Exhibit 10.2
AGREEMENT FOR SALE AND PURCHASE OF ASSETS
This Agreement (which term includes the Schedules referred to herein and
attached hereto, which are an integral part hereof), is made and entered into
this 22nd day of April, 1998, by and between Strategic Distribution, Inc., a
Delaware corporation ("Strategic"); Strategic's wholly owned subsidiary American
Technical Services Group, Inc., a Delaware corporation which has its principal
place of business in Norcross, Georgia ("ATSG"); ATSG's wholly owned subsidiary,
ATS Phoenix, Inc., a Delaware corporation which has its principal place of
business in Norcross, Georgia and which does business as "American Technical
Services, Inc." ("ATS"; ATSG and ATS are hereinafter referred to as "Sellers");
and SPEC/ATS, Inc. a Pennsylvania corporation which has its principal place of
business in Pittsburgh, Pennsylvania ("Purchaser") and is a wholly owned
subsidiary of SPEC Group Holdings, Inc. ("SPEC").
RECITALS
A. ATS is in the business of providing process control and instrumentation
services and technical staffing services, including third party maintenance,
repair and calibration of industrial control systems (the "Business"); and
X. Xxxxxxx desire to sell, and Purchaser desires to purchase substantially all
of the assets utilized by Sellers in the Business for the consideration, and
upon the terms, provisions and conditions of this Agreement.
Now, therefore, in consideration of the mutual representations, warranties,
covenants and agreements contained in this Agreement, and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. AGREEMENT FOR PURCHASE AND SALE
Section 1.01. Subject to the terms of this Agreement, on May 19, 1998 or on such
other date as Purchaser and Sellers shall mutually agree (the "Closing" and the
"Closing Date"), Purchaser shall purchase, and Sellers shall sell to Purchaser,
the Business and the Assets described in Section 2.01 below.
SECTION 2. TRANSFERRED ASSETS
Section 2.01. The assets purchased shall be comprised of all of the business,
assets, properties and goodwill, tangible and intangible, except for those
assets described in Schedule 2.03, used by Sellers in the Business, without
regard to whether such assets are included on the Balance Sheet (as defined in
Section 7.08 below) or not, all such assets being hereinafter referred to as the
"Assets" and including without limitation all inventory, accounts receivable,
cash (in an amount equal to the amount, if any, by which "costs and recognized
profits in excess of xxxxxxxx" less "xxxxxxxx in excess
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of costs and recognized profits" is less than zero as of the Closing Date),
furniture, fixtures, equipment, goodwill, intellectual property, contracts,
customer lists, customer files, employee files, procedure manuals, training
materials, accounting files and records, software, databases, computer files,
trade names, trademarks, franchises, fictitious names, logos, slogans, patents
and including, without limitation, those assets set forth on Schedule 2.01
(which schedule sets forth the name of the particular Seller of each such Asset
and, in the case of personal property, the location thereof).
Section 2.02. Sellers shall transfer the Assets to Purchaser free and clear of
all mortgages, security interests, charges, encumbrances, liens, infringements,
assessments, covenants, claims, title defects, pledges, encroachments and
burdens of every kind or nature whatsoever ("Encumbrances") except those
Encumbrances described on Schedule 2.02 ("Permitted Encumbrances").
Section 2.03. The Assets do not include those certain assets set forth on
Schedule 2.03 (the "Excluded Assets") which shall remain the property of the
Sellers.
Section 2.04. At Closing the Sellers shall amend their articles of incorporation
to change their names to delete any use of the terms "American Technical
Services Group", "American Technical Services", "ATS" or "ATSG". The rights to
all such names shall be part of the Assets and shall be transferred to Purchaser
hereunder.
SECTION 3. PURCHASE PRICE
Section 3.01. Purchase Price. The purchase price for the Assets shall be the
Base Purchase Price, as defined in Section 3.02(1) below and adjusted as
provided in Section 3.05 below, plus the Earn-Out Payment, if any, payable
pursuant to Section 3.02(2), (the total of the Base Purchase Price, as adjusted,
and the Earn-Out Payment being the "Purchase Price").
Section 3.02. Payment: Purchaser shall pay Sellers the Purchase Price as
follows:
1. Cash at Closing. A payment of $1,150,000 shall be made in cash at
Closing (as adjusted, the "Base Purchase Price"), such amount to be subsequently
adjusted as provided in Section 3.05 below.
2. Earn-Out Payments. In addition to the Base Purchase Price, an
Earn-Out Payment ("Earn-Out Payment"), if any, shall be determined based on
Gross Profit of the Business for the twelve month period beginning June 1, 1998
and ending May 31, 1999 (the "Earn-Out Period") as follows: (i) if Gross Profit
of the Post-Closing Business during the Earn-Out Period is less than $1,300,000,
no Earn-Out Payment will be payable; (ii) if Gross Profit of the Post-Closing
Business during the Earn-Out Period is greater than $1,300,000 and less than or
equal to $1,750,000, the Earn-Out Payment will be an amount equal to 15% of the
total Gross Profit; and (iii) if Gross Profit of the Post-Closing Business
during the Earn-Out Period is greater than $1,750,000, the Earn-Out Payment will
be an amount equal to 25% of the total Gross Profit; provided that the aggregate
amount of the Earn-Out Payment shall not exceed $1,200,000. For purposes of this
Agreement, "Gross Profit" shall mean the gross profit of the Post-Closing
Business calculated in accordance with generally accepted
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accounting principles applied on a basis consistent with historic practices of
SPEC. For purposes of this Agreement, "Post-Closing Business" shall mean the
Business acquired by the Purchaser hereunder plus any business generated by
those current employees of Sellers who are employed by Purchaser. As soon as
practicable and in any event within sixty (60) days following the end of the
Earn-Out Period, Purchaser shall prepare and deliver to Sellers a statement (the
"Earn-Out Statement") setting forth the Gross Profit of the Post-Closing
Business for the Earn-Out Period, together with a calculation of the amount of
any Earn-Out Payment payable by the Purchaser. Any Earn-Out Payment shall be
payable by the Purchaser within 15 days of the day that Sellers notify Purchaser
that they agree with the Earn-Out Statement. In the event of any dispute or
failure to reach agreement with respect to the amount of the Earn-Out Payment,
if any, the applicable Earn-Out Payment shall be determined by the Arbiter (as
defined in Section 3.04).
3. Guarantee of Earn-Out Payments. SPEC hereby guarantees payment of
any Earn-Out Payment payable under Section 3.02(2) of this Agreement.
Section 3.03. Liabilities of Sellers. Purchaser shall assume only (i) those
current liabilities of Sellers set forth on Schedule 3.03 and those current
liabilities of the same character which arise in the ordinary course of the
Business between February 28, 1998 and the Closing and (ii) those liabilities of
ATS arising after the Closing Date under leases and contracts referenced on
Schedule 3.03 and under contracts entered into in the ordinary course of the
Business between the time of execution of this Agreement and the Closing
(collectively the "Assumed Liabilities"). Purchaser shall not assume or agree to
pay any liability or obligation of the Sellers of any nature whatsoever that (i)
is not expressly set forth on Schedule 3.03, (ii) is not a current liability
which is of the same character as those set forth on Schedule 3.03 and which
arises in the ordinary course of the Business between February 28, 1998 and the
Closing, or (iii) is not a lease or contact assumed pursuant to Sections 5.01 or
5.02 or a contract entered into in the ordinary course of the Business between
the time of execution of this Agreement and the Closing. Except as expressly
provided in this Agreement, the Purchaser does not hereby and shall not assume,
or in any way undertake to pay, perform, satisfy or discharge any other
liabilities, obligations, agreements or commitments of the Sellers or relating
to the operations of the Business, whether due or to become due, whether
accrued, absolute, contingent, known or unknown, disclosed or undisclosed in
this Agreement (including the Schedules hereto) or otherwise, existing on the
Closing Date or arising out of any transactions entered into, or any state of
facts existing prior to the Closing Date (collectively, the "Retained
Liabilities"). The Sellers shall pay and satisfy when due all Retained
Liabilities and shall indemnify, defend and hold the Purchaser harmless from and
against any loss, liability, damage or expense (including reasonable attorneys'
fees) arising out of any failure by the Sellers to pay, perform or discharge
when due any Retained Liabilities. The Retained Liabilities shall include the
following liabilities of Sellers:
1. All accounts payable, accrued expenses and other current liabilities
(except to the extent reflected on the Closing Date Balance Sheet);
2. All federal, state, local or other taxes, levies, duties, fines and
other governmental charges of any kind of the Sellers, including interest and
penalties;
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3. With respect to services provided to Sellers, any salary or other
compensation, expense reimbursement, benefit, severance and termination
obligations, whether imposed by contract, plan or law, owed Sellers' current or
past employees, consultants, directors, shareholders or other affiliates,
including obligations under employee benefit plans of Sellers (except to the
extent set forth on Schedule 3.03);
4. Workers' compensation claims filed by employees of the Sellers with
respect to injuries that occurred prior to the Closing Date;
5. All existing or future obligations of the Sellers to any
governmental entity or private party (i) based upon any action, omission, or
condition occurring or existing prior to the Closing Date to the extent that
such action, omission, or condition constitutes a violation or alleged violation
by or a liability or obligation of the Sellers or any subsidiary, affiliate or
predecessor of the Sellers under the Comprehensive Environmental Response,
Compensation and Liability Act, as amended (and any applicable similar state
laws governing the clean-up and remediation of hazardous substances, together
"CERCLA"), the Resource Conservation and Recovery Act, as amended, the Toxic
Substance Control Act, the Clean Water Act, the Clean Air Act, the Occupational
Safety & Health Act or any other federal, state, or local laws or regulations
relating to public health and safety or environmental protection or liability or
pollution control and natural resource damages (including common law nuisance,
property damage and similar common law theories) ("Environmental Laws") or (ii)
arising from the release, investigation, study, clean-up or remediation of any
hazardous substance (as defined by CERCLA) in connection with the disposal,
treatment, or transport (or arrangement for disposal, treatment or transport) of
such hazardous substance by the Sellers or any subsidiary, affiliate or
predecessor of the Sellers, pursuant to CERCLA;
6. All litigation or other claims against the Sellers, the Assets or
the Business, pending or threatened, known or unknown, including without
limitation all claims, counterclaims, actions, suits, proceedings or
investigations by any private person or governmental authority, relating to or
affecting the Business or the Assets and arising out of events or circumstances
occurring or existing prior to the Closing Date;
7. Any obligation of Sellers or any affiliated employer under Section
4201 of the Employee Retirement Income Security Act of 1974 ("ERISA") which
arose at any time prior to the Closing Date or which may arise as a result of
this Agreement. Specifically, without limiting the foregoing, Purchaser does not
assume any liability under Section 4202 of ERISA; and
8. Any liabilities or obligations of Strategic or NTS (as hereinafter
defined) or of any of their affiliates other than ATS and ATSG.
Section 3.04. Closing Date Balance Sheet. Sellers shall, at Sellers' expense,
cause the firm of KPMG Peat Marwick to prepare, in accordance with generally
accepted accounting principles consistently applied, an audited statement of the
Assets and the Liabilities as of the Closing Date (the "Closing Date Balance
Sheet") which shall show the difference between the Assets and the
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Assumed Liabilities (the "Net Closing Book Value") as of the Closing Date. The
format of such Closing Date Balance Sheet is attached hereto as Schedule 3.04.
The Closing Date Balance Sheet shall be prepared using the Sellers' best
estimate of the aggregate amount of accounts receivable which will be actually
collected by Purchaser within ninety (90) days after the Closing Date (the
"Estimate of Collectable Receivables"). The Closing Date Balance Sheet, together
with the work papers of such accountants, shall be delivered to Purchaser by
Sellers within sixty (60) days of the Closing Date. Unless Purchaser shall
deliver to Sellers a written statement of objections to the Closing Date Balance
Sheet ("Statement of Objections") within forty-five (45) days after delivery
thereof to Purchaser, the Closing Date Balance Sheet shall be deemed to be final
and binding for all purposes of this Agreement. In the event that Purchaser
shall deliver a written statement of objections to the Closing Date Balance
Sheet as aforesaid, and such objections cannot be resolved by agreement between
Sellers and Purchaser, the matters in dispute shall be submitted to the firm of
Price Waterhouse (the "Arbiter"), who shall resolve the dispute on the basis of
the Closing Date Balance Sheet and the objections and whose determinations shall
be final and binding for all purposes of this Agreement. The fees and expenses
of the Arbiter shall be paid by Purchaser, if the disputes are resolved in favor
of the Sellers, or by the Sellers, if the disputes are resolved in favor of
Purchaser, or, if such disputes are resolved partly in favor of Purchaser and
partly in favor of the Sellers, in such amounts by Purchaser and Sellers as
shall be determined by the Arbiter on a basis intended to reflect the relative
success of Purchaser, on the one hand, and the Sellers, on the other, with
respect to the resolution of all such disputes.
Section 3.05. Purchase Price Adjustments.
1. To the extent that the Estimate of Collectable Receivables shall
exceed the amount of receivables actually collected by Purchaser within ninety
days following the Closing Date, Purchaser shall promptly notify Sellers of the
amount of such shortfall, Sellers shall, within fifteen days of receipt of such
notice, pay to Purchaser the amount of such shortfall, and Purchaser shall
immediately upon receipt of payment reassign absolutely to Sellers all such
uncollected receivables. To the extent that the amount of receivables actually
collected by Purchaser within ninety days following the Closing Date shall
exceed the Estimate of Collectable Receivables, Purchaser shall promptly pay to
Sellers the amount of such excess.
2. Without regard to any payment made (or to be made) pursuant to
Section 3.05(1) above, if the Net Closing Book Value, determined as provided in
Section 3.04, exceeds $604,403.00, the Purchase Price shall be increased on a
dollar-for-dollar basis by the difference, and Purchaser shall pay such amount
to Sellers within ten days of the date on which the Closing Date Balance Sheet
shall become final. Without regard to any payment made (or to be made) pursuant
to Section 3.05(1) above, if the Net Closing Book Value, determined as provided
in Section 3.04, is less than $604,403.00, the Purchase Price shall be reduced
on a dollar-for-dollar basis by the difference, and Sellers shall pay such
amount to Purchaser within ten days of the date on which the Closing Date
Balance Sheet shall become final. To the extent that any portion of the amount
which would be payable pursuant to this Section 3.05(2) is not affected by the
Statement of Objections, if any, such portion shall be paid promptly following
delivery of the Statement of Objections.
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SECTION 4. GUARANTY OF STRATEGIC
Section 4.01. Strategic hereby guarantees payment and performance of all
obligations of Sellers hereunder, including without limitation, obligations of
Sellers under Section 3 and Section 9.
SECTION 5. LEASES AND CONTRACTS
Section 5.01. Leases. At Closing Sellers shall assign and Purchaser shall assume
the liabilities arising after the Closing Date under the express terms of those
real and personal property leases described on Schedule 5.01 (the "Leases"),
which assignment shall transfer all rights of Sellers under the Leases. Sellers
warrant that the Leases are in full force and effect, that no default by any
party exists under any of the Leases and that no consent to any such assignment
is necessary (or that Sellers will deliver any such consent to Purchaser at
Closing). A true, correct and complete copy of each of the Leases has been
provided to Purchaser prior to execution of this Agreement.
Section 5.02. Contracts. At Closing Sellers shall assign and Purchaser shall
assume the liabilities arising after the Closing Date under the express terms of
those contracts described on Schedule 5.02 (the "Contracts"). Sellers warrant
that the Contracts are in full force and effect, that no default by any party
exists, that there are no setoffs thereunder and that no consents to any such
assignment are necessary except as described on Schedule 5.02A (and that,
without limiting the obligation of Sellers to deliver the consents identified on
Schedule 7.10 prior to Closing, Sellers will make their reasonable best efforts
to deliver, within a reasonable time after Closing, any such consents that are
requested by Purchaser). Such assignment shall transfer all rights of Sellers
under the Contracts. A true, correct and complete copy of each of the Contracts
has been provided to Purchaser prior to execution of this Agreement.
SECTION 6. EMPLOYMENT
Section 6.01. Employees of Sellers. Purchaser shall offer employment to the
employees of Seller listed on Schedule 6.01. Purchaser shall be responsible for
any severance pay that might be payable to any of Sellers' employees pursuant to
Purchaser's severance policies who accept such offer of employment (the
"Transferred Employees"). Notwithstanding anything to the contrary contained
herein, Purchaser shall have no liability of any nature whatsoever for severance
obligations to employees of Seller who are not Transferred Employees.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, jointly and severally, represent and warrant to and for the benefit of
the Purchaser and agree with Purchaser as follows:
Section 7.01. Organization. Sellers are corporations duly organized and
validly existing and in good standing under the laws of the State of Delaware
and are qualified to do business under the laws of
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and in such other jurisdictions as are set forth in Schedule 7.01, are
entitled to own or lease the Assets, and have all requisite corporate power
and authority to carry on their business as now conducted.
Section 7.02. Sellers' Authority. The execution and delivery of this Agreement
by Sellers and the performance of the terms hereof, and the sale contemplated
hereby:
1. have been authorized by the shareholders and directors of Sellers;
2. will not result in breach of any of the terms or conditions of, or
constitute a default under, the Certificates of Incorporation or Bylaws of any
of the Sellers; and
3. will not violate any injunction, writ, decree, ruling, assessment or
other similar command or ruling of, nor is any consent required of, any court or
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, to which any Seller is a party or by
which it is bound.
When duly executed and delivered by the officers of the Sellers, this Agreement,
and all documents contemplated hereby to be executed by Sellers, will constitute
the valid and binding agreements of Sellers, enforceable in accordance with
their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally and by general principles of equity.
Section 7.03. Litigation. There are no actions, suits or proceedings pending or,
to the knowledge of the officers and directors of Sellers, threatened against
the Sellers or their property or business, or to limit or impair any of their
powers, rights and privileges or to dissolve Sellers, except as disclosed in
Schedule 7.03. Sellers are not in default with respect to any judgment, order,
writ or injunction, decree, assessment or other similar demand of any court or
of any federal, state or municipal or other governmental department, commission,
board, bureau, agency or instrumentality affecting them or any one of them or
any of the Assets.
Section 7.04. Compliance with Laws. Except as set forth in Schedule 7.04:
1. Sellers have complied in all material respects with all laws,
regulations and orders applicable to Sellers, the Assets or the Business,
including without limitation all environmental laws and regulations;
2. Sellers do not need any governmental permits or licenses in
connection with the transaction of their business as presently conducted;
3. no notice or warning from any governmental authority with respect to
any failure or alleged failure of any Seller to comply with any law, regulation
or order has been issued or given and is currently in effect, nor is any such
notice or warning proposed or threatened; and
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4. the business of the Sellers is not currently being conducted
pursuant to an exemption to or exception from any law, governmental regulation,
permit or license that will not be available to Purchaser.
Section 7.05. Title to the Assets. Sellers have good and marketable title to all
of the Assets, free and clear of any Encumbrances, except for Permitted
Encumbrances. Sellers shall execute all documents and do all other things
reasonably necessary or appropriate prior to Closing and, at Purchaser's request
after Closing, to perfect title to the Assets in Purchaser.
Section 7.06. Payment of Taxes, Assessments, Etc. As of the Closing Date,
Sellers will have paid and discharged all taxes, assessments, excises and levies
for which they are obligated and which are then due and payable or which, if not
paid, will not interfere with Purchaser's enjoyment of the Assets. Any and all
such taxes, assessments, excises and levies that Purchaser is assuming or for
which Purchaser might be liable shall be fully and accurately reflected in the
Closing Date Balance Sheet and the Net Closing Book Value. Sellers shall pay any
and all sales, transfer, or other tax incurred by either party as a result of
the transactions contemplated under this Agreement.
Section 7.07. Insurance. Schedule 7.07 contains a true and complete list and
description (including face amount of policy, name of insured, policy number,
insurance company, broker, dates of coverage and premium) of all insurance
policies and binders held by or on behalf of Sellers for the current year. To
the best of Sellers' knowledge, Sellers have taken no action nor omitted to take
any action which would make such policies and binders invalid and unenforceable
in accordance with their terms, and all premiums on such policies and binders
due as of the date hereof have been paid in full. True and correct copies of all
such policies and binders, all of which, if Purchaser so requests, have been
delivered to Purchaser, as well as a complete listing of all claims open. Such
policies provide all such insurance as Sellers are contractually required to
provide under customer contracts or pursuant to governmental licensing and
regulatory provisions. The Assets of an insurable character are insured now and
will be insured through the Closing Date against loss or damage by fire and
other risks in accordance with such policies.
Section 7.08. Financial Statements.
1. The books of account and related records of Sellers reflect in
detail the assets, liabilities, revenues, expenses, cash flows, and other
transactions of Sellers. The Sellers have delivered to the Purchaser unaudited
financial statements of Sellers as at December 31, 1996, December 31, 1997, and
for the fiscal years then ended and as at February 28, 1998 and for the two
month period then ended. Each such financial statement presents fairly, as of
the date thereof, the financial position of Sellers on a combined basis and of
ATS individually and the results of operations and retained earnings and cash
flows for the period covered thereby in conformity with generally accepted
accounting principles consistently applied ("GAAP"). The unaudited balance sheet
of the Sellers as at December 31, 1997 (the "Balance Sheet Date"), is referred
to herein as the "Balance Sheet."
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2. The Balance Sheet accurately reflects all liabilities, required to
be disclosed in accordance with GAAP, of the Sellers at December 31, 1997. Since
the Balance Sheet Date, except as set forth on Schedule 7.08(2), there has not
been any: (a) material adverse change in the financial condition, assets,
liabilities, net worth, earning power, business or prospects of Sellers; (b)
damage or destruction to any of the properties of Sellers in excess of $1,000;
(c) strike or other labor trouble at Sellers; (d) creation of any Encumbrances
on any of the properties of Sellers; (e) increases in the salaries or bonuses of
any employee of Sellers; (f) capital expenditures or other asset acquisition or
expenditure in excess of $5,000 in the aggregate; (g) change in any of Sellers'
Employee Benefit Plans; (h) payment to or transaction with any Related Party;
(i) disposition of any asset outside the ordinary course of business; (j)
payment, prepayment or discharge of any liability other than in the ordinary
course of business; (k) adverse change or threat thereof of any relations or
contracts with, or any loss of, the suppliers of Sellers; (l) write-offs or
write-downs of any assets of Sellers in excess of $1,000 in the aggregate; (m)
change in the board of directors or management of Sellers; (n) creation or
termination of any material agreement, right or liability of Sellers not in the
ordinary course of business; or (o) agreement or commitment to do any of the
foregoing. Neither Sellers nor the Business has any debts, obligations or
liabilities, absolute, fixed, contingent or otherwise, of any nature whatsoever,
whether due or to become due (including unasserted claims), whether incurred
directly or by any predecessor thereto, except: (a) those reflected or reserved
against on the Closing Date Balance Sheet in the amounts shown thereon, or (b)
those of the same nature as those set forth in the Closing Date Balance Sheet
that have arisen in the ordinary course of business after the Balance Sheet
Date.
Section 7.09. Tax Returns. Sellers have filed all tax returns and reports
(federal, state and local) required to be filed by them and have paid, or will
by the Closing Date pay, all taxes shown to be due on such returns and reports
or on any assessments received by them, as well as all other taxes or deposits,
federal, state and local, due by them, except local property taxes which are
payable but which are not yet due, federal and state income taxes for the
current fiscal year of Sellers and such other taxes which are the subject of
timely and good faith contest by Sellers with the appropriate taxing authority.
All accrued but unpaid taxes, and all contested taxes, are accurately reflected
on the Balance Sheet and shall be accurately reflected on the Closing Date
Balance Sheet.
Section 7.10. Contracts. The Contracts listed on Schedule 5.02 include all
written contracts and written summaries of all oral contracts and any and all
amendments thereto, by which ATS or any of the Assets are bound. Except as
disclosed on Schedule 5.02, the Contracts are valid and in full force and effect
and have not been modified or amended; no default by any party to a Contract
exists; and no payment is more than 30 days past due under any Contract. The
parties have agreed that consent to assignment will be obtained for only those
Contracts specifically noted on Schedule 7.10, such consents shall be delivered
to Purchaser at Closing. The Sellers have delivered true, correct and complete
copies of the Contracts to Purchaser. Schedule 5.02 sets forth the backlog of
the Business as of March 31, 1998, and the projected gross profit associated
therewith.
Section 7.11. Prepayments By Customers. No customer of the Sellers has made any
prepayment or deposit for services for any period commencing on or after the
Closing Date except as disclosed
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on Schedule 7.11. No customer of Seller is entitled to any setoff, rebate,
discount or credit except as disclosed on Schedule 7.11.
Section 7.12. Labor Relations.
1. No Seller is party to any collective bargaining or similar
agreement.
2. Sellers are in compliance with all applicable laws respecting
employment and wages and hours, and are not engaged in any unfair labor
practice.
3. There is no unfair labor practice charge or complaint against any of
the Sellers relating to employees who worked for the business of any of the
Sellers pending or, to the knowledge of Sellers, threatened before the National
Labor Relations Board.
4. There has not occurred, nor to the knowledge of Sellers has there
been threatened, a labor strike, request for representation, slowdown, work
stoppage or lockout and there is currently no labor strike, dispute, request for
representation, slowdown, work stoppage or lockout against or affecting any of
the Sellers.
5. There is no representation claim or petition pending before the
National Labor Relations Board and no question concerning representation is
presently being raised or, to the knowledge of Sellers, is threatened respecting
the employees of any of the Sellers.
6. No grievance nor any arbitration proceeding arising out of or under
any employment agreement, collective bargaining agreement, severance agreement
or written personnel policy is pending and no such claims therefor exist or, to
the knowledge of Sellers, are threatened.
7. No charges with respect to or relating to any of the Sellers is
pending before the Equal Employment Opportunity Commission or any state, local
or foreign agency responsible for the prevention of unlawful employment
practices.
8. None of the Sellers has received notice of the intent of any
federal, state, local or foreign agency responsible for the enforcement of labor
or employment laws to conduct an investigation of or relating to any of the
Sellers and no such investigation is in progress.
9. Schedule 7.12A sets forth all of Sellers' employees, such employees'
titles, current salaries or wages, and location of workplace.
Section 7.13. Benefits and ERISA Plans.
1. Schedule 7.13 describes all payroll practices, compensation
arrangements, employee benefit plans or arrangements for employees, officers,
shareholders or directors to which any of Sellers is a party, copies of which
have been delivered to Purchaser prior to the execution of this Agreement.
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As used herein, "Employee Benefit Plans" shall mean and include any retirement,
profit sharing, money purchase pension, defined benefit, bonus, thrift savings,
stock purchase, deferred compensation, health or medical insurance, dental
insurance, incentive, group insurance, death benefit, fringe benefit,
disability, split-dollar, medical reimbursement or similar type of plan, whether
or not qualified or required to be qualified under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Except as disclosed on
Schedule 7.13, no unfunded liabilities, including unfunded past service
liabilities, exist under any such plans and, to the extent that any plans
maintained by any of Sellers are subject to the provisions of ERISA, or other
Federal, state or local statutes, laws, ordinances, rules or regulations
relating to employee benefit plans, Sellers are in full compliance with all
applicable provisions thereof. Except as required by COBRA or as disclosed on
Schedule 7.13A, none of the Sellers has any obligation to a former employee or
employees to continue to provide medical benefits.
2. Neither Sellers nor any affiliate, as defined in ERISA, nor any
employee benefit pension plan, including a multi-employer plan, as described in
Section 4001(a)(3) of ERISA (a "Multiemployer Plan"), is in violation of any of
the provisions of ERISA or any of the qualification requirements of Section
401(a) of the Internal Revenue Code, as amended (the "Code").
3. No prohibited transaction or reportable event, both as defined or
referred to in ERISA, has occurred with respect to any employee benefit plan or
pension plan nor has any such plan been the subject of a waiver of the minimum
funding standard under Section 412 of the Code.
4. No notice of intent to terminate an employee benefit plan has been
filed under Section 4041 of ERISA, nor has any such plan been terminated under
Section 4041(f) of ERISA.
5. The Pension Benefit Guaranty Corporation ("PBGC") has not instituted
proceedings to terminate, or appoint a trustee to administer, any employee
benefit plan or pension plan of any of Sellers, and no event has occurred or
condition exists which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any such
plan.
6. Neither Sellers nor any affiliate will be liable for any amount
pursuant to Sections 4062, 4063 or 4064 of ERISA for any terminated employee
benefit plan.
7. Neither Sellers nor any affiliate has incurred or expects to incur
any withdrawal liability to any multi-employer plan.
8. No Seller has engaged in any transaction in connection with which it
could be subjected to either a potential civil penalty assessed pursuant to
Section 502(i) of ERISA or a material tax imposed by Section 4975 of the Code.
9. No Seller or any affiliated employer has incurred any liability
under, arising out of, or by operation of Title IV of ERISA, including, without
limitation, any liability in connection with the withdrawal, partial withdrawal
or mass withdrawal from any Multiemployer Plan or the termination
11
or reorganization of any Multiemployer Plan. To the knowledge of Sellers, no
fact or event exists which could give rise to any such liability under Title IV
of ERISA. Neither ATS nor ATSG, nor any affiliated employer of ATS or ATSG, has
ever contributed to, or has ever had an obligation to contribute to, any
Multiemployer Plan with respect to, or on behalf of, an employee of ATS or ATSG.
10. The accrued vacation and sick pay of employees of Sellers, in the
aggregate, is equal to $24,000 as of December 31, 1997.
Section 7.14. Customer Relations. Except as set forth on Schedule 7.14, no
customer of Sellers listed on Schedule 7.10 has ceased or materially reduced its
use of the services of the Sellers since June 30, 1997, or, to the knowledge of
the Sellers, has threatened to cease or materially reduce such use of services
after such date.
Section 7.15. Warranties. Purchaser shall have no liability after the Closing
Date relating to any services performed or products sold by Seller prior to the
Closing Date, whether or not such liability relates to breach of any express or
implied warranty.
Section 7.16. Receivables. Schedule 7.16 discloses all trade and other accounts
receivable included in the Assets ("Receivables") outstanding as of March 31,
1998, presented on an aged basis and separately identifies the name of each
account debtor and the total amount of each related Receivable. All Receivables,
including Receivables reflected on the Closing Date Balance Sheet, arose or
shall arise from bona fide sale transactions of Sellers, and no portion of any
Receivable is or shall be subject to counterclaim, defense or set-off or is
otherwise in dispute.
SECTION 8. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to and for the benefit of Sellers and agrees
with Sellers as follows:
Section 8.01. Organization. Purchaser is a corporation duly organized and
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania is entitled to acquire the Assets and has all requisite corporate
power and authority to carry on its business as now conducted.
Section 8.02. Purchaser's Authority. The execution and delivery of this
Agreement by Sellers and the performance of the terms hereof, and the sale
contemplated hereby:
1. have been authorized by the directors of Purchaser.
2. will not result in breach of any of the terms or conditions of, or
constitute a default under, the Certificate of Incorporation or Bylaws of the
Purchaser.
12
3. will not violate any injunction, writ, decree, ruling, assessment or
other similar command or ruling of any court or any federal, state or
municipality or other governmental department, commission, board, bureau, agency
or instrumentality, to which Purchaser is a party or by which it is bound.
When duly executed and delivered by the officers of the Purchaser, this
Agreement and all documents contemplated hereby to be executed by Purchaser,
will constitute the valid and binding agreements of Purchaser, enforceable in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization and other laws affecting
creditors' rights generally and by general principles of equity.
Section 8.03. Litigation. There are no actions, suits or proceedings pending or
threatened against the Purchaser, or to the knowledge of the officers and
directors of Purchaser, threatened against the Purchaser or its property or
business, or to limit or impair any of its powers, rights and privileges or to
dissolve Purchaser, except as disclosed in Schedule 8.03. Purchaser is not in
default with respect to any judgment, order, writ or injunction, decree,
assessment or other similar demand of any court or of any federal, state or
municipal or other governmental department, commission, board, bureau, agency or
instrumentality affect it.
Section 8.04. Control. Until the Closing, Purchaser, its employees and agents
will not, directly or indirectly, control, supervise, direct or attempt to
supervise or direct, the operations of the business of Sellers. Such operations
shall be the sole responsibility and under the complete direction of the
officers, directors, employees and agents of Sellers.
SECTION 9. INDEMNIFICATION BY THE PARTIES
Section 9.01. Sellers' Indemnity. The Sellers and Strategic shall, jointly and
severally, indemnify, defend, save and hold harmless Purchaser and Purchaser's
officers, directors, affiliates and representatives (collectively, "Purchaser
Indemnitees") from and against all demands, claims, actions or causes of action,
assessments, losses, damages, deficiencies, liabilities, costs and expenses,
including reasonable attorneys' fees, interest, penalties and all reasonable
amounts paid in investigation, defense or settlement of any of the foregoing,
asserted against, imposed upon, resulting to or incurred by any Purchaser
Indemnitees in connection with, arising out of, or resulting from:
1. Any and all Retained Liabilities.
2. Any breach of the representations, warranties, covenants and
agreements of Sellers set forth in this Agreement or from the failure of Sellers
to perform or comply with any other provision of this Agreement.
Section 9.02. Purchaser's Indemnity. Purchaser hereby indemnifies and holds
harmless Sellers and Sellers' officers, directors, affiliates and
representatives (collectively, "Seller Indemnitees") from and against all
demands, claims, actions or causes of action, assessments, losses, damages,
deficiencies,
13
liabilities, costs and expenses, including reasonable attorneys' fees, interest,
penalties and all reasonable amounts paid in investigation, defense or
settlement of any of the foregoing, asserted against, imposed upon, resulting to
or incurred by any of Seller Indemnitees in connection with, arising out of, or
resulting from:
1. Any and all Assumed Liabilities.
2. Any breach of the Purchaser's representations, warranties, covenants
and agreements set forth in this Agreement or from the failure of Purchaser to
perform or comply with any other provision of this Agreement.
Section 9.03. Indemnification Claims. Any of the parties indemnified hereunder
(the "Indemnitee") having or claiming any right to indemnification under the
foregoing Sections 9.01 or 9.02 shall immediately notify the other party (or
parties, as the case may be) (the "Indemnitor") in writing, specifying the
nature of the claim. The Indemnitor shall have the right to defend any such
claim at its own expense and with counsel of its choice; provided that such
right shall have been timely asserted and such counsel shall have been approved
by the Indemnitee, prior to engagement, which approval shall not be unreasonably
withheld or delayed; and provided further, that the Indemnitee may participate
in such defense, if it so chooses, with its own counsel and at its own expense.
Indemnitor agrees that if the claim in respect of which such notice shall have
been given is finally determined adversely to Indemnitor (or is settled with the
Indemnitee's incurring any expense or cost), then Indemnitor shall pay to
Indemnitee an amount sufficient to reimburse the Indemnitee to the full extent
of its losses and expenses sustained by reason thereof, but excluding any legal
fees and costs if the Indemnitor elected, pursuant to this Section, to defend
the claim and Indemnitee approved the counsel.
Section 9.04. Indemnification Limitations. Notwithstanding anything in this
Section 9.04 to the contrary, a party's rights to indemnification from another
party shall be limited as follows:
1. Purchaser shall not be entitled to indemnification unless and until
the total amount of damages sustained by it exceeds $50,000 in the aggregate.
Once such aggregate amount of damages exceeds $50,000, Purchaser shall be
entitled to indemnification for the entire amount of its damages, including such
$50,000, and shall be entitled to the right of set-off against any Earn-Out
Payment.
2. Purchaser's right of indemnification, and the liability of the
Sellers, is limited to an aggregate sum for all claims equal to that portion of
the Purchase Price, as finally adjusted hereunder, which is actually received by
Sellers.
Section 9.05. Exclusive Remedy. Except for claims arising out of fraud or
intentional misrepresentation, indemnification pursuant to this Section shall be
the exclusive remedy of the parties for any claim, damage, cause of action or
loss arising or resulting from any breach of representation or warranty made by
any party. The Sellers acknowledge and agree that, subject to the limitations
set
14
forth in Section 9.04(1), Purchaser shall have the right to set-off any claims
for damages pursuant to this Section against any Earn-Out Payment payable under
this Agreement.
SECTION 10. NATURE AND SURVIVAL OF
REPRESENTATIONS AND WARRANTIES
Section 10.01. Truth, Accuracy and Survival. All representations and warranties
made by Sellers and Purchaser in this Agreement shall be true and correct at the
time of Closing and shall survive for a period of two (2) years from the Closing
Date except that the representations and warranties contained in Sections 7.06,
7.09 and 7.13 shall survive without time limit. Upon the expiration of such
period, such representation or warranty shall be null, void and of no further
effect.
SECTION 11. BROKER
Section 11.01. No Brokers. Except as set forth in Schedule 11.01, Sellers and
Purchaser represent to each other that no broker or finder has acted for any of
them in connection with this Agreement or the transaction contemplated hereby,
and no broker or finder is entitled to any brokerage commission, finder's fee or
similar charge in respect thereof based on any agreement made by either of them.
Sellers shall be solely responsible for any fees payable to New England Business
Exchange, Inc. Each of said parties agrees to indemnify and hold harmless the
other parties from and against any claim for brokerage commission, finder's fee
or similar charge relative to this Agreement or the transaction contemplated
thereby, which claim is based in any way on any agreement or understanding made
or alleged to have been made by said party, together with any and all expenses
of any character (including but not limited to reasonable attorney's fees)
incurred either in the investigation or defense of any such claim.
SECTION 12. CONDITIONS PRECEDENT TO CLOSING
Section 12.01. Conditions to Purchaser's Obligations. As a condition to the
Purchaser's obligation to close the transaction contemplated by this Agreement,
all of the following shall have occurred at or prior to Closing:
1. all representations and warranties of Sellers shall be true and
correct.
2. Sellers shall have fully performed all of their obligations under
this Agreement.
3. Sellers shall have delivered all of the closing items required of
them pursuant to Section 13.01 below.
4. Purchaser shall have had an opportunity to talk to customers of the
Business and shall be reasonably satisfied with the relationships between ATS
and such customers and that the contemplated transaction will not have a
material adverse effect on such relationships.
15
5. Seller shall have obtained consent to assignment of the Contracts
listed on Schedule 7.10.
6. Xxxxxx Xxxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxx and
Xxx Xxxx shall have executed employment agreements with Purchaser substantially
in the form attached hereto as Schedule 12.01(6). Substantially all of the other
employees of Sellers who Purchaser wishes to hire shall have accepted
Purchaser's offer of employment.
7. Purchaser shall be satisfied that there shall be no material adverse
change in the business, results of operations, property, condition or prospects
of the Business, that Sellers shall have operated the Business in the ordinary
course between the time of execution of this Agreement and the Closing, and that
any contracts entered into between the time of execution of this Agreement and
the Closing have been approved by Xxxxxx Xxxxx.
Section 12.02. Conditions to Sellers' Obligations. As a condition to the
Sellers' obligation to close the transaction contemplated by this Agreement, all
of the following shall have occurred at or prior to Closing:
1. all representations and warranties of Purchaser shall be true and
correct.
2. Purchaser shall have fully performed all of its obligations under
this Agreement.
3. Purchaser shall have delivered all of the closing items required of
it pursuant to Section 13.02 below.
SECTION 13. CLOSING ITEMS
Section 13.01. Sellers. At the Closing, Sellers shall deliver or cause to be
delivered to Purchaser the following:
1. Certificates of Good Standing as of a recent date from the
secretaries of state of each of the states of Sellers' respective incorporation.
2. Certified copies of actions of the shareholders and directors of
Sellers approving this Agreement and all documents to be executed and delivered
in accordance therewith and authorizing the officers of the Sellers to execute
this Agreement and to execute all of said documents and take all other steps
required to carry out the terms of the same.
3. Xxxx of Sale from Sellers conveying to Purchaser the Assets.
4. Titles to all motor vehicles.
5. Assignment of all of Seller's right, title, and interest in and to
all telephone numbers and listings.
16
6. Assignment of all of Seller's right, title, and interest in and to
the Leases, together with those consents provided for under this Agreement.
7. Assignment of all of Seller's right, title, and interest in and to
the Contracts, together with those consents provided for under this Agreement.
8. Assignment of all permits and licenses to the extent assignable.
9. Assignment of all copyrights, patents, trademarks and service marks.
10. Customer lists and records, together with all related information.
11. Duly executed articles of amendment, notice of change of name or
other appropriate document deleting from Sellers' names any use of the terms
"American Technical Services Group", "American Technical Services", "ATS" or
"ATSG".
12. A written opinion of counsel for Sellers:
a. that the Sellers are duly organized, validly existing and
in good standing in the jurisdictions of their respective incorporation.
b. that this Agreement and all documents to which the Sellers
are a party have been properly authorized and executed by Sellers.
c. that to the best knowledge of such counsel, execution of
this Agreement and performance of the transactions contemplated hereby will not
result in a breach of the terms or conditions of, or constitute a default under,
the Certificate of Incorporation or Bylaws of any of the Sellers.
d. when duly executed and delivered by the officers of the
Sellers, this Agreement, and all documents contemplated hereby to be executed by
Sellers, will constitute the valid and binding agreements of Sellers,
enforceable in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization and other laws
affecting creditors' rights generally and by general principles of equity.
e. that to the best knowledge of such counsel, execution of
this Agreement and performance of the transactions contemplated hereby will not
violate any injunction, writ, decree, ruling, assessment or other similar
command or ruling of any court or any federal, state or municipality or other
governmental department, commission, board, agency or instrumentality, to which
any Seller is a party or by which it is bound.
f. that to the best knowledge of such counsel, there are no
actions, suits or proceedings pending or threatened against the Sellers or their
property or business, or to limit or
17
impair any of their powers, rights and privileges or to dissolve Sellers, except
as disclosed in Schedule 7.03.
g. that to the best knowledge of such counsel, Sellers are not
in default with respect to any judgment, order, writ or injunction, decree,
assessment or other similar demand of any court or of any federal, state or
municipal or other governmental department, commission, board, bureau, agency or
instrumentality affecting them or any one of them or any of the Assets.
h. that to the best knowledge of such counsel, except as set
forth in Schedule 7.04.
i. no notice or warning from any governmental authority with
respect to any failure or alleged failure of any Seller to comply with any law,
regulation or order has been issued or given and is currently in effect, nor is
any such notice or warning proposed or threatened; and ii. the business of the
Sellers is not currently being conducted pursuant to an exemption to or
exception from any law, governmental regulation, permit or license that will not
be available to Purchaser.
13. Any and all other instruments and documents set forth in this
Agreement required to be delivered by Sellers at Closing.
14. Any and all other instruments and documents which may be necessary
to effect the obligations of Sellers under this Agreement.
Section 13.2. Purchaser. At the Closing, Purchaser shall deliver or cause to be
delivered to Sellers the following:
1. Certificates of Good Standing as of a recent date from the secretary
of state of Purchaser's incorporation and from each state in which Purchaser is
qualified to do business.
2. Certified copies of action of the directors of Purchaser approving
this Agreement and all documents to be executed and delivered in accordance
therewith and authorizing the officers of the Purchaser to execute this
Agreement and to execute all of said documents and take all other steps required
to carry out the terms of the same.
3. The Cash that is to be paid to Sellers at Closing.
4. Assumption of the Leases.
5. Assumption of the Contracts.
6. A written opinion of counsel for Purchaser:
18
a. that the Purchaser is duly organized, validly existing
and in good standing in the jurisdiction of its incorporation.
b. that this Agreement and all related documents to which the
Purchaser is a party have been properly authorized and executed by Purchaser.
c. that to the best knowledge of such counsel, execution of
this Agreement and performance of the transactions contemplated hereby will not
result in a breach of the terms or conditions of, or constitute a default under,
the Certificate of Incorporation or Bylaws of Purchaser.
d. when duly executed and delivered by the officers of the
Purchaser, this Agreement, and all documents contemplated hereby to be executed
by Purchaser, will constitute the valid and binding agreements of Purchaser,
enforceable in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization and other laws
affecting creditors' rights generally and by general principles of equity.
7. Any and all other instruments and documents set forth in this
Agreement required to be delivered by Purchaser at Closing.
8. Any and all other instruments and documents which may be necessary
to effect the obligations of Purchaser under this Agreement.
SECTION 14. MISCELLANEOUS
Section 14.01. Noncompetition. For a period of five (5) years from and after
the Closing Date, neither Sellers nor Strategic, alone or in partnership or
in conjunction with any other person, firm, corporation or other entity,
either directly or indirectly (a "Noncompete Party"), shall undertake or
carry on or be engaged or have any financial or other interest in, or in any
other manner advise or invest in any business providing process control and
instrumentation services, technical staffing services or any other services
similar to services provided by the Business on the Closing Date; provided,
however, that nothing contained herein shall restrict Strategic from
providing any such service if it is provided by Strategic ancillary to an
industrial supply service to a current or future In-Plant Store-Registered
Trademark- customer. Each of the Sellers and Strategic acknowledge that in
the event of its violation of the covenants contained in this Section 14.01,
Purchaser's damages will be difficult to ascertain and Purchaser's remedy at
law will be inadequate. Accordingly, Sellers and Strategic agree that, in
addition to such remedies as Purchaser may have at law, Purchaser shall be
entitled to specific performance of such covenants and to an injunction
(without the requirement of posting bond) to prevent any continuing violation
thereof. Notwithstanding anything to the contrary contained in this Section
14.01, if at any time during the two year period following the Closing Date,
any Noncompete Party shall have as an In-Plant Store-Registered Trademark-
customer one of the companies listed on Schedule 7.10, and if any such
company shall request the Noncompete Party to provide process control,
instrumentation or technical staffing services of the type currently provided
by the Business, then in such case the Noncompete Party shall give Purchaser
the right to make an offer to provide such services to the In-
19
Plant Store-Registered Trademark- customer on behalf of the Noncompete Party,
and the Noncompete Party shall accept such offer from Purchaser so long as
(i) Purchaser's offer is competitive with any other offers received by the
Noncompete Party, and (ii) the In-Plant Store-Registered Trademark- customer
does not reject Purchaser as supplier of the services.
Section 14.02. Access to Books and Records. Following the Closing, Purchaser
will provide to Sellers, their counsel and their accountants access to
Purchaser's books and records relating to the Assets, the Excluded Assets and
the Liabilities and the right to make copies and extracts therefrom to the
extent such access is reasonably required by Sellers. Purchaser shall maintain
all such books and records which are not maintained on the computer system for
no less than six years following the Closing; provided, however, that Purchaser
may dispose of any such books and records prior to the sixth anniversary of the
Closing Date after having given Sellers sixty days advance notice of its intent
to dispose and a reasonable opportunity to copy any such books and records that
are to be disposed of. Notwithstanding the foregoing, Purchaser shall only be
required to provide Sellers with access to the computer system for 120 days
following the Closing, and Purchaser shall have no obligation to maintain the
computer system, including but not limited to any related software, computer
files or data, for more than 120 days following the Closing.
Section 14.03. Headings. The headings of the paragraphs of this Agreement are
for the convenience of reference only and do not form a part hereof and in no
way modify, interpret or construe the meanings of the parties.
Section 14.04. Agreement and Amendments. This Agreement, together with the
schedules hereto attached (which are incorporated herein as if wholly set
forth), embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof, supersedes all prior or
contemporaneous agreements, whether written or oral, between the parties and may
be amended only by an instrument in writing signed by the parties hereto.
Section 14.05. Parties in Interest. All the terms and provisions of this
Agreement shall be binding on and inure to the benefit of and be enforceable by
the respective successors, heirs and assigns of the parties.
Section 14.06. Governing Law. This Agreement shall be construed and governed in
accordance with the laws of the State of Delaware.
Section 14.07. Expenses. Sellers and Purchaser shall each pay their own expenses
incident to the preparation of this Agreement and the consummation of the
transactions contemplated hereby.
Section 14.08. Notices. All notices and other communications shall be sufficient
if given in writing and delivered and mailed by certified or registered mail as
follows:
20
To Sellers: American Technical Services Group, Inc.
c/o Interlaken Capital, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn. Xxxxxxx X. Xxxxxx
phone: (000)000-0000; fax: (000)000-0000
with a copy to:
D. Xxxxx Xxxxxxxx
Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A.
00 Xxxx Xxxxxxxxxx Xxx
Post Xxxxxx Xxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
phone: (000)000-0000; fax: (000)000-0000
To Guarantor: Strategic Distribution, Inc.
c/o Interlaken Capital, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn. Xxxxxxx X. Xxxxxx
phone: (000)000-0000; fax: (000)000-0000
with a copy to:
D. Xxxxx Xxxxxxxx
Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A.
00 Xxxx Xxxxxxxxxx Xxx
Post Xxxxxx Xxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
phone: (000)000-0000; fax: (000)000-0000
To Purchaser: SPEC/ATS, Inc.
c/o SPEC Group Holdings, Inc.
The Landings
00 Xxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn. Xxxx-Xxxxxx Xxxxx, President and CEO
phone: (000)000-0000; fax: (000)000-0000
21
with a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
phone: (000) 000-0000; fax: (000) 000-0000
or at such other address as any such party shall furnish the other in writing by
such method.
Section 14.09. Closing. This transaction will be closed at 9:00 a.m. on the
Closing Date at the offices of Sellers' counsel in Greenville, South Carolina,
or at such other time and place as the Sellers and Purchaser may mutually agree
upon, and the Assets will be purchased as of 11:59 p.m. on the Closing Date. All
sales and accounts receivable generated on or after 11:59 p.m. on the Closing
Date shall belong to Purchaser, and Purchaser shall be liable for all accounts
payable, purchases and operating expenses incurred after 11:59 p.m. on the
Closing Date.
Section 14.10. Survival. All covenants given by the parties hereunder shall
survive the Closing and shall not be merged into the Closing.
Section 14.11. Severability. Each portion of this Agreement is severable, and if
one portion shall prove to be invalid, unenforceable or violative of any
statute, regulation, ordinance or other law, the remainder of the Agreement
shall remain in full force and effect.
Section 14.12. Attorney's Fees. If any party should bring an action under, or to
enforce, this Agreement or any provision thereof, the prevailing party shall be
entitled to reimbursement for all costs and reasonable attorneys' fees incurred
in the course of such action.
Section 14.13. Allocation of Purchase Price. The Purchase Price shall be
allocated, in accordance with this Agreement, for federal income tax and state
income tax purposes among the Assets as set forth on Schedule 14.13. Sellers and
Purchaser shall cooperate in filing with the Internal Revenue Service their
respective Forms 8594, as provided for in Section 1060 of the Internal Revenue
Code, on a basis consistent with such allocation, and such allocation shall be
reflected on any returns required to be filed with the Internal Revenue Service
or any other state or foreign taxing authority as a result of the transactions
contemplated hereby.
Section 14.14. Costs and Expenses of the Parties. The Sellers and Purchaser
shall each bear their own costs and expenses (including legal fees and expenses)
in connection with the sale and purchase of the Assets. Any legal costs and
expenses of the Sellers incurred in connection with the negotiation of this
Agreement and the other agreements incident hereto shall be deemed to be costs
and expenses of Sellers and shall not be paid, directly or indirectly, out of
the assets of the Purchaser.
22
Section 14.15. Further Agreements. Each of the parties hereto shall use its best
efforts to execute and deliver to the other all such agreements or instruments,
and to take all other action (whether required prior or subsequent to the
Closing), necessary or appropriate to consummate the transactions contemplated
hereby.
[signatures on the following page]
23
Executed the day and year first above written.
SELLERS:
American Technical Services Group, Inc.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Its: Chairman
--------------------------------
ATS Phoenix, Inc.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Its: Chairman
--------------------------------
GUARANTOR:
Strategic Distribution, Inc.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Its: Chairman
--------------------------------
PURCHASER:
SPEC/ATS, INC.
By:
--------------------------------
Its: Chairman
--------------------------------
GUARANTOR:
SPEC GROUP HOLDINGS, INC.
By:
--------------------------------
Its: President
--------------------------------
Executed the day and year first above written.
SELLERS:
American Technical Services Group, Inc.
By:
--------------------------------
Its: Chairman
--------------------------------
ATS Phoenix, Inc.
By:
--------------------------------
Its: Chairman
--------------------------------
GUARANTOR:
Strategic Distribution, Inc.
By:
--------------------------------
Its: Chairman
--------------------------------
PURCHASER:
SPEC/ATS, INC.
By: /s/ Xxxx-Xxxxxx Xxxxx
--------------------------------
Its: Chairman
--------------------------------
GUARANTOR:
SPEC GROUP HOLDINGS, INC.
By: /s/ Xxxx-Xxxxxx Xxxxx
--------------------------------
Its: President
--------------------------------
