EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
Agreement entered into as of October 10, 1997, to be effective October
1, 1997, by and between Quixote Corporation, a Delaware corporation, and its
wholly-owned subsidiary, Transafe Corporation, a Delaware corporation
("Transafe") (Quixote and Transafe, together are referred to as the
"Buyer"), and Roadway Safety Service, Inc., a New York corporation
("Roadway"), Momentum Management, Inc., a New York corporation ("Momentum"),
and Fitch Barrier Corporation, a New York corporation ("FBC") (Roadway,
Momentum and FBC together are referred to as the "Seller").
RECITALS
Roadway, Momentum and FBC own certain assets and have certain
contractual rights and obligations utilized in connection with the highway
safety business known as "Roadway".
Buyer wishes to acquire Seller's Fitch Universal Module, the React 350
Crash Cushion and the Dragnet Vehicle Arresting Barrier product lines and
the exclusive and world-wide rights to those product lines (the "Business").
The shareholders of Roadway, Momentum and FBC have agreed to sell the
Business to Buyer.
An Affiliate of the Buyer, Roadway and its Affiliates are currently
involved in litigation which the Parties wish to settle.
This Agreement contemplates a transaction in which the Buyer will
purchase certain of the assets and assume certain of the liabilities of the
Business in return for Cash, and the Parties and their Affiliates will
settle certain litigation and enter into certain other arrangements all as
provided in this Agreement.
AGREEMENT
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 agree as follows.
1. Definitions.
"Acquired Assets" means all of the right, title, and interest that the
Seller possesses and has the right to transfer in and to all of the Seller's
assets or the assets that the Seller uses in the Ordinary Course in the
Business, including but not limited to, all of its (a) FHWA and state
approvals, permits and licenses; (b) tangible personal property (such as
machinery, equipment, inventories of raw materials and supplies,
manufactured and purchased parts, goods in process and finished goods,
finished goods, work-in process, automobiles, trucks, tractors, trailers,
molds, tools, jigs, and dies) wherever located; (c) 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; (d) customer contracts in progress, purchase orders, quotes,
manufacturer and supplier contracts, indentures, agreements and mortgages
for borrowed money, instruments of indebtedness, Security Interests,
guaranties, sales representative agreements, other similar arrangements, and
rights thereunder, whether or not incurred in the Ordinary Course; (e) in-
process engineering, design and test information; (f) customer and
distributor information; (g) franchises, approvals, permits, licenses,
orders, registrations, certificates,
variances, and similar rights obtained from governments and governmental
agencies; (h) books, records, ledgers, files, documents, correspondence,
lists, blue prints, drawings, and specifications, creative materials,
advertising and promotional materials, studies, reports, and other printed or
written materials; (i) all computer software used in the Business; (j) the
Roadway Web site; and (k) all other assets necessary to operate the Business
other than Excluded Assets.
"Adverse Consequences" means all charges, complaints, actions, suits,
proceedings, hearings, investigations, claims, demands, judgments, orders,
decrees, stipulations, injunctions, damages, dues, penalties, fines, costs,
amounts paid in settlement, liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including all attorneys' fees and court costs.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means a group of Affiliates filing a consolidated
Tax Return.
"Assumed Contracts" means those contracts, whether written or oral,
identified on Schedule 1.
"Assumed Liabilities" means only those liabilities and obligations of
the Seller post-Closing which arise pursuant to the Assumed Contracts, and
the liabilities of the Business which have arisen in the Ordinary Course
since August 31, 1997.
"Basis" means any past or present fact, situation, circumstances,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis
for any specified consequence.
"Business" has the meaning set forth in the preface above.
"Buyer" has the meaning set forth in the preface above.
"Cash" means cash.
"Closing" has the meaning set forth in Section 2(d) below.
"Closing Date" has the meaning set forth in Section 2(d) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
Business that the Seller has treated as confidential and proprietary.
"Contracts" has the meaning set forth in Section 3(p) below.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Employee Benefit Plan" means any (a) non-qualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or
arrangement which is an Employee Pension Benefit Plan, (c) qualified defined
benefit retirement plan or arrangement which is an Employee Pension Benefit
Plan (including any Multi-employer Plan), or (d) Employee Welfare Benefit
Plan or material fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Sec. 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Sec. 3(1).
"Environmental Laws" means any applicable federal, state, or local
statutory or common law, ordinance, rule, or regulation relating to: (i)
pollution or protection of the environment; (ii) nuisance or trespass; (iii)
emissions, discharges, releases, or threatened releases of any hazardous
substance into the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata); or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, or handling of hazardous substances. The term
"Environmental Laws" shall include, but shall not be limited to: the Clean
Air Act; the Clean Water Act; the Occupational Safety and Health Act; the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980; the Superfund Amendments and Reauthorization Act of 1986; the Resource
Conservation and Recovery Act; the Hazardous and Solid Waste Amendments of
1984; and the Toxic Substances Control Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" means all receivables generated by Seller from the
Business through the Closing Date; Cash; the corporate name and trade
"Momentum Management;" all real estate owned or used by the Seller; the
corporate charter, qualifications to conduct business as a foreign
corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals, minute
books, stock transfer books, blank stock certificates, and other documents
relating to the organization, maintenance, and existence of any of Roadway,
Momentum or FBC, as a corporation; any of the rights of the Seller under
this Agreement (or under any side agreement between the Seller on the one
hand and the Buyer on the other hand entered into on or after the date of
this Agreement); and rights in and with respect to the assets associated
with Seller's Employee Benefit Plans.
"FBC" has the meaning set forth in the preface above.
"Financial Statements" has the meaning set forth in Section 3(e)
below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Indemnified Party" has the meaning set forth in Section 9(c) below.
"Indemnifying Party" has the meaning set forth in Section 9(c) below.
"Intellectual Property" means all (a) patents, patent applications,
patent disclosures, and improvements thereto; (b) trademarks, service marks,
trade dress, logos, trade names, and corporate names and registrations and
applications for registration thereof; (c) copyrights and registrations and
applications for registration thereof; (d) mask works and registrations and
applications for registration thereof; (e) computer software, data, and
documentation; (f) trade secrets and confidential business information
(including ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how,
manufacturing and production processes and techniques, research and
development information, shop rights, drawings, specifications, designs,
plans, proposals, technical data, copyrightable works, financial, marketing,
and business data, pricing and cost information, business and marketing
plans, and customer and supplier lists and information); (g) other
proprietary rights; (h) copies and tangible embodiments thereof (in whatever
form or medium); and (i) the product names "Fitch Barrier", "Fitch Sand
Barrel System", "Fitch Inertial Barrier", "Roadway", "React 350", and
"Dragnet Vehicle Arresting Barrier".
"Knowledge" means actual knowledge after reasonable investigation.
"Momentum" has the meaning set forth in the preface above.
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"Most Recent Fiscal Month End" has the meaning set forth in Section
3(e) below.
"Most Recent Fiscal Year End" has the meaning set forth in Section
3(e) below.
"Multi-employer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Ordinary Course" means the ordinary course of business consistent
with past custom and practice (including with respect to quantity and
frequency).
"Parties" has the meaning set forth in the preface above.
"Party" means any one of the Parties.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization, labor union, or
other entity or governmental body.
"Purchase Price" has the meaning set forth in Section 2(c) below.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Retained Liabilities" means any liabilities of the Seller that are
not Assumed Liabilities, including but not limited to: (a) all payables
generated by Seller from the Business through the Closing Date; (b) all
liabilities of the businesses of Roadway, Momentum, FBC and affiliates and
predecessors, arising from the manufacture, sale and products by Roadway,
Momentum and FBC as of the Closing Date, including but not limited to,
product liability; (c) all liabilities and obligation of the Seller, whether
known or unknown, whether absolute or contingent, whether liquidated or
unliquidated, and whether due or to become due, that are not identified as
"Assumed Liabilities"; (d) all liabilities of the Seller for sales, use and
other taxes arising in the Seller's Ordinary Course of business; (e) all
liabilities and obligations of the Seller under the licenses, sublicenses,
leases, subleases, contracts and other arrangements referred to in the
definition of "Acquired Assets" and the Assumed Contracts which are incurred
prior to or on the Closing Date; (f) all product warranty obligations for
products manufactured or sold prior to the Closing Date; (g) all liabilities
to the employees of the Seller; (h) all other liabilities and obligations of
the Seller set forth in the Disclosure Schedule represented in the Financial
Statements that are not expressly identified as "Assumed Liabilities"; (i)
any liability or obligation of the Seller under this Agreement or under any
side agreement between the Seller on one hand and the Buyer on the other
hand, entered into on or after the date of this Agreement; (j) all
liabilities of the Seller for unpaid Taxes; (k) all liabilities of the
Seller for costs and expenses (including legal fees and expenses) incurred
in connection with this Agreement or the consummation of the transactions
contemplated hereby; (l) any liability specifically retained by Seller in
Section 8 hereof; (m) any and all debt owed by the Seller to the Seller
Stockholders and its Affiliates; (n) all liabilities of Seller for transfer,
sales, use and other Taxes arising in connection with the consummation of
the transactions contemplated in this Agreement (including any Income Taxes
arising because Seller is transferring the Acquired Assets); and (o) all
liabilities and obligations of Seller under its Employee Benefit Plans.
"Roadway" has the meaning set forth in the preface above.
"Securities Act" means the Securities Act of 1933, as amended.
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"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Security Interest" means any mortgage, pledge, security interest,
encumbrance, charge, or other lien, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for Taxes not yet due and
payable or for Taxes that the taxpayer is contesting in good faith through
appropriate proceedings, (c) liens arising under worker's compensation,
unemployment insurance, social security, retirement, and similar
legislation, (d) liens arising in connection with sales of foreign
receivables, (e) liens on goods in transit incurred pursuant to documentary
letters of credit, (f) purchase money liens and liens securing rental
payments under capital lease arrangements, and (g) other liens arising in
the Ordinary Course of Business and not incurred in connection with the
borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Seller 401(k) Plan" means the 401(k) Profit Sharing Plan of Seller in
place prior to the Closing.
"Seller Stockholders" means the stockholders of Roadway, Momentum and
FBC.
"Subsidiary" means any corporation, limited liability company,
partnership or other entity with respect to which another person or entity
has the power to vote or direct the voting of sufficient securities to elect
a majority of directors, or managers or managing partners, or the equivalent
persons.
"Tax" means any federal, state, local, or foreign tax.
"Tax Return" means any return, declaration, report, claim for refunds,
or information return or statement relating to Taxes, including any schedule
or attachment thereto.
"Threatened" means, with respect to a claim, proceeding, dispute,
action, or other matter, if any demand or statement has been made (orally or
in writing) or any notice has been given (orally or in writing), or if any
other event has occurred or any other circumstances exist, that would lead a
prudent Person to conclude that such a claim, proceeding, dispute, action,
or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.
2. Purchase and Sale.
(a) Purchase of Acquired Assets. On and subject to the terms
and conditions of this Agreement, the Buyer agrees to purchase from the
Seller, and the Seller agrees to sell, transfer, convey, and deliver to
Buyer, all of the Acquired Assets, free and clear of all Security Interests,
at the Closing for the consideration specified in this Section 2. The
Seller shall retain the Excluded Assets.
(b) Assumption of Assumed Contracts and the Assumed
Liabilities. On and subject to the terms and conditions of this Agreement,
the Buyer agrees to assume and become responsible for, and the Seller agrees
to assign to Buyer, all of the Assumed Contracts and the Assumed Liabilities
at the Closing. The Buyer shall not assume and shall not have any
responsibility with respect to the Retained Liabilities.
(c) Purchase Price.
(i) Subject to the adjustments provided in this Section
2(c), the Buyer agrees to pay to the Seller at the Closing $3.85
million (the "Purchase Price") in Cash, payable by wire transfer or
delivery of other immediately available funds.
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(ii) The Cash payable at Closing shall be reduced by the
amount of any xxxxxxx money deposited with the Seller by the Buyer.
(iii) The Cash Purchase Price shall be reduced dollar-for-
dollar for any monies the Buyer is required to pay third parties to
obtain the Acquired Assets, including the Assumed Contracts, on the
terms and conditions provided in this Agreement and Schedule 2.
(d) The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of XxXxxxx
Xxxxx & Xxxxx, 000 Xxxx Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx
00000-0000, commencing at 9:00 a.m. local time on the second business day
following the satisfaction or waiver of all conditions to the obligations of
the Parties to consummate the transactions contemplated hereby or such other
date as the Parties may mutually determine (the "Closing Date"); provided,
however, that the Closing Date shall be no later than January 15, 1998.
(e) Deliveries at the Closing. At the Closing, (i) the Seller
will deliver to the Buyer the various certificates, instruments, and
documents referred to in Section 6(a) below; (ii) the Buyer will deliver to
the Seller the various certificates, instruments, and documents referred to
in Section 6(b) below; (iii) the Seller will execute, acknowledge (if
appropriate), and deliver to the Buyer (A) assignments (including personal
property and Intellectual Property transfer documents) in the forms
attached hereto as Exhibit A and Exhibit B and (B) such other instruments of
sale, transfer, conveyance, and assignment as the Buyer and its counsel
reasonably may request; (iv) the Buyer will execute, acknowledge (if
appropriate), and deliver to the Seller (A) an assumption agreement in the
form attached hereto as Exhibit C and (B) such other instruments of
assumption as the Seller and its counsel reasonably may request; (v) the
Buyer will deliver to the Seller the consideration as provided in Section
2(c) above; (vi) the Seller will deliver to the Buyer a fully-executed Post
Closing Agreement with Seller Stockholders in the form of Exhibit D;
executed Consulting Agreements in the form of Exhibits F-1, F-2, and F-3,
executed Litigation Settlement Agreements in the form of Exhibits G-1 and G-
2, and executed agreements in the form of Exhibits X-0, X-0, I and J.
(f) Allocation. The Parties agree to allocate the Purchase
Price (and all other capitalizable costs) among the Acquired Assets for all
purposes (including financial accounting and tax purposes) in accordance
with the allocation schedule attached hereto as Exhibit E.
3. Representations and Warranties of the Seller. Each of Roadway,
Momentum, and FBC represents and warrants to the Buyer that the statements
contained in this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 3), except as set forth in the
disclosure schedule accompanying this Agreement and initialed by the Parties
(the "Disclosure Schedule"). The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained
in this Section 3.
(a) Organization, Qualification, and Corporate Power. Each of
Roadway, Momentum, and FBC is a corporation, duly organized, validly
existing, and in good standing under the laws of each jurisdiction in which
the nature of its business or the ownership or leasing of its properties
requires such qualification, except where the lack of such qualification
would not have a material adverse effect on the financial condition of the
Seller taken as a whole. Each of Roadway, Momentum, and FBC has full
corporate power and authority to carry on the business in which it is
engaged and to own and use the properties owned and used by it. Section
3(a) of the Disclosure Schedule lists the directors and officers of each of
Roadway, Momentum, and FBC.
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(b) Authorization of Transaction. Each of Roadway, Momentum,
and FBC has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its
obligations hereunder. Without limiting the generality of the foregoing,
the board of directors and the Stockholders of each of Roadway, Momentum,
and FBC have duly authorized the execution, delivery, and performance of
this Agreement by each of Roadway, Momentum, and FBC. This Agreement
constitutes the valid and legally binding obligation of each of Roadway,
Momentum, and FBC, enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to in Section 2
above), 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 Roadway, Momentum, or FBC
is subject or any provision of its charter or bylaws, 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 Roadway, Momentum, or FBC is a party or by
which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets), except where
the violation, conflict, breach, default, acceleration, termination,
modification, cancellation, failure to give notice, or Security Interest
would not have a material adverse effect on the financial condition of the
Seller taken as a whole or on the ability of the Parties to consummate the
transactions contemplated by this Agreement. Except as set forth in Section
5(b) hereof, none of Roadway, Momentum and FBC need give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignments and
assumptions referred to in Section 2 above).
(d) Seller Stockholders and Subsidiaries. Section 3(d) of the
Disclosure Schedule sets forth the names of each Subsidiary of each of
Roadway, Momentum and FBC, and for each of Roadway, Momentum and FBC, and
for each of their Subsidiaries: (i) its name and jurisdiction of
incorporation; (ii) the number of shares of authorized capital stock of each
class of its capital stock; (iii) the number of issued and outstanding
shares of each class of its capital stock, the names of the holders thereof,
and the number of shares held by each such holder; (iv) the number of shares
of its capital stock held in treasury; (v) its directors and officers; and
(vi) each jurisdiction where it is qualified to do business.
Each Subsidiary of the Seller is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation. Each Subsidiary of the Seller is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
in which the nature of its businesses or the ownership or leasing of its
properties requires such qualification. Each Subsidiary of the Seller has
full corporate power and authority to carry on the businesses in which it is
engaged and to own and use the properties owned and used by it.
The Seller has delivered to the Buyer correct and complete
copies of the charter and bylaws of each Seller and of each Subsidiary of
the Seller (as amended to date).
All of the issued and outstanding shares of capital stock of
each Subsidiary and of Roadway, Momentum and FBC have been duly authorized
and are validly issued, fully paid, and nonassessable. One of Roadway,
Momentum or FBC holds of record and owns beneficially all of the outstanding
shares of each Subsidiary, free and clear of any restrictions on transfer
(other than restrictions under the Securities Act and state securities
laws), claims,
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Taxes, Security Interests, options, warrants, rights, contracts, calls,
commitments, equities, and demands.
There are no outstanding or authorized options, warrants,
rights, contracts, calls, puts, rights to subscribe, conversion rights, or
other agreements or commitments to which any of Roadway, Momentum, FBC and
their Subsidiaries is a party or which are binding on any of them providing
for the issuance, disposition, or acquisition of any capital stock of any
Subsidiary or the Seller (other than this Agreement). There are not
outstanding stock appreciation, phantom stock, or similar rights with
respect to Roadway, Momentum, FBC, or any Subsidiary. There are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting of any capital stock of Roadway, Momentum, FBC, or any Subsidiary.
The minute books containing the records of meetings of the stockholders, the
board of directors, and any committees of the board of directors, the stock
certificate books, and the stock record books of Roadway, Momentum, FBC, or
of each Subsidiary are correct and complete. None of Roadway, Momentum,
FBC, or the Subsidiaries is in default under or in violation of any
provision of its charter or bylaws. The Seller does not control directly or
indirectly or have any direct or indirect equity participation in any
corporation, partnership, trust, or other business association which is not
a Subsidiary.
(e) Financial Statements. Seller has delivered to Buyer the
following financial statements (collectively the "Financial Statements") as
Schedule 3: (i) audited balance sheets and statements of income, changes in
stockholders' equity, and cash flow as of and for the fiscal year ended
June 30, 1997 (the "Most Recent Fiscal Year End") for the Seller; (ii)
unaudited balance sheets and statements of income, changes in stockholders'
equity, and cash flow as of the fiscal years ended June 30, 1993, June 30,
1994, June 30, 1995, June 30, 1996 and June 30, 1997 for the Seller; and
(iii) unaudited balance sheets and statements of income, changes in the
stockholders' equity and cash flow as of and for the 2 months ended August
31, 1997 (the "Most Recent Fiscal Month End") for the Seller. The Financial
Statements have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and present fairly
the financial condition of the Seller as of such dates and the results of
operations of the Seller for such periods; provided, however, that the
financial statements for the Most Recent Fiscal Month End are subject to
normal year-end adjustments and lack footnotes and other presentation items.
(f) Events Subsequent to Most Recent Fiscal Month End. Since
the Most Recent Fiscal Month End, there has not been (i) any material
adverse change in the financial condition of the Seller taken as a whole or
(ii) any fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or
transaction outside the Ordinary Course.
(g) Events Subsequent to Most Recent Fiscal Year End. Since
the Most Recent Fiscal Year End, there has not been any adverse change in
the assets, Liabilities, business, financial condition, operations, results
of operations, or future prospects of the Seller and their Subsidiaries
taken as a whole. Without limiting the generality of the foregoing, since
that date:
(i) none of the Seller or their Subsidiaries has sold,
leased, transferred, or assigned any of its assets, tangible or
intangible, other than for a fair consideration in the Ordinary
Course;
(ii) none of the Seller or their Subsidiaries has entered
into any contract, lease, sublease, license, or sublicense (or series
of related contracts, leases, subleases, licenses, and sublicenses)
either involving more than $5,000 or outside the Ordinary Course;
(iii) no party (including any of the Seller and their
Subsidiaries) has accelerated, terminated, modified, or canceled any
contract, lease, sublease, license, or sublicense (or series of
related
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contracts, leases, subleases, licenses, and sublicenses)
involving more than $5,000 to which any of the Seller and their
Subsidiaries is a party or by which any of them is bound;
(iv) none of the Seller or their Subsidiaries has imposed
any Security Interest upon any of their assets, tangible or
intangible;
(v) none of the Seller or their Subsidiaries has made
any capital expenditure (or series of related capital expenditures)
either involving more than $5,000 or outside the Ordinary Course;
(vi) none of the Seller or their Subsidiaries has made
any capital investment in, any loan to, or any acquisition of the
securities or assets of any other person (or series of related capital
investments, loans, and acquisitions) either involving more than
$5,000 or outside the Ordinary Course;
(vii) none of the Seller or their Subsidiaries has
created, incurred, assumed, or guaranteed any indebtedness (including
capitalized lease obligations) either involving more than $5,000
singly or $25,000 in the aggregate or outside the Ordinary Course;
(viii) none of the Seller or their Subsidiaries has
delayed or postponed (beyond its normal practice) the payment of
accounts payable and other Liabilities;
(ix) none of the Seller or their Subsidiaries has
canceled, compromised, waived, or released any right or claim (or
series or related rights and claims) either involving more than $5,000
or outside the Ordinary Course;
(x) none of the Seller or their Subsidiaries has granted
any license or sublicense of any rights under or with respect to any
Intellectual Property;
(xi) there has been no change made or authorized in the
charter or bylaws of any of the Seller and their Subsidiaries;
(xii) none of the Seller or their Subsidiaries has issued,
sold, or otherwise disposed of any of its capital stock, or granted
any options, warrants, or other rights to purchase or obtain
(including upon conversion or exercise) any of its capital stock;
(xiii) none of the Seller or their Subsidiaries has
declared, set aside, or paid any dividend or distribution with respect
to its capital stock or redeemed purchased or otherwise acquired any
of its capital stock;
(xiv) none of the Seller or their Subsidiaries has
experienced any damage, destruction, or loss (whether or not covered
by insurance) to its property;
(xv) none of the Seller or their Subsidiaries has made
any loan to, or entered into any other transaction with, any of its
directors, officers, and employees outside the Ordinary Course giving
rise to any claim or right on its part against the person or on the
part of the person against it;
(xvi) none of the Seller or their Subsidiaries has entered
into any employment contract or collective bargaining agreement,
written or oral, or modified the terms of any existing such contract
or agreement;
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(xvii) none of the Seller or their Subsidiaries has
granted any increase outside the Ordinary Course in the base
compensation of any of its directors, officers, and employees;
(xviii) none of the Seller or their Subsidiaries has
adopted any (A) bonus, (B) profit-sharing, (C) incentive compensation,
(d) pension, (E) retirement, (F) medical, hospitalization, life, or
other insurance, (G) severance, or (H) other plan, contract, or
commitment for any of its directors, officers, and employees, or
modified or terminated any existing such plan, contract, or
commitment;
(xix) none of the Seller or their Subsidiaries has made or
pledged to make any charitable or other capital contribution outside
the Ordinary Course;
(xx) none of the Seller or their Subsidiaries has made or
pledged to make any charitable or other capital contribution outside
the Ordinary Course;
(xxi) none of the Seller or their Subsidiaries has paid
any amount to any third party with respect to any Liability or
obligation (including any costs and expenses the Seller has incurred
or may incur in connection with this Agreement or any of the
transitions contemplated hereby) which would not constitute an Assumed
Liability if in existence as of the Closing;
(xxii) there has not been any other occurrence,
event, incident, action, failure to act, or transaction outside the
Ordinary Course involving any of the Seller or their Subsidiaries; and
(xxiii) none of the Seller or their Subsidiaries has
committed to any of the foregoing.
(h) Undisclosed Liabilities. None of the Seller or their
Subsidiaries has any Liability (and there is no Basis for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim or demand against any of them giving rise to any Liability), except
for (i) Liabilities set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) and (ii) Liabilities which have arisen
after the Most Recent Fiscal Month End in the Ordinary Course (none of which
relates to any breach of contract, breach of warranty, tort, infringement,
or violation of law or arose out any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand).
(i) Tax Matters.
(i) The Seller has filed all Tax Returns that it was
required to file, and has paid, or shall pay, all Taxes shown thereon
as owing, except where the failure to file or to pay Taxes would not
have a material adverse effect on the financial condition of the
Seller taken as a whole.
(ii) Section 3(i) of the Disclosure Schedule lists all
Tax Returns filed with respect to the Seller for taxable periods
ended on or after June 30, 1993, indicates those Tax Returns that
have been audited, and indicates those Tax Returns that currently
are the subject of audit. The Seller has delivered to the Buyer
correct and complete copies of all federal Tax Returns,
examination reports, and statements of deficiencies assessed
against or agreed to by the Seller since June 30, 1994.
(iii) The Seller has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.
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(iv) The Seller is not a party to any Tax allocation
or sharing agreement.
(v) The Seller has never been (or has any liability
for unpaid Taxes because it once was) a member of an Affiliated
Group.
(j) Tangible Assets. Each of the Seller and their
Subsidiaries owns or leases, and the Acquired Assets are, all the tangible
assets necessary for the conduct of the Business as presently conducted and
as presently proposed to be conducted. Each such tangible asset is free
from defects, has been maintained in accordance with normal industry
practice, is in good operating condition and repair (subject to normal wear
and tear), and is suitable for the purposes for which it presently is used.
(k) Owned Real Property. Section 3(i) of the Disclosure
Schedule lists all real property that the Seller owns or has ever owned.
With respect to each such parcel of owned real property, and except for
matters which would not have a material adverse effect on the financial
condition of the Seller taken as a whole:
(i) the Seller has good and marketable title to the
parcel of real property, free and clear of any Security Interest,
easement, covenant, or other restriction, except for (A)
installments of special assessments not yet delinquent, (B)
recorded easements, covenants, and other restrictions, and (C)
utility easements, building restrictions, zoning restrictions, and
other easements and restrictions existing generally with respect to
properties of a similar character;
(ii) there are no leases, subleases licenses,
concessions, or other agreements granting to any party or parties
the right of use or occupancy of any portion of the parcel of real
property; and
(iii) there are no outstanding options or rights of
first refusal to purchase the parcel of real property, or any
portion thereof or interest therein.
(l) Environmental Matters. To the Knowledge of the Seller,
no condition exists at any real property owned by the Seller with respect to
the storage or discharge into the earth or its atmosphere of effluents,
waste or other materials, solid, liquid or gaseous, nor has any waste been
disposed of in any way or manner which would or will in the future cause the
Seller to be liable in any material respect for fines or penalties under
Environmental Laws currently in effect or to incur material expenses of any
sort to correct any condition of this type. The Seller has not received any
notice from any governmental body claiming any material violations of any
zoning, building, health, or safety law or ordinance, or requiring any
material work, repairs, construction, alterations, noise reductions, clean-
up, or installation with which the Seller has not fully complied.
(m) Intellectual Property.
(i) One of the Seller and their Subsidiaries owns or has
the right to use pursuant to license, sublicense, agreement, or
permission all Intellectual Property necessary for the operation of
the Business as presently conducted and as presently proposed to be
conducted. Each item of Intellectual Property owned or used by any
of the Seller and Subsidiaries immediately prior to the Closing
hereunder will be owned or available for use by the Buyer on
identical terms and conditions immediately subsequent to the
Closing hereunder. Each of the Seller and Subsidiaries has taken
all necessary or desirable action to protect each item of
Intellectual Property that it owns or uses.
(ii) None of the Seller and its Subsidiaries has
interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any Intellectual Property rights of third
parties, and none of the
11
Seller Stockholders and the directors and officers of the Seller has
ever received any charge, complaint, claim, or notice alleging any
such interference, infringement, misappropriation, or violation. To
the Knowledge of any of the Seller Stockholders and the directors and
officers of the Seller, no third party has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of any of the Seller and Subsidiaries.
(iii) Section 3(m) of the Disclosure Schedule
identifies each patent or registration which has been issued to any
of the Seller with respect to any of its Intellectual Property,
identifies each pending patent application or application for
registration which any of the Seller had made with respect to any
of its Intellectual Property, and identifies each license,
agreement, or other permission which any of the Seller and
Subsidiaries has granted to any third party with respect to any of
its Intellectual Property (together with any exceptions). The
Seller has delivered to the Buyer correct and complete copies of
all such patents, registrations, applications, licenses,
agreements, and permissions (as amended to date) and has made
available to the Buyer correct and complete copies of all other
written documentation evidencing ownership and prosecution (if
applicable) of each such item. With respect to each item of
Intellectual Property that any of the Seller and Subsidiaries owns:
(A) the identified owner possesses all right,
title, and interest in and to the item;
(B) the item is not subject to any outstanding
judgment, order, decree, stipulation, injunction, or charge;
(C) no charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand is
pending or is threatened which challenges the legality,
validity, enforceability, use, or ownership of the items; and
(D) none of the Seller and its Subsidiaries has
ever agreed to indemnify any person or entity for or against
any interference, infringement, misappropriation, or other
conflict with respect to the item.
(iv) Section 3(m) of the Disclosure Schedule also
identifies each item of Intellectual Property that any third party
owns and that any of the Seller and its Subsidiaries uses pursuant
to license, sublicense, agreement, or permission. The Seller has
supplied the Buyer with correct and complete copies of all such
licenses, sublicenses, agreements, and permissions (as amended to
date). With respect to each such item of used Intellectual
Property:
(A) the license, sublicense, agreement, or
permission covering the item is legal, valid, binding,
enforceable, and in full force and effect;
(B) the license, sublicense, agreement, or
permission will continue to be legal, valid, binding,
enforceable, and in full force and effect;
(C) no party to the license, sublicense,
agreement, or permission is in breach or default, and no
event has occurred which with notice or lapse of time would
constitute a breach or default or permit termination,
modification, or acceleration thereunder;
(D) no party to the license, sublicense,
agreement, or permission has repudiated any provision
thereof;
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(E) with respect to each sublicense, the
representations and warranties set forth in subsections (A)
through (D) above are true and correct with respect to the
underlying license;
(F) the underlying item of Intellectual
Property is not subject to any outstanding judgment, order,
decree, stipulation, injunction, or charge;
(G) no charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand is
pending, or is threatened which challenges the legality,
validity, or enforceability of the underlying item of
Intellectual Property; and
(H) none of the Seller and its Subsidiaries has
granted any sublicense or similar right with respect to the
license, sublicense, agreement, or permission.
(v) None of the Seller Stockholders and the directors
and officers of the Seller has any Knowledge of any new products,
inventions, procedures, or methods of manufacturing or processing
that any competitors or other third parties have developed which
reasonably could be expected to supersede or make obsolete any
product or process of any of the Seller in the Business.
(n) Inventory. The inventory of the Seller consists of raw
materials and supplies, manufactured and purchased parts, goods in process,
and finished goods, all of which is merchantable and fit for the purpose for
which it was procured or manufactured, and none of which is slow-moving,
obsolete, damaged, or defective, subject only to the reserve for inventory
writedown set forth on the face of the Most Recent Balance Sheet (rather
than in any notes thereto) as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice of the Seller.
(o) Real Property Leases. Section 3(o) of the Disclosure
Schedule lists all real property leased or subleased to the Seller. The
Seller has delivered to the Buyer correct and complete copies of the leases
and subleases listed in Section 3(o) of the Disclosure Schedule (as amended
to date). To the Knowledge of the Seller, each lease and sublease listed in
Section 3(o) of the Disclosure Schedule is legal, valid, binding,
enforceable, and in full force and effect, except where the illegality,
invalidity, nonbinding nature, unenforceability, or ineffectiveness would
not have a material adverse effect on the financial condition of the Seller
taken as a whole.
(p) Contracts. Section 3(p) of the Disclosure Schedule
lists the following contracts, agreements, and other written and oral
arrangements to which the Seller is a party ("Contracts"):
(i) any arrangement (or group of related written
arrangements) for the lease of personal property from or to third
parties providing for lease payments in excess of $5,000 per annum;
(ii) any arrangement (or group of related written
arrangements) for the purchase or sale of raw materials,
commodities, supplies, products, or other personal property or for
the furnishing or receipt of services which either calls for
performance over a period of more than one year or involves more
than the sum of $5,000;
(iii) any arrangement concerning a partnership or joint
venture;
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(iv) any arrangement (or group of related written
arrangements) under which it has created, incurred, assumed, or
guaranteed (or may create, incur, assume, or guarantee)
indebtedness (including capitalized lease obligations) involving
more than $5,000 under which it has imposed (or may impose) a
Security Interest on any of its assets, tangible or intangible;
(v) any arrangement concerning confidentiality or
competition;
(vi) any arrangement involving any of the Seller
Stockholders and their Affiliates;
(vii) any written arrangement with any of its
directors, officers, and employees in the nature of a collective
bargaining agreement, employment agreement, or severance agreement.
(viii) any arrangement under which the
consequences of a default or termination could have an adverse
effect on the assets, Liabilities, business, financial condition,
operations, results of operations, or future prospects of the
Seller taken as a whole; or
(ix) any other arrangement (or group of related
arrangements) either involving more than $5,000 or not entered into
in the Ordinary Course.
The Seller has delivered to the Buyer a correct and complete copy
of each written arrangement listed in Section 3(p) of the Disclosure
Schedule (as amended to date) and written summary of every verbal contract,
agreement, or other arrangement. With respect to each written arrangement
so listed: (A) the written arrangement is legal, valid, binding,
enforceable, and in full force and effect; (B) the written arrangement will
continue to be legal, valid, binding, and enforceable and in full force and
effect on identical terms following the Closing; (C) no party is in breach
or default, and no event has occurred which with notice or lapse of time
would constitute a breach or default or permit termination, modification, or
acceleration, under the written arrangement; and (D) no party has repudiated
any provision of the written arrangement.
No filled customer order or commitment obligating the Seller to
process, manufacture, or deliver products or perform services will result in
a loss to the Seller upon completion of performance. No purchase order or
commitment of the Seller is in excess of normal requirements, nor are prices
provided therein in excess of current market prices for the products or
services to be provided thereunder. No supplier of the Seller has indicated
within the past year that it will stop, or decrease the rate of, supplying
materials, products, or services to them and no customer of the Seller has
indicated within the part year that it will stop, or decrease the rate of,
buying materials, products, or services from them.
The Seller is in full compliance with all applicable terms and
requirements of each Contract under which the Seller has or had any
obligation or liability or by which Seller or any of the assets owned or
used by the Seller is or was bound. Each other Person that has or had any
obligation or liability under any Contract under which the Seller has or had
any rights is in full compliance with all applicable terms and requirements
of such contract. No event has occurred or circumstance exists that (with or
without notice or lapse of time) may contravene, conflict with, or result in
a violation or breach of, or give the Seller or other Person the right to
declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any
applicable Contract; and the Seller has not given to or received from any
other Person any notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential violation or breach
of, or default under, any Contract.
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The Contracts are all the agreements, arrangements, and contracts
necessary to operate the business as it is currently conducted and as it is
currently proposed to be conducted. All of the Assumed Contracts can be
assigned by Seller to Buyer without any other action, and such assignment
will permit Buyer to operate under the Assumed Contracts on the same terms
and conditions as Seller currently operates.
(q) Notes and Accounts Receivable. All notes and accounts
receivable of the Seller are reflected properly on their books and records,
are valid receivables subject to no setoffs or counterclaims, are presently
current and collectible, and will be collected in accordance with their
terms at their recorded amounts, subject only to the reserve for bad debts
set forth on the face of the Most Recent Balance Sheet (rather than in any
notes thereto) as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of the Seller.
(r) Insurance. Section 3(r) of the Disclosure Schedule
sets forth the following information with respect to each insurance policy
(including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which the Seller
has been a party, a named insured, or otherwise the beneficiary of coverage
at any time within the past five (5) years:
(i) the name, address, and telephone number of the
agent;
(ii) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the
coverage was on a claim made, occurrence, or other basis and amount
(including a description of how deductibles and ceilings are
calculated and operate) of coverage; and
(v) a description of any retroactive premium
adjustments or other loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy is legal, valid,
binding, and enforceable and in full force and effect; (B) neither the
Seller nor any other party to the policy is in breach or default (including
with respect to the payment of premiums or the giving of notices), and no
event has occurred which, with notice or the lapse of time, would constitute
such a breach or default or permit termination, modification, or
acceleration, under the policy; and (C) no party to the policy has
repudiated any provision thereof. Each of the Seller and its Subsidiaries
has been covered during the past 15 years by insurance in scope and amount
customary and reasonable for the business in which it has engaged during the
aforementioned period. Section 3(r) of the Disclosure Schedule describes
any self-insurance arrangements affecting any of the Seller.
(s) Powers of Attorney. To the Knowledge of the Seller,
there are no outstanding powers of attorney executed on behalf of any of the
Seller.
(t) Litigation. Section 3(t) of the Disclosure Schedule
sets forth each instances in which the Seller (i) is subject to any
unsatisfied judgment, order, decree, stipulation, injunction, or charge, or
(ii) is 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, except where
the judgment, order, decree, stipulation, injunction, charge, complaint,
action, suit, proceeding, hearing, or investigation would not have a
material adverse effect on the financial condition of the Business. To the
Knowledge of the Seller (i) no such proceeding has been Threatened, and (ii)
no event has occurred or
15
circumstance exists that may give rise to or serve as a Basis for the
commencement of any such proceeding. The Seller has delivered to Buyer copies
of all pleadings, correspondence, and other documents relating to each
proceeding listed in Section 3(t) of the Disclosure Schedule. The proceedings
listed in Section 3(t) of the Disclosure Schedule will not have a material
adverse effect on the Business.
(u) Product Warranty. Each product manufactured, sold,
leased, or delivered by the Seller has been in conformity with all
applicable contractual commitments and all express and implied warranties,
and the Seller has no Liability (and there is no Basis for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand against any of them giving rise to any Liability) for
replacement or repair thereof or other damages in connection therewith,
subject only to the reserve for product warranty claims set forth on the
face of the Most Recent Balance Sheet (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in accordance with
the past custom and practice of the Seller. No product manufactured, sold,
leased, or delivered by the Seller is subject to any guaranty, warranty, or
other indemnity beyond the applicable standard terms and conditions of sale
or lease. Section 3(u) of the Disclosure Schedule includes copies of the
standard terms and conditions of sale for the Seller (containing applicable
guaranty, warranty, and indemnity provisions).
(v) Product Liability. The Seller has no Liability (and
there is no Basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against any of them
giving rise to any Liability) arising out of any injury to persons or
property as a result of the ownership, possession, or use of any product
manufactured, sold, leased, or delivered by the Seller.
(w) Employee Benefits. Section 3(w) of the Disclosure
Schedule lists all Employee Benefit Plans that the Seller maintains or to
which the Seller contributes for the benefit of any current or former
employee of the Seller.
(i) To the Knowledge of the Seller, each Employee
Benefit Plan (and each related trust or insurance contract)
complies in form and in operation in all respects with the
applicable requirements of ERISA and the Code, except where the
failure to comply would not have a material adverse effect on the
financial condition of the Seller taken as a whole.
(ii) All contributions (including all employer
contributions and employee salary reduction contributions) which
are due have been paid to each Employee Pension Benefit Plan.
(iii) Each Employee Pension Benefit Plan has received a
determination letter from the Internal Revenue Service to the
effect that it meets the requirements of Code Sec. 401(a).
(iv) As of the last day of the most recent prior plan
year, the market value of assets under each Employee Pension
Benefit Plan (other than any Multi-employer Plan) equaled or
exceeded the present value of liabilities thereunder (determined in
accordance with then current funding assumptions). No Employee
Pension Benefit Plan (other than any Multi-employer Plan) has been
completely or partially terminated or been the subject of a
Reportable Event as to which notices would be required to be filed
with the PBGC. No proceeding by the PBGC to terminate an Employee
Pension Benefit Plan (other than any Multi-employer Plan) has been
instituted. The Seller has not incurred any liability to the PBGC
(other than PBGC premium payments) or otherwise under Title IV of
ERISA (including any withdrawal liability) with respect to any
Employee Pension Benefit Plan.
16
(v) No charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand with respect to the
administration or the investment of the assets of any Employee
Benefit Plan (other than routine claims for benefits) is pending,
except where the charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand would not have a material
adverse effect on the financial condition of the Seller taken as a
whole.
(vi) The Seller has delivered to the Buyer correct and
complete copies of (A) the plan documents and summary plan
descriptions, (B) the most recent determination letter received
from the Internal Revenue Service, (C) the most recent Form 5500
Annual Report, and (D) all related trust agreements, insurance
contracts, and other funding agreements which implement each
Employee Benefit Plan.
(x) Legal Compliance. To the Knowledge of the Seller, the
Seller has complied with all laws (including rules and regulations
thereunder) of federal, state, local, and foreign governments (and all
agencies thereof), except where the failure to comply would not have a
material adverse effect on the financial condition of the Seller taken as a
whole.
(y) Certain Business Relationships with the Seller.
Neither the Seller Stockholders nor its Affiliates have been involved in any
material business arrangement or relationship with the Seller within the
past 12 months, and neither the Seller Stockholders nor its Affiliates owns
any material property or right, tangible or intangible, which is used in the
business of the Seller.
(z) Brokers' Fees. The Seller 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.
(aa) Books and Records. The books of account, minute books,
stock record books, and other records of the Seller, all of which have been
made available to Buyer, are complete and correct and have been maintained
in accordance with sound business practices and the requirements of Section
13(b)(2) of the Securities Exchange Act, including the maintenance of an
adequate system of internal controls. The minute books of the Seller contain
accurate and complete records of all meetings held of, and corporate action
taken by, the stockholders, the boards of directors, and committees of the
boards of directors of the Seller.
(bb) Employees. No employee of the Seller is a party to, or
is otherwise bound by, any agreement or arrangement, including any
confidentiality, noncompetition, or proprietary rights agreement, between
such employee and any other Person ("Proprietary Rights Agreement") that in
any way adversely affects or will affect (i) the performance of his duties
as an employee of the Seller, or (ii) the ability of the Seller to conduct
its business, including any Proprietary Rights Agreement with Seller by any
such employee.
(cc) Disclosure. No representation or warranty made by
Seller in this Agreement, the Schedules or the Exhibits attached hereto
contains an untrue statement of a material fact or omits to state a material
fact required to be stated herein or therein or necessary to make the
statements contained herein or therein not misleading.
4. Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Seller that the statements contained in this
Section 4 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 4).
(a) Organization of the Buyer. Each of Quixote and
Transafe is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation.
17
(b) Authorization of Transaction. Each of Quixote and
Transafe has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of Quixote and Transafe, enforceable in accordance with
its terms and conditions.
(c) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby (including the assignments and assumptions referred to
in Section 2 above), 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 either
Quixote or Transafe is subject or any provision of its charter or bylaws, 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 either Quixote or Transafe
is a party or by which it is bound or to which any of its assets is subject.
Neither Quixote nor Transafe needs to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement (including the assignments and assumptions
referred to in Section 2 above), except as set forth in Section 5(b) hereof.
(d) Brokers' Fees. Neither Quixote nor Transafe has any
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 Seller could become liable or obligated.
5. Pre-Closing Covenants. The Parties agree as follows with
respect to the period between the execution of this Agreement and the
Closing.
(a) General. Each of the Parties will use its reasonable
best efforts to take all action and to do all things necessary, proper, or
advisable to consummate and make effective the transactions contemplated by
this Agreement (including satisfying the Closing conditions set forth in
Section 6 below). The Seller shall act diligently and reasonably to secure,
before the Closing Date, the consent, approval or waiver, in form and
substance reasonably satisfactory to Buyer, from any party to the Assumed
Contracts required to be obtained to assign or transfer any such agreement
to Buyer or to otherwise satisfy the conditions set forth in Section 6;
provided, however, that neither Buyer nor Seller shall have any obligation
to offer or pay any consideration in order to obtain any such consent,
approval or waiver; and provided, further that Seller shall not make any
agreement or enter into any understanding affecting the Acquired Assets or
the Business as a condition for obtaining any such consent, approval or
waiver, except with the prior written consent of Buyer. During the period
prior to the Closing Date, Buyer shall act diligently and reasonably to
cooperate with Seller to obtain the consents, approvals and waivers
contemplated by this Section 5(a).
(b) Notices and Consents. The Seller will give any notices
to third parties and will use its reasonable best efforts to obtain any
third party consents that the Buyer reasonably may request in connection
with the matters pertaining to the Seller disclosed or required to be
disclosed in the Disclosure Schedule. Each of the Parties will take any
additional action that may be necessary, proper, or advisable in connection
with any other notices to, filings with, and authorizations, consents, and
approvals of governments, governmental agencies, and third parties that it
may be required to give, make, or obtain.
(c) Operation of Business. The Seller will not engage in
any practice, take any action, embark on any course of inaction, or enter
into any transaction outside the Ordinary Course prior to the Closing. The
Seller will: use best efforts to preserve intact the current reputation of
the Business, and maintain the relations and good will of the Business with
suppliers,
18
customers, creditors and agents; confer with Buyer concerning operational
matters of a material nature; and otherwise report periodically to Buyer
concerning the status of the Business.
Except as expressly contemplated by this Agreement or except with
the express written approval of Buyer (which shall not be unreasonably
withheld), Seller shall not:
(i) make any change in the Business or in the
operation of the Business or make or contract or commit to make any
expenditure in respect of the Business which shall, in any case,
exceed $5,000;
(ii) enter into any contract, agreement, undertaking
or commitment which would have been required to be set forth in
Schedule 3(p) if in effect on the date hereof or enter into any
contract which cannot be assigned to Buyer or a permitted assignee
of Buyer under Section 2(b);
(iii) sell, lease (as lessor), transfer or otherwise
dispose of (including any transfers from the Business to Seller or
any of its Affiliates), or mortgage, pledge, impose or suffer to be
imposed any encumbrance on, any of the assets acquired for the
Business, except for inventory and other insignificant items of
personal property sold or otherwise disposed of for fair value in
the Ordinary Course consistent with past practice;
(iv) cancel any debts owed to or claims held for the
benefit of the Business (including the settlement of any claims or
litigation) other than in the Ordinary Course;
(v) create, incur or assume, or agree to create,
incur or assume, any indebtedness for borrowed money in respect of
the business, or enter into, as lessee, any capitalized lease
obligation (as defined in Statement of Financial Accounting
Standards No. 13);
(vi) accelerate or delay collection of any notes or
accounts receivable generated by the Business in advance of or
beyond their regular due dates or the dates when the same would
have been collected in the Ordinary Course;
(vii) delay or accelerate payment of any account
payable or other liability of the Business beyond or in advance of
its due date or the date when such liability would have been paid
in the Ordinary Course;
(viii) allow the levels of raw materials,
supplies, work-in-process or other materials included in the
inventory of the Business to vary in any material respect from the
levels customarily maintained in the Business;
(ix) make, or agree to make, any payment of Cash or
distribution of assets to Seller Stockholders or Affiliates or any
of its Affiliates whether pursuant to any management fee or service
agreement or similar arrangement of the business;
(x) enter in any agreement, commitment or arrangement
in connection with or affecting the Business.
(d) Full Access. The Seller will permit representatives of
the Buyer to have full access at all reasonable times, and in a manner so
as not to interfere with the normal business operations of the Seller, to
all premises, properties, books, records, contracts, Tax records, and
documents of or pertaining to the Seller. The Buyer will treat and hold as
such any Confidential Information it receives from the Seller in the course
of the reviews contemplated by this Section 5(d), will not use any of the
19
Confidential Information except in connection with this Agreement, and, if
this Agreement is terminated for any reason whatsoever, will return to the
Seller all tangible embodiments (and all copies) of the Confidential
Information which are in its possession; provided, however, that this
sentence shall not apply to any information (i) which, at the time of
disclosure, is available publicly, (ii) which, after disclosure, becomes
available publicly through no fault of the Buyer, or (iii) which the Buyer
knew or to which the Buyer had access prior to disclosure.
(e) Notice of Developments. The Seller will give prompt
written notice to the Buyer of any material development affecting the
Business. Each Party will give prompt written notice to the other of any
material development affecting the ability of the Parties to consummate the
transactions contemplated by this Agreement.
The Buyer will have 10 business days after the Seller gives
any written notice pursuant to this Section 5(e) within which to exercise
any right the Buyer may have to terminate this Agreement pursuant to Section
7(a)(ii) below by reason of the material development, and the Seller
likewise will have 10 business days after the Buyer gives any written notice
pursuant to this Section 5(e) within which to exercise any right the Seller
may have to terminate this Agreement pursuant to Section 7(a)(ii) below by
reason of the material development. Unless the Buyer or the Seller
terminates this Agreement within the aforementioned period, the written
notice of a material development will be deemed to have amended the
Disclosure Schedule, to have qualified the representations and warranties
contained herein, and to have cured any misrepresentation or breach of
warranty that otherwise might have existed hereunder by reason of the
material development.
(f) Exclusivity. The Seller will not solicit or initiate
the submission of any proposal or offer from any person relating to any (i)
liquidation, dissolution, or recapitalization, (ii) merger or consolidation,
(iii) acquisition or purchase of securities or assets, or (iv) similar
transactions or business combination involving the Seller. The Seller shall
notify the Buyer immediately if any person makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.
6. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation
of the Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties set forth in
Section 3 above shall be true and correct in all material respects
at and as of the Closing Date;
(ii) the Seller shall have performed and complied with
all of its covenants hereunder in all material respects through the
Closing;
(iii) all of the third party consents identified on
Schedule 1 have been procured;
(iv) no action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction
wherein an unfavorable judgment, order, decree, stipulation,
injunction, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded
following consummation, or (C) affect adversely the right of the
Buyer to own, operate, or control the Acquired Assets (and no such
judgment, order, decree, stipulation, injunction, or charge shall
be in effect);
20
(v) there shall not be any actual or Threatened
judgment, order, decree, stipulation, injunction, or charge in
effect preventing consummation of any of the transactions
contemplated by this Agreement;
(vi) the Seller shall have delivered to the Buyer a
certificate (without qualification as to knowledge or materiality
or otherwise) to the effect that each of the conditions specified
above Section 6(a)(i)-(v) is satisfied in all respects;
(vii) the Buyer shall have received from counsel to the
Seller an opinion, addressed to the Buyer and dated as of the
Closing Date in form acceptable to Buyer;
(viii) the Board of Directors of Buyer shall have
approved the transactions contemplated in this Agreement;
(ix) the Seller Stockholders shall have executed and
delivered the Post Closing Agreement with Seller Stockholders in
form and substance set forth on Exhibit D attached hereto and the
same shall be in full force and effect;
(x) the Seller shall have delivered to Buyer the
consulting agreements with E. Xxxxx Xxxxxx, Xxx Xxxxxx and Xxxx
Warton in the form and substance as set forth on Exhibit F-1,
Exhibit F-2 and Exhibit F-3, respectively, each executed by the
consultant;
(xi) the Parties shall have executed and delivered the
Litigation Settlement Agreements in form and substance set forth in
Exhibit G-1 and Exhibit G-2 attached hereto and the same shall be
in full force and effect;
(xii) the Seller shall have delivered to Buyer the
Agreements of Xxxxxxx Xxxxxx and Xxxx Xxxxx in the form and
substance as set forth on Exhibit H-1 and Exhibit H-2,
respectively, executed by Xx. Xxxxxx or Xx. Xxxxx;
(xiii) the Seller shall have delivered to Buyer
the agreement between Buyer and Safety Quest in the form and
substance as set forth on Exhibit I, executed by a duly authorized
representative of Safety Quest, and evidence of such authorization;
(xiv) the Seller shall have delivered to Buyer the
Investment Agreement in form and substance set forth at Exhibit J,
executed by a duly authorized representative of Impact Attenuation,
Inc. and evidence of such authorization; and
(xv) all actions to be taken by the Seller in
connection with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby
will be reasonably satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation
of the Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties set forth in
Section 4 above shall be true and correct in all material respects
at and as of the Closing Date;
(ii) the Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through the
Closing;
21
(iii) all of the third party consents identified on
Schedule 1 have been procured;
(iv) no action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction
wherein an unfavorable judgment, order, decree, stipulation,
injunction, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded
following consummation (and no such judgment, order, decree,
stipulation, injunction, or charge shall be in effect);
(v) there shall not be any actual or Threatened
judgment, order, decree, stipulation, injunction, or charge in
effect preventing consummation of any of the transactions
contemplated by this Agreement;
(vi) the Buyer shall have delivered to the Seller a
certificate (without qualification as to knowledge or materiality
or otherwise) to the effect that each of the conditions specified
above in Section 6(b)(i)-(v) is satisfied in all respects;
(vii) the Seller shall have received from counsel to
the Buyer an opinion, addressed to the Seller and dated as of the
Closing Date in a form acceptable to the Seller;
(viii) the stockholders and Board of Directors of
the Seller shall have approved the transaction contemplated by this
Agreement;
(ix) the Buyer shall have executed and delivered the
Post Closing Agreement with Seller Stockholders in form and
substance set forth on Exhibit D attached hereto and the same shall
be in full force and effect;
(x) the Buyer shall have executed and delivered the
consulting agreements with E. Xxxxx Xxxxxx, Xxx Xxxxxx and Xxxx
Warton in the form and substance as set forth on Exhibit F-1,
Exhibit F-2 and Exhibit F-3, respectively;
(xi) the Parties shall have executed and delivered the
Litigation Settlement Agreements in form and substance set forth in
Exhibit G-1 and Exhibit G-2 attached hereto and the same shall be
in full force and effect;
(xii) the Buyer shall have executed and delivered the
Agreements with Xxxxxxx Xxxxxx and Xxxx Xxxxx in the form and
substance as set forth on Exhibit H-1 and Exhibit H-2,
respectively;
(xiii) the Buyer shall have executed and delivered
the agreement between Buyer and Safety Quest in the form and
substance as set forth on Exhibit I;
(xiv) the Buyer shall have executed and delivered the
Investment Agreement with Impact Attenuation, Inc. in form and
substance set forth at Exhibit J; and
(xv) all actions to be taken by the Buyer in
connection with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby
will be reasonably satisfactory in form and substance to the
Seller.
22
The Seller may waive any condition specified in this Section 6(b) if it
executes a writing so stating at or prior to the Closing.
7. Termination.
(a) Termination of Agreement. The Parties may terminate
this Agreement as provided below:
(i) the Buyer and the Seller may terminate this
Agreement by mutual written consent at any time prior to the
Closing;
(ii) the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing in
the event the Seller is in breach of any material representation,
warranty, or covenant contained in this Agreement in any material
respect, and the Seller may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing in the
event the Buyer is in breach, of any material representation,
warranty, or covenant contained in this Agreement in any material
respect;
(iii) the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing if
the Closing shall not have occurred on or before the 120th day
following the date of this Agreement by reason of the failure of
any condition precedent under Section 6(a) hereof (unless the
failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement);
or
(iv) the Seller may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing if the
Closing shall not have occurred on or before the 120th day
following the date of this Agreement by reason of the failure of
any condition precedent under Section 6(b) hereof (unless the
failure results primarily from the Seller itself breaching any
representation, warranty, or covenant contained in this Agreement).
(b) Effect of Termination. If any Party terminates this
Agreement pursuant to Section 7(a) above, all obligations of the Parties
hereunder shall terminate without any liability of any Party to any other
Party (except for any liability of any Party then in breach); provided,
however, that the confidentiality provisions contained in Section 5(d) above
shall survive termination.
8. Post-Closing Covenants. The Parties agree as follows with
respect to the period following the Closing.
(a) General. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any
other Party reasonably may request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to indemnification
therefor under Section 9 below).
(b) Litigation Support. In the event and for so long as
any Party actively is contesting or defending against any charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand in
connection with (i) any transaction contemplated under this Agreement or
(ii) any fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving the Seller, the other
Party will cooperate with Seller and its counsel in the contest or defense,
make available its personnel, and provide such testimony and access to its
books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending
Party (unless
23
the contesting or defending Party is entitled to indemnification therefor
under Section 9 below).
(c) Transition. The Seller will not take any action that
primarily is designed or intended to have the effect of discouraging any
licensor, customer, supplier, or other business associate of the Seller from
maintaining the same business relationships with the Buyer after the Closing
as it maintained with the Seller prior to the Closing. In addition, at
Buyer's request, Seller will make available Seller's employees to assist
Buyer in the transfer of the Business to Buyer, for a period not to exceed
60 days after Closing. Buyer shall reimburse Seller for services performed
by Seller's employees.
(d) Covenant Not to Compete. For a period of ten (10)
years from and after the Closing Date, the Seller will not engage in any
transportation safety systems business in any geographic area in which the
Seller conducts that business as of the Closing Date; provided, however,
that no owner of less than 5% of the outstanding stock of any publicly
traded corporation shall be deemed to engage solely by reason thereof in any
of its business; and provided further, Impact Dynamics, L.L.C., or another
entity owned by E. Xxxxx Xxxxxx and Transafe shall be entitled to conduct a
transportation safety systems business limited to motorized vehicle
racetracks and racecourses.
(e) Employees. Buyer will not offer employment to any
employees of the Seller as of the Closing Date.
(f) Employee Benefit Plans. Buyer shall have no liability
under any of Seller's Employee Benefit Plans maintained or contributed to
for the benefit of any of the employees or other persons performing services
for Seller.
(g) Assistance. After the Closing, Buyer will cooperate
with Seller to facilitate Seller's collection of its receivables.
9. Remedies for Breaches of this Agreement.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Seller contained in Section 3 above
shall survive the Closing hereunder (unless the Buyer knew or had reason to
know of any misrepresentation or breach of warranty at the time of Closing)
and continue in full force and effect for a period of three years
thereafter. All of the other representations, warranties, and covenants of
the Parties contained in this Agreement shall survive the Closing (unless
the damaged Party knew or had reason to know of any misrepresentation or
breach of warranty or covenant at the time of Closing) and continue in full
force and effect forever thereafter.
(b) Indemnification Provisions.
(i) In the event the Seller breaches any of its
representations and warranties contained in Section 3, and provided
that the Buyer makes a written claim for indemnification against
the Seller pursuant to Section 10(g) below within the applicable
survival period, then the Seller agrees to indemnify the Buyer from
and against the entirety of any Adverse Consequences the Buyer may
suffer through and after the date of the claim for indemnification
(but not including any Adverse Consequences the Buyer may suffer
after the end of the applicable survival period) resulting from,
arising out of, relating to, in the nature of, or caused by the
breach.
(ii) In the event the Buyer suffers any Adverse
Consequences arising from or relating to the Excluded Assets or the
Retained Liabilities and the Buyer makes a written claim for
indemnification against the Seller pursuant to Section 10(g) below,
then
24
the Seller agrees to indemnify the Buyer from and against the
entirety of any Adverse Consequences the Buyer may suffer through
and after the date of the claim for indemnification resulting from,
arising out of or relating to the Excluded Assets or the Retained
Liabilities.
(iii) In the event the Seller suffers any Adverse
Consequences arising from or relating to the Acquired Assets or the
Assumed Liabilities and the Seller makes a written claim for
indemnification against the Buyer pursuant to Section 10(g) below,
then the Buyer agrees to indemnify the Seller from and against the
entirety of any Adverse Consequences the Seller may suffer through
and after the date of the claim for indemnification resulting from,
arising out of or relating to the Acquired Assets or the Assumed
Liabilities.
(c) Matters Involving Third Parties. If any third party
shall notify any Party (the "Indemnified Party") with respect to any matter
which may give rise to a claim for indemnification against the other Party
(the "Indemnifying Party") under this Section 9, then the Indemnified Party
shall notify the Indemnifying Party thereof promptly (and in any event
within 30 days after receiving any written notice from a third party). Once
the Indemnified Party has given notice of the matter to the Indemnifying
Party, the Indemnified Party may defend against the matter in any manner it
reasonably may deem appropriate. In the event the Indemnifying Party
notifies the Indemnified Party at any time after the Indemnified Party has
given notice of the matter that the Indemnifying Party is assuming the
defense thereof, however, (A) the Indemnifying Party will defend the
Indemnified Party against the matter with counsel of its choice reasonably
satisfactory to the Indemnified Party, (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 the
separate co-counsel to the extent the Indemnified Party concludes reasonably
that the counsel the Indemnifying Party has selected has a conflict of
interest), (C) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the matter without the
written consent of the Indemnifying Party (not to be unreasonably withheld),
and (D) the Indemnifying Party will not consent to the entry of any judgment
with respect to the matter, or enter into any settlement which does not
include a provision whereby the plaintiff or claimant in the matter releases
the Indemnified Party from all liability with respect thereto, without the
written consent of the Indemnified Party (not to be withheld unreasonably).
(d) Determination of Loss. The Parties shall make
appropriate adjustments for Tax benefits and insurance proceeds (reasonably
certain of receipt and utility in each case) and for the time cost of money
(using the Applicable Rate as the discount rate) in determining the amount
of loss for purposes of this Section 9. All indemnification payments under
this Section 9 shall be deemed adjustments to the Purchase Price.
(e) Other Indemnification Provisions; Set-Off. The
foregoing indemnification provisions are in addition to, and not in
derogation of, any statutory or common law remedy any Party may have for
breach of representation, warranty, or covenant. The Parties agree that the
Buyer may, to the extent the Seller fails to pay any claim for
indemnification of Buyer within thirty (30) days of notice by Buyer
requiring such indemnification, set-off said amounts claimed against any
sums otherwise due and owing Seller and its Affiliates in any other
capacity.
10. Miscellaneous.
(a) Press Releases and Announcements. No Party shall issue
any press release or announcement relating to the subject matter of this
Agreement without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good
faith is required by law or regulation (in which case the disclosing Party
will advise the other Party prior to making the disclosure).
25
(b) No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any person other than the Parties and
their respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement between the
Parties and supersedes any prior understandings, agreements, or
representations by or between the Parties, written or oral, that may have
related in any way to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either
this Agreement or any of its rights, interests, or obligations hereunder
without the prior written approval of the other Party; provided, however,
that the Buyer may (i) assign any or all of its rights and interests
hereunder to one or more of its Affiliates and (ii) designate one or more of
its Affiliates to perform its obligations hereunder (in any or all of which
cases the Buyer nonetheless shall remain liable and responsible for the
performance of all of its obligations hereunder).
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
(f) 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.
(g) 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
if (and then two business days after) it is sent by registered or certified
mail, return receipt requested, postage prepaid, and addressed to the
intended recipient as set forth below:
If to the Seller: E. Xxxxx Xxxxxx
00 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
Copy to: Xxxxxxxx, Xxxxxxx & Xxxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile No.: 000-000-0000
If to the Buyer: Quixote Corporation
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile No.: 000-000-0000
Copy to: XxXxxxx Xxxxx & Xxxxx
000 Xxxx Xxxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx Schiave
Facsimile No.: 000-000-0000
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication
shall be deemed to have been duly given unless and until it actually is
26
received by the individual for whom it is intended. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving other Party notice in the manner
herein set forth.
(h) Governing Law, Jurisdiction; Service of Process. This
Agreement shall be governed by and construed in accordance with the internal
laws (and not the law of conflicts) of the State of Illinois. Any action or
proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement shall be brought against either of the
Parties in the courts of the State of Illinois, County of Xxxx, or, if it
has or can acquire jurisdiction, in the United States District Court for the
Northern District of Illinois, and each of the Parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence
may be served on either Party anywhere in the world.
(i) Amendments and Waivers. No amendment of any provision
of this Agreement shall be valid unless the same shall be in writing and
signed by the Buyer and the Seller. 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.
(j) 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.
(k) Expenses. The Buyer and the Seller will each bear its
own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
(l) Construction. The language used in this Agreement will
be deemed to be the language chosen by the Parties to express their mutual
intent, and no rule of strict construction shall be applied against any
Party. 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.
(m) Incorporation of Exhibits and Schedules. The Exhibits
and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(n) Bulk Transfer Laws. The Buyer acknowledges that the
Seller will not comply with the provisions of any bulk transfer laws of any
jurisdiction in connection with the transactions contemplated by this
Agreement.
(o) Time of Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence.
27
(p) Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.
28
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
as of the date first above written.
SELLERS: BUYER:
ROADWAY SAFETY SERVICE, INC., a New QUIXOTE CORPORATION, a Delaware
York corporation corporation
By: /s/E. Xxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------ --------------------------------
Title: President & CEO Title: President & CEO
MOMENTUM MANAGEMENT, INC., a New York TRANSAFE CORPORATION, a Delaware
corporation corporation
By: /s/ E. Xxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------ --------------------------------
Title: President & CEO Title: President & CEO
FITCH BARRIER CORPORATION, a New
York corporation
By: /s/ E. Xxxxx Xxxxxx
--------------------------
Title: President & CEO
29
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
QUIXOTE CORPORATION
and its wholly-owned subsidiary,
TRANSAFE CORPORATION
(together, "Buyer"),
and
ROADWAY SAFETY SERVICE, INC.,
MOMENTUM MANAGEMENT, INC. and
FITCH BARRIER CORPORATION
(together, "Seller")
October 1, 1997
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . .6
(a) Purchase of Acquired Assets . . . . . . . . . . . . . . . . .6
(b) Assumption of Assumed Contracts and the Assumed Liabilities .6
(c) Purchase Price. . . . . . . . . . . . . . . . . . . . . . . .6
(d) The Closing . . . . . . . . . . . . . . . . . . . . . . . . .7
(e) Deliveries at the Closing . . . . . . . . . . . . . . . . . .7
(f) Allocation. . . . . . . . . . . . . . . . . . . . . . . . . .7
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. . . . . . . . . . . . . .7
(a) Organization, Qualification, and Corporate Power. . . . . . .8
(b) Authorization of Transaction. . . . . . . . . . . . . . . . .8
(c) Noncontravention. . . . . . . . . . . . . . . . . . . . . . .8
(d) Seller Stockholders and Subsidiaries. . . . . . . . . . . . .8
(e) Financial Statements. . . . . . . . . . . . . . . . . . . . .9
(f) Events Subsequent to Most Recent Fiscal Month End . . . . . 10
(g) Events Subsequent to Most Recent Fiscal Year End. . . . . . 10
(h) Undisclosed Liabilities . . . . . . . . . . . . . . . . . . 12
(i) Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . 12
(j) Tangible Assets . . . . . . . . . . . . . . . . . . . . . . 13
(k) Owned Real Property . . . . . . . . . . . . . . . . . . . . 13
(l) Environmental Matters . . . . . . . . . . . . . . . . . . . 13
(m) Intellectual Property . . . . . . . . . . . . . . . . . . . 13
(n) Inventory . . . . . . . . . . . . . . . . . . . . . . . . . 16
(o) Real Property Leases. . . . . . . . . . . . . . . . . . . . 16
(p) Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 16
(q) Notes and Accounts Receivable . . . . . . . . . . . . . . . 18
(r) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 18
(s) Powers of Attorney. . . . . . . . . . . . . . . . . . . . . 18
(t) Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 18
(u) Product Warranty. . . . . . . . . . . . . . . . . . . . . . 19
(v) Product Liability . . . . . . . . . . . . . . . . . . . . . 19
(w) Employee Benefits . . . . . . . . . . . . . . . . . . . . . 19
(x) Legal Compliance. . . . . . . . . . . . . . . . . . . . . . 20
(y) Certain Business Relationships with the Seller. . . . . . . 20
(z) Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . 20
(aa) Books and Records. . . . . . . . . . . . . . . . . . . . . 20
(bb) Employees. . . . . . . . . . . . . . . . . . . . . . . . . 21
(cc) Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 21
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER . . . . . . . . . . . . . 21
(a) Organization of the Buyer . . . . . . . . . . . . . . . . . 21
(b) Authorization of Transaction. . . . . . . . . . . . . . . . 21
(c) Noncontravention. . . . . . . . . . . . . . . . . . . . . . 21
(d) Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . 22
5. PRE-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Notices and Consents. . . . . . . . . . . . . . . . . . . . 22
(c) Operation of Business . . . . . . . . . . . . . . . . . . . 22
(d) Full Access . . . . . . . . . . . . . . . . . . . . . . . . 23
(e) Notice of Developments. . . . . . . . . . . . . . . . . . . 24
(f) Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . 24
6. CONDITIONS TO OBLIGATION TO CLOSE . . . . . . . . . . . . . . . . . . 24
(a) Conditions to Obligation of the Buyer . . . . . . . . . . . 24
(b) Conditions to Obligation of the Seller. . . . . . . . . . . 26
7. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) Termination of Agreement. . . . . . . . . . . . . . . . . . 27
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(b) Effect of Termination . . . . . . . . . . . . . . . . . . . 28
8. POST-CLOSING COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 28
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(b) Litigation Support. . . . . . . . . . . . . . . . . . . . . 28
(c) Transition. . . . . . . . . . . . . . . . . . . . . . . . . 28
(d) Covenant Not to Compete . . . . . . . . . . . . . . . . . . 29
(e) Employees . . . . . . . . . . . . . . . . . . . . . . . . . 29
(f) Employee Benefit Plans. . . . . . . . . . . . . . . . . . . 29
(g)
ASSISTANCE..................................................................
..........................................32
9. REMEDIES FOR BREACHES OF THIS AGREEMENT . . . . . . . . . . . . . . . 29
(a) Survival of Representations and Warranties. . . . . . . . . 29
(b) Indemnification Provisions. . . . . . . . . . . . . . . . . 29
(c) Matters Involving Third Parties . . . . . . . . . . . . . . 30
(d) Determination of Loss . . . . . . . . . . . . . . . . . . . 30
(e) Other Indemnification Provisions; Set-Off . . . . . . . . . 31
10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(a) Press Releases and Announcements. . . . . . . . . . . . . . 31
(b) No Third-Party Beneficiaries. . . . . . . . . . . . . . . . 31
(c) Entire Agreement. . . . . . . . . . . . . . . . . . . . . . 31
(d) Succession and Assignment . . . . . . . . . . . . . . . . . 31
(e) Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 31
(f) Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 31
(g) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(h) Governing Law, Jurisdiction; Service of Process . . . . . . 32
(i) Amendments and Waivers. . . . . . . . . . . . . . . . . . . 32
(j) Severability. . . . . . . . . . . . . . . . . . . . . . . . 33
(k) Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 33
(l) Construction. . . . . . . . . . . . . . . . . . . . . . . . 33
(m) Incorporation of Exhibits and Schedules . . . . . . . . . . 33
(n) Bulk Transfer Laws. . . . . . . . . . . . . . . . . . . . . 33
(o) Time of Essence . . . . . . . . . . . . . . . . . . . . . . 33
(p) Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 33
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EXHIBITS AND SCHEDULES
[AS REFERENCED IN AGREEMENT]
EXHIBITS
EXHIBIT A - XXXX OF SALE
EXHIBIT B - ASSIGNMENT AGREEMENT
EXHIBIT C - ASSUMPTION AGREEMENT
EXHIBIT D - POST CLOSING AGREEMENT WITH SELLER STOCKHOLDERS
EXHIBIT E - ALLOCATION SCHEDULE
EXHIBIT F-1 - CONSULTING AGREEMENT WITH E. XXXXX XXXXXX
EXHIBIT F-2 - AGREEMENT WITH XXX XXXXXX
EXHIBIT F-3 - AGREEMENT WITH XXXX WARTON
EXHIBIT G-1 - ENERGY/ROADWAY LITIGATION SETTLEMENT AGREEMENT
EXHIBIT G-2 - XXXXXX/ROADWAY LITIGATION SETTLEMENT AGREEMENT
EXHIBIT H-1 - XXXXXXX XXXXXX AGREEMENT - WAIVED
EXHIBIT H-2 - XXXX XXXXX AGREEMENT
EXHIBIT I - SAFETY QUEST AGREEMENT
EXHIBIT J - IMPACT DYNAMICS, L.L.C. INVESTMENT AGREEMENT
SCHEDULES
SCHEDULE 1 - ASSUMED CONTRACTS
SCHEDULE 2 - ADJUSTMENTS TO PURCHASE PRICE
SCHEDULE 3 - FINANCIAL STATEMENTS
DISCLOSURE SCHEDULE EXCEPTIONS TO SELLER'S REPRESENTATIONS AND WARRANTIES
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