properties, interests in properties and assets, real and
personal, including without limitation those reflected in the
Financial Statements or acquired since the date of the Financial
Statements, free and clear of all mortgages, pledges, liens, claims,
rights, encumbrances or charges of any kind or nature.
(m) Equipment and Condition of Assets - All non-vehicular equipment,
assets, personal property and fixtures in the possession or custody of
the Company which, as of the date hereof, are owned, leased or held
under license or similar arrangement by the Company and are necessary
for the conduct of the Business are in good condition, repair and
proper working order, reasonable wear and tear excepted. Copies of all
leases, licenses, agreements and other documentation relating thereto
have been provided or made available to Purchaser.
(n) Leases of Real Property - The Company is not a party to or bound by
any leases of real property other than those disclosed in Schedule "J"
hereto, and all interests held by the Company as lessee under such
leases are free and clear of any and all liens, charges and
encumbrances of any nature and kind whatsoever. All rental and other
payments required to be paid by the Company, as lessee, pursuant to
such leases have been duly paid. Such leases are in full force and
effect without amendment thereto and the Company is not otherwise in
default in any material respect in meeting its obligations contained
in any such lease. The representations or warranties set forth in
Appendix "J" hereto with respect to any real property owned by NRM
Properties, Inc. or Chaparral Properties, Inc. that is subject to a
lease to which the Company is a party or by which it is bound are true
and correct.
(o) Real Property - The Company does not own any interest in real
property, except as disclosed on Schedule "J" hereto.
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(p) Vehicular Equipment - Schedule "K" contains a list of all vehicular
equipment owned or leased by the Company and copies of all motor
vehicle certificates of title with respect to such vehicular equipment
have been provided to the Purchaser. Such vehicular equipment is, in
all material respects, in good condition, repair and proper working
order, reasonable wear and tear excepted, and each vehicle complies in
all material respects with all laws and regulations affecting its
operation and each vehicle bears a current safety standards
certificate.
(q) Revenue Contracts - Except as disclosed in Schedule "L", the Company
is not a party to any contract pursuant to which it is to provide
transportation or other services. Each of the contracts set out in
Schedule "L" is in full force and effect and enforceable in accordance
with its respective terms and conditions, and there is not existing
any default, or event or condition which, with the giving of notice or
the passage of time, or both, would constitute an event of default, by
the Company or any other party thereto under any of such contracts,
that could have a material adverse effect on any of such contracts.
(r) Contracts to Purchase - Except as set out in Schedule "M", the Company
is not a party to any contract to purchase any goods and/or services
with a value in excess of $20,000/year. Each of the contracts set out
in Schedule "M" is in full force and effect and enforceable in
accordance with its respective terms and conditions, and there is not
existing any default, or event or condition which, with the giving of
notice or the passage of time, or both, would constitute an event of
default, by the Company or any other party thereto under any of such
contracts, that could have a material adverse effect on any of such
contracts.
(s) Employment Contracts - Except as set out in Schedule "N", the Company
neither has any written employment contracts, union or collective
labor, pension, deferred profit sharing, retirement, employee benefit,
stock option or other similar agreements or plans nor has it had any
such plan or agreement in the past, nor does it have any written
contracts of employment with any employees or, to the best of Vendors'
knowledge, any oral contracts of employment which are not terminable
on the giving of reasonable notice in accordance with applicable law.
The Company has not, in the last four (4) years, experienced any labor
disputes which were of a material nature, work stoppages or strikes.
There is not now any circumstances or conduct which could result in
the filing of an unfair labor practice complaint against the Company;
any such complaints previously raised and currently ongoing and the
current status thereof are particularized in Schedule "N".
(t) Material Contracts - Except for the material contracts and commitments
disclosed herein, including the Schedules attached hereto, the Company
is not a party to or bound by any material contract or commitments
whether oral or written. True, correct and complete copies of all such
written contracts and commitments either have been delivered to the
Purchaser or will be delivered prior to Closing. Each of such
contracts and commitments is in full force and effect and enforceable
in
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accordance with its respective terms and conditions, and there is not
existing any default, or event or condition which, with the giving of
notice or the passage of time, or both, would constitute an event of
default, by either of the Company or any other party thereto under any
of such contracts or commitments, that could have a material adverse
effect on any of such contracts or commitments. The Company has the
capacity, including the necessary personnel, equipment and supplies,
to perform all its obligations thereunder in all material respects.
(u) Pension/Benefit/Health Plans - The only pension, benefit or health
plans established by or for the Company for its employees are those
disclosed in Schedule "N" hereto; such plans are duly registered where
required by, and are in good standing under all, applicable
legislation; all required employer contributions thereunder to the
date hereof have been made and the respective pension funds are funded
in accordance with the rules of the pension plans and no past service
funding liabilities exist thereunder. Except as disclosed on Schedule
"N" hereto, there is no employee benefit or health plan established or
maintained for employees of the Company, or to which contributions
have been made by the Company with respect to such employees, which is
subject to Title IV of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). The Company is in compliance in all
material respects with all provisions of ERISA, and the Company is not
subject to any liability or obligation arising under ERISA or any
other applicable law or the provisions of any other employee benefit
plan, including but not limited to liability owed to the Pension
Benefit Guaranty Corporation on account of a termination or partial
termination of any employee benefit plan, any liability resulting from
a "prohibited transaction", any liability for failure to meet minimum
funding requirements, any liability related to the termination of a
multi-employer pension plan, and any liability caused by the
non-qualification of any plan under section 401 of the Code. No
pension plan, no employee benefit plan, no "disqualified person" (as
such term is used in Section 4975(c)(1) of the Code) has engaged, and
no Vendor has engaged, in any transaction in violation of Section 406
of ERISA or any "prohibited transaction" (as defined in Section
4975(c)(1) of the Code) other than any such transaction which is
exempt under Section 408 of ERISA or Section 4975(d) of the Code. The
401k plan of the Company meets in all material respects the
requirements of section 401(a) of the Code. The Company does not have
any obligation to provide material post-retirement benefits of any
nature to its employees, former employees or their survivors,
dependents or beneficiaries, except as may be required by the
Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA") or
any other applicable state medical benefits continuation laws, nor
will any such obligation to provide such post-retirement benefits be
incurred solely as a result of the consummation of the within
transactions. The Company has not caused there to occur a "mass
lay-off", as defined in section 693.3 of the regulations issued under
the Worker Adjustment and Retention Notification Act (20 CFR 639) at
any time in the past.
(v) Absence of Conflicting Agreements - Neither the Company nor any Vendor
is a party to, bound or affected by or subject to any indenture,
mortgage, lease,
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agreement, instrument, charter or by-law provision, or, to the best of
Vendors' knowledge, any statute, regulation, order, judgment, decree
or law which would be in any material respect violated, contravened,
breached by or under which a material default would occur, as a result
of the execution and delivery of this Agreement or the consummation of
any of the transactions provided for herein.
(w) Litigation - Except for the items disclosed in Schedule "O" hereto,
all of which are fully insured against, there is no suit, action,
litigation, arbitration proceeding or private or governmental
proceeding, hearing before an administrative tribunal, including
appeals and applications for review, in progress, pending or to the
knowledge of Vendors threatened against the Company or materially and
adversely affecting its properties, business, financial condition or
business prospects. Except as shown in Schedule "O", there is not
presently outstanding against the Company any adverse judgment,
decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or arbitrator.
(x) Employees - There are set forth in Schedule "P" hereto the names and
titles of all personnel employed or engaged by the Company whose
annual base salary exceeds $40,000, including rates of remuneration,
positions held and date of commencement of employment. The employment
records of the Company are true, complete and correct in all material
respects. Except as disclosed in Schedule "P" hereto, the Company does
not owe any past or present employee any sum other than for accrued
wages or salaries for the current payroll period, reimbursable
expenses, accrued vacation and holiday pay (none of which is for a
period in excess of two (2) weeks' pay with respect to any single
employee), sick leave rights and amounts payable under employee
benefit plans, and all of such sums that accrue from the date hereof
until the Closing shall be timely paid by the Company on or prior to
the Closing Date. There is not pending or, to the best knowledge of
Vendors, after due inquiry, threatened, any charge or complaint
against or involving the Company or any of its officers or employees
by the National Labor Relations Board, the Occupational Health &
Safety Administration, the Department of Labor, or any similar
federal, state or local board of agency, or any representative
thereof.
(y) Insurance - The Company currently has in force the policies of
insurance set out in Schedule "Q" hereto. Such policies are
appropriate to its Business, property and assets, are in such amounts
and against such risks as are customarily carried and insured against
by owners of comparable businesses, properties and assets, and, to the
knowledge of Vendors, are issued by responsible insurers. All such
policies of insurance are in full force and effect and the Company is
not in default, whether as to the payment of premium or otherwise,
under the terms of any such policy. Such policies can be cancelled
without penalty or premium, and such cancellation would trigger a full
pro rata refund of prepaid premiums. The Company has no liability for
retrospective insurance premiums or costs.
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(z) Intellectual Property - Attached as Schedule "R" is a true and correct
schedule identifying all material patents, patent rights or licenses,
patent applications, trademarks, trademark registrations and
applications, trademark rights, trade names, trade secrets, service
marks and applications therefore, copyrights and copyright
registrations and copyright applications used in whole or in part in
or required for the proper carrying on of the Business of the Company
(the "Intellectual Property"). None of the matters covered by the
Intellectual Property, nor any of the products or services sold or
provided by the Company, nor any of the processes used or the business
practices followed by the Company, infringes or has infringed upon any
trademark, trade name, fictitious name, service xxxx, trade secrets,
patent or copyright owned by any person or entity (or any application
with respect thereto), or constitutes unfair competition. The Company
is not obligated to pay any royalty or other payment with respect to
any of the Intellectual Property, except as disclosed in Schedule "R".
Except as disclosed in Schedule "R" hereto, to the best of Vendors'
knowledge, no person or entity is producing, providing, selling or
using products, services, names, or marks that would constitute an
infringement of any of the Intellectual Property.
(aa) Corporate Records - The corporate records and minute books of the
Company have been delivered to the Purchaser and contain complete and
accurate copies of the Company's Articles of Incorporation, as
amended, by-laws, minutes of all meetings, and resolutions of its
directors and shareholders. All such meetings were duly called and
held, all such by-laws and resolutions were duly passed and the share
certificate books, registers of shareholders and members, registers of
transfers and registers of directors of the Company are complete and
accurate in all material respects. In all material respects, the books
and records of the Company with respect to its assets, businesses,
operations, properties and prospects have been maintained in
accordance with generally accepted accounting principles and in the
usual, regular and ordinary manner, and all entries with respect
thereto have been made and all transactions have been properly
accounted for. All applicable corporate and other laws and all
applicable generally accepted accounting principles relating to the
maintenance of such books and records have been complied with by the
Company.
(bb) Third Party Approvals - Except for approvals required by the Federal
Trade Commission or other agencies for purposes of complying with the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder (the "Xxxx Act") and
required by the Arizona Department of Health Services, and except as
disclosed in Schedule "S", there are no approvals, consents or waivers
required to be obtained or applications required to be filed from or
with governmental authorities or from any other Person whatsoever,
including pursuant to any leases or contracts containing prohibitions
or pre-consent provisions pertinent to this Agreement in order to
permit the transactions contemplated herein or to preserve the
Business and/or assets of the Company.
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(cc) Compliance with Environmental Laws - Except as disclosed in Schedule
"T" hereto, the Company and the Business are in all material respects
in compliance with all, and do not violate in any material respect,
and have not violated in any material respect any, applicable federal,
state, municipal or local laws, regulations, orders, certificates of
approval, licenses, permits, governmental decrees, ordinances or any
and all other applicable legislation or regulatory requirements with
respect to environmental, health or safety matters. There has been no
storage, treatment, generation, discharge, transportation or disposal
of industrial, toxic or hazardous substances or solid or hazardous
waste by, or on behalf of, the Company, in violation of any federal,
state or local law, statute, rule or regulation or any decree, order,
arbitration award or agreement with or any license or permit from any
federal, state or local governmental authority. There has been no
spill, discharge, leak, emission, injection, escape, dumping, or
release of any kind by, or on behalf of, the Company, into the
environment (including, without limitation, into air, water or ground
water) of any materials including, without limitation, industrial,
toxic or hazardous substances or solid, medical or hazardous waste, as
defined under any federal, state or local law, statute, rule or
regulation other than those releases permissible under such law,
statute, rule or regulation or allowable under applicable permits.
(dd) Compliance - The Company is not in violation in any material respect
of any laws, regulations, decrees or ordinances applicable to the
Business, assets, properties, financial condition or business
prospects of the Company.
(ee) Subsidiaries and Affiliates - Except as disclosed in Schedule "U"
hereto, the Company has no subsidiaries or any other equity investment
in any entity engaged in any aspect of the medical or transportation
industry. Except as disclosed in Schedule "U" hereto, no Vendor has
any equity interest in any "Affiliates." For purposes of this
Agreement, the term "Affiliates" shall mean all entities engaged in
any aspect of the medical or transportation industry in which the
applicable Vendor is either an officer or director, or in which the
applicable Vendor, directly or indirectly, owns or controls ten
percent (10%) or more of the equity securities of the entity.
(ff) Accounts Receivable - The accounts receivable existing on the books of
the Southwest Companies at the Closing Time (net of contractual
allowance) (the "Closing Accounts Receivable") shall be at least
$6,040,000 (the "Minimum Accounts Receivable") and an amount at least
equal to the Minimum Accounts Receivable or the Closing Accounts
Receivable, whichever amount is greater (the "Target Accounts
Receivable"), is good and collectible within 365 calendar days
thereafter. None of the Closing Accounts Receivable are subject to the
return of the merchandise or other property the selling price of which
is represented thereby, or to offsets or counterclaims, the extent of
which is in excess of any reserves for collectibility thereof
reflected in the books of the Southwest Companies at the Closing.
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(gg) Bank Accounts - Schedule "V" hereto sets forth the name and location
of each bank in which the Company has an account, lock box or safe
deposit box, the number of each such account or box, the names of all
signatories thereto and the persons authorized to draw thereon or have
access thereto. No power of attorney exists from the Company.
(hh) Accuracy of Documents, Representations and Warranties - The copies of
all documents furnished to Purchaser, or any of its representatives
by or on behalf of any Vendor or the Company, or any one or more of
them, or their representatives, are true, complete and correct in all
material respects. No representation or warranty of any Vendor
contained in this Agreement or the other agreements to be executed by
any Vendor pursuant hereto, and no statement contained in the
exhibits, the schedules or the other documents delivered by or on
behalf of any Vendor, or his or its representatives pursuant to or in
connection with this Agreement or the other agreements to be executed
by any Vendor pursuant hereto or any of the transactions contemplated
hereby or thereby, contains any untrue statement of a material fact,
or omits to state any material fact required to be stated herein or
therein in order to make the statements contained herein or therein
not misleading.
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER - To induce the Vendors to
enter into this Agreement and to perform Vendors' obligations hereunder, and
with full knowledge that Vendors will rely thereon, the Purchaser hereby
represents and warrants to the Vendors the truth, accuracy and completeness of
the following, except as disclosed in Schedule "W" hereto:
(a) Organization and Valid Existence - The Purchaser is a corporation duly
incorporated and organized, validly existing and in good standing
under the laws of the State of Delaware and has all necessary
corporate power, authority and capacity to execute and deliver the
Agreement and the other agreements referenced herein to which the
Purchaser is a party, to consummate the transactions contemplated
hereby and thereby, and to fully and timely perform its obligations
hereunder and thereunder. The execution and delivery by Purchaser of
this Agreement and the other agreements referenced herein to which
Purchaser is a party, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized and
approved by Purchaser's board of directors, and no other corporate
proceedings on the part of Purchaser are required to authorize the
execution and delivery of this Agreement, the other agreements
referenced herein to which Purchaser is a party, or the consummation
of the transactions contemplated hereby or thereby.
(b) Enforceability - This Agreement and the other agreements referenced
herein to which Purchaser is a party have been duly executed and
delivered by Purchaser and constitute legal, valid and binding
obligations of Purchaser, enforceable against Purchaser in accordance
with their respective terms.
(c) Absence of Conflicting Agreements - The Purchaser is not a party to,
bound or affected by or subject to any indenture, mortgage, lease,
agreement, instrument,
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charter or by-law provision, statute, regulation, order, judgment,
decree or law which would be violated, contravened or breached by, or
under which any default would occur, as a result of the execution and
delivery of this Agreement or the consummation of any of the
transactions provided for herein.
(d) Litigation - There is no suit, action, litigation, arbitration
proceeding or governmental proceeding, including appeals and
applications for review, in progress, pending or, to the best of the
knowledge, information and belief (after due inquiry) of the senior
officers of the Purchaser, threatened against or involving the
Purchaser or any judgment, decree, injunction, rule or order of any
court, governmental department, commission, agency, instrumentality or
arbitrator which, in any such case, would materially and adversely
affect the ability of the Purchaser to enter into this Agreement or to
consummate the transactions contemplated hereby.
(e) Third Party Approvals - Except for approvals required by the Federal
Trade Commission or other agencies for purposes of complying with the
Xxxx Act and those required by the Arizona Department of Health
Services, and except as disclosed in Schedule "W", there are no
approvals, consents or waivers required to be obtained or applications
required to be filed from or with governmental authorities or from any
other Person whatsoever, including pursuant to any leases or contracts
containing prohibitions or pre-consent provisions pertinent to this
Agreement, in order to permit the transactions contemplated herein.
(f) Accuracy of Documents, Representations and Warranties - The copies of
all documents furnished to the Vendors and their representatives by
or on behalf of Purchaser and its representatives are true, complete
and correct in all material respects. No representation or warranty of
Purchaser contained in this Agreement or the other agreements
referenced herein to which Purchaser is a party, and no statement
contained in the exhibits, the schedules or the other documents
delivered by or on behalf of Purchaser or its representatives
pursuant to or in connection with this Agreement or any of the
transactions contemplated hereby contains any untrue statement of a
material fact, or omits to state any material fact required to be
stated herein or therein in order to make the statements contained
herein or therein not misleading.
3.3 NO BROKER - Each of the Parties represents and warrants to the others that
all negotiations relating to this Agreement and the transactions contemplated
hereby have been carried on between them directly and without the intervention
of any other party in such manner as to give rise to any valid claims against
any of the Parties for a brokerage commission, finder's fee or other like
payment.
3.4 NON-WAIVER - No investigations made by or on behalf of a Party at any time
shall have the effect of waiving, diminishing the scope of or otherwise
affecting any representation or warranty made by the other Party herein or
pursuant hereto.
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3.5 NATURE OF REPRESENTATIONS, WARRANTIES AND COVENANTS - All statements
contained in any certificate or other instrument delivered by or on behalf of a
Party pursuant to or in connection with the transactions contemplated by this
Agreement shall be deemed to be made by such Party hereunder.
ARTICLE 4
CONDITIONS PRECEDENT TO THE PERFORMANCE
BY THE PURCHASER AND THE VENDORS OF
THEIR OBLIGATIONS UNDER THIS AGREEMENT
4.1 PURCHASER'S CONDITIONS - The obligation of the Purchaser to complete the
purchase of the Purchased Shares hereunder shall be subject to the satisfaction
of, or compliance with, in all material respects, at or before the Closing Time,
each of the following conditions precedent (each of which is hereby acknowledged
to be inserted for the exclusive benefit of the Purchaser and may be waived by
it in whole or in part):
(a) Truth and Accuracy of Representations of Vendors at the Closing Time -
All of the representations and warranties of Vendors made in or
pursuant to this Agreement shall be true and correct in all material
respects as at the Closing Time and with the same effect as if made at
and as of the Closing Time (except as such representations and
warranties may be affected by the occurrence of events or transactions
expressly contemplated and permitted hereby), and the Purchaser shall
have received a certificate from each of the Vendors confirming the
truth and correctness in all material respects of their
representations and warranties contained herein;
(b) Performance of Obligations - The Vendors shall have performed or
complied with all of their obligations, covenants and agreements
hereunder;
(c) Receipt of Closing Documentation - All documentation relating to the
due authorization and completion of the sale and purchase hereunder of
the Purchased Shares and all actions and proceedings taken on or prior
to the Closing in connection with the performance by the Vendors of
their obligations under this Agreement shall be reasonably
satisfactory to the Purchaser and the Purchaser shall have received
copies of all such documentation or other evidence as it may
reasonably request in order to establish the consummation of the
transactions contemplated hereby and the taking of all corporate
proceedings in connection therewith in compliance with these
conditions, in form (as to certification and otherwise) and substance
reasonably satisfactory to the Purchaser;
(d) Consents, Authorizations and Registrations - All consents, approvals,
orders and authorizations of any Persons or governmental authorities
(or registrations, declarations, filings or recordings with any such
authorities) required in connection with the completion of any of the
transactions contemplated by this Agreement (including, without
limitation, any notifications, approvals or consents required by the
Arizona Department of Health Services) shall have been obtained
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on or before the Closing Time; the Vendors shall have obtained and
delivered by Closing to the Purchaser written consents, in form and
substance satisfactory to the Purchaser, to the transaction
contemplated herein which are required (if any) pursuant to the real
property leases referred to in Schedule "J" (and any customer
contracts where approval or consent is required), including, without
limiting the generality of the foregoing, such acknowledgements and
confirmations of good standing from the lessors in respect of the real
property leases referred to in Schedule "J" hereto as may be
reasonably requested by the Purchaser;
(e) Directors and Officers of Company - Subject to the terms of the
Employment Agreement, there shall have been delivered to the Purchaser
on or before the Closing Date the resignations of such persons as the
Purchaser shall direct who are presently directors and/or officers of
the Company.
(f) No Damage - No substantial damage by fire or other hazard to the
assets of the Company shall have occurred from the date hereof to the
Closing Date which is not fully and adequately insured against;
(g) Litigation - On the Closing Date, there shall be no litigation,
governmental investigation or proceeding pending or threatened for the
purpose of enjoining or preventing the consummation of any of the
transactions contemplated by this Agreement or otherwise claiming that
such consummation is improper;
(h) Xxxx-Xxxxx-Xxxxxx Filing - The applicable waiting period under the
Xxxx Act shall have expired or terminated.
(i) Management - Rural/Metro's Board of Directors shall have confirmed the
appointment of Xxxxxx to the Board of Directors of Rural/Metro and to
a senior executive position with Rural/Metro.
(j) Environmental Reports - Purchaser shall have received reports, in form
and content satisfactory to Purchaser, in the exercise of its sole
discretion, from independent environmental consultants acceptable to
Purchaser in its sole discretion, and from legal counsel to Purchaser,
concerning the real properties owned or leased by the Company, which
reports shall be based, in part, on the results of environmental site
assessments which Purchaser may cause to be completed for and on
behalf of Purchaser prior to the Closing Date on all such real or
leased properties, which reports, if any, shall be prepared at
Purchaser's expense.
(k) Due Diligence - Purchaser shall, in the exercise of its sole
discretion, be entirely satisfied with the business, operations,
financial condition, assets and liabilities of the Company.
(l) Schedules - Purchaser shall have received from Vendors the Schedules
referred to herein and all amendments and modifications thereto, and
Purchaser shall, in the exercise of its sole discretion, be entirely
satisfied with the nature and extent
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of the disclosures made therein and the representations and warranties
of Vendors as modified by the disclosures contained in the Schedules.
(m) Simultaneous Closings - On the Closing Date, the share purchases and
other transactions contemplated in each of the Agreements of Purchase
and Sale executed of even date herewith for the sale of Southwest
Ambulance of Casa Grande, Inc., Medical Emergency Devices and Services
(MEDS), Inc., and SW General, Inc. shall be consummated simultaneously
with the transactions contemplated herein.
4.2 VENDORS' CONDITIONS - The obligations of the Vendors to complete the sale of
the Purchased Shares hereunder shall be subject to the satisfaction of or
compliance with, at or before the Closing Time, each of the following conditions
precedent (each of which is hereby acknowledged to be inserted for the exclusive
benefit of the Vendors and may be waived by them in whole or in part):
(a) Truth and Accuracy of Representations of Purchaser at Closing Time -
All of the representations and warranties of the Purchaser made in or
pursuant to this Agreement shall be true and correct in all material
respects as at the Closing Time and with the same effect as if made at
and as of the Closing Time and the Vendors shall have received a
certificate from a duly authorized senior officer of the Purchaser
confirming the truth and correctness in all material respects of the
representations and warranties of the Purchaser contained herein;
(b) Performance of Obligations - The Purchaser shall have performed or
complied with all of its obligations, covenants and agreements
hereunder;
(c) Receipt of Closing Documentation - All documentation relating to the
due authorization and completion of the sale and purchase hereunder of
the Purchased Shares and all actions and proceedings taken on or prior
to the Closing in connection with the performance by the Purchaser of
its obligations under this Agreement shall be reasonably satisfactory
to the Vendors and the Vendors shall have received copies of all such
documentation or other evidence as they may reasonably request in
order to establish the consummation of the transactions contemplated
hereby and the taking of all corporate proceedings in connection
therewith in compliance with these conditions, in form (as to
certification and otherwise) and substance satisfactory to the
Vendors;
(d) Release of Vendors' Guaranties - Purchaser shall have secured the
release of Vendors from liability for any personal guarantees issued
by Vendors as the shareholders of the Company with respect to any
liability of the Company for borrowed money, and shall have provided
to Vendors written evidence thereof, or, in the alternative, Purchaser
shall deliver an agreement of assumption and indemnification, in form
and content mutually satisfactory to Purchaser and Vendors, pursuant
to which Purchaser will indemnify Vendors for any such personal
guaranty;
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(e) Litigation - On the Closing Date, there shall be no litigation,
governmental investigation or proceeding pending or threatened for the
purpose of enjoining or preventing the consummation of any of the
transactions contemplated by this Agreement or otherwise claiming that
such consummation is improper;
(f) Xxxx-Xxxxx-Xxxxxx Filing - The applicable waiting period under the
Xxxx Act shall have expired or terminated;
(g) Management - The Board of Directors of Rural/Metro shall have
confirmed the appointment of Xxxxxx to the Board of Directors of
Rural/Metro and to a senior executive position with Rural/Metro and
approved certain existing management contracts of the Company;
(h) Simultaneous Closings - On the Closing Date, the share purchases and
other transactions contemplated in each of the Agreements of Purchase
and Sale executed of even date herewith for the sale of Southwest
Ambulance of Casa Grande, Inc., Medical Emergency Devices and Services
("MEDS"), Inc., and SW General, Inc. shall be consummated
simultaneously with the transactions contemplated herein.
ARTICLE 5
OTHER COVENANTS OF THE PARTIES
5.1 CONDUCT OF BUSINESS PRIOR TO CLOSING - During the period from the date of
this Agreement to the Closing Time, the Vendors will have the following
obligations and will cause the Company to do the following:
(a) Access to Records - Vendors shall, and shall cause the Company and its
employees, officers, agents, representatives and accountants to, fully
cooperate with Purchaser to allow the officers, employees, attorneys,
consultants and accountants of Purchaser free and unrestricted access
(but only through Xxxxx Xxxxxx, as representative of the Vendors and
without interference to the ordinary conduct of the Business) during
normal business hours to all of the properties, books, contracts,
documents and records of the Company and furnish to Purchaser such
information as Purchaser may at any time and from time to time
reasonably request until the Closing Time.
(b) Business in Ordinary Course - Vendors shall cause the Company to carry
on its business and affairs as heretofore carried on, and neither the
Company nor any Vendor will order, purchase or lease any products,
inventory, equipment, leased personalty, or other items, or dispose of
any of its assets or leased property, or issue any quotations, or
prepay any of its material obligations, incur any liabilities or
obligations, hire or discharge any employee or officer or, without
limitation by specific enumeration of the foregoing, enter into any
other transaction, except in the usual and ordinary course of its
business in accordance with the past practices of the Company and
except as provided herein. Without limiting the
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generality of the foregoing, Vendors shall not permit the Company,
without the prior written consent of Purchaser, to:
(i) create or suffer to exist any liens or encumbrances with
respect to any of the assets or properties of the Company
which shall not be discharged at or prior to the Closing
Date, other than liens for nondelinquent taxes;
(ii) incur any indebtedness for borrowed money other than in the
usual and ordinary course of its business;
(iii) sell or transfer any material assets or properties
(including, without limitation, sales and transfers to
Affiliates, other than Affiliates of the Company the stock
of which is to be acquired by Purchaser or an Affiliate of
Purchaser on the Closing Date);
(iv) acquire or enter into any agreement or understanding (oral
or written) to acquire the stock or assets of any other
person, firm, corporation or other entity;
(v) make any material change in the conduct or nature of any
aspect of its business, whether in the ordinary course of
business or not, or whether or not the change has or will
have a material adverse affect on the business activities,
financial condition, or business prospects of the Company;
(vi) waive any material rights;
(vii) pay any Affiliate, other than Affiliates of the Company the
stock of which is to be acquired by Purchaser or an
Affiliate of Purchaser on the Closing Date, or be charged by
any Affiliate, other than Affiliates of the Company the
stock of which is to be acquired by Purchaser or an
Affiliate of Purchaser on the Closing Date, for goods sold
or services rendered or be charged by any Affiliate, other
than Affiliates of the Company the stock of which is to be
acquired by Purchaser or an Affiliate of Purchaser on the
Closing Date, for corporate overhead expenses, management
fees, legal or accounting fees, capital charges, or similar
charges or expenses, except for any payments made by the
Company pursuant to leases with NRM Properties, Inc. or
Chaparral Properties, Inc.;
(viii) incur or commit to incur any individual capital expenditures
except in the ordinary course of its business;
(ix) amend employment contracts or the terms and conditions of
employment of any officer, director or employee earning
total annual compensation in excess of $70,000, other than
normal merit and cost of living
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increases to employees in accordance with the general
prevailing practices of the Company existing prior to the
date of this Agreement;
(x) pay or incur any management or consulting fees;
(xi) hire any employee who shall have an annual salary in excess
of $70,000;
(xii) enter into any transaction other than in the usual and
ordinary course of business; or
(xiii) issue or sell any shares of the stock or other securities of
the Company, including any of the Purchased Shares, or make
or become obligated to make any dividend or other
distribution or payment to Vendors or any former shareholder
of the Company in respect of any stock or other security of
the Company at any time held by Vendor or such other former
shareholders.
(c) Employees - Vendors shall use their reasonable efforts to retain, and
shall cause the Company to each retain its business intact, preserve
all its goodwill and customer and employee relations, including
keeping available the services of each of its present employees,
representatives and agents.
(d) Continue Insurance - Vendors shall cause the Company to continue in
force all existing policies of insurance presently maintained by the
Company.
(e) Perform Obligations - Vendors shall cause the Company to comply in all
material respects with all laws affecting the operation of the
Business and to pay all required taxes and tax installments.
(f) Confidentiality - Until the Closing, and at all times thereafter as
provided in Section 6.1(d) hereof, Vendors will maintain as
confidential their discussions with Purchaser, and the terms and
conditions of this Agreement, and the other agreements to be executed
in connection herewith, and except as reasonably necessary to fulfill
Vendors' obligations hereunder or as required by law, will not make
any trade press or other announcement or disclosure in relation to
such discussions whether before or after Closing without the prior
written consent of Purchaser.
(g) Exclusivity - Until the earlier of the Closing or the termination of
this Agreement in accordance with the terms hereof, Vendors will
negotiate the sale of the stock, assets and properties of the Company
only with Purchaser, and no Vendor will permit the Company to,
directly or indirectly, enter into any discussion with, or disclose
any information in relation to the Purchased Shares or the assets of
the Company to any other person, firm, or other entity, other than
Purchaser.
(h) Equitable Relief - Each Vendor acknowledges and agrees that the
covenants contained in each of paragraphs (f) and (g) of this Section
5.1 are a material inducement for Purchaser to execute and deliver
this Agreement and to con-
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summate the transactions contemplated hereby. Accordingly, Vendor
acknowledges and agrees that the restrictions contained in each of
paragraphs (f) and (g) of this Section 5.1 are reasonable and
necessary for the protection of the business of Purchaser and its
subsidiaries, the Company, and the investment of Purchaser in the
Company, and that a breach of any such restriction could not
adequately be compensated by damages in an action at law. In the event
of a breach or threatened breach by any Vendor of any of the
provisions of any of paragraphs (f) or (g) of this Section 5.1,
Purchaser shall be entitled to obtain, without the necessity of
posting bond therefor, an injunction (preliminary or permanent, or a
temporary restraining order) restraining such Vendor from the activity
or threatened activity constituting, or which would constitute, a
breach, as well as damages and an equitable accounting of all
earnings, profits and other benefits arising from a violation, which
right shall be cumulative and in addition to any other rights or
remedies to which Purchaser may be entitled.
(i) Severability - Each and every provision set forth in each of
paragraphs (f) and (g) of this Section 5.1 is independent and
severable from the others, and no provision shall be rendered
unenforceable by virtue of the fact that, for any reason, any other or
others of them may be unenforceable in whole or in part. The parties
hereto agree that if any provision of paragraphs (f) or (g) of this
Section 5.1 shall be declared by a court of competent jurisdiction to
be unenforceable for any reason whatsoever, the court may
appropriately limit or modify such provision, and such provision shall
be given effect to the maximum extent permitted by applicable law.
(j) Consents - Vendors shall use their reasonable efforts and make every
good faith attempt to obtain any and all consents and estoppel letters
reasonably requested by Purchaser to or in connection with the
assignment of, or alternate arrangements satisfactory to Purchaser
with respect to, any contract, lease, license, permit, agreement, or
other instrument, which is to be an asset of the Company, or which may
be necessary, appropriate, or required in order to permit the conduct
of the Business and operations of the Company after the Closing to be
in all respects the same as the conduct of the Business and operations
of the Company, prior to the Closing.
5.2 OBLIGATIONS OF PURCHASER - During the period from the date of this Agreement
to the Closing Time, or such other period as provided by this Agreement, the
Purchaser will have the following obligations:
(a) Confidentiality - Purchaser will maintain as confidential its
discussions with Vendors, and the terms and conditions of this
Agreement, and the other agreements to be executed in connection
herewith, and except as reasonably necessary to fulfill its
obligations hereunder or as required by law, will not make any trade
press or other announcement or disclosure in relation to such
discussions without the prior written consent of Vendors. In the event
of the termination of this Agreement without consummation of the
transactions contemplated hereby, Purchaser will keep confidential any
information (unless readily available from
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public or published information sources) obtained from the Company or
the Vendors. If this Agreement is so terminated, promptly after such
termination, all documents, work papers and other written material
obtained from Vendors' representative in connection with this
Agreement and not theretofore made public (including all copies
thereof), shall be returned to the Person that provided such material.
Purchaser shall provide Vendors with a list of representatives of
Purchaser involved in the due diligence, and said representatives
shall refrain from discussing the transaction and its due diligence
activities with any other employee or representative of Purchaser not
disclosed on the list.
(b) Nonsolicitation - In the event of termination of this Agreement
without consummation of the transactions contemplated hereby,
Purchaser agrees that for a period of three (3) years following such
termination, Purchaser will not, directly or indirectly, solicit or
cause others to solicit any person who, on the date hereof, is an
employee of the Company and whose annual compensation from the Company
exceeds $25,000, for employment or as an independent contractor with
any person or entity, unless first authorized in writing by Vendors,
which authorization may be withheld in the sole and absolute
discretion of Vendors.
(c) Trade Secrets and Other Information - In the event of termination of
this Agreement without consummation of the transactions contemplated
hereby, Purchaser agrees that after the Closing Purchaser will not
communicate or divulge to, or use for the benefit of, any person, firm
or corporation any of the trade secrets, methods, formulas, business
and/or marketing plans, processes or any other proprietary or
confidential information with respect to the Company and its business,
financial condition, business operations or methods, or business
prospects. The preceding sentence shall not apply to information which
(i) is, was or becomes generally known or available to the public or
the industry other than as a result of a disclosure by Purchaser in
violation of this Agreement, or (ii) is required to be disclosed by
law. Purchaser will advise Vendors, in writing, of any request,
including a subpoena or similar legal inquiry, to disclose any such
confidential information, such that Vendors can seek appropriate legal
relief.
(d) Equitable Relief - Purchasers acknowledge that the covenants contained
in each of paragraphs (a), (b), and (c) of this Section 5.2 are a
material inducement for Vendors to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. Accordingly,
Purchaser acknowledges and agrees that the restrictions contained in
each of paragraphs (a), (b), and (c) of this Section 5.2 are
reasonable and necessary for the protection of the business of the
Company, and Vendors' investment in the Company, and that a breach of
any such restriction could not adequately be compensated by damages in
an action at law. In the event of a breach or threatened breach by
Purchaser of any of the provisions of any of paragraphs (a), (b), or
(c) of this Section 5.2, Vendors shall be entitled to obtain, without
the necessity of posting bond therefor, an injunction (preliminary or
permanent, or a temporary restraining order) restraining Purchaser
from the activity or threatened activity constituting, or which would
constitute, a breach of this Agreement, as well as damages and an
equitable
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accounting of all earnings, profits and other benefits arising from
such a violation, which right shall be cumulative and in addition to
any other rights or remedies to which Vendors may be entitled.
(e) Severability - Each and every provision set forth in each of
paragraphs (a), (b), and (c) this Section 5.2 is independent and
severable from the others, and no provision shall be rendered
unenforceable by virtue of the fact that, for any reason, any other or
others of them may be unenforceable in whole or in part. The parties
hereto agree that if any provision of any of paragraphs (a), (b), or
(c) of this Section 5.2 shall be declared by a court of competent
jurisdiction to be unenforceable for any reason whatsoever, the court
may appropriately limit or modify such provision, and such provision
shall be given effect to the maximum extent permitted by applicable
law.
(f) Consents - Purchaser shall use its reasonable efforts and make every
good faith attempt to obtain any and all consents and estoppel letters
which may be necessary, appropriate, or required in order to permit
consummation of the transactions contemplated herein.
5.3 JOINT OBLIGATIONS OF VENDORS AND PURCHASER - During the period from the date
of this Agreement to the Closing Time, the following shall apply with equal
force to Vendors and Purchaser:
(a) Notice - Each Party shall promptly give the other parties written
notice of the existence or occurrence of any condition that would make
any representation or warranty of the notifying Party untrue or that
might reasonably be expected to prevent the consummation of the
transactions herein contemplated.
(b) Performance - No Party shall intentionally perform or omit to perform
any act which, if performed or omitted, would prevent or excuse the
performance of this Agreement by any Party hereto or that would result
in any representation or warranty contained herein of that Party being
untrue in any material respect as of the date hereof and as if
originally made on and as of the Closing Date.
(c) Xxxx-Xxxxx-Xxxxxx Filings - Each party shall take whatever steps are
necessary to make any filings required under the Xxxx Act not later
than ten days after the date of execution of this Agreement.
ARTICLE 6
POST CLOSING OBLIGATIONS
6.1 OBLIGATIONS OF VENDORS - Following the Closing, Vendors shall each be
subject to the following obligations:
(a) Covenant Not to Compete - In consideration of the execution and
delivery of this Agreement by Purchaser, and in consideration of the
Purchase Price, and as
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additional consideration therefor, each of the Vendors unconditionally
agrees that during the Restricted Period (as defined below) no Vendor
will, directly or indirectly (including, without limitation, as a
partner, shareholder, director, officer or employee of, or lender or
consultant to, any other person or entity), for himself, herself or
itself, or on behalf of, or in conjunction with, any other Person or
governmental entity, in any manner whatsoever, or in any other
capacity within, into or from the Restricted Territory (as defined
below) engage or cause others to engage in the Business, or any aspect
thereof, unless first authorized in writing by Purchaser, which
authorization may be withheld in the sole and absolute discretion of
Purchaser. For purposes of this Agreement, the term "Restricted
Period" shall mean the period ending three (3) years from the Closing
Date. For purposes of this Agreement, the term "Restricted Territory"
shall mean the State of Arizona. If any Vendor violates his, her or
its obligations under this Section 6.1(a), then the Restricted Period
shall be extended by the period of time equal to that period beginning
when the activities constituting such violation commenced and ending
when the activities constituting such violation terminated.
Notwithstanding the foregoing, the obligations of the Vendors under
this Section 6.1(a) shall terminate if Xxxxxx is terminated by
Purchaser without Cause as defined and described in the Employment
Agreement. The Purchaser agrees that no breach of this covenant not to
compete will occur as a result of Xxxxxx'x formation of and activities
with respect to any 501(c)(3) foundation, his continued association
with the International Association of Firefighters, his continued
ownership and operation of an ambulance service company in Pima County
under the name Kords Southwest, or his continued service as President
of the Arizona Ambulance Association.
(b) Nonsolicitation - In consideration of the execution and delivery of
this Agreement by Purchaser, and in consideration of the Purchase
Price, each of the Vendors agrees that for a period of three (3) years
following the Closing Date no Vendor will directly or indirectly
solicit or cause others to solicit, (i) in respect of the Business,
any Person or other entity that is, or was within the twelve (12)
month period immediately prior to the Closing, a customer or supplier
of the Company, or (ii) any person who, on the date hereof, is an
employee of the Company and whose annual compensation from the Company
exceeds $25,000, for employment or as an independent contractor with
any Person or entity, unless first authorized in writing by Purchaser,
which authorization may be withheld in the sole and absolute
discretion of Purchaser. If any Vendor violates his, her or its
obligations under this Section 6.1(b), then the time periods hereunder
shall be extended by the period of time equal to that period beginning
when the activities constituting such violation commenced and ending
when the activities constituting such violation terminated.
Notwithstanding the foregoing, the obligations of the Vendors under
this Section 6.1(b) shall terminate if Xxxxxx is terminated by
Purchaser without Cause as defined and described in the Employment
Agreement.
(c) Trade Secrets and Other Information - In consideration of the
execution and delivery of this Agreement by Purchaser, and in
consideration of the Purchase Price, each of the Vendors agrees that
after the Closing no Vendor will
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communicate or divulge to, or use for the benefit of, any Person other
than Purchaser or the Company, or its or their agents and
representatives, any of the trade secrets, methods, formulas, business
and/or marketing plans, processes or any other proprietary or
confidential information with respect to the Company and its business,
financial condition, business operations or methods, or business
prospects. The preceding sentence shall not apply to information which
(i) is, was or becomes generally known or available to the public or
the industry other than as a result of a disclosure by a Vendor in
violation of this Agreement, or (ii) is required to be disclosed by
law. Vendors will advise Purchaser, in writing, of any request,
including a subpoena or similar legal inquiry, to disclose any such
confidential information, such that Purchaser can seek appropriate
legal relief.
(d) Confidentiality - At all times after the Closing, Vendors will
maintain as confidential the discussions between Vendors and
Purchaser, and the terms and conditions of this Agreement, and the
other agreements to be executed in connection herewith, and except as
required by law, will not make any trade press or other announcement
or disclosure in relation to such discussions whether before or after
Closing without the prior written consent of Purchaser.
(e) Equitable Relief - Vendors acknowledge that the covenants contained in
each of paragraphs (a), (b), (c), and (d) of this Section 6.1 are a
material inducement for Purchaser to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
Accordingly, Vendors acknowledge and agree that the restrictions
contained in each of paragraphs (a), (b), (c), and (d) of this Section
6.1 (including, without limitation, the Restricted Period and the
Restricted Territory) are reasonable and necessary for the protection
of the business of the Company, and Purchaser's investment in the
Company, and that a breach of any such restriction could not
adequately be compensated by damages in an action at law. In the event
of a breach or threatened breach by any Vendors of any of the
provisions of any of paragraphs (a), (b), (c), or (d) of this Section
6.1, Purchaser shall be entitled to obtain, without the necessity of
posting bond therefor, an injunction (preliminary or permanent, or a
temporary restraining order) restraining that Vendor from the activity
or threatened activity constituting, or which would constitute, a
breach of this Agreement, as well as damages and an equitable
accounting of all earnings, profits and other benefits arising from
such a violation, which right shall be cumulative and in addition to
any other rights or remedies to which Purchaser may be entitled.
(f) Severability - Each and every provision set forth in each of
paragraphs (a), (b), (c), and (d) this Section 6.1 is independent and
severable from the others, and no provision shall be rendered
unenforceable by virtue of the fact that, for any reason, any other or
others of them may be unenforceable in whole or in part. The parties
hereto agree that if any provision of any of paragraphs (a), (b), (c)
or (d) of this Section 6.1 shall be declared by a court of competent
jurisdiction to be unenforceable for any reason whatsoever, the court
may appropriately limit or modify such provision, and such provision
shall be given effect to the maximum extent permitted by applicable
law.
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(g) Consents - Vendors shall use their reasonable efforts and make every
good faith attempt to obtain any and all consent and estoppel letters,
if any, reasonably requested by Purchaser to or in connection with the
assignment of, or alternate arrangements satisfactory to Purchaser
with respect to, any contract, lease, license, permit, agreement, or
other instrument, which is to be an asset of the Company, or which may
be necessary, appropriate, or required in order to permit the conduct
of the business and operations of the Company after the Closing to be
in all respects the same as the conduct of the business and operations
of the Company prior to the Closing.
6.2 OBLIGATIONS OF PURCHASER - Following the Closing, Purchaser shall be subject
to the following obligations:
(a) Tax Amendments - The Purchaser agrees that the Company shall not, and
the Purchaser shall not cause the Company to, amend the Company's tax
returns for 1995 or earlier without the prior consent of Xxxxxx. In
the event the Company and/or the Purchaser amends such tax returns
without Xxxxxx'x consent, the Purchaser agrees to indemnify the
Vendors for any liabilities that any of them may occur as a result of
any such amendment; provided, however, that Vendors agree jointly and
severally to indemnify, defend and hold harmless the Purchaser and the
Company for any liabilities, costs, penalties, fines and interest that
either of them may incur as the result of any refusal to grant the
consent referred to above.
(b) Non Interference With Leases - Purchaser acknowledges the existence of
certain real property leases between the Company and NRM Properties,
Inc. and Chaparral Properties, Inc. (collectively the "Landlords"),
and agrees not to interfere with such leases and to cause the Company
to abide by such leases. In the event that the Company and/or the
Purchaser reaches this Agreement, the Purchaser shall pay to the
appropriate Landlord the full amount of all unpaid monetary
obligations of the Company through the lease period in effect at the
time of the Closing and agrees that such remedy is in addition to all
other remedies that the Landlords or the Vendors may have at law or in
equity.
6.3 OBLIGATIONS OF VENDORS AND PURCHASER - Following the Closing, Vendors and
Purchaser shall execute such further documents, and perform such further acts,
as may be necessary to transfer and convey the Purchased Shares to Purchaser, on
the terms herein contained, and to otherwise comply with the terms of this
Agreement and consummate the transactions herein provided.
6.4 SECTION 338(h)(10) ELECTION
(a) Making the Section 338(h)(10) Election; Form 8023-A - Vendors shall
timely join with the Purchaser in making an election pursuant to
Section 338(h)(10) of the Code (and any corresponding election under
state law) (the "Section 338(h)(10) Election"). After Closing,
Purchaser will promptly prepare IRS Form 8023-A ("Form 8023-A") and
any related schedules required to be included with such
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form and Vendors shall provide the Purchaser with all necessary
information to timely prepare such schedules (the "Election
Schedules"). Purchaser shall submit the Form 8023-A and the Election
Schedules to the Vendors for their review. The Vendors shall
immediately execute the Form 8023-A and submit seven original signed
duplicates thereof to Purchaser who shall be entitled to file the Form
8023-A and the Election Schedules with the IRS. Vendors shall also
timely comply with their responsibilities as required by the Code to
effect the 338(h)(10) Election.
(b) Section 338(h)(10) Election Purchase Price Adjustment. The Purchaser
hereby covenants and agrees to defend, indemnify and hold harmless the
Vendors for, from and against any tax liability, including related
penalties, interest and any additional fees and costs (including,
without limitation, attorneys' and accountants' fees and costs) that
accrue to the Vendors as a direct result of the Section 338(h)(10)
Election (the "Tax Liability"). The Tax Liability resulting from the
Section 338(h)(10) Election shall be paid in cash to the Vendors
immediately prior to the time such Tax Liability, if any, is required
to be paid to the applicable taxing authority.
ARTICLE 7
INDEMNIFICATION
7.1 INDEMNIFICATION BY VENDORS
(a) General - Subject to Section 7.4 hereof, Vendors jointly and severally
covenant and agree to defend, indemnify and hold Purchaser and the
Company, its and their officers, directors, shareholders and
subsidiaries, harmless for, from and against any and all damages,
losses, liabilities (absolute and contingent), fines, penalties, costs
and expenses (including, without limitation, reasonable counsel fees
and costs and expenses incurred in the investigation, defense or
settlement of any claim covered by this indemnity) with respect to or
arising out of any demand, claim, inquiry, investigation, proceeding,
action or cause of action that Purchaser and/or the Company, its and
their officers, directors, shareholders and subsidiaries, may suffer
or incur by reason of: (a) the inaccuracy of any of the
representations or warranties of Vendors contained in this Agreement,
or any of the agreements, certificates, documents, exhibits or
schedules delivered in connection with this Agreement; (b) the failure
to comply with, or the breach or default by any Vendor of any of the
covenants, warranties or agreements made by that Vendor contained in
this Agreement, or any of the agreements, certificates, documents,
exhibits or schedules delivered in connection with this Agreement; (c)
any pending or threatened litigation, claims, investigations,
inquiries, regulatory audits or assessments, or other similar
proceedings against Purchaser and/or the Company and/or its or their
directors, officers, shareholders, employees, agents or
representatives, as well as any future litigation, claims,
investigations, inquiries, regulatory audits or assessments, or other
similar proceedings against the Purchaser and/or the Company and/or
its or their
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directors, officers, shareholders, employees, agents or
representatives that arise from a state of facts existing prior to the
Closing, and which are not fully covered and reimbursed by insurance;
or (d) any liability or obligation of the Company not reflected,
provided for, or adequately reserved against on the balance sheets
included in the Financial Statements. Purchaser and/or the Company
shall be entitled to offset against any amount owed by Purchaser
and/or the Company to Vendors, (or any of them) any amount owed to
Purchaser and/or the Company by Vendor, (or any of them) or any of
their Affiliates.
(b) Environmental - Subject to Section 7.4 hereof, Vendors jointly and
severally covenant and agree to defend, indemnify and hold Purchaser
and/or the Company, and their officers, directors and shareholders
harmless for, from and against any and all damages, losses,
liabilities (absolute and contingent), fines, penalties, costs and
expenses (including, without limitation, reasonable counsel fees and
costs and expenses incurred in the investigation, defense or
settlement of any claim covered by this indemnity and costs associated
with any environmental assessments and/or remediation expenses) by
reason of any inaccuracy of any of the representations or warranties
set forth in Section 3.1(cc) hereof, or with respect to or arising out
of any demand, claim, inquiry, investigation, proceeding, action, or
cause of action brought by any governmental agency or instrumentality
or any Person other than Purchaser, which Purchaser and/or the
Company, or any of their officers, directors or shareholders may
suffer or incur by reason of:
(i) any generation, transportation, storage, treatment or
disposal of industrial, toxic or hazardous substances or
solid or hazardous wastes occurring on or prior to the
Closing Date including, without limitation, any waste or
other disposal activities or discharges that occurred at a
facility on which any portion of the Company's (or its
predecessors') business was conducted, any waste or other
disposal activities or discharges that occurred off of any
such facility with regard to wastes and other substances
generated on such facility, and any waste or other disposal
activities or discharges that occurred on real estate at any
time whether or not the Company (or its predecessors) owned
or leased such real estate at the time such waste or other
disposal activities or discharges were engaged in, where
the Company or Persons at the direction of the Company
performed such waste or other disposal activities or
discharges;
(ii) any spills, discharges, leaks, emissions, injections,
escapes, dumping, or any releases as defined now or in the
future under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, P.L. 96-510, as
amended or reauthorized from time to time, or any other
similar federal, state or local laws, statutes, rules or
regulations, occurring on or prior to the Closing Date,
including, but not limited to, both those releases or
incidents involving environmental contamination that
required notification or reporting to appropriate federal,
state or local officials or agencies, or clean-up or
remedial activities and those
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releases or incidents which occurred prior to the effective
date of any requirements imposing such notification or
reporting obligations or clean-up or remedial activities,
but which would have been subject to such obligations if
they had occurred subsequent to the effective date of such
requirements;
(iii) any discharges to surface waters or groundwaters occurring
on or prior to the Closing Date;
(iv) any air emissions occurring on or prior to the Closing Date;
(v) the exposure of and resulting consequences to any persons,
including, but not limited to, employees of the Company (or
any of its predecessors), to any mineral, chemical or
industrial product, raw material intermediate, by-product or
waste, or substance created, generated, processed, handled
or originating at a facility at which the Company (or any of
its predecessors) conducted business on or prior to the
Closing Date or otherwise used by the Company (or any of its
predecessors) in the conduct of its business;
(vi) any violations by the Company (or any of its predecessors)
occurring on or prior to the Closing Date of federal, state
or local (A) environmental laws, or (B) occupational or
employee health and safety laws;
(vii) any and all actions, failures to act and negligence in
monitoring, maintaining and upkeep of on-site storage,
treatment and disposal facilities on or prior to the Closing
Date;
(viii) any misuse, removal, failure to properly maintain and/or
monitor storage tanks on or prior to the Closing Date; or
(ix) any violations, fees, obligations or failures to comply with
any and all environmental permit requirements on or prior to
the Closing Date.
7.2 INDEMNIFICATION BY PURCHASER
(a) General - Subject to Section 7.4 hereof, Purchaser covenants and
agrees to defend, indemnify and hold each Vendor harmless for, from
and against any and all damages, losses, liabilities (absolute and
contingent), fines, penalties, costs and expenses (including, without
limitation, reasonable counsel fees and costs and expenses incurred in
the investigation, defense or settlement of any claim covered by this
indemnity) with respect to or arising out of any demand, claim,
inquiry, investigation, proceeding, action and/or cause of action that
any Vendor may suffer or incur by reason of: (a) the inaccuracy of any
of the representations or warranties of Purchaser contained in this
Agreement, or any of the agreements, certificates, documents, exhibits
or schedules delivered by Purchaser in connection with this Agreement;
and (b) the failure to comply with, the breach
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or the default by Purchaser of any of the covenants, warranties or
agreements made by Purchaser in this Agreement, or any of the
agreements, certificates, documents, exhibits or schedules delivered
by Purchaser in connection with this Agreement.
(b) Environmental - Subject to Section 7.4 hereof, Purchaser covenants and
agrees to defend, indemnify and hold each Vendor harmless for, from
and against any and all damages, losses, liabilities (absolute and
contingent), fines, penalties, costs and expenses (including, without
limitation, reasonable counsel fees and costs and expenses incurred in
the investigation, defense or settlement of any claim covered by this
indemnity) with respect to or arising out of any demand, claim,
inquiry, investigation, proceeding, action or cause of action brought
by any governmental agency or instrumentality or any Person other than
Vendors which any Vendor may suffer or incur by reason of:
(i) any generation, transportation, storage, treatment or
disposal of industrial, toxic or hazardous substances or
solid or hazardous wastes occurring after the Closing Date
including, without limitation, any waste or other disposal
activities or discharges that occur after the Closing Date
at a facility on which any portion of the business of the
Company is conducted, any waste or other disposal activities
or discharges that occur after the Closing Date off of any
such facility with regard to wastes and other substances
generated after the Closing Date on such facility, and any
waste or other disposal activities or discharges that occur
after the Closing Date on real estate owned or leased by the
Company, at any time after the Closing Date whether or not
the Company owns or leases such real estate at the time such
waste or other disposal activities or discharges are
engaged in, and whether or not the Company performs such
waste or other disposal activities or discharges;
(ii) any spills, discharges, leaks, emissions, injections,
escapes, dumping, or any releases as defined now or in the
future under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, P.L. 96-510, as
amended or reauthorized from time to time, or any other
similar federal, state or local laws, statutes, rules or
regulations occurring after the Closing Date, including, but
not limited to, both those releases or incidents involving
environmental contamination which require notification or
reporting to appropriate federal, state or local officials
or agencies, or clean-up or remedial activities and those
releases or incidents which occurred prior to the effective
date of any requirements imposing such notification or
reporting obligations or clean-up or remedial activities,
but which would have been subject to such obligations if
they had occurred subsequent to the effective date of such
requirements;
(iii) any discharges to surface waters or groundwaters occurring
after the Closing Date;
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(iv) any air emissions occurring after the Closing Date;
(v) the exposure after the Closing Date of and resulting
consequences to any persons, including, but not limited to,
employees of Purchaser to any mineral, chemical or
industrial product, raw material intermediate, by-product
or waste, or substance created, generated, processed,
handled or originated after the Closing Date at a facility
at which Purchaser, or the Company conducts business after
the Closing Date or otherwise used after the Closing Date by
Purchaser or the Company in the conduct of its business or
contained in or constituting a part of merchandise which is
sold by Purchaser or the Company after the Closing Date;
(vi) any violations by Purchaser or the Company occurring after
the Closing Date of federal, state or local (A)
Environmental Laws, or (B) occupational or employee health
and safety laws;
(vii) any and all actions, failures to act and negligence in
monitoring, maintaining and upkeep of on-site storage,
treatment and disposal facilities after the Closing Date;
(viii) any misuse, removal, failure to properly maintain and/or
monitor storage tanks after the Closing Date; and
(ix) any violations, fees, obligations or failure to comply with
any and all environmental permit requirements after Closing
Date.
7.3 NOTICE AND RIGHT TO DEFEND THIRD-PARTY CLAIMS - Promptly upon receipt of
notice of any claim, demand or assessment or the commencement of any suit,
action or proceeding with respect to which indemnity may be sought pursuant to
this Agreement, the party seeking to be indemnified or held harmless (the
"Indemnitee") shall notify in writing, if possible, within sufficient time to
respond to such claim or answer or otherwise plead in such action (but in any
event within thirty (30) days), the party from whom indemnification is sought
(the "Indemnitor"). In case any claim, demand or assessment shall be asserted,
or suit, action or proceeding commenced against the Indemnitee, the Indemnitor
shall be entitled, at the Indemnitor's expense, to participate therein, and, to
the extent that it may wish, to assume the defense, conduct or settlement
thereof, at its own expense, with counsel satisfactory to the Indemnitee, whose
consent to the selection of counsel shall not be unreasonably withheld or
delayed, provided that the Indemnitor confirms to the Indemnitee that it is a
claim to which Indemnitee's rights of indemnification apply. The Indemnitor
shall have the right to settle or compromise monetary claims; however, as to any
other claim, the Indemnitor shall first obtain the prior written consent from
the Indemnitee, which consent shall be exercised in the sole discretion of the
Indemnitee. After notice from the Indemnitor to the Indemnitee of Indemnitor's
intent so to assume the defense, conduct, settlement or compromise of such
action, the Indemnitor shall not be liable to the Indemnitee for any legal or
other expenses (including, without limitation, settlement costs) subsequently
incurred by the Indemnitee in connection with the defense, conduct, settlement
or compromise of such action while the Indemnitor is diligently defending,
conducting, settling or compromising such action. The Indemnitor shall be
afforded at least thirty (30) days, at its sole
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cost and expense, to resist, defend and compromise any claim for which
indemnification is sought. The Indemnitor shall keep the Indemnitee promptly
apprised of the status of the suit, action or proceeding and shall make
Indemnitor's counsel available to the Indemnitee, at the Indemnitor's expense,
upon the request of the Indemnitee. The Indemnitee shall reasonably cooperate
with the Indemnitor in connection with any such claim and shall make personnel,
books and records and other information relevant to the claim available to the
Indemnitor during normal business hours to the extent that such personnel, books
and records and other information are in the possession and/or control of the
Indemnitee. If the Indemnitor decides not to participate, the Indemnitee shall
be entitled, at the Indemnitor's expense, to defend, conduct, settle and/or
compromise such matter with counsel satisfactory to the Indemnitor, whose
consent to the selection of counsel shall not be unreasonably withheld or
delayed.
7.4 SURVIVAL OF OBLIGATIONS - The liability of Vendors and Purchaser for
indemnification pursuant to this Article 7 shall (i) survive until terminated by
the applicable statute of limitations as to matters relating to: (a) ownership
and title to any of the assets of the Company; (b) ownership and title to the
capital stock of the Company; (c) competency to execute and deliver documents to
effect the transactions contemplated thereby and hereby, and the legal, binding
and enforceable nature thereof and hereof; (d) the environment; and (e) taxes;
(ii) expire three (3) years from the Closing Date with respect to claims not
made prior thereto relating to any price or reimbursement adjustment under any
contract or arrangement with the United States Government, any state government,
or any insurer or healthcare provider organization involving any liability,
claim and/or fraud with respect to xxxxxxxx or reimbursement under either
Medicare or Medicaid for services provided by the Company prior to the Closing
Date; and (iii) expire two (2) years from the Closing Date with respect to
claims not made prior thereto relating to all other matters not referenced in
this Section 7.4. This Section in no way limits any claims that an Indemnitee
may have against an Indemnitor for fraud or for the breach of any direct
covenant made by the Indemnitor to the Indemnitee contained in this Agreement or
the other agreements delivered in connection therewith.
ARTICLE 8
TERMINATION
8.1 RIGHT TO TERMINATE - Notwithstanding anything to the contrary contained
herein, this Agreement and the transactions contemplated hereby may be
terminated at any time prior to the Closing: (a) by Purchaser if the conditions
precedent set forth in Section 4.1 are not satisfied or waived in writing by
Purchaser; or (b) by Vendors if the conditions precedent set forth in Section
4.2 are not satisfied or waived in writing by Vendors. In addition, this
Agreement shall terminate if the Closing has not occurred by April 15, 1997,
unless extended by written agreement of the Parties hereto.
35
36
ARTICLE 9
GENERAL
9.1 DISCLOSURE SCHEDULES - The Schedules referred to in Section 3.1 and Section
3.2 of this Agreement reflect information supplied to Purchaser and Vendors,
respectively, in the course of their investigation of the Company and Purchaser,
respectively. Vendors may supplement or amend any Schedule from time to time
prior to or at the Closing, by notice in accordance with the terms of this
Agreement, including by delivering one or more supplements or amendments to
correct any matter which would constitute a breach of any representation or
warranty contained herein. All references to any Schedule hereto which is
supplemented or amended as provided in this Section 9.1 shall, for all purposes,
whether or not the transactions contemplated hereby occur, be deemed to be a
reference to such Schedule as so supplemented or amended.
9.2 PUBLIC NOTICES - All public notices to third parties and all other publicity
concerning the transactions contemplated by this Agreement shall be jointly
planned and coordinated by the Vendors and the Purchaser and no Party shall act
unilaterally in this regard without the prior approval of the Vendors and the
Purchaser or the other of them.
9.3 EXPENSES - The expenses incurred by each party hereto in connection with
this Agreement and the transactions provided herein shall be borne by such
party. Notwithstanding the foregoing, all professional fees incurred by the
Vendors in connection with the transactions contemplated by this Agreement shall
be borne by the Vendors and all expenses incurred in connection with the
preparation of any environmental reports after the date of execution of this
Agreement with respect to the real property owned or leased by the Company shall
be borne by the Purchaser (which reports shall remain the property of the
Purchaser following the Closing).
9.4 TIME - Time shall be of the essence hereof.
9.5 NOTICES - Any notice, direction or other document required or permitted to
be given hereunder or for the purposes hereof (hereinafter in this Section 9.5
called a "notice") to any Party shall be in writing and shall be sufficiently
given if delivered personally, or if sent by prepaid registered mail or if
transmitted by telex, facsimile or other form of recorded communication tested
prior to transmission to such Party:
(a) in the case of a notice to the Vendors to:
Xxxxxx X. Xxxxxx, Xx.
000 Xxxx Xxxxxx Xxxx
Xxxx, Xxxxxxx 00000
36
37
with a copy to the Vendors' Counsel at
Xxxxxxxxx & Xxxxxxx, P.A.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
with a facsimile number of (000) 000-0000.
(b) in the case of a notice to the Purchaser at
0000 X. Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
with a facsimile number of (000) 000-0000
with a copy to Purchaser's Counsel at
X'Xxxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxxxxxxxx & Xxxxxxxx, P.A.
One E. Camelback Road, Suite 1100
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
with a facsimile number of (000) 000-0000
or at such other address as the Party to whom such writing is to be given shall
have last notified the Party giving the same in the manner provided in this
section. Any notice delivered in person to the Party to whom it is addressed as
hereinbefore provided shall be deemed to have been given and received on the day
it is so delivered at such address, provided that if such day is not a Business
Day then the notice shall be deemed to have been given and received on the first
Business Day next following such day. Any notice mailed as aforesaid shall be
deemed to have been given and received on the seventh Business Day following the
date of its mailing. Any notice transmitted by telex, facsimile or other form of
recorded communication shall be deemed given and received on the Business Day of
its transmission.
9.6 ASSIGNMENT - Neither this Agreement nor any rights or obligations hereunder
shall be assignable by any Party without the prior written consent of the other
Party hereto; provided, however, that the Vendors shall be entitled to assign
their rights to receive payments hereunder (or under any related documents) to
any person without the consent of the Purchaser. Subject thereto, this Agreement
shall enure to the benefit of and be binding upon the Parties and their
respective heirs, executors, administrators and successors (including any
successor by reason of amalgamation of the Purchaser) and permitted assigns.
9.7 FURTHER ASSURANCES - The Parties hereto shall with reasonable diligence do
all such things and provide all such reasonable assurances as may be required to
consummate the transactions contemplated hereby, and each Party shall provide
such further documents or instruments required by any other Party as may be
reasonably necessary or desirable to effect the purpose of this Agreement and
carry out its provisions, whether before or after the Closing.
37
38
9.8 SEVERABILITY - If any covenant or provision of this Agreement (other than
the provisions pertaining to payments to be made to the Vendors) is prohibited
in whole or in part in any jurisdiction, such covenant or provision shall, as to
such jurisdiction, be ineffective to the extent of such prohibition without
invalidating the remaining covenants and provisions hereof and shall, as to such
jurisdiction, be deemed to be severed from this Agreement to the extent of such
prohibition.
9.9 COUNTERPARTS - This Agreement may be executed by the Parties in separate
counterparts (and by facsimile transmission) each of which when so executed and
transmitted or delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
9.10 MEDIATION AND ARBITRATION - Any dispute, controversy or claim (including
without limitation tort claims, requests for provisional remedies or other
interim relief, and issues as to the arbitrability of any matter) arising out of
or relating to this Agreement, or breach thereof, (a) shall be settled by
negotiation at a meeting between the Vendors and the chief executive officer of
the Purchaser held in Phoenix, Arizona within 5 days after notice given by any
party hereto to the other parties hereto, and (b) if within that 5 day period
settlement cannot be achieved through negotiation, it shall be settled (i)
first, by the parties trying in good faith to settle the dispute by mediation
under the Commercial Mediation Rules of the American Arbitration Association
("AAA") (such mediation session to be held in Phoenix, Arizona and to commence
with 10 days of the appointment of the mediator by the AAA), and (ii) if the
controversy, claim or dispute cannot be settled by mediation, then by
arbitration administered by the AAA under its Commercial Arbitration Rules and
in accordance with its expedited hearing procedures (such arbitration to be held
in Phoenix, Arizona before a single arbitrator by the AAA), and judgment on the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
9.11 ATTORNEYS' FEES - If any action is necessary to enforce the terms of this
Agreement, the prevailing party shall be entitled to recover from the other
party all costs, expenses and fees incurred by the prevailing party (including
reasonable attorneys' fees, costs and disbursements) in addition to other relief
to which the prevailing party may be entitled.
38
39
IN WITNESS WHEREOF, the Parties have set their hand this 25th day of
February, 1997 through our trust in God and our service to others. . . . for
life.
Rural/Metro Corporation, a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
---------------------------------------------
Xxxxx X. Xxxxx, President
/s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------------------------
Xxxxxx X. Xxxxxx, Xx., individually
/s/ Xxxxxxx XxXxxxxx
--------------------------------------------------
Xxxxxxx XxXxxxxx, individually
/s/ Xxxxx Xxxxxx
--------------------------------------------------
Xxxxx Xxxxxx, individually
/s/ Xxxx Xxxxxx
--------------------------------------------------
Xxxx Xxxxxx, individually
39
40
CONSENT OF SPOUSE
The undersigned spouse of Xxxxxx X. Xxxxxx, Xx., who is a party to the
above Agreement of Purchase and Sale, pertaining to the sale of the stock of
Southwest General Services, Inc., an Arizona corporation (the "Agreement"),
hereby declares, contemporaneously with the execution of the Agreement, that she
has read the Agreement in its entirety, and being fully convinced of the wisdom
and equity of the terms of the Agreement, and in consideration of the premises
and of the provisions of the Agreement, hereby expresses her consent to the
execution and consummation of the Agreement by Xxxxxx X. Xxxxxx, Xx.
The undersigned further agrees that in the event of the death of Xxxxxx X.
Xxxxxx, Xx., the dissolution of their marriage, or any occurrence contemplated
by the Agreement that gives rise to any liability or obligation of Xxxxxx X.
Xxxxxx, Xx., the provisions of the Agreement shall be binding upon her to the
extent of any community property she may now have or hereafter acquire, and any
and all separate property that she may hereafter possess which arises (directly
or indirectly) from any consideration given to Xxxxxx X. Xxxxxx, Xx. pursuant to
the Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonably
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this 24th day of February, 1997.
/s/ Virginia (Xxxxx) X. Xxxxxx
--------------------------------------------------
Virginia (Xxxxx) X. Xxxxxx
State of Arizona )
County of Maricopa)
The foregoing instrument was acknowledged before me this 24th day of February,
1997 by Virginia (Xxxxx) X. Xxxxxx.
[SEAL] /s/ Xxxxxx Xxxxx
-----------------------------
Notary Public
41
CONSENT OF SPOUSE
The undersigned spouse of Xxxxxxx XxXxxxxx, who is a party to the above
Agreement of Purchase and Sale, pertaining to the sale of the stock of Southwest
General Services, Inc., an Arizona corporation (the "Agreement"), hereby
declares, contemporaneously with the execution of the Agreement, that she has
read the Agreement in its entirety, and being fully convinced of the wisdom and
equity of the terms of the Agreement, and in consideration of the premises and
of the provisions of the Agreement, hereby expresses her consent to the
execution and consummation of the Agreement by Xxxxxxx XxXxxxxx.
The undersigned further agrees that in the event of the death of Xxxxxxx
XxXxxxxx, the dissolution of their marriage, or any occurrence contemplated by
the Agreement that gives rise to any liability or obligation of Xxxxxxx
XxXxxxxx, the provisions of the Agreement shall be binding upon her to the
extent of any community property she may now have or hereafter acquire, and any
and all separate property that she may hereafter possess which arises (directly
or indirectly) from any consideration given to Xxxxxxx XxXxxxxx pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonably
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this 25th day of February, 1997.
/s/ Xxxxx XxXxxxxx
-------------------------
Xxxxx XxXxxxxx
State of Arizona )
)
County of Maricopa)
On this 25 day of February, 1997, before me, the undersigned Notary Public,
personally appeared Xxxxx XxXxxxxx who acknowledged to me that she signed the
foregoing instrument for the purposes and contents therein contained.
My Commission expires:
6-1-97 /s/ Xxxxxxx X. Xxxxxxx
--------------------- -----------------------------
Notary Public
42
CONSENT OF SPOUSE
The undersigned spouse of Xxxxx Xxxxxx, who is a party to the above
Agreement of Purchase and Sale, pertaining to the sale of the stock of Southwest
General Services, Inc., an Arizona corporation (the "Agreement"), hereby
declares, contemporaneously with the execution of the Agreement, that she has
read the Agreement in its entirety, and being fully convinced of the wisdom and
equity of the terms of the Agreement, and in consideration of the premises and
of the provisions of the Agreement, hereby expresses her consent to the
execution and consummation of the Agreement by Xxxxx Xxxxxx.
The undersigned further agrees that in the event of the death of Xxxxx
Xxxxxx, the dissolution of their marriage, or any occurrence contemplated by the
Agreement that gives rise to any liability or obligation of Xxxxx Xxxxxx, the
provisions of the Agreement shall be binding upon her to the extent of any
community property she may now have or hereafter acquire, and any and all
separate property that she may hereafter possess which arises (directly or
indirectly) from any consideration given to Xxxxx Xxxxxx pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonably
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this 25th day of February, 1997.
/s/ Xxxxxxxx Xxxx Xxxxxx
-----------------------------------
Xxxxxxxx Xxxx Xxxxxx
State of Arizona )
County of Maricopa)
The foregoing was acknowledged before me this 25th day of February,
1997 by Xxxxxxxx Xxxx Xxxxxx.
[SEAL] /s/ Xxxxxx Xxxxx
-----------------------------
Notary Public
43
CONSENT OF SPOUSE
The undersigned spouse of Xxxx Xxxxxx, who is a party to the above
Agreement of Purchase and Sale, pertaining to the sale of the stock of Southwest
General Services, Inc., an Arizona corporation (the "Agreement"), hereby
declares, contemporaneously with the execution of the Agreement, that she has
read the Agreement in its entirety, and being fully convinced of the wisdom and
equity of the terms of the Agreement, and in consideration of the premises and
of the provisions of the Agreement, hereby expresses her consent to the
execution and consummation of the Agreement by Xxxx Xxxxxx.
The undersigned further agrees that in the event of the death of Xxxx
Xxxxxx, the dissolution of their marriage, or any occurrence contemplated by the
Agreement that gives rise to any liability or obligation of Xxxx Xxxxxx, the
provisions of the Agreement shall be binding upon her to the extent of any
community property she may now have or hereafter acquire, and any and all
separate property that she may hereafter possess which arises (directly or
indirectly) from any consideration given to Xxxx Xxxxxx pursuant to the
Agreement or any agreement executed in connection thereto.
The undersigned further agrees that she will, at any and all times, make,
execute and deliver such instruments and documents as may be reasonably
necessary to carry out the provisions of the Agreement, provided that no such
documents require the incurring of any liabilities in excess of that already
provided in the Agreement.
Dated this 25th day of February, 1997.
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
State of Arizona )
County of Maricopa)
The foregoing instrument was acknowledged before me this 25th day of
February, 1997.
[SEAL] /s/ Xxxxxx Xxxxx
-----------------------------
Notary Public
44
APPENDIX J
(i) All real property leased by the Company from NRM Properties, Inc.
or Chaparral Properties, Inc. (the "Leased Properties") is set forth in Schedule
"J" and is zoned as set forth on Schedule "J", pursuant to the ordinances of the
applicable cities, towns, villages or townships identified on such Schedule "J",
and is not located in an area that has been identified by the Secretary of
Housing and Urban Development as an area of special flood hazard. The uses to
which such real property are presently put do not violate or conflict with the
applicable provisions of such zoning ordinances, or other zoning laws of such
cities, towns, villages or townships or any other governmental body.
(ii) The Company does not sublease any of its Leased Properties. The
Company does not lease any of its owned real property.
(iii) Neither the Company nor any Vendor, nor any one or more of them,
has retained or engaged any real estate broker, commission agent or other person
who is or may be entitled to payment of a commission or finder's fee or other
compensation in connection with any of the Leased Properties.
(iv) As to the Leased Properties, the present use and operation of the
real property is authorized by and in compliance with all applicable building,
fire, health, labor and safety laws, ordinances, rules and regulations
applicable to the real property, including, without limitation, OSHA, and the
Americans with Disabilities Act, and there is no litigation, action, proceeding
or any present plan or study by any governmental authority or any private person
or entity which in any way would affect the present use and operation of the
real property. There are in existence all licenses, permits and approvals that
are required for the use and operation of the Leased Properties, and no Vendor
has any reason to believe that any of the same are in jeopardy of being revoked
or not being reissued upon expiration.
(v) No Vendor has any knowledge of any fact or condition existing
which would result or could result in the termination or reduction of the
current access from the Leased Properties to existing public roads and highways,
or of any reduction in sewer or other utility services presently serving the
Leased Properties. Leased Properties have direct access to dedicated roads and
highways and all utility services to the Leased Properties are furnished through
dedicated or perpetual easements.
(vi) As to the Leased Properties, no Vendor has received notice from
any insurance company of any defects or inadequacies in such real property or
any part thereof which would materially and adversely affect the insurability of
the real property or the premiums for the insurance thereof.
(vii) As to the Leased Properties, no Vendor has failed to disclose
any material conditions of disrepair or other adverse conditions or defects with
respect to such
Appendix J-1
45
real property or any portion thereof of which that Vendor has knowledge or
which, with the exercise of reasonable diligence, that Vendor should have known.
(viii) As to the Leased Properties, no Vendor has any knowledge of any
planned public improvement which might result in a special assessment levied
against such real property. If any Vendor becomes aware of any of the foregoing
(whether arising before or after the date hereof) after the date hereof, but
prior to Closing, that Vendor shall give prompt written notice thereof to
Purchaser prior to Closing.
Appendix J-2
46
AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
WHEREAS, RURAL/METRO CORPORATION, a Delaware corporation ("Purchaser"), XXXXXX
X. XXXXXX, XX., an individual ("X. Xxxxxx"), XXXXX XXXXXX ("Xxxxxx"), XXXXXXX
XXXXXXXX ("XxXxxxxx"), and XXXX XXXXXX ("X. Xxxxxx") (X. Xxxxxx, XxXxxxxx,
Xxxxxx and X. Xxxxxx may be hereinafter referred to collectively as the
"Vendors"), signed that certain Agreement of Purchase and Sale, made as of
February 25, 1997 (the "Agreement"), with respect to the purchase of all the
issued and outstanding shares of the stock of SOUTHWEST GENERAL SERVICES, INC.,
an Arizona corporation (the "Company").
WHEREAS, Purchaser and Vendors desire to extend the Closing Date (as defined in
the Agreement), and amend the Agreement as set forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual agreements and
covenants herein contained (the adequacy of which consideration as to each of
the parties hereto is hereby mutually admitted), the parties hereto hereby amend
the Agreement as follows:
1. Section 1.1(e) of the Agreement is hereby modified to read as
follows:
"Closing Date" means the earlier of May 30, 1997 or
five (5) business days following the satisfaction or
waiver of all conditions precedent to the
transactions contemplated by this Agreement, or such
other date as the Parties may mutually agree in
writing;"
2. The last sentence of Section 8.1 of the Agreement is hereby amended
to read as follows:
"In addition, this Agreement shall terminate if the
Closing has not occurred by May 30, 1997, unless
extended by written agreement of the Parties hereto."
3. This Amendment shall constitute a written extension as contemplated
by the original Section 8.1 of the Agreement.
4. The terms and conditions set forth in the letter agreement, dated
April 15, 1997, by and among Purchaser, Xxx Xxxxxx and Xxxxx Xxxxxx, Trustee for
the Southwest
47
ESOP, a copy of which letter agreement is attached hereto as Exhibit A, shall
constitute amendments and supplemental provisions to the Agreement, as
applicable.
5. This Amendment may be executed by the parties hereto in separate
counterparts (and by facsimile transmission) each of which when so executed and
transmitted or delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have set their hand as of the
15th day of April, 1997, through our trust in God and our service to others ...
for life.
RURAL/METRO CORPORATION, a
Delaware corporation
By: /s/ Xxxxx X. Xxxxx
____________________________________
Xxxxx X. Xxxxx, President
/s/ Xxxxxx X. Xxxxxx, Xx.
_______________________________________
Xxxxxx X. Xxxxxx, Xx., individually
/s/ Xxxxxxx XxXxxxxx
_______________________________________
Xxxxxxx XxXxxxxx
/s/ Xxxxx Xxxxxx
_______________________________________
Xxxxx Xxxxxx
/s/ Xxxx Xxxxxx
_______________________________________
Xxxx Xxxxxx
2
48
I HEREBY CONSENT TO THE TERMS
OF THIS AMENDMENT as of the 15th day
of April, 1997:
_______________________________
Virginia (Xxxxx) X. Xxxxxx
_______________________________
Xxxxx XxXxxxxx
_______________________________
Xxxxxxxx Xxxx Xxxxxx
_______________________________
Xxxxxx Xxxxxx
3
49
EXHIBIT A
April 15, 1997
Xxxxx X. Xxxxx, President
Rural/Metro Corporation
0000 X. Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Dear Xxx:
In response to our phone conversation in which we discussed the
extension of the Agreement of Purchase and Sale between Rural/Metro and SW
General, Inc., Southwest Ambulance of Casa Grande, Inc., Medical Emergency
Devices and Services (MEDS), Inc. and Southwest General Services, Inc., I am
asking for your acknowledgment of the following clarifications:
1. SW General, Inc. shall, effective May 1, 1997, enter into a lease for the
3.5 acres of land adjacent to our facility at 617 W. Main. This land has been
used by Southwest since last year without any rental fees being paid. The need
for a new lease was disclosed during the due diligence process and will be
added to the Book of Schedules under Schedule "J".
2. The original "Normalization Work Sheet" which was presented to you in
January of this year was omitted from the Schedules. The Normalization Work
Sheet will be added to the Book of Schedules under Section "H".
Additionally, Rural Metro, as presented in the Normalization Worksheet, has
acknowledged the annual draws/management fees paid to Xxx Xxxxxx associated
with the ownership of the "S" corporations and SW General, Inc. These
draws/management fees shall continue in practice until the closing of the
Agreements at which time they shall cease and the start up of the Xxxxxx
employment contract shall take effect.
3. Prior to 12/31/96 the equity of Southwest Ambulance of Casa Grande, Inc.
and MEDS were drawn out by Xxx Xxxxxx and loaned back to the corporations as
represented by the "Notes Payable" in Schedules "A" & "C", on the respective
balance sheets of the corporations. Subsequent to 1/1/97, Xxx Xxxxxx has drawn
the
50
equity out of Southwest General Services, Inc. The equity and all state and
federal taxes have been met by these transactions.
4. From the time period from January 1, 1997 through the date of closing all
profits of the identified "S" corporations are passed on to SW General, Inc.
through a management fee resulting in a zero equity position. This action is
reflected in the financial statements of February and March, 1997 as presented
to Rural/Metro through the due diligence process. (See Schedule "A")
5. As identified in Section 5.1(b)(ii) of the Agreement, Southwest shall, prior
to close and during the normal course of business, expense such items as
management fees, annual bonus', required capital expenditures (except the two
new ambulances previously identified by SW) and miscellaneous expenses, which
shall be acceptable to Rural/Metro so long as the $2,045,000 of this section is
maintained per the Agreement.
6. Two new ambulances which were previously disclosed must be funded at this
time. This expenditure, as invoiced, shall not be utilized in the debt formulas
identified in the warranties with the original Purchase and Sale Agreement.
7. Rural/Metro acknowledges that Xxxxxx may exceed the $2,045,000 as identified
in section 5 above, for the purpose of purchasing the ownership interests of
Xxxxxxx Xxxxxxxxxx in MOROKO, Inc. Utilization of these funds in excess of the
$2,045,000 will be deducted from the MEDS purchase transaction.
8. Rural/Metro re-clarifies the understanding as to Xxx Xxxxxx'x position,
responsibility and reporting structure as follows:
- Xxx Xxxxxx will serve as President and CEO of Southwest companies with
direct management authority over the Arizona ambulance operations of
Rural/Metro except where the fire department personnel directly
operates the ambulance unit. In this capacity he shall report directly
to Xxx Xxxxxxx or to Xxxxxx Xxxxxxx and not to any Regional President.
- Xxx Xxxxxx agrees to serve as a member of the Board of Directors of
Rural/Metro Corporation.
- Xxx Xxxxxx will serve in a senior executive position as a
vice-president of Rural/Metro (reference: Employment Agreement and
Letter of Intent) reporting to the office of the CEO under the
direction of Xxxxxx Xxxxxxx.
51
(See also the Letter of Intent dated January 31, 1997 and the Agreements
of Purchase and Sale dated February 25, 1997 as referenced herein and
exhibited in Schedule "C" of the Agreement.)
As agreed, the closing date will be extended to Friday, May 30, 1997.
Additionally, before implementation, I would like to initially meet with
Xxxxxx, Xxx and yourself to review the initial and mid-term efficiencies
created by the acquisition and merging of the entities.
This letter of agreement and extension, as signed by the parties below,
shall be incorporated into the Agreement.
ACKNOWLEDGED AND ACCEPTED AS OF THE DATE FIRST WRITTEN ABOVE.
RURAL/METRO CORPORATION
/s/ Xxx Xxxxxx /s/ Xxxxx Xxxxx
------------------------------ By: --------------------------
Xxx Xxxxxx Xxxxx Xxxxx
Its: President
/s/ Xxxxx Xxxxxx
------------------------------
Xxxxx Xxxxxx
Trustee for the Southwest ESOP
cc: Xxxxxx Xxxxxxx
52
SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
WHEREAS, RURAL/METRO CORPORATION, a Delaware corporation ("Purchaser"), XXXXXX
X. XXXXXX, XX., an individual ("X. Xxxxxx"), XXXXX XXXXXX ("Xxxxxx"), XXXXXXX
XXXXXXXX ("XxXxxxxx"), and XXXX XXXXXX ("X. Xxxxxx") (X. Xxxxxx, Landon,
McGroder, and X. Xxxxxx may be hereinafter referred to collectively as the
"Vendors"), signed that certain Agreement of Purchase and Sale, made as of
February 25, 1997, and that certain Amendment to Agreement of Purchase and Sale,
made as of April 15, 1997 (together, the "Agreement"), with respect to the
purchase of all the issued and outstanding shares of the stock of SOUTHWEST
GENERAL SERVICES, INC., an Arizona corporation (the "Company"). All defined
terms used herein but not otherwise defined shall have the meaning set forth in
the Agreement.
WHEREAS, Purchaser and Vendors desire to extend the Closing Date (as defined in
the Agreement), and amend the Agreement as set forth in this Second Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual agreements and
covenants herein contained (the adequacy of which consideration as to each of
the parties hereto is hereby mutually admitted), the parties hereto hereby amend
the Agreement as follows:
1. Section 1.1(e) of the Agreement is hereby modified to read as
follows:
"Closing Date" means the earlier of July 31, 1997 or
five (5) business days following the satisfaction or
waiver of all conditions precedent to the
transactions contemplated by this Agreement, or such
other date as the Parties may mutually agree in
writing;"
2. The last sentence of Section 8.1 of the Agreement is hereby amended
to read as follows:
"In addition, this Agreement shall terminate if the
Closing has not occurred by July 31, 1997, unless
extended by written agreement of the Parties hereto."
3. This Second Amendment shall constitute a written extension as
contemplated by the original Section 8.1 of the Agreement.
4. The terms and conditions set forth in the letter agreement, dated
May 30, 1997, by and among Purchaser, Xxx Xxxxxx and Xxxxx Xxxxxx, Trustee for
the Southwest
53
ESOP, a copy of which letter agreement is attached hereto as Exhibit A (the
"Letter Agreement"), shall constitute amendments and supplemental provisions to
the Agreement, as applicable, subject to the following: Paragraph 5 of the
Letter Agreement shall be interpreted as a $277,000 indemnification threshold
with respect to claims other than Third Party Claims, in the same manner as the
$50,000 indemnification threshold for Third Party Claims in Section 7.5 of the
Agreement of Purchase and Sale regarding SW General, Inc., and the $277,000
indemnification threshold shall be an aggregate threshold against the liability
of the Vendors for indemnification arising from any of the Agreements of
Purchase and Sale pertaining to the Southwest Companies.
5. The Vendors represent and warrant that the Company is and shall be
at the Closing a valid S-Corporation as defined in Section 1361 of the Code.
6. This Second Amendment may be executed by the parties hereto in
separate counterparts (and by facsimile transmission) each of which when so
executed and transmitted or delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have set their hand as of the
30th day of May, 1997, through our trust in God and our service to others ...
for life.
WE HEREBY CONSENT TO THE RURAL/METRO CORPORATION, a
TERMS OF THIS SECOND Delaware corporation
AMENDMENT as of the 30th day
of May, 1997:
By: /s/ Xxxxx X. Xxxxx
____________________________________
Xxxxx X. Xxxxx, President
/s/ Xxxxxx X. Xxxxxx, Xx.
_______________________________ _______________________________________
Virginia (Xxxxx) X. Xxxxxx Xxxxxx X. Xxxxxx, Xx., individually
/s/ Xxxxxxx XxXxxxxx
_______________________________ _______________________________________
Xxxxx XxXxxxxx Xxxxxxx XxXxxxxx
/s/ Xxxxx Xxxxxx
_______________________________ _______________________________________
Xxxxxxxx Xxxx Xxxxxx Xxxxx Xxxxxx
/s/ Xxxx Xxxxxx
_______________________________ _______________________________________
Xxxxxx Xxxxxx Xxxx Xxxxxx
2
54
THIRD AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
A. WHEREAS, RURAL/METRO CORPORATION, a Delaware corporation
("Purchaser"), XXXXXX X. XXXXXX, XX., an individual ("X. Xxxxxx"), XXXXX XXXXXX
("Xxxxxx"), XXXXXXX XXXXXXXX ("XxXxxxxx"), and XXXX XXXXXX ("X. Xxxxxx") (X.
Xxxxxx, Landon, McGroder, and X. Xxxxxx may be hereinafter referred to
collectively as the "Vendors"), signed that certain Agreement of Purchase and
Sale, made as of February 25, 1997, that certain Amendment to Agreement of
Purchase and Sale, made as of April 15, 1997, and that certain Second Amendment
to Agreement of Purchase and Sale, made as of May 30, 1997, (the "Agreement"),
with respect to the purchase of all the issued and outstanding shares of the
stock of SOUTHWEST GENERAL SERVICES, INC., an Arizona corporation (the
"Company"). All defined terms used herein but not otherwise defined shall have
the meaning set forth in the Agreement;
B. WHEREAS, the Agreement and exhibits thereto incorrectly state that
X. Xxxxxx is the registered and beneficial owner of 769 of the Purchased Shares;
C. WHEREAS, X. Xxxxxx is the registered and beneficial owner of 469 of
the Purchased Shares and Xxxxxxx Xxxxxxxx ("Xxxxxxxx") is the registered and
beneficial owner of 300 of the Purchased Shares; and
D. WHEREAS, Cantelme and the parties to the Agreement as originally
executed and delivered desire to amend the Agreement as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants herein contained (the adequacy of which consideration
as to each of the parties hereto is hereby mutually admitted), the parties
hereto hereby amend the Agreement as follows:
1. For all purposes under and in connection with the Agreement
(including any all amendments thereto, exhibits or schedules thereto and any
documents, agreements and instruments delivered at the Closing of the
Agreement), (a) the terms "Vendor" and "Vendors" shall be deemed to include
Cantelme, in addition to the Vendors named in the Agreement as originally
executed and delivered and (b) the ownership of Purchased Shares and the
allocation of the aggregate Purchase Price therefor, shall be changed to reflect
the fact that the 769 Purchased Shares incorrectly indicated as being held by X.
Xxxxxx are held by X. Xxxxxx as to 469 of such shares and by Cantelme as to 300
of such shares.
2. The parties hereto agree that Cantelme shall be deemed a "Vendor"
for all purposes under or in connection with the Agreement, as if named as a
Vendor in the Agreement when and as originally executed by the original parties
thereto, and as if it had executed and delivered the Agreement when and as
originally executed by the original parties thereto. Cantelme and the parties to
the Agreement as originally executed and
55
delivered agree that Cantelme and the other Vendors shall be jointly and
severally liable for the obligations of the Vendors as and to the extent set
forth in the Agreement.
3. Cantelme and each of the Vendors named in the Agreement as
originally executed and delivered represent and warrant to Purchaser that (a)
the recitals set forth in paragraphs B and C above are true and correct as of
the date hereof, and (b) that Cantelme has full power and authority to execute
and deliver this Fourth Amendment.
4. This Third Amendment may be executed by the parties hereto in
separate counterparts (and by facsimile transmission) each of which when so
executed and transmitted or delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.
2
56
IN WITNESS WHEREOF, the parties hereto have set their hand as of the
30th day of June, 1997, through our trust in God and our service to others ...
for life.
WE HEREBY CONSENT TO THE
TERMS OF THIS THIRD
AMENDMENT as of the 30th day
of June, 1997:
RURAL/METRO CORPORATION, a
Delaware corporation
By:_________________________________
Xxxx Xxxxxxx, Director of
Finance
/s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxxx X. Xxxxxx, Xx.
/s/ Xxxxxxx XxXxxxxx
------------------------------------
Xxxxxxx XxXxxxxx
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
/s/ Xxxx Xxxxxx
------------------------------------
Xxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxxx
------------------------------------
Xxxxxxx Xxxxxxxx
3
