ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into as
of October 1, 1999 by and among All Transmission Parts, Inc., an Oregon
corporation ("All Trans"), All Automatic Transmission Parts, Inc., an Oregon
corporation ("AATP"), Xxxxx X. Xxxx, an individual, Xxxxx X. Xxxx, an
individual, Aftermarket Technology Corp., a Delaware corporation ("ATC"), and
ATC Distribution Group, Inc., a Delaware corporation ("Buyer"). All Trans and
AATP are hereinafter referred to individually as a "Seller" and collectively
as "Sellers." Xxxxx X. Xxxx and Xxxxx X. Xxxx are hereinafter referred to
individually as a "Stockholder" and collectively as "Stockholders."
R E C I T A L S
A. Sellers are engaged in the remanufacture and/or distribution of
standard and automatic transmissions and related components and parts for the
automotive aftermarket (the "Business");
B. Stockholders collectively own all of the issued and outstanding
shares of the capital stock of each Seller; and
C. Buyer (a wholly owned subsidiary of ATC) desires to purchase the
Business and substantially all the assets of Sellers, and Stockholders and
Sellers desire to sell the Business and such assets to Buyer on the terms and
conditions set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual representations, warranties, covenants and agreements set forth below,
the parties hereto agree as follows.
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. The following terms, as used herein, have the
following meanings:
"ACCOUNTS RECEIVABLE" means all accounts receivable and notes
receivable (including, without limitation, any gainsharing payments from
customers and rebates from suppliers), together with any unpaid interest or fees
accrued thereon or other amounts due with respect thereto. An Account Receivable
will not be deemed to have been paid until the payment thereof is actually
received by the payee, without regard to when the payor deposited such payment
in the mail or with a third party delivery service.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Act of 1934, as amended.
"APPLICABLE LAW" means, with respect to any Person, any domestic or
foreign, federal, state, provincial, territorial, county or local statute, law,
ordinance, rule, administrative interpretation, regulation, policy, guidance,
order, writ, injunction, directive, judgment, decree or other requirement of any
Governmental Authority (including any Environmental Law) applicable to such
Person or any of its properties, assets, officers, directors, employees,
consultants or agents (in connection with such officer's, director's,
employee's, consultant's or agent's activities on behalf of such Person).
"ASSOCIATE" or "ASSOCIATED WITH" means, when used to indicate a
relationship with any Person, (i) any other Person of which such Person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10% or
more of any class of equity securities issued by such other Person, (ii) any
trust or other estate in which such Person has a beneficial interest of more
than 50% or as to which such Person serves as trustee or in a similar fiduciary
capacity, and (iii) any parent, grandparent, aunt, uncle, sibling, child,
grandchild or spouse of such Person, or any relative of such spouse who has the
same home as such Person or who is a director or officer of such Person or any
Affiliate thereof.
"BENEFIT ARRANGEMENT" means any material benefit arrangement, other
than an Employee Benefit Plan, maintained by the Company or any ERISA Affiliate,
including, without limitation, the following: (i) each material employment or
consulting agreement; (ii) each arrangement providing for material insurance
coverage for employees or workers' compensation benefits; (iii) each material
incentive bonus or deferred bonus arrangement; (iv) each arrangement providing
material termination allowance, severance or similar benefits; (v) each material
equity compensation plan; (vi) each material deferred compensation plan; and
(vii) each material compensation policy and practice.
"BENEFIT PLAN" means an Employee Benefit Plan or Benefit Arrangement.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day
on which commercial banks in Chicago, Illinois are authorized or required by law
to close.
"BUYER ENVIRONMENTAL LIABILITY" means Environmental Liabilities arising
as a result of the actions of Buyer after the Closing Date.
"COMPANY" means All Trans and AATP, as Sellers, individually and
collectively.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DAMAGES" means, with respect to any Person, all assessments, losses,
damages, costs, expenses, liabilities, judgments, awards, fines, sanctions,
penalties, charges and amounts paid in settlement, net of insurance proceeds and
indemnification proceeds actually received, including without limitation, (i)
interest on any of the foregoing, at the Reference Rate in effect from time to
time, from the date of incurrence thereof until such Person shall have been
indemnified in respect thereof and (ii) reasonable costs, fees and expenses of
attorneys, accountants and other agents of such Person, but excluding any
consequential, incidental or special damages.
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"EMPLOYEE BENEFIT PLAN" means any employee benefit plan, as defined in
Section 3(3) of ERISA, that is sponsored or contributed to by the Company or any
ERISA Affiliate.
"EMPLOYEE PENSION BENEFIT PLAN" means any employee pension benefit
plan, as defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA,
including a multiemployer plan as defined in Section 3(37) and 4001(a)(3) of
ERISA.
"ENVIRONMENTAL LAWS" means all Applicable Laws relating to Hazardous
Substances, occupational health and safety, or the environment including,
without limitation, (i) all Applicable Laws pertaining to reporting, licensing,
permitting, controlling, investigating or remediating emissions, discharges,
releases or threatened releases of Hazardous Substances, chemical substances,
pollutants, contaminants or toxic substances, materials or wastes, whether
solid, liquid or gaseous in nature, into the air, surface water, groundwater or
land, (ii) all Applicable Laws relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances, chemical substances, pollutants, contaminants or toxic
substances, materials or wastes, whether solid, liquid or gaseous in nature, and
(iii) the Resource Conservation and Recovery Act (RCRA), the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA), the Clean Air
Act, the Water Pollution Control Act, the Safe Drinking Water Act, the Toxic
Substance Control Act (TSCA) and all requirements promulgated pursuant to any of
these or analogous domestic or foreign, federal, state, provincial, territorial,
county or local statutes.
"ENVIRONMENTAL LIABILITIES" means Liabilities of a Person that arise
under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any Person that, together with the Company as
of the relevant measuring date under ERISA, was or is required to be treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code.
"GAAP" means generally accepted accounting principles in the United
States as in effect at the time the relevant financial statement is prepared,
applied on a consistent basis.
"GOVERNMENTAL AUTHORITY" means any foreign or domestic, federal,
territorial, state, provincial, county or local governmental authority,
quasi-governmental authority, instrumentality, court, government or
self-regulatory organization, commission, tribunal or organization or any
regulatory, administrative or other agency, or any political or other
subdivision, department or branch of any of the foregoing.
"GROUP HEALTH PLAN" means any group health plan, as defined in Section
5000(b)(1) of the Code.
"HAZARDOUS SUBSTANCE" means any substance or material (i) the presence
of which requires investigation or remediation under any Applicable Law, (ii)
the generation, storage, treatment, transportation, disposal, remediation,
removal, handling or management of which is
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regulated by any Environmental Law, (iii) that is defined as a "hazardous waste"
or "hazardous substance" under any Applicable Law, (iv) that is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic or
mutagenic or otherwise hazardous and is regulated by any Governmental Authority,
(v) the presence of which constitutes a nuisance, trespass or other tortious
condition, or (vi) without limitation, that contains gasoline, diesel fuel or
other petroleum hydrocarbons, polychlorinated biphenols (PCBs) or asbestos.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"INDEBTEDNESS" means all liabilities and obligations, contingent or
otherwise, of the Company (i) in respect of borrowed money, (ii) evidenced by
bonds, notes, debentures or similar instruments, (iii) representing the balance
deferred and unpaid of the purchase price of any property or services, other
than those incurred in the ordinary course of its business that constitute trade
payables to trade creditors, (iv) evidenced by a bankers' acceptance or similar
instrument issued or accepted by banks, (v) for the capitalized amount of a
lease that is required to be capitalized for financial reporting purposes in
accordance with GAAP, (vi) evidenced by a letter of credit or a reimbursement
obligation of the Company with respect to any letter of credit, and (vii) any of
the foregoing of another Person as to which the Company is a guarantor or
otherwise liable (except endorsements of customer checks in the ordinary course
of business). "Indebtedness" shall also include any interest on, or prepayment
penalty or redemption premium with respect to, any Indebtedness.
"INDEMNIFYING PARTY" means (i) Stockholders or Sellers when any Buyer
Indemnitee is asserting a claim under Sections 9.01(a), or (ii) ATC and Buyer
when any Seller Indemnitee is asserting a claim under Sections 9.01(b).
"INDEMNITEE" means (i) each of ATC, Buyer and their respective
Affiliates with respect to any claim for which Stockholders and Sellers are
Indemnifying Parties under Sections 9.01(a), or (ii) Stockholders, Sellers and
their respective Affiliates with respect to claims for which ATC and Buyer are
Indemnifying Parties under Sections 9.01(b).
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" means, with respect to any Person that is a legal entity,
all things actually known, after due inquiry, by any director or executive
officer of such Person. The Knowledge of any Seller or Stockholder will be
imputed to all the Sellers and Stockholders.
"LANDLORD" means Helm Brothers, an Oregon partnership, or such other
Person controlled by Stockholders that owns the facilities used by All Trans as
of the date hereof.
"LIABILITY" means, with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, whether or
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not the same is required to be accrued on the financial statements of such
Person and, in the case of the Company, whether or not the same is disclosed on
any schedule to this Agreement.
"LIEN" means, with respect to any asset, any mortgage, title defect or
objection, lien, pledge, charge, security interest, hypothecation, restriction,
encumbrance or charge of any kind in respect of such asset, but excluding liens
for taxes not yet due and payable.
"MATERIAL ADVERSE EFFECT" means a change in, or effect on, the
operations, affairs, prospects, financial condition, results of operations,
assets, Liabilities, reserves or any other aspect of the Company or the Business
that results in a material adverse effect on, or a material adverse change in,
the Transferred Assets or the Business taken as a whole.
"MATERIAL TITLE DEFECT" means any condition of title that will
materially interfere with Buyer's operation of a Transferred Asset in the manner
in which the Company has historically operated such asset. Without limiting the
generality of the foregoing, "Material Title Defect" shall include any of the
following to the extent that it will materially interfere with Buyer's operation
of a Transferred Asset in the manner in which the Company has historically
operated such asset: (i) lack of access to any Real Property for the benefit of
Buyer, (ii) material violations of zoning laws or regulations, (iii) zoning or
building restrictions, and (iv) easements, rights of way and servitudes for the
benefit of third Persons.
"OUTSIDE DATE" means December 2, 1999.
"PERMITTED LIENS" means those Liens listed on SCHEDULE 1.01 hereto.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust, estate or other entity or organization,
including a Governmental Authority.
"PLAN AFFILIATE" means, with respect to any Person, any Benefit Plan
sponsored by, maintained by or contributed to by such Person, and with respect
to any Benefit Plan, any Person sponsoring, maintaining or contributing to such
Benefit Plan.
"PROHIBITED TRANSACTION" means a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA, respectively.
"REFERENCE RATE" means the per annum rate of interest publicly
announced from time to time by The Chase Manhattan Bank as its prime rate (or
reference rate). Any change in the Reference Rate shall take effect at the
opening of business on the day specified in the public announcement of such
change.
"TAX" means all taxes imposed of any nature including foreign or
domestic, federal, state, provincial, territorial, county or local net income
tax, alternative or add-on minimum tax, profits or excess profits tax, franchise
tax, gross income, adjusted gross income or gross receipts tax, employment
related tax (including employee withholding or employer payroll tax, FICA, FUTA
or SUTA), real or personal property tax or ad valorem tax, sales or use tax,
excise tax, stamp tax
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or duty, any withholding or back up withholding tax, value added tax, severance
tax, prohibited transaction tax, premiums tax, occupation tax, together with any
interest or any penalty, addition to tax or additional amount imposed by any
Governmental Authority responsible for the imposition of any such tax.
"TAX RETURN" means all returns, reports, forms or other information
required to be filed with respect to any Tax.
1.02 ADDITIONAL DEFINED TERMS. The following terms are defined in the
Sections referred to below:
"1999 Balance Sheet"...........................................Section 3.08(a)
"AAA Rules"...................................................Section 11.11(a)
"AATP"................................................................Preamble
"Agreement"...........................................................Preamble
"All Trans"...........................................................Preamble
"Assumed Liabilities".............................................Section 2.03
"ATC".................................................................Preamble
"Business"...........................................................Recital A
"Buyer"...............................................................Preamble
"Buyer Indemnitees"............................................Section 9.01(a)
"Buyer's Benefit Plans.........................................Section 7.08(b)
"Closing Date".................................................Section 2.06(a)
"Closing"......................................................Section 2.06(a)
"Contracts"....................................................Section 2.01(d)
"Equipment"....................................................Section 2.01(b)
"Excluded Assets".................................................Section 2.02
"Excluded Liabilities"............................................Section 2.04
"Existing Facility"............................................Section 7.07(b)
"Hired Employees"..............................................Section 7.08(a)
"Insurance Policies"...........................................Section 3.20(a)
"Intellectual Property Rights".................................Section 3.18(a)
"Inventory"....................................................Section 2.01(c)
"Leases".......................................................Section 3.09(b)
"Master Lease".................................................Section 7.07(d)
"New Facility".................................................Section 7.07(b)
"Permits".........................................................Section 3.14
"Personal Property Leases".....................................Section 3.09(a)
"Proceedings".....................................................Section 3.12
"Real Property"................................................Section 3.09(a)
"Required Approvals and Consent"..................................Section 3.04
"Scheduled Contracts"..........................................Section 3.13(a)
"Seller"..............................................................Preamble
"Seller Indemnitees"...........................................Section 9.01(b)
"Stockholder".........................................................Preamble
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"Subsequent Material Contract".............................Section 5.01(b)(iv)
"Suitable Location"............................................Section 7.07(b)
"Transferred Assets"..............................................Section 2.01
ARTICLE II
TRANSFER OF ASSETS
2.01 TRANSFER OF ASSETS BY SELLER. Upon the terms and subject to
the conditions of this Agreement and in reliance upon the representations,
warranties and agreements herein set forth, Buyer agrees to purchase from
Sellers and each Seller agrees to sell or cause to be sold to Buyer at the
Closing, free and clear of all Liens other than Permitted Liens, all the
assets, properties, rights, licenses, permits, contracts, causes of action
and claims, of every kind and description (other than the Excluded Assets) as
the same shall exist on the Closing Date, wherever located, whether tangible
or intangible, real, personal or mixed, that are used by, owned by, leased by
or in the possession of such Seller in connection with the Business, whether
or not reflected on the books and records of such Seller, including all
assets shown on the 1999 Balance Sheet and not disposed of in the ordinary
course of business or as permitted by this Agreement prior to the Closing
Date (the collective assets, properties, rights, licenses, permits,
contracts, causes of action and claims to be transferred to Buyer by Sellers
pursuant hereto are referred to collectively herein as the "Transferred
Assets") and including without limitation all right, title and interest of
the Company in, to and under the following, to the extent owned or leased by
the Company at the time of Closing:
(a) all real property leases (whether capitalized or
operating), all fixtures and improvements on and appurtenances to leased real
property, and all leasehold improvements relating to any leased real property,
including the foregoing listed on SCHEDULE 3.09(a)(i);
(b) all machinery, equipment, furniture, office equipment,
computer equipment (including all hardware and software), communications
equipment, vehicles, storage tanks, spare and replacement parts, fuel and other
tangible property ("Equipment") including any of the foregoing listed on
SCHEDULE 2.01;
(c) all items of inventory notwithstanding how or if
classified in the financial records of the Company, including all raw materials,
cores, purchased parts, work-in-process, finished goods, supplies, spare parts
and samples ("Inventory");
(d) all contracts, agreements, options, licenses, sales and
purchase orders, commitments and other instruments of any kind, whether written
or oral, to which the Company is a party, including the Scheduled Contracts and
the Subsequent Material Contracts (the "Contracts");
(e) all books, records, files and papers, whether in hard copy
or computer format, including books of account, invoices, engineering
information, sales and promotional literature, manuals and data, sales and
purchase correspondence, lists of present and former suppliers, personnel and
employment records of present and former employees, and
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documentation developed or used for accounting, marketing, engineering,
manufacturing or any other purpose;
(f) all prepaid charges and expenses other than prepaid
insurance, including any such charges and expenses with respect to ad valorem
taxes, leases and rentals and utilities;
(g) all rights, claims, credits, causes of action or rights of
set-off against third parties, whether liquidated or unliquidated, fixed or
contingent, including claims pursuant to all warranties, representations and
guarantees made by suppliers, manufacturers, contractors and other third parties
in connection with products or services purchased by or furnished to the
Company;
(h) all Accounts Receivable and any security or collateral
therefor;
(i) all patents, copyrights, trademarks, trade names, service
marks, service names, designs, know-how, processes, trade secrets, inventions,
and other proprietary data, including any of the foregoing listed on SCHEDULE
3.18;
(j) all transferable franchises, licenses, permits or other
authorizations issued or granted by any Governmental Authority, whether or not
actually utilized by the Company;
(k) all lists of present customers and lists of former
customers;
(l) all goodwill associated with the Business or the
Transferred Assets; and
(m) all product designations used in the Company's catalogs.
2.02 EXCLUDED ASSETS. Buyer expressly understands and agrees that
those assets listed on Schedule 2.02 (the "Excluded Assets") shall be excluded
from the Transferred Assets and shall be retained by the relevant Seller.
2.03 ASSUMPTION OF LIABILITIES. Upon the terms and subject to the
conditions of this Agreement and in reliance upon the representations,
warranties and agreements herein set forth, Buyer agrees, effective at the time
of Closing, to assume and in due course perform, pay and discharge each of the
following (the "Assumed Liabilities"):
(a) all Liabilities and obligations of the Company arising
after the Closing under Contracts and Leases included in the Transferred Assets;
(b) all trade payables of the Business arising in the ordinary
course of business as of the Closing Date that are not then past due; and
(c) warranty claims with respect to the products of the
Business sold prior to the Closing Date that do not exceed $75,000 in the
aggregate.
2.04 EXCLUDED LIABILITIES. Buyer does not hereby assume, and shall
not at any time hereafter (including on or after the Closing Date) become liable
for, any of the Liabilities of the
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Company or any of its Affiliates or ERISA Affiliates other than the Assumed
Liabilities (the "Excluded Liabilities"). The Excluded Liabilities shall
include, without limitation, the following Liabilities:
(a) any Liability of the Company or any of its Affiliates or
ERISA Affiliates, whether currently in existence or arising hereafter, that is
not attributable to, or that does not arise out of the conduct of, the Business;
(b) any Liability whether presently in existence or arising
hereafter relating to an Excluded Asset;
(c) any Environmental Liability, whether presently in
existence or arising hereafter, other than Buyer Environmental Liabilities;
(d) any Liability whether currently in existence or arising
hereafter relating to fees, commissions or expenses owed to any broker, finder,
investment banker, attorney, accountant or other intermediary or advisor
employed by either Stockholder or Seller or any of their respective Affiliates
in connection with the transactions contemplated hereby or otherwise;
(e) any Liability the existence of which constitutes a breach
of any representation or warranty of Stockholders and Sellers hereunder;
(f) any contingent Liabilities of the Company related to any
transactions by the Company prior to the date hereof except Liabilities that
Buyer has expressly agreed to assume pursuant to the terms of this Agreement;
(g) any Liability related to Indebtedness;
(h) any Liability for Taxes relating to the Company's
operations;
(i) any Liability arising under any of Seller's Benefit Plans;
(j) any Liability of the Company for accrued payroll for its
employees;
(k) warranty claims with respect to the products of the
Business sold prior to the Closing Date that exceed $75,000 in the aggregate;
and
(l) any Liability of either Seller arising under this
Agreement.
Any Liability that is listed in both Section 2.03 and Section 2.04 shall be
deemed an Excluded Liability.
2.05. ASSIGNMENT OF CONTRACTS AND RIGHTS.
(a) With respect to any material Contract and any claim, right
or benefit arising thereunder or resulting therefrom that constitute Transferred
Assets, promptly after the date hereof, to the extent requested by Buyer,
Stockholders and Sellers will use their respective
9
best efforts to obtain the written consent of the other parties to any such
Contract to the assignment thereof to Buyer or written confirmation from such
parties reasonably satisfactory in form and substance to Buyer confirming that
such consent is not required. In this regard, Stockholders' and Sellers' best
efforts will not include the payment of money.
(b) If such consent, waiver or confirmation is not obtained
with respect to any such Contract and notwithstanding the provisions of Section
8.01(b) Buyer elects to consummate the Closing, Sellers and Buyer shall
cooperate in an arrangement reasonably satisfactory to Buyer and Sellers under
which (i) Buyer will obtain, to the extent practicable, the claims, rights and
benefits under such Contact and assume the corresponding obligations thereunder
in accordance with this Agreement, including subcontracting, sub-licensing or
sub-leasing to Buyer, or (ii) Sellers will enforce for the benefit of Buyer,
with Buyer assuming Sellers' obligations to be performed after the Closing Date,
any and all claims, rights and benefits of Sellers against a third party
thereto. Sellers will promptly pay to Buyer when received all monies received by
Sellers under or with regard to any Transferred Asset or any claim, right or
benefit arising thereunder not transferred to Buyer pursuant to this Section
2.05(b).
2.06. CLOSING.
(a) The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place at the offices of Xxxx &
Xxxxxxxx, 0000 XX Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxx 00000-0000. The Closing of the
sale of Transferred Assets of All Trans and the assumption of Assumed
Liabilities of All Trans shall take place concurrently with the execution and
delivery of this Agreement by the parties hereto, which date shall be the
"Closing Date" with respect to such transactions. The Closing of the sale of
Transferred Assets of AATP and the assumption of Assumed Liabilities of AATP
will take place on the earlier to occur of (i) the relocation of AATP's facility
pursuant to Section 7.07 or (ii) December 1, 1999, which date shall be the
"Closing Date" with respect to such transactions, unless this Agreement is
terminated pursuant to Section 10.01. The effective time of each Closing will be
the close of business on the business day immediately preceding the relevant
Closing Date.
(b) At the Closing, Buyer shall pay $32,000,000 to All Trans
and $8,000,000 to AATP in cash by wire transfer of immediately available funds
to a bank account or bank accounts designated in writing by the recipients prior
to the Closing.
(c) Sellers shall deliver or cause to be delivered to Buyer
such bills of sale, certificates of title, endorsements, consents, assignments
and other good and sufficient instruments of conveyance and assignment of such
rights as the parties and their respective counsel shall deem reasonably
necessary or appropriate to vest in Buyer all of each Seller's right, title and
interest in, to and under the Transferred Assets.
2.07. PURCHASE PRICE ALLOCATION. The final allocation of the Closing
payments among the Transferred Assets for purposes of complying with Section
1060 of the Code and making any required filings under state or local law shall
be as set forth on the Company's September 30, 1999 balance sheet prepared in
accordance with GAAP. ATC, Buyer, Sellers and Stockholders
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shall report the tax consequences of the transactions contemplated by this
Agreement in a manner consistent with such allocation statement and shall not
take any position inconsistent therewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDERS AND SELLERS
As an inducement to ATC and Buyer to enter into this Agreement and to
consummate the transactions contemplated herein, Stockholders and Sellers
jointly and severally represent and warrant to ATC and Buyer as follows:
3.01 EXISTENCE, GOOD STANDING AND POWER. Each Seller is a
corporation duly organized and validly existing and in good standing under
the laws of the State of Oregon and has all corporate power and all
governmental licenses, authorizations, consents, approvals and qualifications
required to carry on its business as now conducted and to own and operate its
assets as now owned and operated except where, in the aggregate, the failure
to have such licenses, authorizations, consents, approvals and qualifications
would not have a Material Adverse Effect. Each Seller is duly qualified to do
business as a foreign corporation in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary to carry on its business as now conducted, except for
those jurisdictions where the failure to be so qualified has not been, and
may not reasonably be expected to be, material. SCHEDULE 3.01, sets forth
those states in which either Seller is duly qualified to do business and in
good standing.
3.02 AUTHORIZATION AND ENFORCEABILITY. Each Stockholder and Seller
has the full right, power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby, including, in the case of
Sellers, the transfer, conveyance and sale of the Transferred Assets to Buyer.
This Agreement has been duly and validly executed and delivered by each
Stockholder and Seller and constitutes the legal, valid and binding agreement of
each of them, enforceable against each of them in accordance with the terms of
this Agreement, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and subject to general principles of equity.
3.03 NON-CONTRAVENTION. The execution, delivery and performance by
each Seller and Stockholder of this Agreement do not and will not (i)
contravene or conflict with the charter or bylaws of either Seller, true and
correct copies of which have been delivered to Buyer, (ii) assuming receipt
of the Required Approvals and Consents, contravene or conflict with or
constitute a violation of any provision of any Applicable Law binding upon or
applicable to any Seller or Stockholder or the Business or the Transferred
Assets, (iii) assuming receipt of the Required Approvals and Consents,
constitute a default under or give rise to any right of termination,
cancellation or acceleration of, or to a loss of any benefit to which the
Company is entitled under, any material Contract or any Permit or similar
authorization relating to the Company, the Business or the Transferred Assets
by which the Company, the Business or the Transferred Assets may be bound, or
(iv) result in the creation or imposition of any Lien on any Transferred
Assets.
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3.04 REQUIRED APPROVALS AND CONSENTS. SCHEDULE 3.04 lists (i) each
governmental or other registration, filing, application, notice, transfer,
consent, approval, order, qualification and waiver required under Applicable
Law to be obtained or made by any Stockholder or Seller by virtue of the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby in order to comply with Applicable Law or
avoid the loss of any material Permit, and (ii) each Scheduled Contract with
respect to which the consent of the other party or parties thereto must be
obtained by virtue of the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby to avoid the invalidity
of such Contract, the termination thereof, a breach or default thereunder or
any other change or modification to the terms thereof (the "Required
Approvals and Consents"). To the Knowledge of Sellers and Stockholders, there
are no facts relating to the identity or circumstances of any Seller or
Stockholder or the Transferred Assets that would prevent or materially delay
obtaining any of the Required Approvals and Consents. This Agreement and the
transactions contemplated hereby have been approved by the Board of Directors
of each Seller and the necessary vote of the stockholders of each Seller.
3.05 CAPITAL STOCK OF SELLERS. Stockholders collectively own of
record and beneficially all of the outstanding capital stock of Sellers.
There are not outstanding (i) any options, warrants or other rights to
purchase from either Stockholder any shares of such capital stock, (ii) any
securities convertible into or exchangeable for shares of such capital stock,
or (iii) any other commitments of any kind for the issuance of additional
shares or options, warrants or other securities of either Seller.
3.06 SUBSIDIARIES AND OTHER INTERESTS. The Transferred Assets do not
include, either directly or indirectly, any interest in any Person.
3.07 FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES.
(a) Attached hereto as EXHIBIT A are true and complete copies
of the statements of income and balance sheets of All Trans or AATP as of and
for the 12 months ended December 31, 1998 and the six months ended June 30,
1999. The June 30, 1999 balance sheets are collectively referred to herein as
the "1999 Balance Sheet." Each of the financial statements (i) has been
prepared based on the books and records of the Company in accordance with
GAAP (except for the omission of footnotes and adjustments, consisting only
of normal recurring adjustments, in the case of the 1999 financial
statements) and the Company's normal accounting practices, consistent with
past practices and with each other, except the AATP financial statements,
which reflects the omission of a $36,000 reserve for bad debts, (ii) was
compiled by the Company, and (iii) present fairly the financial condition and
results of operations of the Company as of the dates indicated or for the
periods indicated.
(b) There are no material Liabilities relating to the
Business or the Transferred Assets except for those Liabilities set forth on
the 1999 Balance Sheet or set forth on SCHEDULE 3.07, except for those
arising since the date of the 1999 Balance Sheet in the ordinary course of
business consistent with past practices.
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3.08 ABSENCE OF CERTAIN CHANGES. Except as set forth on SCHEDULE
3.08, since the date of the 1999 Balance Sheet, the Business has been
conducted in the ordinary course, and there has not been:
(a) any event, occurrence, development or state of
circumstances or facts or change in the Company or the Business (including
any damage, destruction or other casualty loss, but excluding changes in
general economic conditions) affecting the Company or the Business that has
had or that may be reasonably expected to have, either alone or together with
all such events, occurrences, developments, states of circumstances or facts
or changes, a Material Adverse Effect;
(b) any incurrence of, or change in, any material Liability
other than in the ordinary course of business;
(c) any creation, assumption or sufferance of the existence
of any Lien on any of the Transferred Assets;
(d) any material transaction or commitment made, or any
material Contract entered into, by the Company, or any waiver, amendment,
termination or cancellation of any material Contract, or any relinquishment of
any rights thereunder by the Company, or of any other material right or debt
owed to the Company, other than in each such case actions taken in the ordinary
course of business consistent with past practice;
(e) except for actions taken in the ordinary course of
business consistent with past practice that are not, in the aggregate,
material, (i) any grant of any severance, continuation or termination pay,
(ii) any entering into of any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement), (iii)
any increase in benefits payable or potentially payable under any severance,
continuation or termination pay policies or employment agreements, (iv)
except as required by Applicable Law, any increase in compensation, bonus or
other benefits payable or potentially payable, (v) except as required by
Applicable Law, any change in the terms of any bonus, pension, insurance,
health or other Benefit Plan, or (vi) any representation of the Company to
any employee or former employee of the Company that ATC or Buyer would
assume, continue to maintain or implement any Benefit Plan after the Closing
Date (except to the extent that any such representation is consistent with
the terms hereof);
(f) any material change by the Company in its accounting
principles, methods or practices or in the manner it keeps its books and records
or any material change by the Company of its current practices with regard to
sales, receivables, payables or accrued expenses that would affect the timing of
income recognition, collection of receivables or payment of payables; or
(g) the entering into of any Contract or other arrangement
between the Company and any of its employees or any of their respective
Affiliates or Associates.
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3.09 TANGIBLE ASSETS.
(a) The Company does not own any real property. SCHEDULE
3.09(a)(i) sets forth a true and complete list of all real property leased by
the Company and used in the conduct of the Business (the "Real Property").
SCHEDULE 3.09(a)(ii) sets forth a true and complete list of all personal
property leases or licenses (x) to which the Company is a party or by which the
Company is bound and (y) that provide for annual payments by the Company in
excess of $10,000 and that cannot be terminated without charge by the Company
within 30 days (the "Personal Property Leases").
(b) With respect to the Personal Property Leases and the leases
relating to the Real Property (collectively, the "Leases"), except as set
forth on SCHEDULE 3.09(b), there exist no defaults by the Company, or, to the
Knowledge of Sellers and Stockholders, any default or threatened default by
any lessor or third party thereunder, that has materially affected or could
reasonably be expected to materially affect the rights and privileges
thereunder of the Company. Assuming the Required Approvals and Consents are
obtained, the consummation of the transactions contemplated hereby will not
result in a breach of, or give any Person the right to terminate, any Lease
or result in any material adverse change in the terms of any Lease.
(c) The Company has (i) a good and valid leasehold interest in
each piece of Real Property, (ii) a good and valid leasehold interest in the
personal property subject to the Personal Property Leases, and (iii) good and
valid title to its other tangible assets. Except as set forth on
SCHEDULE 3.09(c), the Company holds title to each Transferred Asset free and
clear of all Liens and Material Title Defects.
(d) Except as disclosed in SCHEDULE 3.09(d), the Company has not
received notice of any pending zoning or other land-use regulation
proceedings or any proposed change in any Applicable Laws that could
reasonably be expected to detrimentally affect the use or operation of any
Real Property, nor has the Company received notice of any special assessment
proceedings affecting any Real Property, or applied for any change to the
zoning or land use status of any Real Property.
(e) Since January 1, 1997, the Company has not experienced any
material interruption in the delivery to any of the Real Property of adequate
quantities of any utilities (including without limitation electricity, natural
gas, potable water, water for cooling or similar purposes and fuel oil) or other
public services (including without limitation foul and surface water drainage)
required by the Company during such period.
(f) SCHEDULE 3.09(f) sets forth the description and location
of each item of tangible personal property (other than Inventory) that
constitutes a Transferred Asset and on the date hereof has a depreciated book
value per unit in excess of $5,000.
(g) All of the buildings, fixtures and other improvements
located on the Real Property and all the tangible personal property listed on
SCHEDULE 3.09(f) are in good operating condition and repair.
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(h) The Transferred Assets constitute all the assets necessary
to operate the Business as a going concern substantially in the same manner
as conducted prior to the date hereof.
3.10 AFFILIATES. Except as set forth in SCHEDULE 3.10, no Seller or
Stockholder (or any officer, director or immediate family member of any of
them) now has or at any time since January 1, 1997, had, either directly or
indirectly, an equity or debt interest in any Person that furnishes or sells
or during such period furnished or sold services or products to the Company
or purchases or during such period purchased from the Company any goods or
services, or otherwise does or during such period did business with the
Company of a material nature or amount; PROVIDED, HOWEVER, none of them shall
be deemed to have such an interest solely by virtue of the ownership of less
than 5.0% of the outstanding voting stock or debt securities of any Person
the stock or debt securities of which are traded on a national stock exchange
or quoted on the National Association of Securities Dealers Automated
Quotation System.
3.11 INVENTORIES. Subject to any reserve therefor that is included in
the 1999 Balance Sheet and except as disclosed in SCHEDULE 3.11, all
Inventories (i) have been acquired or manufactured in the ordinary course of
business, in accordance with the Company's normal inventory practices,
(ii) are of a usable quality (including processing into merchantable finished
inventories for sale in the ordinary course of business), free of any
material defect or deficiency, (iii) are in merchantable and undamaged
condition and meet customer specifications, (iv) are carried on the books of
the Company at the lower of cost or market, and (v) are sellable in the
ordinary course of business within 24 months.
3.12 LITIGATION. Except as disclosed on SCHEDULE 3.12, (i) there are no
actions, suits, hearings, arbitrations, proceedings (public or private),
governmental investigations or material collection matters that have been
brought by or against any Governmental Authority or any other Person
(collectively, "Proceedings") pending or, to the Knowledge of Sellers and
Stockholders, threatened, against or affecting the Company, the Business or
the Transferred Assets or which seek to enjoin or rescind the transactions
contemplated by this Agreement or otherwise prevent any Seller or Stockholder
from complying with the terms and provisions of this Agreement, and
(ii) there are no existing orders, judgments or decrees of any Governmental
Authority affecting the Company, the Business or the Transferred Assets.
3.13 CONTRACTS.
(a) SCHEDULE 3.13(a) sets forth a complete list of the following
Contracts (collectively with the Leases, the "Scheduled Contracts"):
(i) each Contract between the Company and (A) any of its
present or former employees, (B) any supplier of services or products whose
dollar volume of sales to the Company exceeded $25,000 during the 12 months
ended December 31, 1998 or is expected to exceed $25,000 during the 12 months
ending December 31, 1999, and (C) any Person in which the aggregate payments
made to the Company under such Contract exceeded $25,000 during the 12 months
ended December 31, 1998 or are expected to exceed $25,000 during the 12
months ending December 31, 1999;
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(ii) each other agreement or arrangement of the Company
that (A) requires the payment or incurrence of Liabilities or the rendering
of services by the Company, subsequent to the date of this Agreement, of more
than $10,000 and (B) cannot be terminated without charge by the Company
within 30 days;
(iii) all Contracts relating to, and evidences of or
guarantees of, or providing security for, the deferred purchase price of any
Transferred Asset (whether incurred, assumed, guaranteed or secured by any
asset);
(iv) all license, distribution, commission, marketing,
agent, franchise, technical assistance or similar agreements relating to or
providing for marketing and/or sale of products or services to which the
Company is a party or by which the Company is otherwise bound that cannot be
terminated without charge by the Company within 30 days;
(v) each agreement or covenant not to compete by which
the Company is bound and each joint venture agreement to which the Company is
a party; and
(vi) all other material contracts, commitments and
obligations of the Company that are not in the ordinary course of business.
(b) Except as disclosed in SCHEDULE 3.13(b), (i) each Scheduled
Contract is a legal, valid and binding obligation of the Company enforceable
(except to the extent such enforceability may be limited by bankruptcy,
equity and creditors' rights generally) against the Company and, to the
Knowledge of Sellers and Stockholders, each other party thereto in accordance
with its terms, and (ii) neither the Company nor, to the Knowledge of Sellers
and Stockholders, any such other party is in material default or has failed
to perform any material obligation thereunder. Complete and correct copies of
each written Scheduled Contract have been delivered to Buyer.
(c) SCHEDULE 3.13(c) sets forth a list (by name and address) of
the customers to whom the Company made sales of more than $25,000 and vendors
providing more than $25,000 of services or products to the Company during the
12 months ended December 31, 1998 together with the approximate dollar amount
of sales by or services or products provided to the Company during said
period.
3.14 PERMITS. SCHEDULE 3.14 sets forth all material approvals,
authorizations, certificates, consents, licenses, orders, permits,
qualifications or other similar authorizations of all Governmental
Authorities necessary for the operation of the Business or the Transferred
Assets in substantially the same manner as currently operated or affecting or
relating in any way to the Business or the Transferred Assets (the
"Permits"). Except as set forth on SCHEDULE 3.14, each Permit is valid and in
full force and effect in all material respects and, assuming the related
Required Approvals and Consents are obtained prior to the Closing Date, none
of the Permits will be terminated or become terminable or impaired or have
the terms thereof changed in any material respect as a result of the
transactions contemplated hereby.
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3.15 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth in
SCHEDULE 3.15, the operation of the Business has not violated or infringed,
and does not violate or infringe, any material Applicable Law.
3.16. EMPLOYMENT AGREEMENTS; CHANGE IN CONTROL; AND EMPLOYEE BENEFITS.
(a) SCHEDULE 3.16 sets forth a list of all Benefit Plans.
Sellers have made true and correct copies of all governing instruments and
related agreements pertaining to such Benefit Plans available to Buyer.
Sellers have made available to Buyer a copy of the three most recently filed
Federal Form 5500 series and accountant's opinion, if applicable, for each
Employee Benefit Plan.
(b) Neither the Company nor any ERISA Affiliates sponsors,
maintains or contributes to, or, within the last five years, has sponsored,
maintained, contributed to, or incurred an obligation to contribute to, any
Employee Pension Benefit Plan.
(c) Except as set forth in SCHEDULE 3.16, no individual shall
accrue or receive additional benefits, service or accelerated rights to
payments of benefits under any Benefit Plan (including the right to receive
any parachute payment, as defined in Section 280G of the Code) or become
entitled to severance, termination allowance or similar payments as a result
of the transactions contemplated by this Agreement.
(d) No Employee Benefit Plan has participated in, engaged in or
been a party to any non-exempt Prohibited Transaction, and neither the
Company nor any ERISA Affiliates has had asserted against it any claim for
Taxes under Chapter 43 of Subtitle D of the Code and Sections 5000 of the
Code, or for penalties under ERISA Section 502(c), (i) or (l), with respect
to any Employee Benefit Plan nor, to the Knowledge of Sellers and
Stockholders, is there a basis for any such claim. No officer, director or
employee of the Company has committed a material breach of any responsibility
or obligation imposed upon fiduciaries by Title I of ERISA with respect to
any Employee Benefit Plan.
(e) Other than routine claims for benefits, there is no claim
pending or to the Knowledge of Sellers and Stockholders threatened, involving
any Benefit Plan by any Person against such plan or the Company or any ERISA
Affiliate. There is no pending or, to the Knowledge of Sellers and
Stockholders, threatened proceeding involving any Employee Benefit Plan
before the IRS, the United States Department of Labor or any other
Governmental Authority.
(f) Each Benefit Plan has at all times prior hereto been
maintained in all material respects, by its terms and in operation, in
accordance with ERISA and the Code, including, but not limited to, all
applicable reporting and disclosure requirements. The Company and each ERISA
Affiliate have made full and timely payment of all amounts required to be
contributed under the terms of each Benefit Plan and Applicable Law or
required to be paid as expenses under such Benefit Plan, and the Company and
each ERISA Affiliate shall continue to do so through the Closing.
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(g) With respect to any Group Health Plans maintained by the
Company or any ERISA Affiliate, the Company and the ERISA Affiliates have
complied in all material respects with the provisions of Part 6 of Title I of
ERISA and Section 4980B of the Code. Except as set forth on SCHEDULE 3.16,
the Company is not obligated to provide health care benefits of any kind to
its retired employees pursuant to any Employee Benefit Plan, including,
without limitation, any Group Health Plan, or pursuant to any agreement or
understanding, other than as required by Code Section 4980B.
3.17 LABOR AND EMPLOYMENT MATTERS.
(a) Except as set forth on SCHEDULE 3.17, no collective
bargaining agreement exists that is binding on the Company and, except as
described on SCHEDULE 3.17, no petition has been filed or proceedings
instituted by any employee or group of employees with any labor relations
board seeking recognition of a bargaining representative which petition or
proceeding is still pending. SCHEDULE 3.17 describes any organizational
effort currently being made or, to the Knowledge of Sellers and Stockholders,
threatened by or on behalf of any labor union to organize any of the
Company's employees.
(b) Except as set forth on SCHEDULE 3.17, (i) there is no labor
strike, dispute, slow down or stoppage pending or, to the Knowledge of
Sellers and Stockholders, threatened against or directly affecting the
Company, (ii) no grievance or arbitration proceeding arising out of or under
any collective bargaining agreement is pending against the Company, and no
claims therefor exist; and (iii) no Seller or Stockholder has received any
notice or has any Knowledge of any threatened labor or civil rights dispute,
controversy or grievance or any other unfair labor practice proceeding or
breach of contract claim or action with respect to claims of, or obligations
to, any of the Company's employees.
(c) To the Knowledge of Sellers and Stockholders, the Company
has complied and is currently complying, in all material respects, with all
Applicable Laws respecting employment and employment practices and the
protection of the health and safety of employees, from whatever source such
law may be derived, including, without limitation, statutes, ordinances,
laws, rules, regulations, policies, standards, judicial or administrative
precedents, judgments, orders, decrees, awards, citations, licenses, official
interpretations and guidelines. Except as set forth on SCHEDULE 3.17, since
January 1, 1997 the Company has not received any citation or other
notification for the violation of occupational and health safety laws or
regulations, wage and hour laws, or other employment related laws.
3.18 INTELLECTUAL PROPERTY.
(a) SCHEDULE 3.18 sets forth a complete and correct list of
each of the Company's patents, patent applications and docketed inventions,
trademarks, tradenames, trademark or tradename registrations or applications,
copyright or copyright registrations or applications for copyright
registration, and each the Company's licenses or licensing agreements for any
of the foregoing (the "Intellectual Property Rights").
18
(b) Except as disclosed in SCHEDULE 3.18, since January 1, 1997
the Company has not been a party to any Proceeding nor, to the Knowledge of
Sellers and Stockholders, is any Proceeding threatened that involved or may
involve a claim by any Person (including any Governmental Authority) of
infringement of any Intellectual Property Right. Except as disclosed in
SCHEDULE 3.18, no Intellectual Property Right is subject to any outstanding
order, judgment, decree, stipulation or agreement restricting the use thereof
by the Company, or restricting the licensing thereof by the Company to any
Person. To the Knowledge of Sellers and Stockholders, the use of the
Intellectual Property Rights and the conduct of the Business do not conflict
with, infringe upon or violate any patent, patent license, patent
application, trademark, tradename, trademark or tradename registration,
copyright, copyright registration, service xxxx, brand xxxx or brand name or
any pending application relating thereto, or any trade secret, know-how,
programs or processes, or any similar rights, of any Person.
(c) Except as set forth in SCHEDULE 3.18, the Company either
owns the entire right, title and interest in, to and under, or has acquired
in connection with the acquisition of Equipment or Inventory an implied or
express license to use, any and all inventions, processes, computer programs,
know-how, formulae, trade secrets, patents, chip designs, mask works,
trademarks, tradenames, brand names and copyrights that are necessary for the
conduct of the Business in the manner that the Business has heretofore been
conducted. No other inventions, processes, computer programs, know-how,
formulae, trade secrets, patents, chip designs, mask works, trademarks,
tradenames, brand names, copyrights, licenses or applications for any of the
foregoing are necessary for the unimpaired continued operation of the
Business in the manner that the Business has heretofore been conducted.
(d) Except as set forth in SCHEDULE 3.18, all of the material
computer software, computer firmware, computer hardware (whether general or
special purpose), and other similar or related items of automated,
computerized, and/or software system(s) that are used or relied on in the
conduct of the Business will not malfunction, will not cease to function,
will not generate incorrect data, and will not produce incorrect results when
processing, providing, and/or receiving (i) date-related data into and
between the 20th and 21st centuries and (ii) date-related data in connection
with any valid date in the 20th and 21st centuries.
3.19 ENVIRONMENTAL COMPLIANCE.
(a) Except as disclosed in SCHEDULE 3.19, the Company has
obtained all material approvals, authorizations, certificates, consents,
licenses, orders and permits or other similar authorizations of all
Governmental Authorities (or from any other Person) that the Company is
required to have under any Environmental Law. SCHEDULE 3.19 sets forth all
material permits, licenses and other authorizations issued under any
Environmental Law to the Company.
(b) Except as disclosed in SCHEDULE 3.19, the Company is in
compliance in all material respects with all terms and conditions of all
approvals, authorizations, certificates, consents, licenses, orders and
permits or other similar authorizations of all Governmental Authorities (and
all other Persons) required under all Environmental Laws and is also in
19
compliance in all respects with all other material limitations, restrictions,
conditions, standards, requirements, schedules and timetables required or
imposed under all Environmental Laws.
(c) Except as disclosed in SCHEDULE 3.19, there are no past or
present events, conditions, circumstances, activities, practices, incidents,
actions, omissions or plans relating to or in any way affecting the Company
or the Business as now conducted or previously conducted that could
reasonably be expected to prevent, or make more expensive, continued
compliance with any Environmental Law by Buyer or any of its Affiliates after
the Closing, or that may give rise to any Environmental Liability for which
Buyer or any of its Affiliates could be responsible, or otherwise form the
basis of any claim, action, demand, suit, Proceeding, hearing, study or
investigation affecting Buyer or any of its Affiliates (i) under any
Environmental Law, (ii) based on or related to the manufacture, processing,
distribution, use, treatment, storage (including without limitation
underground storage tanks), disposal, transport or handling, or the emission,
discharge, release or threatened release of any Hazardous Substance, or
(iii) resulting from exposure to workplace hazards.
(d) Buyer has received copies of all environmental documents,
studies and reports under the control of or in the possession of any Seller
or Stockholder relating to (i) any facilities or real property ever owned,
operated or leased by the Company or its predecessor, or (ii) any
Environmental Liability relating to the Company.
3.20 INSURANCE.
(a) SCHEDULE 3.20 sets forth a complete and correct list of all
of the Company's material insurance policies of any kind currently in force
(the "Insurance Policies"), including all "occurrence based" liability
policies regardless of the periods to which they relate. SCHEDULE 3.20 sets
forth for each Insurance Policy the type of coverage, the name of the
insureds, the insurer, the premium, the expiration date, the period to which
it relates, the deductibles and loss retention amounts and the amounts of
coverage. No cancellation or material amendment or increase of premiums is
pending or, to the Knowledge of Sellers and Stockholders, threatened with
respect to any of the Insurance Policies.
(b) No insurance company that issued any Insurance Policy, Board
of Fire Underwriters or similar body, or Governmental Authority has issued a
recommendation or requirement for any material changes in the conduct of the
Business or any repairs or other work to be done on or with respect to any
material amount of Transferred Assets.
3.21 TAX MATTERS. Except as set forth on SCHEDULE 3.21:
(a) There are no Taxes of the Company or deficiencies in Taxes
or claims for Taxes against the Company for any taxable period that could
become a liability of, or which could be assessed against or collected from,
ATC or Buyer as a result of or after the transfer of assets contemplated by
this Agreement.
(b) There are no Liens against any of the Transferred Assets for
Taxes other than Liens for current Taxes not yet due and payable; all of such
Liens shall be discharged by
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Sellers on or before the Closing Date such that Buyer acquires the
Transferred Assets free and clear of any such Liens.
(c) All amounts that are required to be collected or withheld
by the Company from other Persons have been (or prior to the Closing will have
been) duly collected or withheld and all such amounts that are required to be
remitted to any taxing authority have been (or prior to the Closing will have
been) duly remitted.
(d) None of the Transferred Assets is property that is
required to be treated as owned by any other Person pursuant to the "safe harbor
lease" provisions of former Section 168(f)(8) of the Internal Revenue Code of
1954 as amended and in effect immediately prior to the enactment of the Tax
Reform Act of 1986, and none of the Transferred Assets is "tax exempt use
property" within the meaning of Section 168(h) of the Code.
(e) None of the Transferred Assets secures any debt the
interest on which is tax exempt under Section 103 of the Code.
3.22 ACCOUNTS RECEIVABLE. Except as set forth in SCHEDULE 3.22, the
Company's Accounts Receivable existing on the date hereof arose out of the
sales of inventory or services in the ordinary course of business and are
collectible in full, net of the reserve set forth on the 1999 Balance Sheet,
which reserves are reasonable and were calculated consistent with past
practices.
3.23 ADVISORY FEES. There is no investment banker, broker, finder or
other intermediary or advisor that has been retained by or is authorized to
act on behalf of Sellers, Stockholders or their Affiliates who might be
entitled to any fee, commission or reimbursement of expenses from Buyer or
any of its Affiliates or any of their respective Associates upon consummation
of the transactions contemplated by this Agreement.
3.24 MATERIAL DISCLOSURES. No statement, representation or warranty
made by any Seller of Stockholder in this Agreement or in any certificate,
statement, list, schedule or other document furnished or to be furnished to ATC
and/or Buyer hereunder contains, or when so furnished will contain, any untrue
statement of a material fact, or fails to state, or when so furnished will fail
to state, a material fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they are made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ATC AND BUYER
As an inducement to Stockholders and Sellers to enter into this
Agreement and to consummate the transactions contemplated herein, ATC and Buyer
hereby jointly and severally represent and warrant to Stockholders and Sellers
that:
4.01 ORGANIZATION AND EXISTENCE. Each of ATC and Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has all corporate power and all governmental licenses,
authorizations, consents, approvals and qualifications required to carry on its
business as now conducted and to own and operate its
21
assets as now owned and operated except where, in the aggregate, the failure to
have such licenses, authorizations, consents, approvals and qualifications would
not have a material adverse effect on ATC or Buyer. Each of ATC and Buyer is
duly qualified to do business as a foreign corporation in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary to carry on its business as now
conducted, except for those jurisdictions where the failure to be so qualified
has not been, and may not reasonably be expected to be, material.
4.02 AUTHORIZATION AND ENFORCEABILITY. Each of ATC and Buyer has full
corporate right, power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by each of ATC and Buyer and constitutes the
legal, valid and binding agreement of each of them, enforceable against each of
them in accordance with the terms of this Agreement, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and subject to general principles of
equity.
4.03 REQUIRED APPROVALS AND CONSENTS. There are no governmental or other
registrations, filings, applications, notices, transfers, consents,
approvals, orders, qualifications or waivers required to be obtained or made
by either ATC or Buyer by virtue of its execution and delivery of this
Agreement or its consummation of the transactions contemplated hereby, except
for (i) those required under the HSR Act, (ii) those required under the
Amended and Restated Revolving Credit Agreement between ATC and The Chase
Manhattan Bank, as agent, and (iii) those that have already been obtained. To
the Knowledge of ATC and Buyer, there are no facts relating to the identity
or circumstances of ATC or Buyer that would prevent or materially delay
obtaining any of the foregoing.
4.04 NON-CONTRAVENTION. The execution, delivery and performance by ATC
and Buyer of this Agreement does not (i) contravene or conflict with the
Certificate of Incorporation or Bylaws of ATC or Buyer, or (ii) assuming
compliance with the matters referred to in Section 4.03, contravene or conflict
with or constitute a violation of any provision of any Applicable Law binding
upon or applicable to ATC or Buyer.
4.05 ADVISORY FEES. There is no investment banker, broker, finder or
other intermediary or advisor that has been retained by or is authorized to
act on behalf of ATC or Buyer who might be entitled to any fee, commission or
reimbursement of expenses from Sellers or Stockholders or any of their
Affiliates upon consummation of the transactions contemplated by this
Agreement.
4.06 LITIGATION. There is no Proceeding pending against, or to the
Knowledge of ATC and Buyer, threatened against or affecting, ATC or Buyer
before any court or arbitrators or any governmental body, agency or official
that in any matter challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Agreement.
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ARTICLE V
COVENANTS OF STOCKHOLDERS AND SELLERS
5.01 CONDUCT OF THE BUSINESS. From the date hereof until the Closing
Date, Sellers shall, and Stockholder shall cause the Company to, conduct the
Business in the ordinary course and in substantially the same manner as it
has prior to the date of this Agreement and Sellers agree, other than in the
ordinary course of business, not to enter into any material agreements or
take any other significant actions without the prior written consent of ATC
or Buyer, which shall not be unreasonably withheld. Sellers shall use their
reasonable efforts to preserve intact the Business and the Business
organizations and relationships and goodwill of the Company with third
parties and keep available the services of the present employees of the
Company. Without limiting the generality of the foregoing and except as
otherwise expressly provided in this Agreement, from the date hereof until
the Closing Date:
(a) Sellers will, and Stockholders will cause the Company
to:
(i) (A) maintain the Transferred Assets in the ordinary
course of business consistent with past practice in operating order and
condition, reasonable wear and tear excepted, (B) promptly repair, restore or
replace any Transferred Assets in the ordinary course of business consistent
with past practice, (C) upon any damage, destruction or loss to any of the
Transferred Assets, apply any and all insurance proceeds received with
respect thereto to the repair, replacement and restoration thereof prior to
the Closing Date to the condition of such assets before such event (or in
lieu of such repair, replacement and restoration, pay such insurance proceeds
to Buyer upon the Closing), (D) use its best efforts to obtain, prior to the
Closing Date, all Required Approvals and Consents, and (E) take all actions
reasonably necessary to be in compliance with, and to maintain the
effectiveness of, all material Permits;
(ii) comply with all material Applicable Laws;
(iii) promptly notify Buyer in writing of (A) any
action, event, condition or circumstance, or group of actions, events,
conditions or circumstances, that results in, or could reasonably be expected
to result in, a Material Adverse Effect, other than changes in general
economic conditions, (B) the commencement of any material Proceeding by or
against the Company or either Stockholder relating to the Business, or the
Company or either Stockholder becoming aware of any threat, claim, action,
suit, inquiry, proceeding, notice of violation, demand letter, subpoena,
government audit or disallowance that could reasonably be expected to result
in a material Proceeding against the Company, and (C) the occurrence of any
breach by Sellers or Stockholders of any representation or warranty, or any
covenant or agreement, contained in this Agreement;
(b) without Buyer's prior consent, which shall not be
unreasonably withheld, Sellers will not, and Stockholders shall not permit
the Company to, do or agree to do any of the following:
(i) purchase or otherwise acquire assets from any other
Person other than in the ordinary course of business;
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(ii) sell, assign, lease, license, transfer or otherwise
dispose of, or mortgage, pledge or encumber, any of the Transferred Assets
except in the ordinary course of business consistent with past practices;
(iii) enter any agreement or arrangement that requires
or allows payment, acceleration of payment or incurrence of Liabilities, or
the rendering of services by the Company outside the ordinary course of
business;
(iv) amend or modify in any material respect or
terminate any Scheduled Contract or any other Contract entered into by the
Company after the date hereof which, if in existence on the date hereof,
would be required to be set forth in SCHEDULE 3.13(a) as a Scheduled Contract
(each, a "Subsequent Material Contract");
(v) make or commit to make any capital expenditure or
group of related capital expenditures in excess of $10,000, other than
capital expenditures expressly required under any Scheduled Contract;
(vi) enter into or commit or propose to enter into any
Subsequent Material Contract;
(vii) (A) increase the rate or terms of compensation
payable or to become payable to any employee except in the ordinary course of
business, (B) pay or agree to pay any pension, retirement allowance or other
employee benefit not provided for by any Employee Plan, Benefit Arrangement or
Employment Agreement set forth in the Schedules hereto, (C) commit itself to any
additional pension, profit sharing, bonus, incentive, deferred compensation,
stock purchase, stock option, stock appreciation right, group insurance,
severance pay, continuation pay, termination pay, retirement or other employee
benefit plan, agreement or arrangement, or increase the rate or terms of any
Employee Plan or Benefit Arrangement, (D) enter into any employment agreement,
(E) increase the rate of compensation under or otherwise change the terms of any
employment agreement set forth in SCHEDULE 3.13(a), or (F) hire or agree to hire
any management personnel; and
(viii) make any material change in its accounting
principles, methods or practices or in the manner it keeps its books and
records or any material change of its current practices with regard to sales,
receivables, payables or accrued expenses that would affect the timing of
income recognition, collection of receivables or payment of payables.
5.02 ACCESS TO INFORMATION. Subject to compliance with Applicable Laws,
from the date hereof until the Closing Date, Sellers will, and Stockholders will
cause the Company to, and Stockholders will, promptly (a) give ATC and Buyer and
their counsel, financial advisors, auditors and other authorized representatives
reasonable access to the offices, properties, books and records of the Company
upon reasonable prior notice, (b) furnish to ATC and Buyer and their counsel,
financial advisors, auditors and other authorized representatives such
information as ATC and Buyer may reasonably request, and (c) instruct the
directors, officers, employees, counsel, auditors and financial advisors of the
Company and Stockholders to cooperate with
24
ATC and Buyer and their counsel, financial advisors, auditors and other
authorized representatives in their investigation of the Company and the
Business.
5.03 COMPLIANCE WITH TERMS OF REQUIRED APPROVALS AND CONSENTS. On and
after the Closing Date, Stockholders and Sellers shall comply at their own
expense with all conditions and requirements affecting any Stockholder or
Seller set forth in all Required Approvals and Consents as necessary to keep
the same in full force and effect assuming continued compliance with the
terms thereof by Buyer.
5.04 MAINTENANCE OF INSURANCE POLICIES. Between the date hereof and the
Closing Date, Sellers shall not, and Stockholders shall cause the Company to
not, take or fail to take any action if such action or inaction, as the case
may be, would adversely affect the applicability of any Insurance Policies
with respect to the period of time ending on the Closing Date.
5.05 ADMINISTRATION OF ACCOUNTS. All payments and reimbursements received
by any Stockholder or Seller after the Closing Date from any third party with
respect to the Transferred Assets shall be held by such Stockholder or Seller
in trust for the benefit of Buyer and, immediately upon receipt of any such
payment or reimbursement, such Stockholder or Seller shall pay, or cause to
be paid, over to Buyer the amount of such payment or reimbursement without
right of set off. The fact that such payment or reimbursement may have been
deposited by the payor into the mail or with a third party delivery service
on or prior to the Closing Date shall not relieve Stockholders and Sellers of
their obligation under this Section.
5.06. CHANGE OF NAME. Within three Business Days after the Closing Date,
each Seller shall amend its Articles of Incorporation so as to change its
corporate name to a name dissimilar to its current name and thereafter will
not use such name or any "D.B.A." name used by the Company prior to the
Closing. As promptly as practicable after the Closing Date, but in no event
more than 30 days thereafter, each Seller shall file in all jurisdictions in
which it is qualified to do business any documents necessary to reflect such
change in its corporate name and to abandon any DBA name that was used by the
Company prior to the Closing. Without limiting the generality of the
foregoing, after the Closing Sellers may not use a name that includes the
words "All Trans," "All Automatic Transmission Parts" or "All Transmission
Parts."
5.09 SATISFACTION OF EXCLUDED LIABILITIES. Sellers shall satisfy and
discharge or cause to be satisfied and discharged all of the Excluded
Liabilities in the ordinary course of business consistent with past
practices, except to the extent that any such Excluded Liability is being
contested in good faith.
5.10 SECURITIES EXCHANGE ACT FINANCIAL STATEMENTS.
(a) Sellers understand that following the Closing Date ATC will
be required to file with the Securities and Exchange Commission a periodic
report on Form 8 K (i) disclosing the purchase of the Transferred Assets in
response to Item 2 of Form 8-K and (ii) setting forth certain financial
statements regarding the Transferred Assets pursuant to Item 7 of Form 8-K.
On or before October 27, 1999, Sellers shall prepare and deliver to Buyer (x)
audited financial statements for the year ended December 31, 1998 and (y)
unaudited financial statements for the
25
six months ended June 30, 1999, all of such financial statements to be in the
form called for by Form 8-K and Regulation S-X under the Securities Exchange Act
of 1934, as amended.
(b) Each of the financial statements required by this Section
5.10 will (i) be prepared based on the books and records of the Company in
accordance with GAAP (except for the omission of adjustments, consisting only of
normal recurring adjustments, in the case of the 1999 financial statements) and
the Company's normal accounting practices, consistent with past practice and
with each other, and (ii) present fairly the financial condition and results of
operations of the Company as of the dates indicated or for the periods
indicated.
(c) Buyer will reimburse Sellers for the cost of preparing and
auditing the required financial statements unless this Agreement is terminated
by Buyer pursuant to Section 10.01(b) or (c). Reimbursement will be made
promptly after submission to Buyer of all invoices.
ARTICLE VI
COVENANTS OF ATC AND BUYER
6.01 ACCESS TO INFORMATION. Subject to compliance with Applicable Laws,
from the Closing Date until December 31, 2004, ATC and Buyer will promptly
(i) furnish to Stockholders and Sellers and their counsel, financial
advisors, auditors and other authorized representatives such information
relating to the Business as they may reasonably request in connection with
the preparation of Tax Returns, and (ii) instruct the directors, officers,
employees, counsel, auditors and financial advisors of ATC and Buyer to
cooperate in all reasonable respects with Stockholders and Sellers and their
counsel, financial advisors, auditors and other authorized representatives in
connection with the preparation of Tax Returns. Any information or documents
provided to any Stockholder or Seller pursuant to this Section 6.01 shall be
held by such Stockholder or Seller pursuant to Section 7.04.
6.02 ELVE CORPORATION PAYMENT. Prior to the date hereof, All Trans paid a
$54,350 invoice to Elve Corporation twice. Upon receipt of a credit from Elve
with respect to such double payment, Buyer shall pay to All Trans an amount
equal to the lesser of (i) the credit received by Buyer from Elve or (ii)
$54,350.
ARTICLE VII
COVENANTS OF ALL PARTIES
7.01 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each party will use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary or
desirable under Applicable Law to consummate the transactions contemplated by
this Agreement. ATC, Buyer, Sellers and Stockholders agree to execute and
deliver such other documents, certificates, agreements and other writings and
to take such other actions as may be reasonably necessary or desirable in
order to consummate or implement expeditiously the transactions contemplated
by this Agreement.
7.02 CERTAIN FILINGS. The parties hereto shall cooperate with one
another in determining whether any action by or in respect of, or filing with,
any Governmental Authority is
26
required or reasonably appropriate, or any action, consent, approval or
waiver from any party to any Contract is required or reasonably appropriate,
in connection with the consummation of the transactions contemplated by this
Agreement. Subject to the terms and conditions of this Agreement, in taking
such actions or making any such filings, the parties hereto shall furnish
information required in connection therewith and seek timely to obtain any
such actions, consents, approvals or waivers. Without limiting the foregoing,
the parties hereto shall each promptly complete and file all reports and
forms, and respond to all requests or further requests for additional
information, if any, as may be required or authorized under the HSR Act.
7.03 PUBLIC ANNOUNCEMENTS. Up to (and including) the Closing Date, the
parties agree that they will not make any disclosure with respect to this
Agreement or the transactions contemplated hereby or cause to be publicized in
any manner whatsoever by way of interviews, responses to questions or inquiries,
press releases or otherwise any aspect of this Agreement or the transactions
contemplated hereby without prior written notice to and approval of the other
parties hereto, unless such party reasonably concludes that such release of
information is required by Applicable Law or Nasdaq regulations, and the parties
hereto cannot reach agreement upon a mutually acceptable form of release.
Notwithstanding the foregoing, the parties hereto may, on a confidential basis,
advise their respective agents, accountants, attorneys, investment advisors and
financing sources with respect to the contents of this Agreement and the
transactions contemplated hereby.
7.04 CONFIDENTIALITY.
(a) Stockholders and Sellers will, and will cause their
Affiliates and representatives to, treat any data and information regarding the
Company, ATC or Buyer confidentially and with commercially reasonable care and
discretion, and will not disclose any such information to third parties;
PROVIDED, HOWEVER, that the foregoing shall not apply to (i) information in the
public domain or that becomes public through disclosure by any Person other than
any Stockholder or Seller or their Affiliates or representatives, so long as
such other Person is not in breach of a confidentiality obligation, (ii)
information available to any Stockholder or Seller or their Affiliates or
representatives on a non-confidential basis prior to its disclosure in
connection with the transactions contemplated by this Agreement, (iii)
information that is required to be disclosed by Applicable Law, (iv) information
required to be disclosed to obtain any Required Approvals and Consents, or (v)
any disclosure of such information in litigation between the parties hereto;
PROVIDED, HOWEVER, that disclosure pursuant to clause (iii), (iv) or (v) may be
made only to the extent necessary to satisfy the permitted purpose.
(b) ATC and Buyer will, and will cause their Affiliates and
representatives to, treat any data and information obtained with respect to
Stockholders and the Company confidentially and with commercially reasonable
care and discretion, and will not disclose any such information to third
parties; PROVIDED, HOWEVER, that the foregoing shall not apply to (i)
information in the public domain or that becomes public through disclosure by
any Person other than ATC or Buyer or their Affiliates or representatives, so
long as such other Person is not in breach of a confidentiality obligation, (ii)
information available to ATC, Buyer or their Affiliates or representatives on a
non-confidential basis prior to its disclosure in connection with
27
the transactions contemplated by this Agreement, (iii) information that is
required to be disclosed by Applicable Law or Nasdaq regulations, (iv)
information required to be disclosed to obtain any Required Approvals and
Consents, (v) any disclosure of such information in litigation between the
parties hereto, (vi) information regarding the Business disclosed after the
Closing Date, or (vii) information disclosed to prospective lenders in
connection with Buyer's financing of the purchase of the Transferred Assets;
PROVIDED, HOWEVER, that disclosure pursuant to clause (iii), (iv), (v) or
(vii) may be made only to the extent necessary to satisfy the permitted
purpose.
(c) In the event that the Closing fails to take place and this
Agreement is terminated, each party, upon the written request of another
party, will, and will cause its representatives to, promptly deliver to the
requesting party any and all documents or other materials furnished by the
requesting party or any of its Affiliates in connection with this Agreement
without retaining any copies thereof. In the event of such request, all other
documents, whether analyses, compilations or studies, that contain or
otherwise reflect the information furnished by the requesting party shall be
destroyed by the other party or shall be turned over to the requesting party,
and the other party shall confirm to the requesting party in writing that all
such materials have been turned over or destroyed. No failure or delay by the
requesting party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any right,
power or privilege hereunder.
(d) The parties hereto recognize and agree that in the event of
a breach of this Section 7.04, money damages would not be an adequate remedy
for such breach and, even if money damages were adequate, it would be
impossible to ascertain with any degree of accuracy the amount of damages
sustained therefrom. Accordingly, if there should be a breach or threatened
breach of this Section 7.04, the nonbreaching party and its Affiliates shall
be entitled to an injunction restraining the breaching party from any breach
without showing or proving actual damage sustained by the nonbreaching party
or its Affiliates. Nothing in the preceding sentence shall limit or otherwise
affect any remedies that the nonbreaching party and its Affiliates may
otherwise have under Applicable Law.
7.05 TAXES.
(a) All Taxes imposed in connection with the sale of the
Transferred Assets shall be borne by Sellers.
(b) Stockholders and Sellers agree that no new elections with
respect to Taxes affecting the Transferred Assets or any changes in current
elections with respect to Taxes affecting the Transferred Assets shall be made
after the date of this Agreement without the prior written consent of Buyer.
(c) ATC on the one hand and Sellers and Stockholders on the
other hand shall (i) provide to each other such assistance as may reasonably be
requested in connection with the preparation of any Tax Return relating to the
Business and the conduct of any audit or other examination by any taxing
authority or in connection with judicial or administrative proceedings relating
to any liability for Taxes relating to the Business, (ii) retain all records or
other
28
information that may be relevant to the preparation of any Tax Returns
relating to the Business, or the conduct of any audit or examination, or
other tax proceeding relating to the Business, and (iii) retain all relevant
documents, including prior year's Tax Returns relating to the Business,
supporting work schedules and other records or information that may be
relevant to such returns and shall not destroy or otherwise dispose of any
such records without the prior written consent of the other party.
(d) Sellers shall provide Buyer with all tax clearance
certificates or similar documents that may be required by any state or local
taxing authority in order to relieve Buyer of any obligations to withhold any
portion of the purchase price for the Transferred Assets.
(e) Stockholders and Sellers shall keep ATC and Buyer fully and
timely informed with respect to the commencement, status and nature of any
administrative or judicial proceedings that could reasonably be expected to
affect the Tax Liability of ATC and/or Buyer with respect to the Business or
the Transferred Assets.
(f) ATC and Buyer shall keep Stockholders and Sellers fully and
timely informed with respect to the commencement, status and nature of any
administrative or judicial proceedings that could reasonably be expected to
affect the Tax Liability of ATC and/or Buyer with respect to the Business or
the Transferred Assets.
(g) If ATC, in its sole discretion, shall request, Stockholders
and Sellers shall (i) assist ATC and Buyer in transferring the unemployment
tax experience rating of Sellers, (ii) cooperate with ATC and Buyer to take
all actions reasonably necessary to effect and preserve such transfer, and
(iii) take no position inconsistent with such transfer. Stockholders and
Sellers shall provide ATC and Buyer with all relevant information necessary
to determine whether such transfer is in ATC's and Buyer's best interest.
7.06 EMPLOYMENT AGREEMENTS. At the Closing, Buyer and each Stockholder
shall enter into an Employment Agreement substantially in the form of EXHIBIT
B hereto providing for annual base salaries of $210,000 for Xxxxx X. Xxxx and
$185,000 for Xxxxx X. Xxxx.
7.07 REAL PROPERTY LEASES.
(a) At the Closing, Stockholders will cause Landlord, as lessor,
to enter into five year leases substantially in the form of EXHIBIT C hereto
with Buyer, as lessee, for the Real Property located at 0000 XX Xxxxxx Xxxxxx
and 0000 XX Xxxxxx Xxxxxx, and the lease previously in effect with respect to
each such location shall terminate as of the Closing Date. The monthly rental
rate for each location shall be as agreed to among the parties prior to the
Closing, PROVIDED that if the parties are unable to reach agreement, then the
rental rate shall equal the "market rate" as established by a MAI appraiser
selected by the mutual agreement of the parties and having experience in
appraising properties in the area of the location in question. The appraiser
may not be Associated With any Seller or Stockholder, Buyer or ATC. The fee
of the appraiser shall be shared equally by Buyer on the one hand and Sellers
on the other.
29
(b) It is the intention of the parties that the operations
currently conducted by AATP at 0000 XX 000xx Xxxxxx (the "Existing Facility")
will be moved to a new facility (the "New Facility"). If on or before
December 1, 1999 Landlord (i) purchases a Suitable Location (as defined
below) or (ii) enters into a contract to purchase a Suitable Location and
completes such purchase within 45 days thereafter, then the New Facility will
be located at such Suitable Location. Otherwise, Buyer shall be free to
secure a Suitable Location from a third party. As used herein, "Suitable
Location" means real property and related improvements the location,
configuration, build-out and physical condition (including environmental
condition) of which is acceptable to Buyer. The real property and
improvements located at 000 X. Xxxxxxxx will be a Suitable Location if (x)
the Phase 2 environmental study currently being conducted at the site shows
an environmental condition acceptable to Buyer or (y) the seller thereof or
Landlord remediates the site to a condition acceptable to Buyer prior to the
relocation from the Existing Facility.
(c) If the New Facility is owned by Landlord, then at the later
of the Closing or the commencement of the relocation to the New Facility
Stockholders will cause Landlord, as lessor, to enter into a lease
substantially in the form of EXHIBIT C hereto with Buyer for the New
Facility. The term of such lease shall expire concurrently with the
expiration of the leases called for by Section 7.07(a) and the rental rate
will be established pursuant to Section 7.07(a). If the New Facility is
located at 000 X. Xxxxxxxx, Xxxxxxxx, at its expense, shall make the
improvements thereto set forth on SCHEDULE 7.07. If the New Facility is owned
by Landlord but is not located at 000 X. Xxxxxxxx, Xxxxxxxx, at its expense,
shall make such improvements as are necessary to cause the New Facility to be
of a nature comparable to that of 000 X. Xxxxxxxx as improved pursuant to
SCHEDULE 7.07.
(d) If the relocation to the New Facility is not completed
until after the Closing, then at the Closing AATP, as sublessor, and Buyer, as
sublessee, will enter into a month-to-month sublease with respect to the
Existing Facility on the same terms as those contained in the lease pursuant to
which AATP leases the Existing Facility (the "Master Lease"). If the relocation
is completed by June 30, 2000, Stockholders and Sellers will be responsible for
the restoration of the Current Facility to the condition required by the Master
Lease (including, without limitation, any repair of damage to the Existing
Facility and the remediation of any environmental conditions thereon or
therein). If the relocation is completed after June 30, 2000, Buyer will be
responsible for the restoration of the Current Facility to the condition
required by the Master Lease (including any repair of damage to the Existing
Facility and the remediation of any environmental conditions thereon or
therein), except to the extent that the foregoing would constitute Excluded
Liabilities (including, without limitation, Environmental Liabilities other than
Buyer Environmental Liabilities). If the relocation is completed by June 30,
2000, Stockholders and Sellers will be responsible for any out-of-pocket
expenses incurred by Buyer in connection with the relocation (including, without
limitation, employee overtime, moving equipment rental, utility connection and
disconnection charges, computer and telephone installation costs and other third
party service charges and fees) but not for indirect costs such as those due to
operational down time during the relocation.
30
(e) AATP may elect to keep the Master Lease in effect following
the relocation to the New Facility, in which case Sellers and Stockholders
will pay and hold Buyer and its Affiliates harmless from all obligations
arising under the Master Lease.
7.08. EMPLOYEES AND EMPLOYEE BENEFIT MATTERS.
(a) Prior to Closing, Sellers will provide to Buyer a list of
all then-active employees of the Company and Buyer will offer employment to all
such employees and shall hire all of them who accept such offer (the "Hired
Employees"). All employment offers will be for the same base cash compensation
as is being paid by the Company as of the Closing Date, PROVIDED that Buyer may
change such employment terms at any time thereafter in its sole discretion.
(b) Through October 31, 2000, Buyer will provide to the Hired
Employees at least the same level and value of employee benefit plans, programs
and arrangements that Seller had been providing to the Hired Employees as of the
Closing Date, other than the Seller's bonus plan, as described on SCHEDULE 7.08
attached hereto ("Buyer's Benefit Plans"), provided, however, that Buyer will
provide a bonus plan comparable to Seller's bonus plan from the Closing Date
through December 31, 1999. After October 31, 2000, Buyer may amend, terminate or
otherwise modify Buyer's Benefit Plans in accordance with the terms and
provisions thereof. Buyer will recognize and credit the prior employment service
of the Hired Employees with Seller for purposes of eligibility and vesting with
respect to Buyer's Benefit Plans. Hired Employees will receive credit for
current year accrued vacation and sick pay, provided that such vacation and sick
pay is claimed prior to January 1, 2000, and Sellers will reimburse Buyer for
all amounts paid by Buyer with respect to such vacation and sick pay. Further,
Buyer shall cause to be waived any preexisting condition clause that would
preclude any of the Hired Employees from being able to participate in Plans in
connection with Buyer's medical plan. It is the intent of Seller and Buyer that
the Hired Employees should have no interruption in their participation in
Buyer's Benefit Plans in connection with commencement of employment with Buyer.
(c) Notwithstanding Section 7.08(a), the Hired Employees will
be employed at the will of Buyer and after the Closing Date Buyer will be free
to terminate the employment of any Hired Employee in Buyer's sole discretion,
subject to Applicable Law and the terms of any written employment agreement
between Buyer and such employee.
(d) Sellers will be responsible for all liabilities for vested
accrued benefits and claims incurred but not yet paid as of the Closing Date
under any employee welfare plan (as defined in Section 3(1) of ERISA), any
Employee Pension Benefit Plan or any other employee benefit plans, programs or
arrangement of the Company that provide benefits for its employees, their
eligible dependents or their beneficiaries, including accrued vacation and sick
pay, and for the payment of any wages accrued as of Closing Date, any severance
or other termination-related obligations to Company employees as may be required
by Applicable Law or otherwise. Buyer will be responsible with respect to all
liabilities arising after the Closing Date with respect to any of the Hired
Employees that relate to or arise from the employment of the Hired Employees by
Buyer.
31
(e) Sellers will bear the entire cost and expense of all
workers' compensation claims arising out of injuries sustained by Hired
Employees on or before the Closing Date. Buyer will bear the entire cost and
expense of all workers' compensation claims arising out of injuries sustained
by Hired Employees after the Closing Date. Buyer shall bear the entire cost
and expense of all workers' compensation claims arising out of injuries
without an identifiable date of occurrence and that are alleged to have
arisen after the Closing Date.
ARTICLE VIII
CONDITIONS TO CLOSING
8.01 CONDITIONS TO OBLIGATION OF ATC AND BUYER. The obligation of ATC
and Buyer to consummate the transactions contemplated hereby is subject to the
satisfaction of each of the following conditions:
(a) (i) Sellers and Stockholders shall each have performed and
satisfied in all material respects each of their material obligations hereunder
required to be performed and satisfied by any of them on or prior to the Closing
Date, (ii) each of the representations and warranties of Sellers and
Stockholders contained in this Agreement shall be true and correct in all
material respects, and shall not contain any misstatement or omission that would
make any such representation or warranty materially misleading, at and as of the
Closing Date with the same force and effect as if made as of the Closing Date,
and (iii) ATC and Buyer shall have received certificates signed by Stockholders
and a duly authorized executive officer of each Seller to the foregoing effect
and to the effect that the conditions specified in this Section 8.01 have been
satisfied.
(b) All Required Approvals and Consents (including such
consents as are required under Subsequent Material Contracts) shall have been
obtained without the imposition of any conditions that are or would become
applicable to the Business, the Transferred Assets, Buyer or any of its
Affiliates after the Closing that Buyer in good faith reasonably determines
would be materially burdensome upon the Business, the Transferred Assets, Buyer
or any of its Affiliates or their respective businesses substantially as such
businesses have been conducted prior to the Closing Date. All such Required
Approvals and Consents shall be in effect; no Proceedings or other action shall
have been instituted or threatened by any Person with respect thereto as to
which, in Buyer's good faith opinion, there is a material risk of termination or
revocation of, or material adverse (as to the Business, the Transferred Assets,
ATC or Buyer) modification of, any such Required Approval or Consent; all
applicable waiting periods with respect to such Required Approvals and Consents
shall have expired; and all conditions and requirements prescribed by Applicable
Law or by such Required Approvals and Consents to be satisfied on or prior to
the Closing Date shall have been satisfied to the extent necessary such that all
such Required Approvals and Consents are, and will remain, in full force and
effect assuming continued compliance with the terms thereof after the Closing.
(c) The consummation of the transactions contemplated by this
Agreement shall not violate any Applicable Law. No temporary restraining order,
preliminary or permanent injunction, cease and desist order or other order
issued by any court of competent jurisdiction or any competent Governmental
Authority or any other legal restraint or prohibition preventing the
32
consummation of the transactions contemplated hereby, or imposing Damages on
ATC or Buyer in respect thereto, shall be in effect, and there shall be no
pending or threatened actions or proceedings by any Governmental Authority
(or determinations by any Governmental Authority) or by any other Person
challenging or in any manner seeking to restrict or prohibit the consummation
of the transactions contemplated hereby, or to impose conditions that Buyer
in good faith determines would be materially burdensome upon the Business,
the Transferred Assets, ATC, Buyer or any of their Affiliates or their
respective businesses substantially as such businesses have been conducted
prior to the Closing Date or as such businesses, as of the date hereof, would
be reasonably expected to be conducted after the Closing Date.
(d) Since the date hereof, there shall not have been any event,
occurrence, development or state of circumstances or facts (including any
damage, destruction or other casualty loss, but excluding any event,
occurrence, development or state of circumstances or facts or change
resulting from changes in general economic conditions) affecting the Company,
the Transferred Assets or the Business that has had or that may be reasonably
expected to have, either alone or together with all such events, occurrences,
developments, states of circumstances or facts or changes, a Material Adverse
Effect.
(e) Buyer shall have received financing on terms reasonably
acceptable to Buyer and in an amount sufficient to pay the purchase price called
for by Section 2.06(b) and Buyer's expenses related to the negotiation of this
Agreement and the consummation of the transactions contemplated hereby.
(f) As of the Closing Date, there shall exist no Liens on any
Transferred Assets.
(g) Each Seller shall have executed and delivered a xxxx of
sale and such other documents of assignment, transfer and conveyance as Buyer
shall reasonably request to transfer to Buyer all right, title and interest of
such Seller in and to the Transferred Assets.
(h) Each Stockholder shall have executed and delivered to
Buyer an employment agreement in substantially the form of EXHIBIT B hereto with
such alterations thereto as Buyer and the respective employee may agree upon
prior to Closing, provided that the employment agreement with Xxxxx X. Xxxx will
not be executed and delivered until the AATP Closing.
(i) Landlord shall have executed and delivered to Buyer the
leases called for by Section 7.07(b) in substantially the form of EXHIBIT C
hereto with such alterations thereto as Landlord and Buyer may agree upon prior
to Closing.
(j) Each Seller and Stockholder shall have executed and
delivered to ATC and Buyer a noncompetition agreement in substantially the form
of EXHIBIT D hereto with such alterations thereto as ATC, Sellers and
Stockholders may agree upon prior to Closing.
(k) Buyer shall have received an opinion of Xxxx & Xxxxxxxx in
a form reasonably acceptable to Buyer.
33
(l) Sellers shall have delivered to Buyer the financial
statements required by Section 5.10, such financial statements to be in form
and substance acceptable to Buyer, in its sole discretion.
8.02 CONDITIONS TO OBLIGATION OF STOCKHOLDERS AND SELLERS. The
obligation of Stockholders and Sellers to consummate the transactions
contemplated hereby is subject to the satisfaction of each of the following
conditions:
(a) (i) ATC and Buyer shall have performed and satisfied in
all material respects each of their material obligations hereunder required to
be performed and satisfied by any of them on or prior to the Closing Date, (ii)
each of the representations and warranties of ATC and Buyer contained in this
Agreement shall be true and correct in all material respects, and shall not
contain any misstatement or omission that would make any such representation or
warranty materially misleading, at and as of the Closing Date with the same
force and effect as if made as of the Closing Date, and (iii) Stockholders and
Sellers shall have received certificates signed by a duly authorized executive
officer of each of ATC and Buyer to the foregoing effect and to the effect that
the conditions specified in this Section 8.02 have been satisfied.
(b) All Required Approvals and Consents (including such
consents as are required under Subsequent Material Contracts) shall have been
obtained without the imposition of any conditions that are or would become
applicable to any Stockholder or Seller or any of their Affiliates after the
Closing that Stockholders and Sellers in good faith reasonably determines would
be materially burdensome upon any Stockholder or Seller or any of their
Affiliates or their respective businesses substantially as such businesses have
been conducted prior to the Closing Date. All such Required Approvals and
Consents shall be in effect; no Proceedings or other action shall have been
instituted or threatened by any Person with respect thereto as to which, in
Stockholders' and Sellers' good faith opinion, there is a substantial risk of
termination or revocation of, or material adverse (as to any Stockholder or
Seller) modification of, any such Required Approval or Consent; all applicable
waiting periods with respect to such Required Approvals and Consents shall have
expired; and all conditions and requirements prescribed by Applicable Law or by
such Required Approvals and Consents to be satisfied on or prior to the Closing
Date shall have been satisfied to the extent necessary such that all such
Required Approvals and Consents are, and will remain, in full force and effect
assuming continued compliance with the terms thereof after the Closing.
(c) The consummation of the transactions contemplated by this
Agreement shall not violate any Applicable Law. No temporary restraining order,
preliminary or permanent injunction, cease and desist order or other order
issued by any court of competent jurisdiction or any competent Governmental
Authority or any other legal restraint or prohibition preventing the
consummation of the transactions contemplated hereby, or imposing Damages
against any Stockholder or Seller in respect thereto, shall be in effect, and
there shall be no pending or threatened actions or proceedings by any
Governmental Authority (or determinations by any Governmental Authority) or by
any other Person challenging or in any manner seeking to restrict or prohibit
the consummation of the transactions contemplated hereby, or to impose
conditions that Stockholders and Sellers in good faith determine would be
materially burdensome upon any
34
Stockholder or Seller or any of their Affiliates or their respective businesses
substantially as such businesses have been conducted prior to the Closing Date
or as such businesses, as of the date hereof, would be reasonably expected to be
conducted after the Closing Date.
(d) Each Seller shall have received the portion of the
purchase price called for by Section 2.06(b) to which it is entitled.
(e) Buyer shall have executed and delivered to each
Stockholder an employment agreement in substantially the form of EXHIBIT C
hereto with such alterations thereto as Buyer and the respective employee may
agree upon prior to Closing, provided that the employment agreement with
Xxxxx X. Xxxx will not be executed and delivered until the AATP Closing.
(f) Buyer shall have executed and delivered to Landlord the
leases called for by Section 7.07(b) in substantially the form of EXHIBIT D
hereto with such alterations thereto as Landlord and Buyer may agree upon prior
to Closing.
(g) Stockholders and Sellers shall have received an opinion of
Xxxxxx Xxxxxxxxxxxx, ATC's General Counsel, in a form reasonably acceptable to
Stockholders and Sellers.
ARTICLE IX
INDEMNIFICATION
9.01 AGREEMENT TO INDEMNIFY.
(a) Subject to the limitations provided herein ATC, Buyer and
their Affiliates (collectively, the "Buyer Indemnitees") shall each be
indemnified and held harmless on a joint and several basis by Stockholders and
Sellers in respect of any Damages reasonably and proximately incurred by any
Buyer Indemnitee (i) as a result of any inaccuracy or misrepresentation in or
breach of or failure to perform any representation, warranty, covenant,
agreement or obligation of any Stockholder or Seller in this Agreement, or (ii)
in connection with any Excluded Liabilities. The aggregate Liability of
Stockholder and Seller under Section 9.01(a)(i) shall not exceed $40,000,000,
except in the case of Damages due to the fraud or willful misconduct of any
Stockholder or Seller.
(b) Subject to the limitations provided herein, Stockholders,
Sellers and their Affiliates (collectively the "Seller Indemnitees") shall each
be indemnified and held harmless by ATC and Buyer in respect of any and all
Damages reasonably and proximately incurred by any of the Seller Indemnitee as a
result of (i) any inaccuracy or misrepresentation in or breach of or failure to
perform any representation, warranty, covenant, agreement or obligation of ATC
or Buyer in this Agreement, (ii) Assumed Liabilities or (iii) the conduct of the
Business after the Closing Date.
(c) Notwithstanding the foregoing, Buyer Indemnitees may not
seek indemnification under Section 9.01(a) unless and until the claims in the
aggregate exceed
35
$50,000, provided that if such threshold is exceeded, the Buyer Indemnitees may
seek indemnification hereunder for all such claims. The foregoing limitation
shall not apply to Damages relating to Excluded Liabilities or Damages due to
the fraud or willful misconduct of any Stockholder or Seller.
9.02 SURVIVAL OF REPRESENTATION, WARRANTIES AND COVENANTS.
(a) The representations and warranties contained in this
Agreement shall survive as follows:
(i) Except as otherwise provided in Section
9.02(a)(ii) or (iii), all representations and warranties shall expire on the
second anniversary of the Closing Date.
(ii) Notwithstanding Section 9.02(a)(i), the
representations and warranties of any party contained herein shall survive until
60 days after the expiration of any applicable statute of limitations, including
extensions thereof, with respect to any inaccuracy or misrepresentation arising
out of fraud or willful misconduct.
(iii) Notwithstanding Section 9.02(a)(i), the
representations and warranties contained in Sections 3.15, 3.19, 3.21 and 3.23
shall survive until 60 days after the expiration of any applicable statute of
limitations, including extensions thereof.
Any cause of action for breach of a representation or warranty contained
herein shall expire and terminate on the date on which such representation or
warranty expires pursuant to this Section 9.02(a) unless the party seeking
indemnification with respect to such breach delivers to the appropriate
Indemnifying Parties written notice and a reasonably detailed explanation of
the alleged breach on or before 5:00 p.m., Pacific Time, on such expiration
date.
(b) The covenants contained in this Agreement to be performed
after the Closing Date shall survive without expiration unless otherwise
expressly provided in such covenant.
9.03 CLAIMS FOR INDEMNIFICATION. If any Indemnitee shall believe that
such Indemnitee is entitled to indemnification pursuant to this Article IX in
respect of any Damages, such Indemnitee shall give the appropriate Indemnifying
Party prompt written notice thereof. Any such notice shall set forth in
reasonable detail and to the extent then known the basis for such claim for
indemnification. The failure of such Indemnitee to give prompt notice of any
claim for indemnification shall not adversely affect such Indemnitee's right to
indemnity hereunder except to the extent that such failure materially adversely
affects the right of the Indemnifying Party to assert any reasonable defense to
such claim. The Indemnifying Party shall have 30 days following its receipt of
such notice to either acquiesce in or object to the claim in writing. If the
Indemnifying Party does not object thereto within such 30-day period, such
Indemnitee shall be entitled to be indemnified for all Damages reasonably and
proximately incurred by such Indemnitee in respect of such claim.
36
9.04 DEFENSE OF CLAIMS.
(a) In connection with any claim that may give rise to indemnity
under this Article IX resulting from or arising out of any claim or
Proceeding against an Indemnitee by a Person that is not a party hereto, any
Indemnifying Party may, subject to Section 9.04(c), assume the defense of
such claim or Proceeding (unless such Indemnitee elects not to seek indemnity
hereunder for such claim) upon written notice to the relevant Indemnitee, if
all Indemnifying Parties with respect to such claim or Proceeding (i) jointly
acknowledge to the Indemnitee its right to indemnity pursuant hereto in
respect of the entirety of such claim and (ii) provide assurances, reasonably
satisfactory to such Indemnitee, that the Indemnifying Parties will be
financially able to satisfy such claim in full. Prior to the assumption by an
Indemnifying Party of the defense of any claim or Proceeding, the Indemnitee
may make such appearances and filings with respect thereto as the Indemnitee
reasonably determines to be necessary or appropriate. If the Indemnifying
Parties do not assume the defense of any claim or Proceeding resulting
therefrom in accordance with the terms of this Section 9.04(a), the
Indemnitee may defend against such claim or Proceeding, subject to Section
9.04(d), PROVIDED that the Indemnifying Parties may subsequently elect to
assume the defense of such claim or Proceeding if they provide the notice
called for by the first sentence of this Section 9.04.
(b) If the Indemnifying Parties assume the defense of any such
claim or Proceeding, the Indemnifying Parties shall select counsel reasonably
acceptable to the Indemnitee to conduct the defense of such claim or
Proceeding, shall take all steps necessary in the defense or settlement
thereof and shall at all times diligently and promptly pursue the resolution
thereof. If the Indemnifying Parties shall have assumed the defense of any
claim or Proceeding in accordance with this Section 9.04, the Indemnifying
Parties shall be authorized to consent to a settlement of, or the entry of
any judgment relating to, such claim or Proceeding, without the prior written
consent of such Indemnitee, PROVIDED that (i) the Indemnifying Parties shall
pay or cause to be paid all amounts arising out of such settlement or
judgment in accordance with the terms thereof, (ii) the Indemnifying Parties
shall not be authorized to encumber any of the assets of any Indemnitee or to
agree to any restriction that would apply to any Indemnitee or to its conduct
of business, and (iii) a condition to any such settlement shall be a complete
release of such Indemnitee and its Affiliates, officers, employees,
consultants and agents with respect to such claim. Subject to Section
9.04(c), the Indemnitee shall be entitled to participate in (but not control)
the defense of any such action, with its own counsel and at its own expense.
Each Indemnitee shall, and shall cause each of its Affiliates, officers,
employees, consultants and agents to, cooperate fully with the Indemnifying
Parties in the defense of any claim or Proceeding being defended by the
Indemnifying Parties pursuant to this Section 9.04.
(c) Notwithstanding Section 9.04(a), the Indemnifying Parties
may not assume the defense of any claim or Proceeding and the Indemnitee may
assume such defense if, in the reasonable opinion of the Indemnitee, there
are one or more legal defenses available to the Indemnitee that conflict with
those available to an Indemnifying Party. If the Indemnitee assumes defense
of any such claim or Proceeding pursuant to the last sentence of Section
9.04(a) or pursuant to this Section 9.04(c), (i) the Indemnifying Parties may
participate in, but not control, the defense of such claim or Proceeding, and
(ii) if the Indemnitee receives a settlement
37
proposal from the Person asserting such claim or instituting such Proceeding and
is notified by an Indemnifying Party that such Indemnifying Party wants to
accept such settlement proposal, the Liability of the Indemnifying Parties with
respect to such claim or Proceeding shall equal the lesser of (A) the amount
offered in such settlement proposal plus the Indemnitee's fees and expenses
incurred in obtaining such settlement proposal, (B) the amount of actual Damages
of the Indemnitee with respect to such claim or Proceeding or (C) the maximum
Liability of the Indemnifying Parties pursuant to Section 9.01(a), and any such
settlement shall expressly release the Indemnifying Parties from any further
Liability with respect to the claim.
(d) If the Indemnitee assumes the defense of any claim or
Proceeding pursuant to the last sentence of Section 9.04(a) or pursuant to
Section 9.04(c), the Indemnitee shall conduct such defense in such manner as it
shall deem appropriate, PROVIDED that the Indemnitee may not settle or
compromise any claim or Proceeding or consent to the entry of any judgment with
respect thereto without the prior written consent of the Indemnifying Parties,
which consent shall not be unreasonably withheld.
9.05 TAX EFFECT. If the payment of any Damages for the benefit of an
Indemnitee results in a reduction of Tax due and payable by such Indemnitee,
then the amount of Damages payable shall be reduced by, or, if Damages have
already been paid, then the Indemnitee shall refund to the Indemnifying Parties,
an amount equal to the difference between the actual amount of Tax due and
payable by such Indemnitee with respect to such year and the amount of Tax that
would have been paid by such Indemnitee solely but for such reduction of Tax.
ARTICLE X
TERMINATION
10.01 GROUNDS FOR TERMINATION. This Agreement may be terminated at any
time prior to the Closing:
(a) by mutual written agreement of all of the parties hereto;
(b) by a party at any time following the expiration of 30 days
from the date that such party has given notice to another party of any one or
more inaccuracies or misrepresentations in or breaches of the representations or
warranties made by the recipient of such notice contained in this Agreement
that, if not cured prior to the Closing Date, would give the notifying party
grounds not to close under Section 8.01 or 8.02, as the case may be, when taken
into account with all other uncured inaccuracies or misrepresentations in or
breaches of such representations or warranties as to which the notifying party
shall have given notice previously pursuant to this clause (b);
(c) by a party at any time following the expiration of 30 days
from the date that such party has given written notice to another party of the
failure by the recipient of such notice to perform and satisfy in any material
respect any of its material obligations under this Agreement required to be
performed and satisfied by it on or prior to the Closing Date, or the failure to
perform and satisfy any other obligations of the recipient of such notice under
this Agreement if the aggregate of all such other failures shall be material;
PROVIDED, HOWEVER, that no
38
termination under this clause (c) shall take effect if such breaches or
failures shall have been cured in all material respects within such 30-day
period;
(d) by any party hereto, if the Closing shall not have been
consummated by the Outside Date; PROVIDED, HOWEVER, that a party may not
terminate this Agreement pursuant to this clause (d) if the Closing shall not
have been consummated by reason of any inaccuracy or misrepresentation in the
representations or warranties made in this Agreement by such party or any
failure of such party or any of his or its Affiliates to perform and satisfy in
all material respects any of his or its respective covenants or obligations
contained in this Agreement; or
(e) by any party hereto if any Applicable Law shall hereafter
be enacted or become applicable that makes the transactions contemplated hereby
illegal or otherwise prohibited, or if any judgment, injunction, order or decree
enjoining any party hereto from consummating the transactions contemplated
hereby is entered, and such judgment, injunction, order or decree shall become
final and nonappealable.
10.02 EFFECT OF TERMINATION. If this Agreement is terminated as permitted
by Section 10.01, such termination shall be without liability of any party to
any other party to this Agreement; PROVIDED, HOWEVER, that if such
termination shall result from the breach by any party of its representations,
warranties or covenants contained in this Agreement, such party shall be
fully liable for any and all Damages incurred or suffered by the other
parties as a result of such failure or breach notwithstanding such
termination. The provisions of Sections 7.04, 10.02, 11.01, 11.03, 11.05
11.07, 11.08, 11.10, 11.11 and 11.12 shall survive any termination of this
Agreement pursuant to Section 10.1.
ARTICLE XI
MISCELLANEOUS
11.01 NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be deemed duly given (i)
when delivered by personal delivery, (ii) five Business Days after having been
sent by registered or certified mail, return receipt requested, postage prepaid
and addressed to the intended recipient as set forth below, (iii) the day
following being sent through an overnight delivery service in circumstances in
which such service guarantees next day delivery, or (iv) once such notice or
other communication is transmitted to the telecopier number specified below and
the appropriate answer back or telephonic confirmation is received, PROVIDED
that such notice or other communication is promptly thereafter mailed in
accordance with the provisions of clause (ii) above:
If to any Seller or Xxxxx Xxxx:
Xxxxx X. Xxxx
00000 XX Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
39
If to Xxxxx Xxxx:
Xxxxx X. Xxxx
0000 XX Xxxxx
Xxxxx, XX 00000
with in any case a copy to:
Xxxx & Xxxxxxxx
XX Xxx 00000
Xxxxxxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Attn.: Xxxxxxx X. Xxxx, Esq.
If to ATC or Buyer:
Aftermarket Technology Corp.
Xxx Xxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn.: General Counsel
Any party may give any notice, request, demand, claim or other communication
hereunder using any other means (including ordinary mail or electronic mail),
but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the
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 the other parties notice in the manner herein set forth.
11.02 AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by all parties hereto, or in the case of a waiver, by the party
against whom the waiver is to be effective.
(b) No waiver by a 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 occurrence. No failure or delay by a party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
11.03 EXPENSES. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
40
11.04 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. No party hereto may assign either this Agreement or any of
its rights, interests or obligations hereunder without the prior written
approval of each other party, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, Buyer may assign its right to purchase some or
all of the Transferred Assets to one or more wholly owned subsidiaries of Buyer,
PROVIDED that such assignment shall not relieve Buyer of any of its obligations
hereunder.
11.05 GOVERNING LAW. Except as otherwise provided in Section 11.11 with
respect to arbitration under the Federal Arbitration Act, this Agreement shall
be construed in accordance with and governed by the internal laws (without
reference to choice or conflict of laws) of the State of Oregon.
11.06 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other parties hereto.
11.07 ENTIRE AGREEMENT. This Agreement (including the Schedules and
Exhibits referred to herein, which are hereby incorporated by reference)
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior oral and written and all contemporaneous
oral agreements, understandings and negotiations between the parties with
respect to the subject matter of this Agreement. Neither this Agreement nor any
provision hereof is intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
11.08 CONSTRUCTION. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof. No party hereto, nor its respective counsel, shall be deemed the drafter
of this Agreement, and all provisions of this Agreement shall be construed in
accordance with their fair meaning, and not strictly for or against any party
hereto. Matters disclosed on one or more schedules attached hereto and made a
part hereof shall be deemed to have been disclosed on each and every relevant
schedule to the extent necessary to make any other statement, representation or
warranty contained herein not misleading or incorrect.
11.09 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the date
this Agreement was executed or last amended.
11.10 THIRD PARTY BENEFICIARIES. No provision of this Agreement shall
create any third party beneficiary rights in any Person, including any employee
of the Company or any Affiliate thereof (including any beneficiary or dependent
thereof).
41
11.11 ARBITRATION OF CLAIMS.
(a) Except as otherwise specifically provided elsewhere in this
Agreement, any dispute or difference between or among the parties arising out
of this Agreement or the transactions contemplated hereby, including, without
limitation, any dispute between any Indemnitee and any Indemnifying Party
under Article IX which the parties are unable to resolve themselves, shall be
submitted to and resolved by arbitration pursuant to and in accordance with
the Federal Arbitration Act and the Commercial Arbitration Rules of the
American Arbitration Association in effect on the date of the initial request
that gave rise to the dispute to be arbitrated (the "AAA Rules").
(b) Such arbitration shall be conducted by a panel of three
arbitrators, which shall be selected from a list of arbitrators pursuant to
and in accordance with the AAA Rules. Such arbitration proceeding shall be
conducted in Oregon. The arbitrators shall not have the authority to modify
any term or provision of this Agreement. The arbitration proceeding shall
include an opportunity for the parties to conduct discovery in advance of the
proceeding, which discovery may be limited by rules established by the
arbitrators. Notwithstanding the foregoing, the parties agree that they will
attempt, and they intend that they and the arbitrators should use their best
efforts in that attempt, to conclude such arbitration proceeding and have a
final decision from the arbitrators within 90 days from the date of selection
of the arbitrators; PROVIDED, HOWEVER, that the arbitrators shall be entitled
to extend such 90-day period one or more times to the extent necessary for
such arbitrators to place a dollar value on any claim that may be
unliquidated. The arbitrators shall promptly deliver a written decision with
respect to the dispute to each of the parties, which shall promptly act in
accordance therewith. Each party agrees that any decision of the arbitrators
shall be final, conclusive and binding, absent fraud or manifest error, and
that it will not contest any action by any other party hereto in accordance
with a decision of the arbitrators, except on a basis of fraud or manifest
error. It is specifically understood and agreed that any party may enforce
any award rendered pursuant to the arbitration provisions of this
Section 11.11 by bringing suit in any court of competent jurisdiction.
(c) All fees, costs and expenses (including attorneys' fees
and expenses) incurred by the party that prevails in any such arbitration
commenced pursuant to this Section 11.11 or any judicial action or proceeding
seeking to enforce the agreement to arbitrate disputes as set forth in this
Section 11.11 or seeking to enforce any order or award of any arbitration
commenced pursuant to this Section 11.11 may be assessed against the party or
parties that do not prevail in such arbitration in such manner as the
arbitrators or the court in such judicial action, as the case may be, may
determine to be appropriate under the circumstances. All costs and expenses
attributable to the arbitrators shall be allocated among the parties to the
arbitration in such manner as the arbitrators shall determine to be appropriate
under the circumstances.
11.12 CUMULATIVE REMEDIES. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
ALL TRANSMISSION PARTS, INC.,
an Oregon corporation
By: _____________________________________
Xxxxx X. Xxxx, President
ALL AUTOMATIC TRANSMISSION PARTS, INC.,
an Oregon corporation
By: _____________________________________
Xxxxx X. Xxxx, President
-----------------------------------------
Xxxxx X. Xxxx
-----------------------------------------
Xxxxx X. Xxxx
AFTERMARKET TECHNOLOGY CORP.,
a Delaware corporation
By: _____________________________________
Xxxxxxx X. XxXxxx
President and Chief Executive Officer
ATC DISTRIBUTION GROUP, INC.,
a Delaware corporation
By: _____________________________________
Xxxxxxx X. XxXxxx
Chief Executive Officer
43
EXHIBITS
Exhibit A................................................Financial Statements
Exhibit B........................................Form of Employment Agreement
Exhibit C...........................................Form of Real Estate Lease
Exhibit D....................................Form of Noncompetition Agreement
SCHEDULES
Schedule 1.01.................................................Permitted Liens
Schedule 2.01.......................................................Equipment
Schedule 2.02.................................................Excluded Assets
Schedule 3.01..........................................Foreign Qualifications
Schedule 3.04.................................Required Approvals and Consents
Schedule 3.07.............................................Certain Liabilities
Schedule 3.08......................................Absence of Certain Changes
Schedule 3.09(a)(i).............................................Real Property
Schedule 3.09(a)(ii).................................Personal Property Leases
Schedule 3.09(b)...........................................Non-Binding Leases
Schedule 3.09(c)........................................................Liens
Schedule 3.09(d)..........................................Land-Use Regulation
Schedule 3.09(f)............................................Personal Property
Schedule 3.10..........................................Affiliate Transactions
Schedule 3.11.....................................................Inventories
Schedule 3.12......................................................Litigation
Schedule 3.13(a)..........................................Scheduled Contracts
Schedule 3.13(b)..............................Non-Binding Scheduled Contracts
Schedule 3.13(c)..............................Primary Customers and Suppliers
Schedule 3.14.........................................................Permits
Schedule 3.15..............................Noncompliance with Applicable Laws
Schedule 3.16................................Employee Agreements and Benefits
Schedule 3.17....................................Labor and Employment Matters
Schedule 3.18...........................................Intellectual Property
Schedule 3.19...........................................Environmental Matters
Schedule 3.20..............................................Insurance Policies
Schedule 3.21.....................................................Tax Matters
Schedule 3.22.............................................Accounts Receivable
Schedule 7.07....................................553 N. Columbia Improvements
