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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
AMONG
REPUBLIC INDUSTRIES, INC.
REPUBLIC SECURITY COMPANIES HOLDING CO., INC.
REPUBLIC SECURITY COMPANIES HOLDING CO. II, INC.
AMERITECH CORPORATION
AND
AMERITECH MONITORING SERVICES, INC.
SEPTEMBER 26, 1997
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of September 26, 1997, by and among Republic Industries, Inc., a
Delaware corporation ("Republic"), Republic Security Companies Holding Co.,
Inc., a Delaware corporation wholly owned by Republic ("RSC"), Republic Security
Companies Holding Co. II, Inc., a Delaware corporation wholly owned by RSC and
indirectly wholly owned by Republic ("Seller"), Ameritech Corporation, a
Delaware corporation ("Ameritech") and Ameritech Monitoring Services, Inc., a
Delaware corporation wholly owned by Ameritech ("Buyer").
Subject to the terms and conditions set forth in this Agreement,
Republic, RSC and Seller desire to cause the Alarm Subsidiaries (as defined
below) to sell all of the Alarm Service Assets (as defined below) to Buyer for
cash and the assumption by Buyer of specified liabilities.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties hereby agree as follows:
ARTICLE 1 - DEFINITIONS
"Acquired Assets" has the meaning set forth in Section 2.1.
"Affiliate" means, with respect to any particular person or entity, any
person or entity controlling, controlled by or under common control with such
person or entity.
"Alarm Service Assets" means all of the assets of each Alarm Subsidiary
(other than Excluded Assets) used in the provision of Services and the
operations and activities of the Alarm Subsidiaries conducted on the date hereof
pursuant to which the Alarm Subsidiaries provide Services.
"Alarm Subsidiaries" has the meaning set forth in Section 3.1(a)
"Assumed Contracts" has the meaning set forth in Section 2.1(f).
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Balance Sheet" has the meaning set forth in Section 3.1(e).
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or reasonably could be
expected to form the basis for any specified consequence.
"Billing Date" means, for any recurring period (such as a month, a
quarter or a year) during which Services are to be provided pursuant to Customer
Contracts, the first day of such period.
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"Buyer Covered Person" means Buyer, its Affiliates (including
Ameritech) and their respective accounting and legal representatives (internal
and external), as well as their respective officers, directors, employees and
agents.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"Closing" and "Closing Date" have the meanings set forth in Section
2.7.
"Code" means the Internal Revenue Code of 1986, as amended, and all
rules and regulations promulgated thereunder.
"Companies" means Republic, RSC, Seller and the Alarm Subsidiaries.
"Confidentiality Agreement" means that certain Nondisclosure Agreement,
dated as of September 12, 1997, between Buyer and Republic.
"Covered Person" means any or all Buyer Covered Persons, any or all
Seller Covered Persons, or any or all Buyer Covered Persons and Seller Covered
Persons, as the context requires.
"Customer Contract" means any written or oral contract, agreement or
arrangement (including all amendments thereto) between any of the Alarm
Subsidiaries (or any party who has validly assigned its rights and obligations
with respect to the provision of Services to any of the Alarm Subsidiaries) and
any of their respective customers with respect to the provision of Services.
"Disclosure Schedule" means any and all disclosure schedules attached
hereto in the manner permitted hereby.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section 2.4.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Sec.
3(2).
"Employees" has the meaning set forth in Section 3.1(q).
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee
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health and safety, including laws relating to emissions, discharges, releases,
or threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials
or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and all rules and regulations promulgated thereunder.
"Extremely Hazardous Substance" has the meaning set forth in ss.302 of
the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"Financial Statements" has the meaning set forth in Section 3.1(e).
"GAAP" means United States generally accepted accounting principles as
in effect from time to time, consistently applied.
"Xxxx-Xxxxx-Xxxxxx Act" has the meaning set forth in Section 3.1(d).
"Indebtedness" of any entity means all obligations of such entity which
in accordance with GAAP should be classified upon a balance sheet of such entity
as indebtedness of such entity, and in any event, regardless of how classified
in accordance with GAAP, shall include, without duplication: (i) all obligations
of such entity for borrowed money or purchase money financing which has been
incurred in connection with the acquisition of property, assets or services,
(ii) obligations secured by any lien or other charge upon property or assets
owned by such entity, even though such entity has not assumed or become liable
for the payment of such obligations, (iii) obligations created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such entity, whether or not the rights and remedies of the lender or
lessor under such agreement in the event of default are limited to repossession
or sale of the property, and (iv) capitalized rentals under any capitalized
lease (as defined in GAAP).
"Intellectual Property" means all (i) patents, patent applications,
patent disclosures, and improvements thereto, (ii) trademarks, service marks,
trade dress, logos, trade names, and corporate names and registrations and
applications for registration therefor, (iii) copyrights and registrations and
applications for registration thereof, (iv) mask works and registrations and
applications for registration thereof, (v) computer software, data and
documentation including, without limitation, ownership or rights to use, source
code and object code, (vi) trade secrets and confidential business information
(including ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, research and
development information, software products in development, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial (excluding employee benefit plans), marketing, and business data,
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pricing and cost information, business and marketing plans, and customer and
supplier lists and information), and (vii) copies and tangible embodiments
thereof (in whatever form or medium).
"Interim Balance Sheet" has the meaning set forth in Section 3.1(e).
"Interim Financial Statements" has the meaning set forth in Section
3.1(e).
"Knowledge of the Companies" means any fact or matter of which any
officer or management employee of any of the Companies listed on the Knowledge
Schedule is actually aware or of which a prudent individual serving as such an
officer or management employee should have become aware based upon a reasonable
investigation and inquiry with respect to the correctness and validity of the
representation, warranty or other matters qualified by Knowledge of the
Companies.
"Liability" means any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated, and whether due or
to become due), including any liability for Taxes.
"Loss" means, without duplication, any damage (including, but not
limited to, consequential damages and punitive damages), obligation, payment,
cost, Taxes, expense, injury, judgment, penalty, fine, interest, or other loss
(including, but not limited to, the cost and expense of defending or prosecuting
any and all charges, claims, complaints, actions, demands, assessments,
litigation, proceedings, hearings, investigations, notices, judgments, orders,
decrees and settlements relating thereto, expenses of preparation and
investigation thereof and attorneys', experts', consultants' and accountants'
fees in connection therewith).
"Material Adverse Change" means any change, event or occurrence which
has, or could reasonably be expected to have, a material adverse effect upon the
business, financial condition, operations or assets of the Alarm Service Assets
taken as a whole, other than those which related solely to the alarm service
industry generally or the general economy.
"Multiemployer Plan" has the meaning set forth in Section 3(37) of
ERISA.
"Ordinary Course of Business" means the ordinary course of business of
the Alarm Subsidiaries with respect to the Alarm Service Assets consistent with
past practice (including with respect to quantity, amount and frequency).
"Party" or "Parties" means Ameritech, Buyer, Republic, RSC or the
Seller individually, and collectively.
"Permitted Liens" means all Liens listed on the Permitted Liens
Schedule attached hereto.
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"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization, a governmental entity or any
department, agency or political subdivision thereof or any other entity.
"Purchase Price" has the meaning set forth in Section 2.5.
"Qualified RMR" means the total recurring amount billed to the accounts
of customers subscribing for Services under written and fully executed Customer
Contracts for the provision of Services as of the Closing Date which shall be
calculated as the sum of the following:
(i) the total recurring revenue (net of any sales tax)
for a one-month period recognized under GAAP by the Alarm Subsidiaries
with respect to the accounts of such customers which have no
outstanding receivable balances for Services as of the Closing Date;
(ii) Plus the total recurring revenue (net of any sales
tax) for a one-month period recognized under GAAP by the Alarm
Subsidiaries with respect to the accounts of such customers which, as
of the Closing Date, had outstanding receivable balances for Services
which were 90 days or less past due from the Billing Date relating to
such receivable balances but only so long as the customer with any such
account has not canceled its Customer Contract for Services in writing
prior to the Closing Date or provided written notice of cancellation to
the applicable Alarm Subsidiary prior to the Closing Date;
(iii) Minus the total recurring revenue (net of any sales
tax) for a one-month period recognized under GAAP by the Alarm
Subsidiaries with respect to the accounts of such customers which is
included in (i) or (ii) above as of the Closing Date which derives from
Customer Contracts which have been canceled effective any time prior to
the ninetieth (90th) day following the Closing Date due to an act or
omission by any Alarm Subsidiary demonstrated by the Buyer through
reasonable evidence to have taken place prior to the Closing Date;
provided that Buyer demonstrates through reasonable evidence that Buyer
had taken all actions in Buyer's ordinary course of business,
consistent with past custom and practice (including with respect to
quantity, amount and frequency), to attempt to retain or re-sign the
cancelling customer.
"Security Interest" means any mortgage, pledge, security interest,
encumbrance, lien, charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof), any sale of
receivables with recourse against the Companies, any filing or agreement to file
a financing statement as debtor under the Uniform Commercial Code or any similar
statute (other than to reflect ownership by a third party of property leased to
the Companies under a lease which is not in the nature of a conditional sale or
title retention agreement), or any subordination arrangement in favor of another
Person, or negative pledge, or the right to impose any of the foregoing.
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"Seller Covered Person" means Republic and its Affiliates and their
respective accounting and legal representatives (internal and external), as well
as their respective officers, directors, employees and agents.
"Services" means electronic burglar alarm services, fire alarm
services, closed circuit television and electronic access control services,
central station monitoring services, security system maintenance services,
leases, fire testing and all other related services provided to the premises of
commercial, residential and other customers, including, without limitation,
guard response services related thereto, but does not mean the sale,
installation, maintenance or monitoring of security systems for automobiles and
other vehicles including vehicle tracking or locating services or products such
as SatTrak 24.
"Small Contract" means any contract, agreement, purchase order,
contractual right and other similar arrangement (other than Customer Contracts),
including all amendments thereto, which, as of the Closing, relates exclusively
to the Alarm Service Assets, to which one of the Alarm Subsidiaries is a party
or otherwise has rights or obligations thereunder and (a) under which the
required future payments by the Companies do not exceed $50,000 in the
aggregate, (b) under which future payments by the Companies do not exceed $2,000
per month and relate solely to the provision of office supplies, office
equipment, employee uniforms, pagers, wireless phones, vehicles, phone directory
advertisements, in each case as entered into in the Ordinary Course of Business,
or (c) under which the obligations of the Alarm Subsidiaries can be terminated
on no more than 30-day's prior notice without the payment of any amount in
excess of $50,000, and in any case do not have as a party thereto any Affiliate,
employee, officer or director of the Companies or 5% stockholder of Republic.
"Tax" or "Taxes" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, communications, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Code Sec. 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transaction, transfer, registration,
value added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
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ARTICLE 2 - THE TRANSACTION
2.1 Acquired Assets. On and subject to the terms and conditions of this
Agreement, at the Closing, Buyer shall purchase from each Alarm Subsidiary, and
each Alarm Subsidiary shall sell, transfer, convey and deliver to Buyer, free
and clear of any Security Interest other than Permitted Liens, all of its right,
title and interest in and to all of the assets included in or used primarily in
the business of the Alarm Service Assets (other than the Excluded Assets)
(collectively, the "Acquired Assets"), including, without limitation (subject to
retention by the Alarm Subsidiaries pursuant to Section 2.2) all of their right,
title and interest in the assets listed on the Acquired Assets Schedule attached
hereto and the following assets to the extent used or included in or generated
in connection with the operations of the Alarm Service Assets:
(a) the lock boxes of RSC, Seller and the Alarm Subsidiaries;
(b) prepaid costs and prepaid expenses;
(c) accounts, notes and other receivables;
(d) Inventory including raw materials and supplies, manufactured and
purchased parts (including without limitation motion, smoke and heat detectors
and alarm control panels whether or not held on the Companies' premises, its
customers' premises or elsewhere), work-in-process, finished goods and other
items of inventory;
(e) machinery, equipment, furniture, fixtures, leasehold improvements,
vehicles and other tangible personal property including that listed on the
Acquired Assets Schedule attached hereto;
(f) Intellectual Property, goodwill associated therewith, licenses and
sublicenses granted and obtained with respect thereto, and rights thereunder,
remedies against infringements thereof, and rights to protection of interests
therein under the laws of all jurisdictions; the names, trade names, trade
dress, and logos as described on the Intellectual Property Schedule attached
hereto;
(g) rights under agreements, contracts, purchase orders, contractual
rights and other similar arrangements, including all amendments thereto, that
relate to the Alarm Service Assets that are Small Contracts, Customer Contracts
or are set forth on the Assumed Contracts Schedule attached hereto
(collectively, the "Assumed Contracts");
(h) performance, surety and warranty bonds entered into in the Ordinary
Course of Business;
(i) prepayments and deposits to the extent any benefit therefrom could
inure to Buyer after the Closing;
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(j) all claims, refunds, rights of recovery, rights of set off and
rights of recoupment of any kind, except with respect to (i) Taxes incurred
prior to the Closing Date, (ii) insurance with respect to Excluded Assets and
(iii) holdbacks of Republic stock with respect to acquisitions by the Companies
prior to the Closing Date;
(k) all franchises, approvals, permits, licenses, orders,
registrations, certificates, variances and similar rights obtained from
governments and governmental agencies, to the extent transferable to Buyer;
(l) rights to the telephone numbers used in the operation of the Alarm
Service Assets and rights to receive mail and other communications addressed to
the Companies which relate to the Alarm Service Assets (including mail and
communications from customers, suppliers, distributors, agents and others and
payments with respect to the Acquired Assets);
(m) books, records, ledgers, files, documents, correspondence, lists,
drawings, specifications, advertising and promotional materials, studies,
reports and other printed or written materials relating to the Acquired Assets
or the Services;
(n) other property owned by the Alarm Subsidiaries and used primarily
in the operations of the Alarm Service Assets at any time prior to the Closing
Date.
2.2 Excluded Assets. Notwithstanding anything in this Agreement to the
contrary, the Acquired Assets shall not include the following assets of the
Companies (collectively, the "Excluded Assets"):
(a) cash and cash equivalents, including the Purchase Price;
(b) minute books and similar corporate records relating to the
existence, structure, or equity ownership of the Companies;
(c) shares of capital stock in any alarm monitoring service entity held
by Seller;
(d) any and all assets used in the sale, installation, maintenance of
security alarm systems in vehicles, including, without limitation, the SatTrak
24 business or other vehicle tracking or locating service (the "SatTrak 24
Business");
(e) any and all rights of Republic, RSC and Seller under this
Agreement;
(f) all claims, refunds, rights of recovery, rights of set off and
rights of recoupment of any kind with respect to (i) Taxes incurred prior to the
Closing Date, (ii) insurance with respect to Excluded Assets and (iii) holdbacks
of Republic stock with respect to acquisitions by the Companies prior to the
Closing Date;
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(g) any and all assets of Plans (as defined below), including, without
limitation, those of the Plans set forth on the Employee Benefits Schedule); and
(h) all rights to receive mail and other communications addressed to
the Companies relating to any of the Excluded Assets or the Excluded
Liabilities.
2.3 Assumed Liabilities. On and subject to the terms and conditions of
this Agreement, Buyer shall assume all of the Liabilities of the Alarm
Subsidiaries (other than the Excluded Liabilities), including (a) Liabilities
with respect to the performance of or breach of Assumed Contracts, Small
Contracts and Customer Contracts (including without limitation any franchise
agreement), (b) the Liabilities of the Alarm Subsidiaries relating to the
failure to comply with the Worker Adjustment and Retraining Notification Act
(and the state law equivalents thereof) in connection with the transactions
contemplated hereby, (c) the Liabilities of the Alarm Subsidiaries reflected on
the face of the Interim Balance Sheet, (d) the Liabilities of the Alarm
Subsidiaries incurred in the Ordinary Course of Business (other than any
Liability for Indebtedness) and (e) the Liabilities of the Alarm Subsidiaries
disclosed on the Disclosure Schedule or not required by the terms hereof to be
so disclosed (collectively, the "Assumed Liabilities"); provided, however, that
the designation of a Liability as an Assumed Liability shall not impact the
right of Buyer to maintain an indemnification claim relating thereto to the
extent permitted under Section 5.3 hereof. The Buyer hereby acknowledges that it
is assuming the Assumed Liabilities and the Buyer shall have the sole
responsibility to pay, discharge and perform all of the Assumed Liabilities
promptly when due.
2.4 Excluded Liabilities. Notwithstanding anything to the contrary
contained in this Agreement, Buyer shall not assume or be liable for (a) any of
the Companies' liabilities under this Agreement and any agreements and
instruments entered into in connection herewith; (b) amounts owed by the Alarm
Subsidiaries to Republic or any of its Affiliates; (c) any Indebtedness of any
of the Companies, (d) Taxes of any of the Companies; (e) any claims arising out
of prior acquisitions by the Companies, including without limitation, from
indemnification claims or held back or contingent consideration; (f) any
Liability arising under any contract or agreement which is not an Assumed
Contract; (g) any and all Liabilities under or relating to the employee benefit
plans, programs, policies and arrangements of the Companies (including, without
limitation, any and all Liabilities of the Plans, including those set forth on
the Employee Benefits Schedule), other than as explicitly assumed by Buyer in
Section 5.4; and (h) any Liabilities of any Company with respect to equity
securities or any and all rights or options relating to such securities
(including, without limitation, any equity financing agreements, stock option or
award agreements or plans, or securities law violations) (collectively, the
"Excluded Liabilities"). The Seller hereby acknowledges that it is retaining the
Excluded Liabilities and the Seller shall have the sole responsibility to pay,
discharge and perform all such liabilities and obligations promptly when due.
2.5 Purchase Price. The aggregate purchase price for the Acquired
Assets (the "Purchase Price") payable hereunder will be the assumption of the
Assumed Liabilities plus cash in an amount
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equal to $610,000,000.00, minus certain agreed adjustments equal to
$6,262,000.00, or net cash to Seller of $603,738,000.00 (six hundred three
million seven hundred thirty eight thousand dollars).
2.6 Closing Transactions.
(a) Closing. Subject to the conditions set forth in this
Agreement, the closing of the transactions contemplated by this Agreement (the
"Closing") will take place at the offices of Republic, commencing at 10:00 A.M.
local time, on the first business day following the termination of the waiting
period under the Xxxx-Xxxxx-Xxxxxx Act, or at such other time or place, or on
such other date as the Parties may mutually agree upon. The date on which the
Closing occurs is referred to herein as the "Closing Date."
(b) Conditions to the Obligations of the Buyer. The obligation
of the Buyer to consummate the transactions contemplated hereby is subject to
satisfaction at or prior to the Closing Date of each of the following
conditions:
(i) Republic's, RSC's and the Seller's representations
and warranties set forth in Section 3.1 shall be true and correct in
all material respects, in each case at and as of the Closing Date,
except for representations and warranties that are made by their terms
as of a specified date, which shall be true and correct in all material
respects as of such specified date;
(ii) Republic, RSC and the Seller shall have performed and
complied in all material respects with all of their covenants and
agreements set forth in this Agreement through the Closing Date;
(iii) Since the date hereof, no Material Adverse Change
shall have occurred;
(iv) The waiting period under the Xxxx-Xxxxx-Xxxxxx Act
shall have expired or shall have been terminated early;
(v) All consents, waivers and approvals set forth on the
Required Consents Schedule will have been duly obtained or waived
without conditions or requirements that are materially adverse to the
Buyer;
(vi) Republic, RSC and the Seller shall have delivered to
the Buyer certificates signed by Republic, RSC and Seller to the effect
that each of the conditions specified above in Sections 2.6(b)(i)-(v),
inclusive, has been satisfied.
(vii) No legal judgment, decree, order or injunction shall
be issued (and no such judgment, decree, order or injunction shall be
in effect) which (A) prevents the consummation of the transactions
contemplated by this Agreement or (B) directs any
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material portion of such transactions to be rescinded following
consummation of the transactions contemplated by this Agreement;
(viii) On the Closing Date, Seller will have delivered to
the Buyer each of the following:
(A) a xxxx of sale in the form attached hereto as Exhibit A-1
from each of the Alarm Subsidiaries;
(B) an assumption and assignment agreement in the form
attached hereto as Exhibit A-2 from each of the Alarm Subsidiaries and
a trademark assignment agreement in the form attached hereto as Exhibit
A-3 from each of the Alarm Subsidiaries;
(C) titles to all vehicles included in the Acquired Assets
(other than those disclosed in the Disclosure Schedule under the
caption "Leased Assets") or appropriate powers of attorney permitting
Buyer to transfer such titles after Closing (which vehicles have been
identified by the Seller on the Acquired Assets Schedule attached
hereto), assigned to Buyer;
(D) UCC-3 termination statements terminating all Security
Interests existing on the Acquired Assets other than Permitted Liens;
(E) assignment and assumption agreements in the form of
Exhibit B-1 hereto, assigning to Buyer all the leases for the
facilities leased by one or more of the Alarm Subsidiaries at the
locations set forth on the Real Property Schedule;
(F) landlord consent and estoppel certificates for the leased
real property located at 000 X. Xxxxx Xxxx Xxx., Xxxxxxxx Xxxxxxx,
Xxxxxxxx and 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxx in the
form of Exhibit B-2 hereto;
(G) a transitional services agreement in the form attached
hereto as Exhibit C between Buyer and Republic;
(H) a legal opinion of Xxxxx X. Xxxx, General Counsel of
Republic and Akerman, Senterfitt & Xxxxxx, P.A., counsel to Republic,
RSC and Seller with respect to the matters set forth in Exhibit D-1
attached hereto addressed to the Buyer and dated as of the Closing Date
("Companies' Legal Opinion");
(I) special warranty deeds transfering good and marketable fee
simple title to the owned real properties set forth in the Real
Property Schedule (the "Owned Real Property") to Buyer or Buyer's
designee (the "Deeds").
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(J) such other instruments of sale, transfer, conveyance and
assignment as Buyer may reasonably request in form satisfactory to
Buyer and consistent with the provisions of this Agreement.
The Buyer may waive any condition, in whole or in part, specified in this
Section 2.6(b); provided that any waiver of the conditions set forth in Section
2.6(b)(i) must be in a writing executed by Buyer and the mere closing of the
transactions contemplated hereby shall not constitute a waiver of such
conditions except to the extent provided in Section 4.5; and provided further
that all other conditions set forth in Section 2.6(b) shall be deemed to be
waived for purposes of indemnification under Section 5.3(a) to the extent Seller
discloses that they are unfulfilled in the certificate delivered by the Seller
to the Buyer pursuant to Section 2.6(b)(vi) (but solely to the extent so
disclosed) if the transactions contemplated by this Agreement are consummated.
(c) Conditions to the Obligations of Republic, RSC and the
Seller. The obligations of Republic, RSC and the Seller to consummate the
transactions contemplated hereby are subject to satisfaction at or prior to the
Closing Date of each of the following conditions:
(i) The representations and warranties set forth in
Section 3.2 shall be true and correct in all material respects, in each
case at and as of the Closing Date;
(ii) The Buyer and Ameritech shall have performed and
complied in all material respects with all of its covenants and
agreements set forth in this Agreement through the Closing Date;
(iii) The waiting period under the Xxxx-Xxxxx-Xxxxxx Act
shall have expired or shall have been terminated early;
(iv) The Buyer and Ameritech shall have delivered to
Republic, RSC and Seller a certificate signed by an officer of the
Buyer to the effect that each of the conditions specified above in
Sections 2.6(c)(i)-(iii), inclusive, are satisfied in all material
respects;
(v) No legal judgment, decree, order or injunction shall
have been issued which could reasonably be expected to (A) prevent the
consummation of the transactions contemplated by this Agreement, or (B)
cause any of such transactions to be rescinded following consummation;
(vi) On the Closing Date, the Buyer will have delivered to
Seller each of the following:
(A) cash in the amount required under Section 2.5 by wire
transfer of immediately available funds to an account designated by
Seller;
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(B) an assumption and assignment agreement in the form
attached hereto as Exhibit A-2 from the Buyer;
(C) legal opinion of Xxxxx Xxxxx, corporate secretary of
Ameritech, and Xxxxxxxx & Xxxxx, counsel to Ameritech and Buyer with
respect to the matters set forth in Exhibit D-2 attached hereto
addressed to the Seller and dated as of the Closing Date ("Buyer's
Legal Opinion"); and
(D) such other instruments of assumption as the Seller may
reasonably request in form satisfactory to the Seller and consistent
with the provisions of this Agreement;
The Seller may waive any condition, in whole or in part, specified in this
Section 2.6(c).
2.7 Purchase Price Allocation. The Purchase Price shall be allocated
for tax purposes among each item or class of Acquired Assets as mutually agreed
to by Buyer and Seller and set forth on a Tax Allocation Schedule to be mutually
agreed upon by Buyer and Seller within seventy-five (75) days of the Closing
Date. Seller and Buyer shall prepare and file any notice or other filing
required pursuant to Section 1060 of the Code, and any such notices or filings
will be prepared based upon such tax allocation for the Purchase Price.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Republic, RSC and the Seller. As
a material inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, Republic, RSC and the Seller hereby each,
jointly and severally, represent and warrant to Buyer that the statements
contained in this Section 3.1 are correct and complete as of the date of this
Agreement except as set forth in the Disclosure Schedule.
(a) Organization and Corporate Power. RSC is a direct
wholly-owned subsidiary of Republic and Seller is a direct wholly-owned
subsidiary of RSC. The Alarm Subsidiary Schedule sets forth a list of each
subsidiary of Republic, RSC and Seller which is engaged in the provision of, or
holds assets used for the provision of Services (collectively, the "Alarm
Subsidiaries"). Each of the Alarm Subsidiaries is a wholly-owned subsidiary of
Seller and the Alarm Subsidiaries are the sole Affiliates of Republic, RSC
and/or the Seller engaged in the provision of Services. Republic, RSC and the
Seller do not directly engage in the provision of Services. Each of the
Companies is a corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation. Each of the
Companies has full corporate power and authority to carry on the operations of
the Alarm Service Assets and to own and use the properties owned and used by
them.
(b) Authorization of Transaction. Each of the Companies has
full corporate power and authority to execute and deliver this Agreement and the
other agreements contemplated hereby to which they are a party and to perform
their respective obligations hereunder and
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thereunder. Without limiting the generality of the foregoing, the boards of
directors of each of the Companies have each duly authorized the execution,
delivery, and performance of this Agreement and the other agreements
contemplated hereby to which they are a party. This Agreement and the other
agreements contemplated hereby to which the Companies are parties constitute the
valid and legally binding obligations of theirs, enforceable against them in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, similar laws of debtor relief and general principles of equity.
(c) Noncontravention. Except as set forth on the Consents
Schedule, assuming the accuracy of the representations of Buyer in Section 3.2,
neither the execution and the delivery of this Agreement, nor the consummation
of the transactions contemplated hereby will (i) violate any statute,
regulation, rule, judgment, order, decree, stipulation, injunction, charge, or
other restriction of any government, governmental agency, or court to which any
of the Companies is subject or any provision of the certificate of incorporation
or bylaws of any of the Companies or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any contract, lease, sublease, license, sublicense, franchise, permit,
indenture, agreement or mortgage for borrowed money, instrument of Indebtedness,
Security Interest, or other arrangement relating to the Acquired Assets to which
any of the Companies is a party or by which it or any of them is bound or to
which any of its or any of their assets is subject; other than any violation,
conflict, breach, default, acceleration or right, individually or in the
aggregate, that will not cause and could not reasonably be expected to cause a
Material Adverse Change.
(d) Governmental Consent. Other than as may be required for
compliance with the provisions of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the "Xxxx-Xxxxx-Xxxxxx Act") and federal securities
laws, neither Republic, RSC, Seller nor the Subsidiaries is required to make any
declaration to or registration or filing with, or to obtain any permit, license,
consent, accreditation, exemption, approval or authorization from, any
governmental or regulatory authority in connection with the execution, delivery
or performance of this Agreement or the consummation of any of the transactions
contemplated hereby.
(e) Financial Statements.
(i) Attached as the Financial Statement Exhibit
is (a) the unaudited consolidated balance sheet of the Alarm
Subsidiaries at December 31, 1996 (the "Balance Sheet"), and
the related unaudited consolidated statement of income for the
fiscal year then ended (collectively the "Financial
Statements"), and (b) an unaudited consolidated balance sheet
of the Alarm Subsidiaries at August 31, 1997 (the "Interim
Balance Sheet") and the related unaudited consolidated
statement of income for the eight (8) months then ended,
(collectively, the "Interim Financial Statements").
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(ii) The Financial Statements fairly present in
all material respects the financial condition and the results
of operations of the Alarm Subsidiaries at and as of December
31, 1996 and were prepared in accordance with GAAP except as
noted thereon. The Financial Statements were prepared in all
material respects in accordance with the accounting principles
used in preparing the audited consolidated balance sheets of
Republic as of December 31, 1996 (the "Republic Audited
Financial Statements").
(iii) The Interim Financial Statements fairly
present in all material respects the financial condition and
the results of operations of the Alarm Subsidiaries at and as
of August 31, 1997 and were prepared in accordance with GAAP,
except as noted thereon and subject to normal year-end audit
adjustments none of which are material other than the
elimination of intercompany accounts and transactions. The
Interim Financial Statements were prepared in all material
respects in accordance with the accounting principles used in
preparing the Republic Audited Financial Statements, except
for the capitalization of certain costs which were expensed in
1996.
(iv) To the knowledge of the Companies, the books
of account and other financial records of the Alarm
Subsidiaries fairly reflect in all material respects all
transactions, assets and liabilities of the Alarm
Subsidiaries, and the information contained in the documents
listed or attached to the attached Financial Information
Schedule fairly present a description or summary in all
material respects of the matters purported to be described or
summarized in such documents, and all of the financial
information attached to the Financial Information Schedule
which is of the kind that is derived from books of account and
other financial records has been based on such books and other
financial records.
(f) Absence of Undisclosed Liabilities. Except as set forth on
the Disclosure Schedule, there are no Liabilities relating to the Alarm Service
Assets or the provision by the Alarm Subsidiaries of Services (whether known or
unknown and whether absolute, accrued, contingent, or otherwise) (and, to the
Knowledge of the Companies, there is no Basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
against the Companies giving rise to any such Liability) except for (1)
Liabilities reflected or reserved against in the Interim Balance Sheet, (2)
Liabilities incurred in the Ordinary Course of Business since August 31, 1997,
and (3) Liabilities under purchase orders entered in the Ordinary Course of
Business prior to August 31, 1997 that constitute Small Contracts. The Knowledge
Schedule includes the president or other person responsible for the management
of each individual Alarm Subsidiary and the officers of Republic whose
responsibility includes the one or more aspects of the operations of the Alarm
Subsidiaries.
(g) Recent Events. Since July 31, 1997, the Companies have not
experienced any Material Adverse Change, and to the Knowledge of the Companies,
no event has occurred or
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circumstance exists that would likely result in such a Material Adverse Change.
Except as expressly contemplated by this Agreement or as set forth on the
attached Developments Schedule, since July 31, 1997, the Companies have not,
with respect to the Alarm Service Assets: (1) sold, assigned, transferred,
leased, licensed or otherwise encumbered (or otherwise entered into an agreement
to do any of the foregoing) any of its tangible assets in excess of $100,000,
except in the Ordinary Course of Business; (2) deviated from its customary
policies and procedures relating to customer credit evaluations and Customer
Contract negotiation and execution; (3) delayed or postponed the payment of any
accounts payable or any other Liability or agreed or negotiated with any party
to extend the payment date of any accounts payable or accelerated the collection
of any accounts or notes receivable other than in the Ordinary Course of
Business; (4) made any change in any method of accounting or accounting
policies, made any change in its cash management policies, or made any material,
non-Ordinary Course of Business write-down in the value of its inventory; (5)
entered into any other material transaction, whether or not in the Ordinary
Course of Business; or (6) agreed, whether orally or in writing, to do any of
the foregoing. Since the later of December 31, 1996 or the date any particular
Alarm Subsidiary was acquired directly or indirectly by Republic, each Alarm
Subsidiary has not factored any receivables.
(h) Real Property. The Real Property Schedule lists and
describes briefly all real property included in the Alarm Service Assets. With
respect to each such parcel of Owned Real Property:
(i) The identified owner has good and marketable title to
the parcel of Owned Real Property, free and clear of any Security
Interest, easement, covenant, or other restriction, except for taxes
not yet due and payable, for installments of special assessments not
yet delinquent and easements, covenants, and other restrictions which
do not impair the current use or occupancy of the property subject
thereto;
(ii) there are no pending or, to the Knowledge of the
Companies, threatened condemnation proceedings, lawsuits, or
administrative actions relating to the property, or other matters
affecting materially and adversely the current use or occupancy
thereof;
(iii) the legal description for the parcel contained in the
deed thereof describes such parcel fully and adequately, the buildings
and improvements are located within the boundary lines of the described
parcels of land, are not in violation of applicable setback
requirements, zoning laws, and ordinances (and none of the properties
or buildings or improvements thereon are subject to "permitted
non-conforming use" or "permitted non-conforming structure"
classifications), and do not encroach on any easement which may burden
the land, the land does not serve any adjoining property for any
purpose inconsistent with the use of the land, and each property has
access to a public roadway, and the property is not located within any
flood plain or subject to any similar type restriction for which any
permits or licenses necessary to the use thereof have not been
obtained;
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(iv) all facilities have received all approvals of
governmental authorities (including licenses and permits) required in
connection with the ownership or operation thereof and have been
operated and maintained in accordance with applicable laws, rules, and
regulations;
(v) there are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to any
party or parties the right of use or occupancy of any portion of the
parcel of real property; and
(vi) there are no outstanding options or rights of first
refusal to purchase the parcel of real property, or any portion thereof
or interest therein.
The leases described on the Real Property Schedule cover all of the real estate
leased, used or occu pied by the operations of the Alarm Service Assets in
connection with the provision of Services (collectively, the "Real Property").
Except as set forth in the Real Property Schedule, the leases de scribed on the
Real Property Schedule are in full force and effect and the Seller holds a valid
and existing leasehold interest under each of such leases. Seller has delivered
to Buyer complete and accurate copies of each of the leases described in the
Real Property Schedule and none of such leases has been modified in any material
respect, except to the extent that such modifications are disclosed by the
copies delivered to Buyer. Seller is not in default and no circumstances exist
which would result in such default, under any of such leases, and to the
Knowledge of the Companies, no other party to such leases has the right to
terminate, accelerate performance under or otherwise modify (including upon the
giving of notice or the passage of time) any of such leases. To the Knowledge of
the Companies, no lessor under any such lease is in default in any material
respect under any of such leases in its duties to the lessee. None of the
Companies has assigned, transferred, conveyed, mortgaged, deeded in trust, or
encumbered any interest in any of the leaseholds or subleaseholds described in
the Real Property Schedule.
(i) Title to Assets; Condition and Sufficiency of Assets. As
of the Closing, the Alarm Subsidiaries will have valid title to each of the
Acquired Assets and shall convey the same to Buyer free and clear of all
Security Interests other than Permitted Liens. No person or entity has any
agreement, option, understanding, commitment or right to purchase from any of
the Companies any of the Acquired Assets or any rights or interests therein,
other than inventory sold to customers in the Ordinary Course of Business. The
Acquired Assets are in good condition and repair, except for ordinary wear and
tear, are fit for use in the provision of Services and conform to the
requirements of applicable law and the standards of Underwriters Laboratories in
all material respects to the extent applicable. The Acquired Assets include all
assets necessary for, or used by the Companies in, the provision of Services.
Neither Republic nor any of its Affiliates, other than the Alarm Subsidiaries,
is engaged in the provision of Services. None of the assets used in the SatTrak
24 Business are used in the provision of Services.
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(j) Intellectual Property. Except as set forth under the
"Exceptions" heading on the Intellectual Property Schedule attached hereto, the
Alarm Subsidiaries own or have the right to use all Intellectual Property
necessary for the operation of the Alarm Service Assets or the provision of
Services as presently conducted, and all of such Intellectual Property is set
forth on the Intellectual Property Schedule. As of the Closing, each item of
Intellectual Property set forth on the Intellectual Property Schedule under the
caption "Material Intellectual Property" will be owned or available for use by
the Buyer on substantially similar terms and conditions immediately subsequent
to the Closing. With respect to the Alarm Service Assets, to the Knowledge of
the Companies, the Companies have not interfered with, infringed upon,
misappropriated, or otherwise become engaged in a controversy or dispute arising
out of any Intellectual Property rights of third parties, and neither the
Companies nor any of their respective directors and officers (and employees with
responsibility for Intellectual Property matters) have received any written
charge, complaint, claim, or notice alleging any such interference,
infringement, misappropriation, or violation for the past two (2) years. To the
Knowledge of the Companies, no third party has interfered with, infringed upon,
misappropriated, or otherwise become engaged in a controversy or dispute arising
out of any Intellec tual Property rights with respect to the Alarm Service
Assets for the past two (2) years.
(k) Contracts. The Seller has delivered or otherwise made
available to Buyer a correct and complete copy of each Assumed Contract
(including in each case all amendments thereto) other than Small Contracts and
Customer Contracts. With respect to each Assumed Contract: (A) the contract is
legal, valid, binding, enforceable and in full force and effect except as
enforceability may be limited by bankruptcy, similar laws of debtor relief and
general principles of equity; (B) (other than with respect to the Small
Contracts) the contract will, assuming that any required third party consent
identified on the Consent Schedule attached hereto with respect to such contract
has been obtained, continue to be legal, valid, binding, and enforceable and in
full force and effect on identical terms immediately after the Closing except as
enforceability may be limited by bankruptcy, similar laws of debtor relief and
general principles of equity and except that no representation or warranty is
made as to the enforceability or assignability of any non-competition covenants
set forth on the Assumed Contracts Schedule; (C) no Company is, and to the
Knowledge of the Companies no other party is, in breach or default (including,
without limitation, with respect to any express or implied warranty other than,
in the case of Customer Contracts for residential premises, warranty claims
incurred in the Ordinary Course of Business), and no event has occurred which
with notice or lapse of time would constitute a breach or default by Seller or
permit termination, modification, or acceleration, under the contract by any
other party thereto; (D) the contract has not been modified or amended in any
way other than through a written amendment signed by all parties to such
contract; (E) except as otherwise set forth on the Consent Schedule, the
assignment of the Companies' rights and obligations to Buyer hereunder under any
contract other than Small Contracts will not require the consent of or notice to
any other person or entity; and (F) the Work in Process Schedule sets forth a
list of the contracts relating to the installation of security systems at
non-residential premises for which installation has not been fully completed
prior to the Closing Date and for which installation costs will exceed $20,000.
The Alarm Subsidiaries provide all of the Services under Customer Contracts.
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(l) Affiliate Transactions. The Affiliate Transaction Schedule
contains a true, correct and complete schedule of all intercompany contracts,
agreements, receivables, payables and other Liabilities and services regularly
provided , between the Alarm Subsidiaries, on the one hand, and Republic or any
of its Affiliates (other than the Alarm Subsidiaries), on the other hand, as of
the date hereof.
(m) Insurance. The Insurance Schedule attached hereto, lists
each insurance policy maintained by the Alarm Subsidiaries with respect to the
Alarm Service Assets and the loss history for all lines of insurance coverage
maintained by the Companies with respect to the Alarm Service Assets since the
purchase of each respective Alarm Subsidiary.
(n) Employees. The Employee Schedule attached hereto sets
forth as of the dates noted thereon, the names, position and annual salaries of
each salaried employee of the Companies working in the business of the Alarm
Service Assets. Except as set forth on the Employee Schedule and except for
normal attrition in the Ordinary Course of Business, to the actual knowledge of
the persons set forth on the Knowledge Schedule, no employees of any Alarm
Subsidiary (such, an "Employee," and collectively, the "Employees") has or group
of such Employees (other than the Non-Hired Employees) have any plans to cease
working for the Alarm Subsidiaries. No Alarm Subsidiary is a party to or bound
by any collective bargaining agreement, and the business of the Alarm Service
Assets has not experienced any strikes, grievances, other collective bargaining
disputes or claims of unfair labor practices relating to Employees. To the
actual knowledge of the persons set forth on the Knowledge Schedule, there is no
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to the Employees.
(o) Employee Benefits. The Employee Benefits Schedule attached
hereto contains an accurate and complete list of all Plans (as defined below)
maintained, contributed to or sponsored by the any of the Companies and made
available to the Employees who work in the business of the Alarm Service Assets
including all Plans contributed to, maintained or sponsored by each member of
the controlled group of companies, within the meaning of Section 414 of the
Code, of which any of the Companies is a member. For purposes of this Agreement,
the term "Plans" shall mean: (i) "employee benefit plans," as such term is
defined in Section 3(3) of ERISA, whether or not funded and whether or not
terminated and (ii) personnel policies, and fringe benefit plans, policies,
programs and arrangements, whether or not subject to ERISA, whether or not
funded, and whether or not terminated, including without limitation, stock
bonus, deferred compensation, pension, severance, bonus, vacation, travel,
incentive, and health, disability and welfare plans. No Plan is a Multiemployer
Plan. With respect to the Employees and former Employees, their spouses and
dependents, the Companies have no obligation to provide, or Liability for,
health care, life insurance, severance or other benefits after termination of
employment except (a) continuation coverage as required by Section 601 of ERISA
and Section 4980B of the Code and (b) continuation rights and conversion rights
under applicable state laws.
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(p) Litigation. The Litigation Schedule attached hereto sets
forth each instance in which any of the Companies with respect to the Alarm
Service Assets is (i) subject to any unsatis fied judgment, order, decree,
stipulation, injunction, or charge that relates in any way to the Alarm Service
Assets or (ii) are a party, or, to the Knowledge of the Companies, have been
threatened in writing within the past twelve (12) months to be made a party to
any charge, complaint, action, suit, proceeding, hearing, or investigation of or
in any court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator, in each case which
relates in any way to the Alarm Service Assets. None of the charges, complaints,
actions, suits, proceedings, hearings, and investigations set forth in the
Litigation Schedule could result, individually or in the aggregate, in a
Material Adverse Change.
(q) Compliance with Laws; Certain Operations. Except as set
forth on the Legal Compliance Schedule attached hereto (i) with respect to the
business of the Alarm Service Assets, each of the Companies is in compliance
with and has not violated any applicable law, rule or regulation of any federal,
state, local or foreign government or agency thereof which affects the Alarm
Service Assets; and (ii) each Company is in compliance with all terms and
conditions of all required permits, licenses, certificates, accreditations or
other authorizations of foreign, federal, state and local government agencies
required for the conduct of the Alarm Service Assets, and is also in compliance
with all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any foreign,
federal, state or local law, or any regulation, code, plan, order, decree or
judgment issued, entered, promulgated or approved thereunder applicable to the
operation of the Alarm Service Assets.
(r) Environment, Health and Safety. Except as set forth on the
Environmental Schedule, each of the Companies and their respective predecessors
and Affiliates has complied with all Environmental, Health, and Safety Laws with
respect to the Alarm Service Assets, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been filed or
commenced against any of them alleging any failure so to comply. None of the
Companies has any Liability (and none of the Companies and their respective
predecessors and Affiliates has handled or disposed of any substance, arranged
for the disposal of any substance, exposed any employee or other individual to
any substance or condition, or owned or operated any property or facility in any
manner that could form the basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand giving
rise to any Liability) with respect to the Alarm Service Assets for damage to
any site, location, or body of water (surface or subsurface), for any illness of
or personal injury to any employee or other individual, or for any reason
illegal under any Environmental, Health, and Safety Law. Other than as set forth
on the Environmental Schedule, all properties and equipment included in or used
in the business of the Alarm Service Assets are free of asbestos, PCB's,
methylene chloride, trichloroethylene, 1,2- trans-dichloroethylene, dioxins,
dibenzofurans, and Extremely Hazardous Substances.
(s) Brokers' Fees. Except for a fee payable by Republic to
Xxxxx & Company, Incorporated, none of the Companies has any Liability or
obligation to pay any fees or commissions
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to any broker, finder, or agent with respect to the transactions contemplated by
this Agreement and neither Buyer nor any Affiliate of Buyer could become liable
or otherwise obligated with respect to any such Liability.
(t) Taxes. Except as set forth on the Taxes Schedule, with
respect to the Alarm Service Assets, none of the Companies has failed to (i)
file, or cause to be filed, in respect of the business of the Alarm Service
Assets, any required foreign, federal, state, county and local Tax returns which
are required to be filed and or (ii) pay any Taxes which have become due
pursuant to applicable Tax law. With respect to the Alarm Service Assets,
neither the Companies nor any Affiliate of the Companies has failed to (a)
collect or withhold any monies required to be withheld by the Companies or any
Affiliate of the Companies from employees of the Companies for income taxes,
social security and other payroll Taxes, or (b) either pay to the respective
governmental agencies, set aside, in accounts for such purpose, or accrue,
reserve against and enter upon the books of the Companies amounts sufficient to
cover Taxes. With respect to the Alarm Service Assets, none of the Companies is
obligated to make any payment, and is not a party to any agreement that under
certain circumstances could obligated it to make any payment that will not be
deductible under Code Section 280G.
(u) Qualified RMR. The Qualified RMR as of the Closing Date is
as set forth on the RMR Schedule.
3.2 Representations and Warranties of Buyer and Ameritech. As a
material inducement to Republic, RSC and Seller to execute this Agreement and
consummate the transactions contemplated hereby, Buyer and Ameritech hereby
jointly and severally represent and warrant to Republic, RSC and the Seller that
the statements contained in this Section 3.2 are correct and complete as of the
date of this Agreement.
(a) Organization. Each of Buyer and Ameritech is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware.
(b) Authorization of Transaction. Each of Buyer and Ameritech
has full corporate power and authority to execute and deliver this Agreement and
the other agreements contemplated hereby to which it is a party and to perform
its obligations hereunder and thereunder. Without limiting the generality of the
foregoing, the board of directors of Ameritech and the sole stockholder of Buyer
have each duly authorized the execution, delivery, and performance of this
Agreement and the other agreements contemplated hereby to which they are a
party. This Agreement and the other agreements contemplated hereby to which the
Buyer and Ameritech are a party constitute the valid and legally binding
obligation of the Buyer and Ameritech, enforceable against the Buyer and
Ameritech in accordance with their respective terms, except as enforceability
may be limited by bankruptcy, similar laws of debtor relief and general
principles of equity.
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(c) Noncontravention. Assuming the accuracy of the
representations of Republic, RSC and the Seller in Section 3.1, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby will (i) violate any statute, regulation, rule,
judgment, order, decree, stipulation, injunction, charge, or other restriction
of any government, governmental agency, or court to which Buyer or Ameritech is
subject or any provision of the certificate of incorporation or bylaws of Buyer
or Ameritech or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
contract, lease, sublease, license, sublicense, franchise, permit, indenture,
agreement or mortgage for borrowed money, instrument of Indebtedness, Security
Interest, or other arrangement to which Buyer or Ameritech is a party or by
which any of them is bound or to which any of its or any of their assets is
subject; other than any violation, conflict, breach, default, acceleration or
right, individually or in the aggregate, that will not cause and could not
reasonably be expected to cause a Material Adverse Change.
(d) Governmental Consent. Other than as may be required for
compliance with the provisions of the Xxxx-Xxxxx-Xxxxxx Act and the federal
securities laws, Buyer is not required to make any declaration to or filing
with, or to obtain any permit, license, consent, accreditation, approval or
authorization from, any governmental or regulatory authority in connection with
the execution, delivery or performance of this Agreement or the consummation of
any of the transactions contemplated hereby.
(e) Brokers' Fees. Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Companies could become
liable or obligated.
(f) Adequate Financing Available. Buyer and Ameritech have
sufficient, unrestricted cash on hand from readily available internal and
external financing sources to pay the cash portion of the Purchase Price in full
at the Closing, and the transactions contemplated hereby are not subject to any
financing contingencies.
ARTICLE 4 - PRE-CLOSING COVENANTS
4.1 Covenants Concerning the Alarm Service Assets. At all times prior
to the Closing Date, Republic, RSC and the Seller, jointly and severally,
covenant and agree to:
(a) cause the Alarm Subsidiaries to conduct the business and
operations of the Alarm Service Assets only in the Ordinary Course of Business;
(b) cause the Alarm Subsidiaries to maintain their cash
management practices with respect to the Alarm Service Assets and all related
policies, practices and procedures with respect to collection of trade accounts
receivable, accrual of accounts receivable, inventory control,
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prepayment of expenses, payment of trade accounts payable, accrual of other
expenses, deferral of revenue, and acceptance of customer deposits in the
Ordinary Course of Business;
(c) cause current insurance policies with respect to the Alarm
Service Assets not to be canceled or terminated or any of the coverage
thereunder to lapse, unless, simultaneously with such termination, cancellation
or lapse, replacement policies providing coverage equal to or greater than the
coverage under the canceled, terminated or lapsed policies to the extent
practicable for market premiums are in full force and effect;
(d) maintain, repair and replace Alarm Service Assets
consistent with past practices;
(e) use all reasonable efforts to retain (1) substantially all
Employees (other than Non-Hired Employees) who are in good standing and (2)
maintain all relationships with agents, distributors, licensees, suppliers and
customers which are material to the Alarm Service Assets;
(f) maintain books, accounts and records in accordance with
past practice as used in the preparation of the Interim Financial Statements;
(g) maintain in full force and effect the existence of all
material Intellectual Property which is used or owned in connection with the
business of the Alarm Service Assets;
(h) comply with all material legal requirements and
contractual obligations applicable to or binding upon the Companies with respect
to the Alarm Service Assets;
(i) maintain all material authorizations, consents,
accreditations, licenses, permits and approvals pertaining to the Companies with
respect to the Alarm Service Assets;
(j) not mortgage, pledge or subject to any Security Interest
(except those for Taxes not yet due and payable) any of the properties or assets
included in the Alarm Service Assets;
(k) not sell, assign or transfer any of the Customer Contracts
and shall not sell, assign or transfer any other remaining Alarm Service Assets
(except in the Ordinary Course of Business) or cancel without fair consideration
any debts or claims owing to any Company or held by any Company which is an
Acquired Asset;
(l) confer with Buyer before taking any actions outside the
Ordinary Course of Business and confer with Buyer concerning any development of
a Material Adverse Change, in each case with respect to the Alarm Service
Assets; and
(m) agree or commit to do any of the matters described in (j)
or (k) above or to not do any other matter described in this Section 4.1.
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4.2 Reasonable Access. Republic, RSC and Seller will permit the Buyer,
its Affiliates, and their respective employees, accountants, legal counsel and
other representatives to have reasonable access at all reasonable times upon
advance notice, and in a manner so as not to interfere with the normal business
operations of the Alarm Service Assets, to such premises, properties, personnel,
books, records, contracts, Tax records, and documents of or pertaining to the
Alarm Service Assets, as is reasonably necessary or desirable for the Buyer. All
information given to the Buyer and its representatives shall be subject to the
Confidentiality Agreement to the extent of the terms thereof.
4.3 Exclusivity. Neither Republic nor any Affiliates of or Persons
acting in concert with Republic shall at any time prior to the Closing Date (or
earlier if this Agreement is terminated pursuant to Article 6 hereof): (i)
solicit, initiate, or encourage the submission of any proposal or offer from any
Person relating to any (A) liquidation, dissolution, or recapitalization of RSC,
Seller or any of the Alarm Subsidiaries, (B) merger or consolidation or share
exchange of RSC, Seller or any of the Alarm Subsidiaries, (C) acquisition or
purchase of securities or assets of RSC, Seller or any of the Alarm
Subsidiaries, or (D) similar transaction or business combination involving the
Alarm Service Assets, RSC, Seller or the Alarm Subsidiaries or (ii) participate
in any discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner any
effort or attempt by any person to do or seek any of the foregoing. Republic
will notify the Buyer immediately if any Person makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.
4.4 General Obligation to Close. Each of the Parties will use their
best efforts to take all actions and to do all things necessary to consummate
and make effective the transactions contemplated hereby.
4.5 Notice of Developments. The Companies may supplement the Disclosure
Schedule prior to the Closing, by notice given in accordance with Section 7.7,
to update the disclosures made thereunder or to otherwise include information
which would have been required to be set forth or described in the Disclosure
Schedule or to have been noted as an exception to the representations and
warranties in Section 3.1 had it existed on the date hereof. For purposes of
determining the accuracy of the representations and warranties of the Companies
contained in Article 3.1 in order to determine the fulfillment of the conditions
set forth in Section 2.6(b), the Disclosure Schedule delivered by the Companies
shall be deemed to include only that information contained therein on the date
of this Agreement and shall be deemed to exclude any information contained in
any subsequent supplement or amendment thereto but if the Closing occurs, the
Disclosure Schedule as supplemented pursuant to this Section 4.5 shall be deemed
to modify the representations and warranties set forth in Section 3.1 for
purposes of determining whether an indemnification obligation exists under
Section 5.3(a) and shall be deemed to constitute a waiver of the right to
indemnification under Section 5.3(a) for the matters disclosed in any such
supplement or amendment (but solely to the extent so disclosed). Buyer shall
retain the right to add names to the Non-Hired Employees Schedule at any time
prior to the Closing Date.
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4.6 Obligation to Remove Liens. Republic, RSC and the Seller, jointly
and severally, covenant and agree to remove all of the Liens set forth on the
Permitted Liens Schedule within 90 days after the Closing Date, other than the
Liens indicated with an asterisk on such schedule.
ARTICLE 5 - CERTAIN COVENANTS
5.1 Post-Closing Assistance Matters.
(a) Post Closing Assistance. In case at any time after the
Closing any further action is necessary or desirable to carry out the purposes
of this Agreement and to effect, consummate, confirm or evidence the
consummation of the transactions contemplated hereby (including, without
limitation, with respect to obtaining all licenses, permits, authorizations,
accreditations and consents necessary in connection therewith and with respect
to conveying title to vehicles, leases and land), each of the Parties will take
such further action (including, without limitation, the execution and delivery
of such further instruments and documents) as any other Party reasonably may
request, at the sole cost and expense of the requesting Party (except to the
extent such expenses are subject to indemnification under Section 5.3 or are
subject to Section 7.12 or such action is related to fulfilling any of the
closing conditions under Section 2.6).
(b) Nonassignable Contracts. To the extent that the assignment
to Buyer of any contract, commitment, license, lease or other agreement of the
Alarm Subsidiaries included in the Acquired Assets (the "Contracts") is deemed
necessary by Buyer and is not permitted without the consent of any other party
to the Contract, this Agreement shall not be deemed to constitute an assignment
of any such Contract if such consent is not given or if such assignment
otherwise would constitute a breach of, or cause a loss of contractual benefits
under, any such Contract. The Alarm Subsidiaries shall advise Buyer promptly in
writing with respect to any and all Contracts which will not receive required
consent prior to the Closing. If any such consent is not obtained and such
transactions are consummated, the Companies shall cooperate with Buyer to
provide Buyer with the rights and benefits (subject to the obligations) under
such Contracts, including, if requested by Buyer and at the Buyer's expense, (i)
by enforcing for the benefit of Buyer any and all rights of the Alarm
Subsidiaries against any other person arising out of any breach or cancellation
of any such Contract by such other person, (ii) acting as an agent on behalf of
Buyer, (iii) subcontracting to Buyer the right to perform under any such
Contract on the same economic terms as applied to the Alarm Subsidiaries prior
to the Closing and (iv) acting as Buyer shall otherwise reasonably require.
5.2 Survival Period. All of the representations and warranties provided
in this Agreement shall survive the Closing for one (1) year; except with
respect to a claim arising under Section 3.1(e) ("Broker's Fee"), Section 3.1
(r) ("Environment, Health and Safety") and Section 3.1(t) ("Taxes"), which shall
survive until the expiration of the applicable statute of limitations; except
with respect to a claim arising under Section 3.1(a) ("Authorization of
Transaction") or the first sentence of Section 3.1(i) ("Title to Assets;
Condition and Sufficiency of Assets"), which shall survive forever;
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and except with respect to a claim arising under Section 3.1(u)("Qualified RMR")
which shall survive the Closing for 150 days. All claims arising out of the
representations and warranties provided in this Agreement shall be unaffected by
any investigations made by or on behalf of any Party hereto. Notwithstanding
anything in Section 5.2 to the contrary, in the event of any breach of a
representation or warranty by a Party that constitutes fraud, the representation
or warranty shall survive consummation of the transactions contemplated in this
Agreement and continue in full force and effect forever thereafter with respect
to such fraud. Unless otherwise specifically limited by this Agreement, all of
the covenants and agreements made in this Agreement shall survive the Closing
for the period necessary for their performance.
5.3 Indemnification.
(a) Indemnification by Republic, RSC and the Seller. Each of
Republic, RSC and Seller agrees, jointly and severally, that regardless of any
investigation made at any time by or on behalf of Buyer, Republic, RSC and
Seller shall, jointly and severally, indemnify and save and hold harmless the
Buyer Covered Persons from and against any Loss, suffered or incurred by any
such Covered Person arising out of or resulting from or in respect of: (1) Any
inaccuracy in any rep resentation or the breach of any warranty (except the
representation and warranty set forth in Section 3.1(u) ("Qualified RMR")) made
by Republic, RSC or Seller pursuant to this Agreement; (2) Any failure by
Republic, RSC or the Seller duly to perform or observe any term, provision,
covenant, agreement or condition in this Agreement on the part of any such Party
to be performed or observed; (3) Any Excluded Liability; and (4) Any inaccuracy
in any representation or the breach of any warranty contained in Section 3.1(u)
("Qualified RMR") measured in accordance with the RMR Schedule.
(b) Indemnification by Ameritech and Buyer. Ameritech and
Buyer agree that regardless of any investigation made at any time by or on
behalf of the Seller, Buyer and Ameritech, jointly and severally, shall
indemnify and save and hold harmless the Seller Covered Persons from and against
any Loss suffered or incurred by any such Seller Covered Person and will pay in
cash such Seller Covered Person the amount of any Loss arising out of or
resulting from or in respect of and payable from: (1) Any inaccuracy in any
representation or the breach of any warranty made by Buyer pursuant to this
Agreement; (2) Any failure by Buyer duly to perform or observe any term,
provision, covenant, agreement or condition in this Agreement on the part of
Buyer to be performed or observed; and (3) Any Assumed Liability.
(c) Cooperation. If any third party (including, without
limitation, any taxing authority) shall make or assert a claim against any Party
(the "Indemnified Party") with respect to any matter which may give rise to a
claim for indemnification against any other Party (the "Indemnifying Party")
under this Section 5.3(a) or 5.3(b), then the Indemnified Party shall notify
each Indemnifying Party thereof promptly; provided, however, that no delay on
the part of the Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any liability or obligation under this
Agreement unless (and then solely to the extent) the Indemnifying
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Party is damaged or prejudiced thereby. In the case of any such claim pursuant
to which only the recovery of a sum of money is being sought and the
Indemnifying Party acknowledges in a writing delivered to the Indemnified Party
that the Indemnifying Party shall be fully responsible (with no reservation of
rights other than the right to be subrogated to the rights of the Indemnified
Party) for all Losses relating to such claim, the Indemnifying Party may, by
written notice to the Indemnified Party, assume the defense thereof. In the case
where the Indemnifying Party has so assumed such defense, (A) the Indemnifying
Party will defend the Indemnified Party against such matter with counsel of its
choice reasonably satisfactory to the Indemnified Party and (B) the Indemnified
Party may retain separate co-counsel at its sole cost and expense (except that
the Indemnifying Party will be responsible for the fees and expenses of any
separate counsel to the Indemnified Party incurred prior to the date upon which
the Indemnifying Party effectively assumes control of such defense). The
Indemnifying Party may retain separate co-counsel at its sole cost and expense
to participate in any defense which it does not assume, and, in any event the
Party which has assumed the defense of any claim in accordance with the
provisions hereof shall (i) provide the other Party with all material
information requested by such other Party relating to the defense of such claim,
(ii) confer with such other Party as to the most cost-effective manner in which
to defend such claim and (iii) use its reasonable efforts to minimize the cost
of defending such claim. The Indemnified Party shall make available to the
Indemnifying Party and its attorneys and accountants, at all reasonable times,
all books and records relating to such suit, claims or proceedings, and the
Parties will render to each other such assistance as may reasonably be required
of each other in order to insure proper and adequate defense of any such suit,
claim or proceeding. In the event that an Indemnifying Party has assumed the
defense of any claim pursuant to this Section 5.3(a), such Indemnifying Party
shall not make any settlement of any such claim without the written consent of
the Indemnified Party, unless such settlement (i) includes only the payment of
money damages, (ii) includes an unconditional release of all Liability which may
be asserted with respect to the facts or circumstances with respect to which the
claim or claims have been made and (iii) does not, in the reasonable judgment of
the Indemnified Party, otherwise materially adversely affect its business. No
Indemnified Party shall make a settlement of any claim assumed by any
Indemnifying Party without the express written consent of the Indemnifying
Party.
(d) Determination of Loss. Any amounts paid by the Seller
under Section 5.3(a) shall be treated as an adjustment to the Purchase Price for
Tax and accounting purposes. A Loss arising from the inaccuracy of more than one
representation or the breach of more than one warranty or covenant or any
combination of inaccuracies or breaches shall only be recovered once. The
Indemnifying Party shall also indemnify the Indemnified Party against any Tax
imposed upon the Indemnified Party as a result of the receipt of any
indemnification payment by such Indemnified Party (including any Taxes imposed
on any such payments which are themselves made with respect to Taxes on
indemnification payments). The Losses with respect to which any Indemnifying
Party is obligated to indemnify an Indemnified Party from and against shall be
adjusted to take into account the present value of any Tax benefit actually
realized by the Indemnified Party as a result of incurring such Loss and shall
also take into account the relevant effective Tax rates applicable to the
Indemnified Party.
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(e) Payment for Losses. If and to the extent that any Loss
shall arise and be payable pursuant to an order or judgment by a court of proper
jurisdiction or written agreement of the Parties then, subject to the
limitations set forth in subsection (f) below, the Parties shall pay an
Indemnified Party in immediately available funds.
(f) Limitations.
(A) With respect to any claim for the inaccuracy of any
representation or breach of any warranty contained in this Agreement
(except as provided in Section 5.3(f) (B) and subject to Section
5.3(f)(C) below), the Companies shall not have any obligation to
indemnify any Covered Person from and against any Loss with respect to
such claims (A) until the Covered Persons have collectively suffered
aggregate Losses (excluding each Single Loss less than $50,000) with
respect to such claims in excess of $1,500,000 (the "Basket") and (B)
to the extent amounts paid by Republic, RSC and Seller to Buyer Covered
Persons exceeds the Purchase Price (the "Cap"); it being understood
that each of the Basket and the Cap shall be applied on an aggregate
basis (i.e. not on a per claim basis). When the Buyer Covered Persons
have collectively suffered aggregate Losses with respect to such claims
in excess of the Basket, Republic, RSC and Seller shall have the
obligation to indemnify each Buyer Covered Person for the full amount
of all Losses suffered by the Buyer Covered Persons, dollar for dollar
from the first dollar of Loss suffered, until the Cap is reached.
(B) In the event of fraud, or with respect to a claim arising
under Section 3.1(a) ("Authorization of Transaction"), Section 3.1(e)
("Broker's Fee") or Section 3.1(u) ("Qualified RMR"), the Companies'
obligations to indemnify the Covered Persons for Losses shall not be
limited by the Basket and in the event of fraud or a claim arising
under Section 3.1(a) ("Authorization of Transaction") the Companies'
obligations to indemnify the Covered Persons for Losses shall not be
limited by the Cap.
(C) None of Republic, RSC or Seller shall be obligated to
indemnify the Buyer Covered Persons for any single Loss covered by
Section 5.3(a) (consolidating into any single Loss any series of
related events, facts or circumstances giving rise to Liability on the
same or a substantially related legal and factual basis (after giving
effect to such consolidation, a "Single Loss")) that arises out of a
breach or inaccuracy of the representations and warranties set forth in
Sections 3.1 (other than any breach or inaccuracy in Section 3.1 (a)
("Authorization of Transactions"), Section 3.1(e) ("Brokers' Fees") or
Section 3.1(u) ("Qualified RMR")) unless such Single Loss exceeds
$50,000, in which case Seller shall be obligated to indemnify the
Covered Persons for the full amount of such Single Loss (including the
portion below $50,000) subject to the Basket and the Cap to the extent
they apply under Section 5.3(f).
(g) Remedies. The indemnification provisions set forth in this
Section 5.3 shall constitute the Parties' sole and exclusive remedy with respect
to claims for money damages (other
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than claims arising out of or relating to acts of wilful misconduct or fraud)
arising out of or related to this Agreement. Except as aforesaid, the Parties
will each have and retain all other rights and remedies existing in their favor
in equity, including, without limitation, any actions for specific performance
and/or injunctive or other equitable relief (including, without limitation, the
remedy of rescission) to enforce or prevent any violations of any provision of
this Agreement.
5.4 Employees and Employee Benefit Plans.
(a) Immediately after the Closing, Buyer (or an affiliate
thereof) shall offer employment to substantially all Employees who work in the
business of the Alarm Service Assets other than those listed on the Non-Hired
Employees Schedule attached hereto; provided that the terms of this Section 5.4
shall not entitle any Employee to remain in the employment of Buyer or affect
the right of Buyer to terminate any Employee at any time, or to establish,
modify or terminate any employee benefit plan as defined in Section (3)(3) of
ERISA or any benefit under any such plan at any time (each Employee who accepts
such offer, a "Transferred Employee"). Buyer and the Seller shall mutually agree
on the written announcements provided to Employees pursuant to this Section 5.4.
Buyer shall have no liability whatsoever with respect to any Employee or former
employee of the business of the Alarm Service Assets except as expressly
provided in this Asset Purchase Agreement.
(b) Each Transferred Employee shall participate in the
existing employee benefit plans of Buyer in accordance with the terms of such
plans if and only if such Transferred Employee is a member of the group of
employees to which such plans are extended and such Transferred Employee meets
all of the participation requirements of such plans (including, without
limitation, eligibility, service and employee contribution requirements),
subject to paragraph (c) below. Buyer shall not be required to amend any of its
employee benefit plans to provide for such participation or to change any
participation requirement of any such plan.
(c) For purposes of each vacation policy of Buyer that on or
after the Closing Date covers Transferred Employees, employment with the
Companies prior to the Closing Date shall be considered as employment with
Buyer. With respect to any accrued but unused vacation time to which any
Transferred Employee is entitled as of the Closing Date pursuant to the vacation
policy of the Companies applicable to such employee, Buyer shall permit such
employee to use such accrued vacation time; provided, however, that if Buyer in
its sole discretion deems it necessary to disallow such employee from using such
accrued vacation time, Buyer shall pay to such employee the cash equivalent of
such unused time. With respect to the Ameritech Medical Benefits Plan ("Buyer's
Medical Plan") that on or after the Closing Date covers Transferred Employees,
employment with the Companies prior to the Closing Date shall be considered as
employment with Buyer solely for the purposes of the initial participation
waiting period and the preexisting condition limitation period.
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(d) The Seller shall cooperate with Buyer and promptly provide
to Buyer such records and data with respect to the Employees as Buyer may
reasonably request for Buyer to satisfy its obligations under this Section 5.4.
5.5 Noncompete and Nonsolicitation.
(a) In consideration of the Purchase Price, but without any
portion of the Purchase Price being specifically allocated hereto, Republic, RSC
and Seller agree that during the period beginning on the Closing Date and ending
on fifth anniversary of the Closing Date (the "Noncompetition Period"),
Republic, RSC and Seller shall not directly or indirectly, including through any
Alarm Subsidiary, either for itself or for any other Person, Participate in any
business or enterprise which provides Services or permit the names of the Alarm
Subsidiaries to be used by any business or enterprise which provides Services in
the United States, Canada, Mexico and Europe. For purposes of this Agreement,
the term "Participate" includes any direct or indirect interest in any
enterprise, whether as an officer, director, employee, partner, sole proprietor,
agent, representative, independent contractor, consultant, franchisor,
franchisee, creditor, owner or otherwise; provided that the term "Participate"
shall not include ownership of less than two percent of any company or other
entity and shall not include any interest in SatTrak 24 or any business which
relates to the sale, installation, maintenance or monitoring security systems
for automobiles and other vehicles (excluding manufactured housing), including,
without limitation, the sale, use, distribution or manufacture of vehicle
tracking or locating services or products.
(b) During the period ending on the fifth anniversary of the
Closing Date (the "Nonsolicitation Period"), Republic, RSC and Seller shall not,
directly or indirectly, including through any Alarm Subsidiary, either for
itself or for any other Person, (1) induce or attempt to induce any customer of
Services to cease doing business or to decrease its business with Buyer and its
subsidiaries, (2) induce or attempt to induce any Employee to leave their employ
with Buyer or in any way interfere with the relationship between Buyer and its
subsidiaries and any of the Employees or (3) induce or attempt to induce any
supplier, agent, licensee, licensor, franchisee, or other business relation of
Buyer or its subsidiaries to cease doing business with them or in any way
interfere with the relationship between Buyer or its subsidiaries and any
customer or business relation with respect to the provision of Services.
(c) If, at the time of enforcement of any of the provisions of
this Section 5.5, a court holds that the restrictions stated herein are
unreasonable under the circumstances then existing, the Parties hereto agree
that the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area. Each of
the Parties ac knowledges and agrees that the Buyer would be damaged irreparably
in the event any of the provisions of this Section 5.5 are not performed in
accordance with their specific terms or otherwise are breached. Accordingly,
each of the Parties agrees that the Buyer shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Section 5.5 and to
enforce specifically this Section 5.5 and the terms and provisions hereof in any
action instituted in any court of the
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United States or any state thereof having jurisdiction over the Parties and the
matter, in addition to any other remedy to which it may be entitled, at law or
in equity.
(d) Republic, RSC and Seller agree that the covenants made in
Section 5.5 shall be construed as an agreement independent of any other
provision of this Agreement and shall survive any order of a court of competent
jurisdiction terminating any other provision of this Agreement.
5.6 Cooperation with Tax Matters. The Seller and Buyer shall (i) each
provide the other with such assistance as may reasonably be requested by any of
them in connection with the preparation of any Tax Return, audit or other
examination by any taxing authority or judicial or administrative proceedings
relating to liability for Taxes, (ii) each retain and provide the other with any
records or other information which may be relevant to such Tax Return, audit or
examination, proceeding or determination, and (iii) each provide the other with
any final determination of any such audit or examination, proceeding or
determination that affects any amount required to be shown on any Tax Return of
the other for any period. Without limiting the generality of the foregoing, the
Seller and Buyer shall retain until the applicable statutes of limitations
(including any extensions) have expired, copies of all Tax Returns, supporting
work schedules and other records or information which are relevant to such
returns for all tax periods or portions thereof ending before or including the
Closing Date and shall not destroy or otherwise dispose of any such records
without first providing the other party with a reasonable opportunity to review
and copy the same.
5.7 Confidentiality. Notwithstanding anything to the contrary set forth
herein, the Confidentiality Agreement shall remain in full force and effect in
accordance with its terms. In addition, each Party shall not disclose and shall
hold confidential the terms and conditions hereof, including, without
limitation, the consideration to be paid hereunder and the structure of the
transactions contemplated hereby, except to the extent that such information is
required to be disclosed by law and except for press releases and announcements
pursuant to Section 7.1. In the event any Party hereto is required to disclose
such information pursuant to applicable law, such Party shall notify each other
Party in writing in advance of such disclosure, which notification shall include
the nature of the legal requirement and the extent of the required disclosure,
such Party shall cooperate with each other Party to preserve the confidentiality
of such information consistent with applicable law and such disclosure will be
in form and substance reasonably satisfactory to the other party; provided,
however, that the Parties acknowledge that Republic will file a current report
on Form 8-K and other federal securities law filings and disclosure obligations
disclosing the transactions contemplated hereby in accordance with Section 7.1.
5.8 Xxxx-Xxxxx-Xxxxxx Act Filing. The Parties will diligently proceed
to seek termination of the waiting period under the Xxxx-Xxxxx-Xxxxxx Act and
shall take all reasonable actions related thereto (e.g. promptly and completely
responding to any second request for information regarding the transactions
contemplated hereby).
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5.9 Retention of Records. Without cost to any other Party, each Party
shall retain all books and records of the Companies ("Records") transferred to
or retained by it pursuant to this Agreement for the greater of four (4) years
from the Closing Date or such longer periods of time as required by applicable
statutes, rules and regulations. For a period of four (4) years after the
Closing Date, and for such longer period as the Records are maintained, each
Party will, during normal business hours and so as not to disrupt unreasonably
normal business, afford any other Party and its representatives upon advance
written notice, reasonable access (and copying at the expense of the requesting
person, if desired, except to the extent such expenses are subject to
indemnification under Section 5.3) to the books and records relating to the
Acquired Assets, Excluded Assets, Assumed Liabilities or Excluded Liabilities in
the possession of such Party as such other Party may reasonably request subject
to appropriate assurances of confidentiality.
5.10 Real Property.
(a) Within twenty (20) days after the Closing Date, Seller
shall deliver to Buyer; (i) a commitment for an ALTA Owners Policy of Title
Insurance Form B-1970 (the "Title Commitments") for each parcel of Owned Real
Property issued by First American Title Insurance Company ("Title Insurer"), in
such amounts as Buyer and Seller mutually and reasonably determine to be the
fair market value (including all improvements thereon), insuring good and
marketable title in Buyer or Buyer's designee in such parcel subject to the
exceptions thereto set forth in the Title Commitments, and (ii) copies of all
underlying and recorded documents referred to in the Title Commitments. If Buyer
elects to obtain title insurance policies based on the Title Commitments
(including reasonable endorsements), then Seller will pay the premiums.
(b) Within forty (40) days after the Closing Date, Seller
shall deliver to Buyer, at Seller's sole cost and expense, current surveys of
each parcel of owned real property dated no more that thirty (30) days after the
Closing Date, prepared by a licensed surveyor and conforming to 1992 ALTA/ASCM
Minimum Detail Requirements for Urban Land Title Surveys including Table A Item
Nos. 1-4 and 6-13 (the "Surveys"), and such standards as the Title Insurer may
require as a condition to removal of survey exceptions from the Title Policy,
and certified to Buyer and Buyer's designee. The Survey shall disclose the
location of all improvements, easements, party walls, sidewalks, roadways,
utility lines and matters shown customarily on such surveys and show access, if
any, to public streets and roads.
(c) Within one hundred eighty (180) days after the Closing
Date, Seller shall remove, at Seller's sole cost and expense, all storage tanks
(whether above ground or underground) located on the Owned Real Property and
perform in a timely manner thereafter all remedial measures in connection with
such removal (collectively, the "Removal Process"). Nothwithstanding any other
provision contained herein, Seller shall fully indemnify and save and hold
harmless each of the Buyer Covered Persons from and against any Loss suffered as
a result of the Removal Process. In addition, Seller shall use Seller's best
efforts to minimize interference with Buyer's business
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operations during the Removal Process. Buyer agrees to grant access to Seller to
undertake the Removal Process.
(d) With respect to each leased real property set forth in the
Real Property Schedule, Seller must use commercially reasonable efforts to
procure and deliver to Buyer within sixty (60) days after the Closing Date a
landlord consent and estoppel certificate for each lease agreement (except for
those landlord consent and estoppel certificates to be delivered at closing) in
a form mutually acceptable to the Parties. To the extent any landlords under the
lease agreements condition consent to the assignment of Seller's rights and
obligations under the lease agreement to Buyer upon the receipt of a fee, such
amount shall be borne equally by Buyer and Republic.
ARTICLE 6 - TERMINATION
6.1 Termination Events. This Agreement may, by notice given prior to or
at the Closing, be terminated:
(a) by either Buyer or Seller if a material breach of any
covenant of this Agreement has been committed by Buyer, on the one
hand, or Republic, RSC or the Seller, on the other, and such breach has
not been waived or cured within the period allowed;
(b) by Buyer if satisfaction of any of the conditions in
Section 2.6(b) is or becomes unlikely to be satisfied (other than
through the failure of Buyer to comply with its obligations under this
Agreement) and Buyer has not waived such condition and Republic, RSC
and the Seller have not been able to satisfy such condition within 10
days after notice by Buyer of its intention to terminate this Agreement
under the provisions of this Section 6.1(b); or
(c) by Seller if satisfaction of any of the conditions in
Section 2.6(c) is or becomes unlikely to be satisfied (other than
through the failure of Republic, RSC or the Seller to comply with their
respective obligations under this Agreement) and Seller have not waived
such condition and the Buyer has not been able to satisfy such
condition within 10 days after notice by Seller of its intention to
terminate this Agreement under the provisions of this Section 6.1(c);
(d) by the mutual consent of Buyer and Seller; or
(e) by either Buyer or Seller if the Closing has not occurred
(other than through the failure, of Buyer if Buyer is seeking to
terminate this Agreement or Seller if Seller is seeking to terminate
this Agreement, to comply fully with its obligations under this
Agreement) on or before such date forty-five (45) calendar days from
the date hereof, or such later date as the Parties may agree upon.
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6.2 Effect of Termination/Remedies. If any Party terminates this
Agreement pursuant to this Article 6, all obligations of the Parties hereunder
shall terminate without any Liability of any Party to any other Party, except
that (a) Republic, RSC and the Seller shall remain responsible for any breach by
them of the provisions of Article 4, Section 5.7 ("Confidentiality"), in the
event and to the extent that any such breach is the grounds for termination and
(b) Ameritech and Buyer shall remain responsible for any breach by them of the
provisions of Article 4 or Section 5.7 ("Confidentiality"), in the event and to
the extent that any such breach is the grounds for termination.
ARTICLE 7 - MISCELLANEOUS
7.1 Press Releases and Announcements. All press releases and other
public announcements and all announcements to the Companies' customers,
suppliers, licensees or employees relating to the transactions contemplated
hereby (including with respect to any termination of this Agreement) shall be
prepared jointly by Buyer and the Seller and shall be made at such time and in
such manner and forum as shall be mutually agreed to by the Parties, other than
public filings under the securities laws which shall be in substance consistent
with the press release prepared jointly by Buyer and Seller to announce the
transactions contemplated hereby. The Parties shall issue such a press release
no later than the business day following the execution of this Agreement.
7.2 No Third Party Beneficiaries. This Agreement (other than Section
5.3 to the extent it purports to confer rights upon the Covered Persons) shall
not confer any rights or remedies upon any Person other than the Parties and
their respective successors and permitted assigns.
7.3 Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agree ments, or representations by or between the
Parties, written or oral, that may have related in any way to the subject matter
hereof (excluding the Confidentiality Agreement) and the Parties agree that
prior drafts of this Agreement shall be deemed to not provide any evidence as to
the meaning of any provision hereof or the intent of the Parties with respect
hereto.
7.4 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. Prior to the Closing, no Party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without the
prior written approval of the other Parties hereto; provided, however, that
prior to Closing, Buyer may, without the consent of, but with notice to, the
Seller, assign its rights and obligations under this Agreement (but not
Ameritech's) and the right to acquire the Acquired Assets to one of its
subsidiaries or Affiliates.
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7.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
7.6 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.7 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given (i) when delivered,
if personally delivered, (ii) when receipt is electronically confirmed, if faxed
(with hard copy to follow via first class mail, postage prepaid) or (iii) one
business day after deposit with a reputable overnight courier, in each case
addressed to the intended recipient as set forth below:
If to Republic, RSC or Seller:
Republic Industries, Inc.
000 Xxxx Xxx Xxxx Xxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx, General Counsel
Telephone #: (000) 000-0000
Facsimile #: (000) 000-0000
with a copy (which shall not constitute notice) to:
Akerman, Senterfitt & Xxxxxx, P.A.
Xxx X.X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000-0000
Attn: Xxxxxxxx X. Xxxxx, Esq.
Telephone #: (000) 000-0000
Facsimile #: (000) 000-0000
If to Buyer:
Ameritech Monitoring Services, Inc.
Two Xxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, President
Telephone #: (000) 000-0000
Facsimile #: (000) 000-0000
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with a copy (which shall not constitute notice) to:
Ameritech Monitoring Services, Inc.
Two Xxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxx, Esq., Vice President and General
Counsel
Telephone #: (000) 000-0000
Facsimile #: (000) 000-0000
7.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
7.9 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by each
Party. No waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
7.10 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
7.11 Expenses. Except as otherwise provided in this Agreement,
Ameritech and Buyer will bear their own costs and expenses (including, without
limitation, legal fees and expenses) incurred in connection with, or arising out
of, this Agreement and the transactions contemplated hereby. Except as otherwise
provided in this Agreement, Republic, RSC and Seller will bear their own costs
and expenses (including, without limitation, legal fees and expenses) and the
costs and expenses of the Companies incurred in connection with, or arising out
of this Agreement or the transactions contemplated hereby.
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7.12 Transfer Taxes. All documentary, sales, use, registration and
other transfer taxes (including, but not limited to, all applicable vehicle
licensing, real estate transfer or stock transfer Taxes, but not including other
Taxes such as employment withholding Taxes) and fees incurred in connection with
the sale of the Acquired Assets and the other transactions contemplated hereby
shall be borne and controlled by the Buyer.
7.13 Construction. The Parties have jointly participated in the
negotiation and drafting of this Agreement. In the event of an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumptions or burdens of proof
shall arise favoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
Parties intend that each representation, warranty, and covenant contained herein
shall have independent significance. If any Party has breached any
representation, warranty, or covenant contained herein in any respect, the fact
that there exists another representation, warranty, or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant. The mere
listing (or inclusion of a copy) of a document or other item shall not be deemed
adequate to disclose an exception to a representation or warranty made herein
(unless the representation or warranty relates solely to the existence of the
document or other items itself). Subject to the foregoing, disclosures set forth
on any Disclosure Schedule relating to one representation and warranty with
reasonable particularity and describes the relevant facts in sufficient detail
to identify an item shall be deemed a disclosure under all other representations
and warranties that related to such item. By including information on a
Disclosure Schedule, such information shall not necessarily be deemed to mean
that such information is "material" or that such information is strictly
required to be included on such Disclosure Schedule, and the listing of an item
on a Disclosure Schedule shall not serve as evidence that a similar or analogous
item not listed on a Disclosure Schedule was required to also be so listed.
7.14 Incorporation of Exhibits and Schedules. The Exhibits and
Disclosure Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
7.15 Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any person or entity, or which such person or
entity is prohibited from taking, such provi sion shall be applicable whether
the action in question is taken directly or indirectly by such person or entity.
* * * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Asset
Purchase Agreement as of the date first above written.
REPUBLIC
REPUBLIC INDUSTRIES, INC.
By: /s/ H. Xxxxx Xxxxxxxx
---------------------------------------------
Its: Chairman and Co-Chief Executive Officer
--------------------------------------------
RSC
REPUBLIC SECURITY COMPANIES HOLDING CO., INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Its: Vice President
--------------------------------------------
SELLER
REPUBLIC SECURITY COMPANIES HOLDING CO. II, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Its: Vice President
--------------------------------------------
BUYER:
AMERITECH MONITORING SERVICES, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------------
Its: President
--------------------------------------------
AMERITECH:
AMERITECH CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Its: Chairman and Chief Executive Officer
--------------------------------------------
