STOCK PURCHASE AGREEMENT
BY AND BETWEEN
XXXXXXX HOLDINGS, INC.,
XXXXXXX GLOBAL CORPORATION,
THIRD SECURITY MANAGEMENT CORPORATION
AND
THIRD SECURITY, LLC
December 21, 2001
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.................................................2
Section 1.1. Accounts.....................................................2
Section 1.2. Affiliate...................................................2
Section 1.3. Agreement...................................................2
Section 1.4. Assets......................................................2
Section 1.5. Books and Records...........................................3
Section 1.6. Buyer.......................................................3
Section 1.7. Buyer's Closing Certificate.................................3
Section 1.8. Closing.....................................................3
Section 1.9. Closing Date................................................3
Section 1.10. Code........................................................3
Section 1.11. Common Stock................................................3
Section 1.12. Company.....................................................3
Section 1.13. Competing Transaction.......................................3
Section 1.14. Contracts...................................................4
Section 1.15. Employee Benefit Plan.......................................4
Section 1.16. Environmental Laws..........................................4
Section 1.17. ERISA.......................................................4
Section 1.18. ERISA Affiliate.............................................4
Section 1.19. Escrow Agent................................................4
Section 1.20. Escrow Agreement............................................4
Section 1.21. Financial Statements........................................4
Section 1.22. GAAP........................................................5
Section 1.23. Governmental Authority......................................5
Section 1.24. Hazardous Materials.........................................5
Section 1.25. Intellectual Property.......................................5
Section 1.26. IRS.........................................................5
Section 1.27. Knowledge of Seller.........................................5
Section 1.28. Law.........................................................5
Section 1.29. Leases......................................................6
Section 1.30. Liens.......................................................6
Section 1.31. Material Adverse Effect.....................................6
Section 1.32. Material Contracts..........................................6
Section 1.33. NASD........................................................6
Section 1.34. Opinion of Buyer's Counsel..................................6
Section 1.35. Opinion of Seller's Counsel.................................6
Section 1.36. Option Closing..............................................6
Section 1.37. Option Closing Date.........................................6
Section 1.38. Permits.....................................................7
Section 1.39. Permitted Liens.............................................7
Section 1.40. Petroleum Products..........................................7
Section 1.41. Purchase Price..............................................7
Section 1.42. Real Property...............................................7
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Section 1.43. Required Consents...........................................7
Section 1.44. SEC.........................................................7
Section 1.45. Seller's Closing Certificate................................7
Section 1.46. Shareholders Agreement......................................7
Section 1.47. Tax and Taxes...............................................8
Section 1.48. Tax Return..................................................8
ARTICLE II PURCHASE AND SALE...........................................8
Section 2.1. Sale of Purchased Stock.....................................8
Section 2.2. Delivery of Option Shares to Escrow Agent...................8
Section 2.3. Payment of Purchase Price...................................8
Section 2.4. Closing Deliveries..........................................8
Section 2.5. Termination of Letter of Intent.............................9
ARTICLE III PUT AND OPTION..............................................9
Section 3.1. Grant of Call Option........................................9
Section 3.2. Grant of Put Option.........................................9
Section 3.3. Manner of Exercising the Options............................9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LGC AND SELLER...........10
Section 4.1. Organization of LGC, Seller, H&R Acquisition and H&R.......10
Section 4.2. Authorization; Enforceability..............................10
Section 4.3. No Violation or Conflict...................................10
Section 4.4. No Consents................................................11
Section 4.5. Title to Purchased Stock and Option Shares.................11
Section 4.6. Capitalization.............................................11
Section 4.7. Subsidiaries...............................................12
Section 4.8. Litigation.................................................12
Section 4.9. Title to, Sufficiency and Condition of Assets..............12
Section 4.10. Contracts..................................................12
Section 4.11. Accounts...................................................13
Section 4.12. Financial Statements.......................................13
Section 4.13. Absence of Undisclosed Liabilities.........................13
Section 4.14. Permits....................................................13
Section 4.15. Real Properties............................................13
Section 4.16. Intellectual Property......................................14
Section 4.17. Books and Records..........................................15
Section 4.18. Affiliated Transactions....................................15
Section 4.19. Insurance..................................................15
Section 4.20. Tax Matters................................................16
Section 4.21. Compliance with Law and Regulations........................17
Section 4.22. Environmental Conditions...................................17
Section 4.23. Labor Matters..............................................18
Section 4.24. No Adverse Change..........................................19
Section 4.25. Employee Benefit Plans.....................................21
Section 4.26. Fees and Expenses of Brokers and Others....................21
Section 4.27. Disclosure.................................................22
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER AND TS.............22
Section 5.1. Organization of Buyer and TS...............................22
Section 5.2. Authorization; Enforceability..............................22
Section 5.3. No Violation or Conflict...................................22
Section 5.4. No Consents................................................23
Section 5.5. Litigation.................................................23
Section 5.6. Fees and Expenses of Brokers and Others....................23
ARTICLE VI COVENANTS AND OTHER MATTERS PENDING THE CLOSING............23
Section 6.1. Affirmative Covenants......................................23
Section 6.2. Negative Covenants.........................................24
Section 6.3. Access.....................................................24
Section 6.4. Non-Solicitation...........................................24
Section 6.5. Cooperation; Best Efforts..................................25
Section 6.6. Confidentiality............................................25
Section 6.7. Election of Board of Directors; Grant of Proxies...........25
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AND TS....25
Section 7.1. Compliance with Agreement..................................26
Section 7.2. Proceedings, Instruments and Due Diligence Satisfactory....26
Section 7.3. No Litigation..............................................26
Section 7.4. Representations and Warranties.............................26
Section 7.5. Material Damage to Assets; Material Adverse Effect.........26
Section 7.6. Shareholders Agreement.....................................26
Section 7.7. Bottoms Stock Purchase Agreement...........................26
Section 7.8. Due Diligence..............................................27
Section 7.9. Deliveries at Closing......................................27
Section 7.10. Deliveries at Option Closing...............................27
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER......28
Section 8.1. Compliance with Agreement..................................28
Section 8.2. Proceedings and Instruments Satisfactory...................28
Section 8.3. No Litigation..............................................28
Section 8.4. Representations and Warranties.............................28
Section 8.5. Deliveries at Closing......................................29
Section 8.6. Deliveries at Option Closing...............................29
ARTICLE IX INDEMNIFICATION AND POST-CLOSING COVENANTS.................29
Section 9.1. Indemnification of Buyer and the Company by Seller.........29
Section 9.2. Indemnification of Seller by Buyer.........................31
Section 9.3. Additional Instruments.....................................32
Section 9.4. Access to Books and Records................................32
Section 9.5. Nonsolicitation of Employees...............................32
Section 9.6. Transfer Taxes.............................................33
Section 9.7. Right to Setoff............................................33
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ARTICLE X CERTAIN INCOME TAX MATTERS.................................33
Section 10.1. Federal Income Taxes in General............................33
Section 10.2. Other Income Taxes in General..............................33
Section 10.3. Section 338 Elections......................................34
Section 10.4. Cooperation................................................35
Section 10.5. Termination of Tax-Sharing Agreements......................36
Section 10.6. Relationship of This Article X to Article IX...............37
ARTICLE XI TERMINATION................................................37
Section 11.1. Termination................................................37
Section 11.2. Rights on Termination; Waiver..............................37
ARTICLE XII MISCELLANEOUS..............................................37
Section 12.1. Entire Agreement; Amendment; Waiver........................37
Section 12.2. Expenses...................................................38
Section 12.3. Governing Law; Consent to Jurisdiction.....................38
Section 12.4. Further Assurances.........................................38
Section 12.5. Assignment.................................................38
Section 12.6. Notices....................................................39
Section 12.7. Counterparts...............................................39
Section 12.8. Interpretation.............................................40
Section 12.9. Severability...............................................40
Section 00.00.Xx Third Party Rights......................................40
Section 12.11.Specific Performance.......................................40
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SCHEDULES
---------
Schedule 1.29 Leases
Schedule 1.37 Permitted Liens
Schedule 1.40 Real Property
Schedule 1.41 Required Consents
Schedule 2.3 Payment of Purchase Price
Schedule 4.1 Foreign Qualification of the Company
Schedule 4.6 Outstanding Options
Schedule 4.8 Litigation
Schedule 4.9 Tangible Assets
Schedule 4.10 Material Contracts
Schedule 4.11 Accounts
Schedule 4.13 Undisclosed Liabilities
Schedule 4.14 Permits
Schedule 4.16Intellectual Property
Schedule 4.18 Affiliated Transactions
Schedule 4.19 Insurance
Schedule 4.20 Tax Matters
Schedule 4.21 Compliance With Law
Schedule 4.22 Environmental Conditions
Schedule 4.23 Labor Matters
Schedule 4.24 No Adverse Changes
Schedule 4.25 Employee Benefit Plans
Schedule 6.7 List of Directors
EXHIBITS
--------
Exhibit 1.7 Buyer's Closing Certificate (delivered separately)
Exhibit 1.20 Escrow Agreement (delivered separately)
Exhibit 1.34 Opinion of Buyer's Counsel (delivered separately)
Exhibit 1.35 Opinion of Seller's Counsel (delivered separately)
Exhibit 1.43 Seller's Closing Certificate (delivered separately)
Exhibit 3.1 Call Exercise Notice (delivered separately)
Exhibit 3.2 Put Exercise Notice (delivered separately)
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement"), made as of December 21,
2001 by and between Xxxxxxx Holdings, Inc, a Delaware corporation ("Seller"),
Xxxxxxx Global Corporation, a Delaware corporation and parent of Seller ("LGC"),
Third Security Management Corporation, a Delaware corporation ("Buyer"), and
Third Security, LLC, a Virginia limited liability company and parent of Buyer
("TS"), recites and provides as follows:
RECITALS
WHEREAS, LGC and TS entered into a Letter of Intent, dated December 3, 2001
(the "Letter of Intent"), whereby LGC granted TS the right purchase an aggregate
of $5,000,000 of shares of common stock of LGC representing 45% of the shares of
common stock of LGC on a fully diluted basis (taking into account all
outstanding warrants, options, and convertible securities) with an option to
purchase, in TS's sole option, additional shares of common stock of LGC
representing up to an additional 6% fully diluted (taking into account all
outstanding warrants, options, and convertible securities) equity ownership of
LGC;
WHEREAS, pursuant to the Letter of Intent, TS loaned LGC $1,500,000 in
accordance with that certain Convertible Promissory Note issued by LGC to TS on
December 4, 2001 (as increased by $300,000 described below, the "Convertible
Note"), convertible into shares of common stock of LGC;
WHEREAS, pursuant to the Letter of Intent, LGC granted TS an option to
acquire up to $1,000,000 of shares of common stock of LGC as set forth in that
certain Call and Put Option Agreement, dated as of December 4, 2001, by and
between LGC and TS (the "Option Agreement");
WHEREAS, pursuant to the Option Agreement, TS purchased 1,609,442 shares of
the common stock of LGC (the "LGC Shares") for which TS paid LGC $300,000;
WHEREAS, TS has put the LGC shares to LGC in consideration of LGC
increasing the outstanding principal amount on the Convertible Note from
$1,500,000 to $1,800,000 as provided in the Option Agreement;
WHEREAS, TS and LGC have agreed to terminate the Letter of Intent in order
to consummate the transactions contemplated by this Agreement concurrent with
the Closing (as defined below);
WHEREAS, TS has assigned the Convertible Note to Buyer;
WHEREAS, Seller owns 8,526.316 shares of common stock, $.01 par value per
share, of H&R Acquisition Corp, a New York corporation ("H&R Acquisition"),
representing 81% of the issued and outstanding shares of capital stock of H&R
Acquisition; and
WHEREAS, H&R Acquisition owns all of the issued and outstanding shares of
capital stock of Xxxx and Xxxxxxx, Inc., a New York corporation and wholly owned
subsidiary of the Company ("H&R");
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WHEREAS, Seller desires to sell, and Buyer desires to purchase, 5,848.421
shares of common stock of H&R Acquisition, representing 55.56% of the issued and
outstanding shares of capital stock of H&R Acquisition (the "Purchased Stock"),
upon the terms and subject to the conditions set forth herein; and
WHEREAS, Seller desires to grant a call to Buyer, and Buyer desires to
grant a put to Seller, with respect to 2,677.895 shares of common stock of H&R
Acquisition representing 25.44% of the issued and outstanding shares of capital
stock of H&R Acquisition (the "Option Shares"), upon the terms and subject to
the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and agreements set
forth in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I DEFINITIONS
When used in this Agreement, the following terms shall have the meanings
specified:
Section 1.1. Accounts.
"Accounts" shall mean all accounts receivable, notes receivable and
associated rights (including, without limitation, amounts due from vendors, all
security deposits, letters of credit and security interests in collateral)
arising from the sale of goods and services in the ordinary course of the
business of the Company, together with any notes or other amounts due to the
Company from its officers, employees or Affiliates.
Section 1.2. Affiliate.
"Affiliate" shall mean, as to any person, any other person or entity that,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such
Section 1.3. Agreement.
"Agreement" shall mean this Stock Purchase Agreement, together with the
schedules and exhibits attached hereto, as the same may be amended from time to
time in accordance with the terms hereof.
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Section 1.4. Assets.
"Assets" shall mean, collectively, all of the tangible and intangible
assets owned by the Company.
Section 1.5. Books and Records.
"Books and Records" shall mean original or true and complete copies of all
of the books, records, files, data and information of the Company (including,
without limitation, customer lists, financial and accounting records, purchase
orders and invoices, sales orders and sales order log books, credit and
collection records, correspondence and miscellaneous records with respect to
customers and supply sources and all other general correspondence).
Section 1.6. Buyer.
"Buyer" shall mean Third Security Management Corporation, a Delaware
corporation.
Section 1.7. Buyer's Closing Certificate.
"Buyer's Closing Certificate" shall mean the certificate of Buyer and TS in
the form of Exhibit 1.7 attached hereto.
Section 1.8. Closing.
"Closing" shall mean the meeting of the closing of the transactions
contemplated hereby with respect to the Purchased Stock to be held at 10:00
a.m., New York City time, on the Closing Date, at the offices of Hunton &
Xxxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, or at such other time and place
as the parties may mutually agree in writing.
Section 1.9. Closing Date.
"Closing Date" shall mean December 21, 2001, or such other date as the
parties may mutually agree in writing.
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Section 1.10. Code.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.11. Common Stock.
"Common Stock" shall mean the shares of common stock, $.01 par value per
share, of H&R Acquisition.
Section 1.12. Company.
"Company" shall mean H&R Acquisition and H&R, collectively or individually,
as appropriate.
Section 1.13. Competing Transaction.
"Competing Transaction" shall have the meaning set forth in Section 6.4
hereto.
Section 1.14. Contracts.
"Contracts" shall mean those contracts, agreements, blanket and other
purchase orders, leases of personal property (such as computers and copiers),
sales orders, license agreements, relationships and commitments and invoices
related thereto, to which the Company is a party or by which the Company is
bound.
Section 1.15. Employee Benefit Plan.
"Employee Benefit Plan" shall mean an "employee benefit plan" as defined in
Section 3(3) of ERISA and any other plans that provide compensation or other
benefits, whether or not subject to ERISA, to any present or former employee of
the Company, or any dependent or beneficiary thereof.
Section 1.16. Environmental Laws.
"Environmental Laws" shall have the meaning set forth in Section 4.22(a)
hereto.
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Section 1.17. ERISA.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
Section 1.18. ERISA Affiliate.
"ERISA Affiliate" shall mean each entity that is a member of a controlled
group or affiliated service group of which the Company is a member or that is
treated as a single employer with the Company under Section 414(b), 414(c),
414(m) or 414(o) of the Code or ERISA.
Section 1.19. Escrow Agent.
"Escrow Agent" shall mean SunTrust Bank.
Section 1.20. Escrow Agreement.
"Escrow Agreement" shall mean the escrow agreement, dated as of the Closing
Date, by and among Buyer, Seller, LGC and Escrow Agent in substantially the form
of Exhibit 1.20 attached hereto.
Section 1.21. Financial Statements.
"Financial Statements" shall mean the audited balance sheets of the Company
as of December 31, 2000, 1999 and 1998 and the audited income statements and
statements of changes in financial position of the Company for the years ended
December 31, 2000, 1999 and 1998, and the unaudited balance sheet of the Company
as of September 30, 2001 and the unaudited income statements and statements of
changes in financial position of the Company for the nine months ended September
30, 2001.
Section 1.22. GAAP.
"GAAP" shall mean generally accepted accounting principles of the United
States as in effect at the time of the preparation of the subject financial
statement consistently applied.
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Section 1.23. Governmental Authority.
"Governmental Authority" shall have the meaning set forth in Section
4.22(a) hereto.
Section 1.24. Hazardous Materials.
"Hazardous Materials" shall have the meaning set forth in Section 4.22(a)
hereto.
Section 1.25. Intellectual Property.
"Intellectual Property" shall mean all intellectual property owned or
licenses by the Company, including, without limitation, the following: (a) all
inventions, patents and patent applications, (b) all registered and unregistered
trademarks, service marks, trade dress, logos, trade names and brand names, and
any combination of such names, including all goodwill associated therewith and
all applications, registrations and renewals in connection therewith, (c) all
copyrightable works, all copyrights and all applications, registrations and
renewals in connection therewith, (d) all trade secrets and confidential
business information (including ideas, research and development, know-how,
compositions, designs, drawings, specifications, customer and supplier lists,
pricing and cost information and business and market plans and proposals), (e)
all computer software and source code (including hard copy and soft copy as well
as all data and related documentation), (f) all websites and related content
(including, without limitation, underlying software, URL's and domain names),
(g) all financial models and (h) all customer lists, current and past.
Section 1.26. IRS.
"IRS" shall mean the Internal Revenue Service of the United States.
Section 1.27. Knowledge of Seller.
"Knowledge of Seller" shall mean a)" (a) the actual knowledge, after due
inquiry, of each officer of LGC, Seller, H&R Acquisition and H&R and )" (b)
knowledge of any other fact or circumstance that would have or should have come
to the attention of any such officer in the course of discharging his or her
duties in a reasonable and prudent manner consistent with sound business
practices.
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Section 1.28. Law.
"Law" shall mean any federal, state, local, foreign or other law or treaty
or governmental requirement of any kind, and the rules, regulations and orders
promulgated thereunder.
Section 1.29. Leases.
"Leases" shall mean all real property leases to which the Company is a
party or by which the Company is bound, each of which is specifically listed on
Schedule 1.29.
Section 1.30. Liens.
"Liens" shall mean any lien, mortgage, security interest, Tax lien,
attachment, levy, charge, claim, restriction, imposition, pledge, encumbrance,
conditional sale or title retention arrangement, or any other interest in
property or assets (or the income or profits therefrom) designed to secure the
repayment of indebtedness, whether consensual or nonconsensual and whether
arising by agreement or under any Law or otherwise.
Section 1.31. Material Adverse Effect.
"Material Adverse Effect" shall mean any event, change or effect that has a
material adverse effect on ")" (a) the properties, business, results of
operations, prospects or condition (financial or otherwise) of the Company or )"
(b) the ability of Seller to consummate the transactions contemplated hereby.
Section 1.32. Material Contracts.
"Material Contracts" shall have the meaning set forth in Section 4.10
hereto.
Section 1.33. NASD.
"NASD" shall mean the National Association of Securities Dealers.
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Section 1.34. Opinion of Buyer's Counsel.
"Opinion of Buyer's Counsel" shall mean the opinion of Hunton & Xxxxxxxx,
counsel to Buyer and TS, substantially in the form of Exhibit 1.34 attached
hereto.
Section 1.35. Opinion of Seller's Counsel.
"Opinion of Seller's Counsel" shall mean the opinion of Beckman, Millman,
Barandes & Xxxxxxx, LLP, counsel to LGC, Seller and the Company, substantially
in the form of Exhibit 1.35 attached hereto.
Section 1.36. Option Closing.
"Option Closing" shall mean the meeting of the closing of the transactions
contemplated hereby with respect to the Option Shares to be held at 10:00 a.m.,
New York City time, on the Option Closing Date, at the offices of Hunton &
Xxxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, or at such other time and place
as the parties may mutually agree in writing.
Section 1.37. Option Closing Date.
"Option Closing Date" shall have the meaning set forth in Section 3.3(a)
hereto.
Section 1.38. Permits.
"Permits" shall mean Governmental Authority, NASD and stock exchange
approvals, authorizations, registrations, permits and licenses.
Section 1.39. Permitted Liens.
"Permitted Liens" shall mean those Liens affecting the Assets that are
specifically listed on Schedule 1.37 hereto.
Section 1.40. Petroleum Products.
"Petroleum Products" shall have the meaning set forth in Section 4.22(a)
hereto.
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Section 1.41. Purchase Price.
"Purchase Price" shall mean the Convertible Note and $3,200,000 in cash.
Section 1.42. Real Property.
"Real Property" shall mean the real property leased or owned by the
Company, together with all improvements and fixtures thereon and all easements,
rights-of-way and other appurtenants thereto, as more fully described in the
legal description set forth on Schedule 1.40 attached hereto.
Section 1.43. Required Consents.
"Required Consents" shall mean all consents required from Governmental
Authorities, self-regulatory organizations, including the NASD, any stock
exchange or other third parties that are necessary, desirable or required in
order to give effect to the transactions contemplated herein, all of which are
specifically identified on Schedule 1.41 attached hereto.
Section 1.44. SEC.
"SEC" shall mean the Securities and Exchange Commission.
Section 1.45. Seller's Closing Certificate.
"Seller's Closing Certificate" shall mean the certificate of Seller and LGC
in the form of Exhibit 1.43 attached hereto.
Section 1.46. Shareholders Agreement.
"Shareholders Agreement" shall mean the Shareholders Agreement dated
September 25, 1992 by and between H&R Acquisition, Seller, Xxxxx X. Xxxxxxx, Xx.
and the shareholders of H&R Acquisition set forth therein.
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Section 1.47. Tax and Taxes.
"Tax" or "Taxes" shall mean any federal, state, county, local or foreign
taxes, charges, levies, imposts, duties, other assessments or similar charges of
any kind whatsoever, including interest, penalties and additions imposed thereon
or with respect thereto.
Section 1.48. Tax Return.
"Tax Return" shall mean any report, return, information return or other
information required to be supplied to a taxing authority in connection with
Taxes, including any return of an affiliated, combined or unitary group.
ARTICLE II PURCHASE AND SALE
Section 2.1. Sale of Purchased Stock.
At the Closing, upon the terms and subject to the conditions of this
Agreement, and in consideration of the Purchase Price to be paid by Buyer to
Seller, Seller shall sell, transfer, convey and deliver to Buyer, and Buyer
shall purchase from Seller, all of the Purchased Stock, free and clear of all
Liens. Seller shall deliver, or cause to be delivered, to Buyer one or more
stock certificates representing the Purchased Stock, duly endorsed for transfer
or accompanied by duly executed stock powers.
Section 2.2. Delivery of Option Shares to Escrow Agent.
At the Closing, Seller shall deliver to the Escrow Agent one or more stock
certificates representing the Option Shares, duly endorsed for transfer or
accompanied by duly executed stock powers, free and clear of all Liens. The
Option Shares shall be held and delivered by Escrow Agent in accordance with the
terms of the Escrow Agreement.
Section 2.3. Payment of Purchase Price.
At the Closing, Buyer shall pay to Seller $3,200,000 in immediately
available funds by wire transfer to the account designated by Seller on Schedule
2.3 and shall deliver to Seller the LGC Shares and the Convertible Note free and
clear of all Liens.
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Section 2.4. Closing Deliveries.
At the Closing, Seller shall deliver, or cause to be delivered, to Buyer
those deliveries required to be made at or prior to the Closing pursuant to
Section 7.6 hereof, and Buyer shall deliver, or cause to be delivered, to Seller
those deliveries required to be made at or prior to the Closing pursuant to
Section 8.5 hereof.
Section 2.5. Termination of Letter of Intent.
The Letter of Intent shall terminate upon the consummation of the
transactions on the Closing Date, shall be of no further force and effect and
none of the parties thereto shall have any further obligations with respect
thereto.
ARTICLE III PUT AND OPTION
Section 3.1. Grant of Call Option.
(a) Subject to the terms and conditions set forth herein, Seller
grants to Buyer an exclusive and irrevocable option (the "Call Option") to
purchase from Seller, in whole but not in part, the Option Shares for an
aggregate purchase price of $2,290,600 in cash at the option of Buyer, a secured
promissory note, without interest due, and payable in full upon demand at any
time after March 31, 2002 (the "Call Exercise Price").
(b) This Call Option may be exercised in whole but not in part at any
time or from time to time at any time after the date hereof and on or before
June 30, 2002 (the "Option Exercise Period").
Section 3.2. Grant of Put Option.
(a) Subject to the terms and conditions set forth herein, Buyer grants
to Seller an exclusive and irrevocable option (the "Put Option") to sell to
Buyer, in whole but not in part, the Option Shares for an aggregate purchase
price of $2,289,600 in cash at the option of Buyer, a secured promissory note,
without interest, due and payable in full upon demand at any time after March
31, 2002 (the "Put Exercise Price").
(b) This Put Option may be exercised in whole but not in part at any
time or from time to time during the Option Exercise Period.
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Section 3.3. Manner of Exercising the Options.
(a) The Call Option or the Put Option, as the case may be, shall be
exercisable by Buyer or Seller, as the case may be, or any permitted assigns by
surrender of a completed and fully executed Option Exercise Notice (in the form
attached hereto as Exhibit 3.1 attached hereto in the case of the Call Option or
Exhibit 3.2 attached hereto in the case of the Put Option, in either case, the
"Option Exercise Notice") to the other party, not less than one business day
prior to the date specified in such Option Exercise Notice for the closing of
the purchase and sale of the Option Shares with respect to such Option Exercise
Notice (the "Option Closing Date") pursuant to either the Call Option or the Put
Option, as the case may be.
(b) On the Option Closing Date, Buyer shall deliver to Seller either
")" (i) by wire transfer of immediately available funds or )" (ii) delivery of a
promissory note to the Escrow Agent or Buyer, the aggregate Call Exercise Price,
if Buyer is exercising the Call Option, or the aggregate Put Exercise Price, if
Seller is exercising the Put Option, against delivery by the Escrow Agent to
Buyer of the stock certificate or certificates representing the Option Shares.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LGC AND SELLER
LGC and Seller hereby represent and warrant to Buyer and TS that:
Section 4.1. Organization of LGC, Seller, H&R Acquisition and H&R.
(a) Each of H&R Acquisition and H&R is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York.
Each of H&R Acquisition and H&R has full corporate power and authority to carry
on its business as it is currently being conducted and to own, operate and hold
under lease its assets and properties as, and in the places where, such assets
and properties are currently owned, operated or held. Each of H&R Acquisition
and H&R is duly qualified or licensed to transact business as a foreign
corporation, and is in good standing, in each jurisdiction where the failure to
be so qualified could be reasonably expected to have a Material Adverse Effect.
Schedule 4.1 lists each jurisdiction where either H&R Acquisition or H&R is so
qualified or licensed to transact business as a foreign corporation.
(b) Each of Seller and LGC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of
Seller and LGC has full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
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Section 4.2. Authorization; Enforceability.
This Agreement is, and the other documents and instruments required hereby
to which Seller or LGC is a party will be, when executed and delivered by Seller
or LGC, as applicable, the valid and binding obligation of Seller or LGC, as
applicable, enforceable against Seller or LGC, as applicable, in accordance with
their respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
rights of creditors generally and (b) principles of equity, whether considered
at law or in equity. Each of Seller and LGC has the absolute and unrestricted
right, power, authority and capacity to execute and deliver, and to perform its
respective obligations under, this Agreement and the other documents and
instruments required hereby to which either Seller or LGC is a party. No further
corporate action is required to be taken on the part of the Board of Directors
or stockholders of LGC or Seller, respectively, with respect to the consummation
of the transactions contemplated hereby. The sale of the Purchase Stock and the
Option Shares by Seller to Buyer will not constitute a sale of substantially all
of the assets of LGC within the meaning of the Delaware General Corporation Law.
Section 4.3. No Violation or Conflict.
The execution, delivery and performance by Seller and LGC of this Agreement
and all of the other documents and instruments required hereby to which Seller
or LGC is a party do not and will not (a) conflict with or violate (i) the
charter or bylaws of either Seller, LGC or the Company, (ii) any Law, rule,
regulation, judgment, order or decree binding on Seller, LGC or the Company or
(iii) any Contract or other contract or agreement to which Seller, LGC or the
Company is a party or by which Seller, LGC or the Company is bound, or (b) give
any party to any Contract or other contract or agreement to which Seller, LGC or
the Company is a party or by which Seller, LGC or the Company is bound any right
of termination, cancellation, acceleration or modification thereunder.
Section 4.4. No Consents.
Except for the Required Consents, all of which shall have been obtained
prior to the Closing, no consent of any other person, and no notice to, filing
or registration with, or consent, approval or authorization of, any court or
Governmental Authority, regulatory or self-regulatory agency is necessary or is
required to be made or obtained by Seller, LGC or the Company in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
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Section 4.5. Title to Purchased Stock and Option Shares.
Seller owns good and valid title to the Purchased Stock and the Option
Shares, free and clear of any and all Liens. Upon Buyer's payment of the
Purchase Price, Buyer will own good and valid title to the Purchased Stock, free
and clear of any and all Liens, and good and valid title to the Purchased Stock,
free and clear of any and all Liens, will pass to Buyer. Upon Buyer's payment of
the Call Exercise Price or the Put Exercise Price, as the case may be, Buyer
will own good and valid title to the Option Shares, free and clear of any and
all Liens, and good and valid title to the option Shares, free and clear of any
and all Liens, will pass to Buyer.
Section 4.6. Capitalization.
(a) The authorized equity capitalization of H&R Acquisition consists
of 100,000 shares of Common Stock. H&R Acquisition has 10,526.316 shares of
Common Stock issued and outstanding which represents all of the issued and
outstanding capital stock of H&R Acquisition. All of the issued and outstanding
Common Stock has been duly and validly issued and is fully paid and
non-assessable. None of the Common Stock was issued in violation of any
preemptive or other right. All of the issued and outstanding capital stock of
H&R Acquisition was offered and sold in compliance with all applicable federal
and state securities laws and regulations. There are no options, warrants or
other rights to subscribe for or purchase any capital stock of H&R Acquisition
or securities convertible into or exchangeable for, or which otherwise confer on
the holder any right to acquire, any capital stock of H&R Acquisition, nor is
H&R Acquisition, LGC or Seller committed to issue any such option, warrant or
other right. There are no outstanding stock appreciation, phantom stock, profit
participation or similar rights with respect to the capital stock of H&R
Acquisition. LGC has received a release from Xxxxx X. Xxxxxxx, Xx. of any rights
he may have pursuant to the Shareholders Agreement or otherwise to call the
Purchased Stock, the Option Shares or any other shares of Common Stock owned by
LGC, Seller or their affiliates.
(b) All of the issued and outstanding capital stock of H&R has been
duly and validly issued and is fully paid and non-assessable. None of the
capital stock of H&R was issued in violation of any preemptive or other right.
All of the issued and outstanding capital stock of H&R was offered and sold in
compliance with all applicable federal and state securities laws and
regulations. There are no options, warrants or other rights to subscribe for or
purchase any capital stock of H&R or securities convertible into or exchangeable
for, or which otherwise confer on the holder any right to acquire, any capital
stock of H&R, nor is H&R, LGC or Seller committed to issue any such option,
warrant or other right. There are no outstanding stock appreciation, phantom
stock, profit participation or similar rights with respect to the capital stock
of H&R, except the options to acquire H&R capital stock set forth in the
Employment Agreements.
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Section 4.7. Subsidiaries.
The Company does not own any capital stock of any other corporation or any
interest in any partnership, joint venture, limited liability company or other
business, nor does the Company have the right or obligation to acquire any
ownership interest in any corporation, partnership, joint venture, limited
liability company or other business except for H&R. H&R Acquisition owns all of
the issued and outstanding shares of capital stock of H&R, free and clear of all
Liens.
Section 4.8. Litigation.
Except as set forth on Schedule 4.8 attached hereto, there is no
litigation, arbitration proceeding, governmental investigation, citation or
action of any kind pending or, to the Knowledge of Seller, proposed or
threatened (a) against the Company, (b) relating to the business, Assets,
properties, services or products of the Company or (c) that seeks restraint,
prohibition, damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby. Except as set forth on
Schedule 4.8, there is no unresolved product liability, product warranty or
worker's compensation claim that has been asserted or filed or, to the Knowledge
of Seller, threatened against the Company.
Section 4.9. Title to, Sufficiency and Condition of Assets.
Set forth on Schedule 4.9 attached hereto is a complete list of all
tangible Assets. The Company owns good, valid and marketable title to all of the
Assets, free and clear of all Liens other than Permitted Liens. The Assets and
Contracts include all tangible and intangible assets, contracts and rights
necessary or desirable for the operation by Buyer of the business of the Company
after the Closing in accordance with the Company's past practices. The tangible
Assets, a complete list of which is set forth on Schedule 4.9, are in good
operating condition and repair, subject to ordinary wear and tear, and are
substantially fit for use in accordance with the Company's past practices.
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Section 4.10. Contracts.
Schedule 4.10 attached hereto is a true and complete list of all Contracts
(including all amendments or modifications thereto) that require the payment, or
involve the receipt, of more than $10,000 during any 12-month period or have a
term in excess of one year (the "Material Contracts"). Seller has provided to
Buyer true and complete copies of all written Material Contracts and, in the
case of oral Material Contracts, true and complete written summaries of the
terms thereof. Each Material Contract is in full force and effect and is
enforceable in accordance with its terms. The Company has performed each
material term, covenant and condition of each Material Contract that is to be
performed by it at or before the date hereof. Except as set forth on Schedule
4.10, no event has occurred or circumstances exist that could, with the passage
of time or compliance with any applicable notice requirements or both,
constitute a default of, result in a violation or breach of, or give any right
to accelerate, modify, cancel or terminate any Material Contract by the Company
or, to the Knowledge of Seller, any other party under any such Material
Contract. To the Knowledge of Seller, no party to any Material Contract intends
to exercise any right of cancellation, termination, acceleration or modification
under any such Material Contract. Except as set forth on Schedule 4.10, the
Company has not made any prior assignment of any Material Contract or any of its
rights or obligations thereunder.
Section 4.11. Accounts.
Set forth on Schedule 4.11 is a true and complete list of all Accounts as
of the date set forth therein. Except as set forth on Schedule 4.11, the
Accounts, including amounts due from vendors, all have arisen from bona fide
transactions in the ordinary course of business and are collectible in
accordance with normal trade practice, net of any reserves for uncollectible
accounts reflected in the Books and Records. There are no offsets or credits
that may be applied against the Accounts, other than as reflected in the Books
and Records.
Section 4.12. Financial Statements.
The Financial Statements present fairly in all material respects the
results of operations and the financial position of the Company as of the
respective dates thereof and were prepared in accordance with GAAP (except for
the absence of notes and normal recurring year-end adjustments with respect to
the interim Financial Statements).
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Section 4.13. Absence of Undisclosed Liabilities.
Except as set forth on Schedule 4.13 attached hereto and except for any
liability or obligation arising under any Material Contract, the Company has no
liabilities or obligations (whether known or unknown, absolute or contingent,
accrued or unaccrued, asserted or unasserted, or otherwise due or to become due)
of any nature other than liabilities or obligations (a) which were accrued or
reserved against on the Financial Statements, or (b) that are current
liabilities incurred in the ordinary course of business consistent with past
practices since the date of the Interim Balance Sheet.
Section 4.14. Permits.
The Company possesses all Permits necessary or required for the conduct of
its business, and all such Permits are in full force and effect and are being
complied with in all material respects. Set forth on Schedule 4.14 attached
hereto is a complete list if all such Permits.
Section 4.15. Real Properties.
The Company does not own any Real Property. The Real Property described in
Schedule 1.40 constitutes all real property leased by the Company. The Company
has delivered to Buyer true and correct copies of all certificates of occupancy
and building permits in the possession of the Company for the improvements
located on the Real Property described in Schedule 1.40. Except as set forth on
Schedule 1.40, with respect to each parcel of Real Property there are no
material impediments to the Company's continued use from and after the Closing.
Section 4.16. Intellectual Property.
(a) Except as set forth on Schedule 4.16 attached hereto, the Company
is the sole owner of all right, title and interest in the Intellectual Property
owned by the Company and has all necessary licenses, rights, permissions and
authorizations to use the Intellectual Property licensed by the Company,
including, without limitation, all required computer software licenses. The
Intellectual Property constitutes all non-tangible property necessary for the
operation of the business of the Company as presently conducted. To the
Knowledge of Seller, each item of Intellectual Property has been used with the
authorization of every other claimant thereto and the execution, delivery and
performance of this Agreement will not impair such use by the Company after the
Closing.
(b) Except as set forth on Schedule 4.16, for a period of three years
prior to the date hereof, the Company has not interfered with, infringed upon,
misappropriated or otherwise come into conflict with any intellectual property
rights of any third party, and the Company has not received any charge,
complaint, claim, demand or notice alleging any such interference, infringement,
misappropriation or violation (including any claim that the Company must license
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or refrain from using any intellectual property rights of any third party). No
third party has interfered with, infringed upon, misappropriated or otherwise
come into conflict with any Intellectual Property rights of the Company. Except
as set forth on Schedule 4.16, there are no pending claims, including but not
limited to litigation, arbitration, opposition proceedings, petitions to cancel,
interferences, administrative proceedings, demand letters, cease and desist
letters, or other demands, challenges, or disputes of any nature challenging,
impacting, or involving the Intellectual Property, or the Company's rights
therein. A description of any such claims asserted, filed, settled or resolved
in the last three years is set forth on Schedule 4.16. Such identifications
shall include descriptions of the parties involved, the Intellectual Property
involved, the nature of the claims, the resolution of the claims, the date of
resolution, and true and correct copies of any demand letters, cease and desist
letters, complaints, notices of opposition, petitions to cancel, decisions or
orders, or settlement agreements.
(c) Schedule 4.16 identifies each patent, trademark, copyright or
other registration that has been issued to the Company with respect to any of
the Intellectual Property, identifies each pending application or application
for registration that Seller has made with respect to any of the Intellectual
Property and identifies each license, agreement or other permission that Seller
has granted to any third party with respect to any of the Intellectual Property
(together with any exceptions thereto). Except as set forth on Schedule 4.16,
Seller has delivered to Buyer correct and complete copies of all such patents,
registrations, applications, licenses, agreements and permissions (as amended to
date) and has made available to Buyer correct and complete copies of all other
written documentation evidencing ownership and prosecution (if applicable) of
each such item. Schedule 4.16 also identifies each trade name or unregistered
trademark used by the Company. Except as set forth on Schedule 4.16, with
respect to each item of Intellectual Property required to be identified therein:
(i) to the Knowledge of Seller, the item is not subject to any outstanding
injunction, judgment, order, decree, ruling or charge; (ii) no action, suit,
proceeding, hearing, charge, complaint, claim or demand is pending or, to the
Knowledge of Seller, is threatened which challenges the legality, validity,
enforceability, use or ownership of the item; and (iii) the Company has not
licensed or permitted any third party to use any such item.
Section 4.17. Books and Records.
The Books and Records, all of which have been made available to Buyer, are
complete and correct in all material respects. The minute books of the Company
contain accurate and complete records of all meetings held of, and corporate
action taken by, the stockholders, the Board of Directors and committees of the
Board of Directors of the Company, and no meeting of any such stockholders,
Board of Directors or committee has been held for which minutes have not been
prepared and are not contained in such minute books. At the Closing, all such
Books and Records will be in the possession of the Company.
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Section 4.18. Affiliated Transactions.
Except as set forth on Schedule 4.18 attached hereto, the Company has not
purchased, licensed or leased or otherwise acquired any property or assets or
obtained any services from, or sold, licensed, leased or otherwise disposed of
any property or assets or provided any services to, any employee (except with
respect to remuneration for services as an employee), shareholder, officer or
director, or any Affiliate of any of the foregoing. Except as set forth on
Schedule 4.18, the Company does not owe any contractual obligation or commitment
to any of the foregoing (other than compensation for current services not yet
due and payable and reimbursement of expenses arising in the ordinary course of
business), and none of the foregoing owes any amount or has any contractual
obligation to the Company.
Section 4.19. Insurance.
Schedule 4.19 attached hereto is a true and complete list of each insurance
policy (including policies providing property, casualty, liability and workers'
compensation coverage and bond and surety arrangements) that is in force as of
the date hereof and as to which the Company is a party, a named insured or
otherwise the beneficiary of coverage. Seller has delivered a certificate of
insurance issued by the insurance provider to Buyer for each such insurance
policy. Except as disclosed on Schedule 4.19, with respect to each such
insurance policy: (a) the policy is legal, valid, binding, enforceable and in
full force and effect; (b) neither the Company nor, to the Knowledge of Seller,
any other party to the policy is in breach or default thereunder (including with
respect to the payment of premiums or the giving of notices), and no event has
occurred that, with notice or the lapse of time, would constitute such a breach
or default, or permit termination, modification or acceleration under the
policy; and (c) no party to any policy has repudiated any provision thereof. The
Company has been covered during the past five years by insurance substantially
similar in scope to that listed on Schedule 4.19. Schedule 4.19 accurately and
completely describes any self-insurance arrangements affecting the Company. Set
forth on Schedule 4.19 are all claims made by the Company under any insurance
policy during the past five years with respect to its business.
-19-
Section 4.20. Tax Matters.
The Company is a member of an "affiliated group," within the meaning of
Section 1504(a) of the Code, of which LGC is the common parent. Such affiliated
group files a consolidated federal income Tax Return and, except as set forth on
Schedule 4.20 attached hereto, neither the Company nor any entity to whose Tax
liabilities the Company has succeeded has filed a consolidated federal income
Tax Return with (or been included in a consolidated return of) a different
affiliated group. Schedule 4.20 attached hereto describes all material Tax
elections, consents and agreements made by or affecting the Company, lists all
material types of Taxes paid and Tax Returns filed by or on behalf of the
Company and expressly indicates each Tax with respect to which the Company is or
has been included in a consolidated, unitary, or combined Tax Return, and
describes the status of all examinations, administrative or judicial proceedings
and litigation with respect to any Taxes of the Company. Except as set forth on
Schedule 4.20 attached hereto:
(a) the Company has filed or caused to be filed all Tax Returns
required to have been filed by or for it on or before the Closing Date, and all
information set forth on such Tax Returns is materially accurate and complete;
(b) the Company has paid or made adequate provision for all Taxes due
and payable by the Company;
(c) the Company is in compliance with, and its records contain all
information and documents (including, without limitation, properly completed IRS
Forms W-9) necessary to comply with all applicable information reporting and Tax
withholding requirements under applicable laws and such records identify with
specificity all accounts subject to backup withholding under Section 3406 of the
Code;
(d) the Company has collected or withheld, all amounts required to be
collected or withheld by it for any Taxes, and all such amounts have been paid
to the appropriate Governmental Authorities or set aside in appropriate accounts
for future payment when due;
(e) there are no unpaid Taxes payable by the Company or by any other
person that are or could become a Lien on any Asset, or otherwise could be
reasonably expected to have a material adverse effect on the Company, or that
could result in any liability to Buyer;
(f) for all periods after the date of the Financial Statements through
the Closing Date, the Books and Records properly reflect the liabilities of the
Company for all accrued Taxes;
(g) the Company has not granted (and is not subject to) any waiver of
the period of limitations for the assessment of any Tax for any currently open
taxable period, no unpaid Tax deficiency has been asserted against or with
respect to the Company by any taxing authority, and neither the Company nor any
of its Tax Returns is under examination by any taxing authority and there is no
pending administrative or judicial proceeding or deficiency or refund litigation
with respect to any Taxes of the Company;
-20-
(h) the Company has not made or entered into, and does not hold any
asset subject to, a consent filed pursuant to Section 341(f) of the Code and the
regulations thereunder or a "safe harbor lease" subject to former Section
168(f)(8) of the Internal Revenue Code of 1954, as amended before the Tax Reform
Act of 1984, and the regulations thereunder;
(i) the Company is not required to include in income any amount for an
adjustment pursuant to Section 481 of the Code or the regulations thereunder or
any similar provision of state Law;
(j) the Company is not a party to any agreement or other arrangement
under which the Company is or may become obligated to make any payment that
would constitute an "excess parachute payment" with the meaning of Section 280G
of the Code or would be nondeductible by reason of Section 162(m) of the Code;
(k) since April 16, 1997, the Company has not distributed to its
stockholders or security holders stock or securities of a controlled corporation
in a transaction to which Section 355(a) of the Code applies; and
(l) the Purchased Stock plus the Option Shares constitute at least 80
percent of the total voting power of the stock of H&R Acquisition and have a
value equal to at least 80 percent of the total value of the stock of H&R
Acquisition.
Section 4.21. Compliance with Law and Regulations.
Except as set forth on Schedule 4.21 attached hereto, the conduct of the
business of the Company and its use of the Assets and performance under the
Contracts do not violate or conflict, and have not violated or conflicted, with
any Law. Except as set forth on Schedule 4.21 attached hereto, the business of
the Company has been conducted at all times in compliance with all applicable
SEC, NASD and stock exchange rules and regulations. The Company has complied
with and satisfied all SEC concerns set forth in the SEC compliance letter
issued by the SEC to H&R on July 5, 2001. Seller has delivered to Buyer the
latest version of H&R's SEC Form ADV and any other federal, state or local
investment advisor or broker-dealer registration form required to be filed or
maintained by the Company. All such forms are true and correct in all material
respects.
Section 4.22. Environmental Conditions.
(a) Definitions. When used in this Section 4.22:
(i) "Environmental Laws" shall mean any and all applicable
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any Governmental Authority (as
defined below) regulating, relating to or imposing liability or standards of
conduct concerning any Hazardous Materials (as defined below), Petroleum
Products (as defined below) or environmental protection, together with any
amendment or reauthorization thereto or thereof, as now or at any time hereafter
in effect;
-21-
(ii) "Governmental Authority" shall mean any federal, state,
local, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, or any court, in each case having jurisdiction over
the applicable matter and whether of the United States or another country;
(iii) "Hazardous Materials" shall mean any solid waste, hazardous
material, hazardous waste, infectious medical waste, or hazardous or toxic
substance defined or regulated as such in or under any Environmental Law,
including, without limitation, materials exhibiting the characteristics of
ignitability, corrosivity, reactivity or toxicity characteristic leaching
procedure, as such terms are now or hereafter defined in connection with
hazardous materials or hazardous wastes or hazardous or toxic substances in any
applicable Environmental Law; and
(iv) "Petroleum Products" shall mean gasoline, diesel fuel, motor
oil, waste or used oil, heating oil, kerosene and any other petroleum products.
(b) Except as set forth on Schedule 4.22 attached hereto, (i) the
Company has not used, stored, treated, transported, manufactured, refined,
handled, produced or disposed of any Hazardous Materials or Petroleum Products
on, under, at, from or in any way affecting any of its properties or assets
(including, without limitation, any properties or assets now or previously owned
or operated by the Company), or otherwise, in any manner which constituted or
constitutes a violation of any applicable Environmental Law governing the use,
storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials or Petroleum Products, and (ii) to
the Knowledge of Seller, no prior owner of any such property or asset or any
tenant, subtenant, prior tenant or prior subtenant thereof has used Hazardous
Materials or Petroleum Products on, from or in any way affecting any such
property or asset, or otherwise, in any manner which constituted or constitutes
a violation of any applicable Environmental Law governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials or Petroleum Products.
(c) Except as set forth on Schedule 4.22, there has been no (i)
off-site shipment of any Hazardous Materials or Petroleum Products by the
Company or (ii) release on, under, at, from or in any way affecting any real
properties now or previously owned or operated by the Company, which off-site
shipment or release gives rise to liabilities or obligations under Environmental
Laws or common law that could have a material adverse effect on the Assets or
Contracts or the properties, business, financial condition or results of
operations of the Company. Neither Seller nor the Company has received any
notices or claims that it is a responsible party in connection with any claim or
notice asserted pursuant to 42 U.S.C. Section 9601 et seq., or any state
superfund law.
(d) The Company has received all Permits as may be required under
applicable Environmental Laws to conduct the business of the Company as
currently conducted, and the Company is in compliance in all material respects
with the terms and conditions of each such Permit.
-22-
Section 4.23. Labor Matters.
Except as set forth on Schedule 4.23 attached hereto:
(a) the Company is and has been in compliance in all material respects
with all applicable Laws respecting employment and employment practices, terms
and conditions of employment and wages and hours including, without limitation,
any such Laws respecting employment discrimination and occupational safety and
health requirements, and has not and is not engaged in any unfair labor
practice;
(b) there is no unfair labor practice charge or complaint against the
Company pending or, to the Knowledge of Seller, threatened before the National
Labor Relations Board or any other comparable authority;
(c) the Company is not a party to any collective bargaining
agreements;
(d) there is no litigation, arbitration proceeding, governmental
investigation, citation or action of any kind pending or, to the Knowledge of
Seller, proposed or threatened against the Company relating to employment,
employment practices, terms and conditions of employment or wages and hours;
(e) there are no pending or, to the Knowledge of Seller, threatened
strikes, lockouts or other work stoppages involving any persons employed by the
Company; and
(f) there are no representation petitions or other similar petitions
or requests for representation pending or, to the Knowledge of Seller, proposed
or threatened, before the National Labor Relations Board or other federal,
provincial, state, or local agency in connection with any persons employed by
the Company.
Section 4.24. No Adverse Change.
Except as set forth on Schedule 4.24 attached hereto, since the date of the
most recent balance sheet included in the Financial Statements, the business of
the Company has been operated in the ordinary course and substantially in the
same manner as previously conducted, and there has not been any:
(a) change in either H&R Acquisition's or H&R's authorized or issued
capital stock, grant of any stock option or right to purchase shares of capital
stock of either H&R Acquisition or H&R, issuance of any security convertible
into such capital stock, grant of any registration rights, purchase, redemption,
retirement or other acquisition by either H&R Acquisition or H&R of any shares
of any such capital stock, declaration or payment of any dividend or other
distribution or payment in respect of shares of capital stock, or split,
combination or reclassification of any shares of capital stock of either H&R
Acquisition or H&R;
-23-
(b) amendment to the charter or bylaws of either H&R Acquisition or
H&R;
(c) material adverse change in the business of the Company, financial
condition, results of operations or prospects of the Company and, to the
Knowledge of Seller, no fact or condition has occurred or exists or is
contemplated or threatened (other than general economic or industry conditions)
which might reasonably be expected to result in any such material adverse
change;
(d) merger or consolidation with, purchase of substantially all of the
assets of, or other acquisition of any business or proprietorship, firm,
association, corporation or other business organization or division thereof by
the Company;
(e) loss or, to the Knowledge of Seller, threatened or contemplated
loss of business of one or more customers of the Company, which loss could
reasonably be expected to have a Material Adverse Effect;
(f) borrowings by the Company other than trade payables arising in the
ordinary course of business or pledge or hypothecation of any Assets to secure
any indebtedness of the Company;
(g) forgiveness of any indebtedness or other obligations owed to the
Company;
(h) payment or increase by the Company of any bonuses, salaries or
other compensation to any stockholder, director, officer or (except in the
ordinary course of business) employee or entry into any employment, severance or
similar contract with any director, officer or employee;
(i) entry into any collective bargaining agreement;
(j) adoption of, or increase in the payments to or benefits under, any
profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, severance or other employee benefit plan for or with any employees
of the Company;
(k) damage to, or destruction, condemnation or loss of, any asset or
property of the Company, whether or not covered by insurance, materially and
adversely affecting the properties, assets, business, financial condition, or
prospects of the Company, taken as a whole;
(l) termination or assignment of, or receipt of notice of termination
of, any Material Contract;
(m) sale (other than sales of inventory in the ordinary course of
business), lease or other disposition of any asset or property of the Company or
mortgage, pledge, or imposition of any Lien (other than a Permitted Lien) on any
material asset or property of the Company, including the sale, lease or other
disposition of any of the Intellectual Property;
-24-
(n) capital expenditure by the Company outside of the ordinary course
of business;
(o) purchase of Inventory or trade accounts payable incurred by the
Company in excess of levels (giving effect to seasonal needs) normally purchased
or incurred by the Company in the ordinary course of business consistent with
past practices;
(p) cancellation or waiver of any claims or rights with a value to the
Company in excess of $10,000;
(q) change in the accounting methods or Tax elections used by the
Company; or
(r) agreement, whether oral or written, by the Company to do any of
the foregoing.
Section 4.25. Employee Benefit Plans.
Except as set forth on Schedule 4.25 attached hereto:
(a) Seller has provided Buyer a true and complete list of the Employee
Benefit Plans currently or previously maintained by the Company or an ERISA
Affiliate;
(b) no Employee Benefit Plan is a "multiemployer plan" as defined in
Section 3(3) of ERISA and neither the Company nor any ERISA Affiliate has
previously maintained or had an obligation to contribute to a "multiemployer
plan" (as defined above);
(c) each Employee Benefit Plan has been administered in accordance
with its terms and all applicable Law;
(d) neither the Company nor any ERISA Affiliate has any obligation to
provide welfare benefits to any former employee or the dependents of
beneficiaries of any former employee other than those benefits required under
Section 4980B of the Code and Sections 601 et seq. of ERISA;
(e) no Employee Benefit Plan is subject to Title IV of ERISA and
neither the Company nor any ERISA Affiliate has any obligation with respect to
the funding of an employee pension benefit plan (as defined in Section 3(2) of
ERISA), that is or was subject to Title IV of ERISA;
(f) each Employee Benefit Plan that is intended to be qualified under
Sections 401(a) and related sections of the Code has been determined by the
Internal Revenue Service to be so qualified as to its form and to the Knowledge
of Seller there are no facts of circumstances that might jeopardize the
qualification of any such Employee Benefit Plan; and
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(g) the transactions contemplated herein will not result in the
payment of any compensation that will not be deductible under Section 280G of
the Code or for which an excise tax will be owed under Section 4999 of the Code.
Section 4.26. Fees and Expenses of Brokers and Others.
Neither the Company, LGC nor Seller is committed to any liability for any
brokers' or finders' fees or any similar fees in connection with the
transactions contemplated hereby, and neither the Company nor Seller has
retained any broker or other intermediary to act on its behalf in connection
with the transactions contemplated by this Agreement.
Section 4.27. Disclosure.
Neither this Agreement or any schedule or exhibit hereto nor any
certificate or other document furnished to Buyer by Seller, LGC or the Company
pursuant hereto contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein, in light of the circumstances under which they were made, not
misleading.
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER AND TS
Buyer and TS hereby represent and warrant to Seller and LGC that:
Section 5.1. Organization of Buyer and TS.
Buyer is a corporation duly organized and in good standing under the laws
of the State of Delaware. Buyer has full corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. TS
is a limited liability company duly organized and in good standing under the
laws of the Commonwealth of Virginia. TS has full limited liability company
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.
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Section 5.2. Authorization; Enforceability.
This Agreement is, and the other documents and instruments required hereby
to which Buyer or TS is a party will be, when executed and delivered by Buyer or
TS , as applicable, the valid and binding obligation of Buyer or TS , as
applicable,, enforceable against Buyer or TS , as applicable, in accordance with
their respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
rights of creditors generally and (b) principles of equity, whether considered
at law or in equity. Each of Buyer and TS has the absolute and unrestricted
right, power, authority and capacity to execute and deliver, and to perform its
obligations under, this Agreement and the other documents and instruments
required hereby to which either Buyer or TS is a party.
Section 5.3. No Violation or Conflict.
The execution, delivery and performance by Buyer and TS of this Agreement
and all of the other documents and instruments required hereby to which Buyer or
TS is a party do not and will not (a) conflict with or violate (i) the operating
agreement of TS or the charter or bylaws of Buyer, (ii) any Law, rule,
regulation, judgment, order or decree binding on Buyer or TS or (iii) any
contract or agreement to which Buyer or TS is a party or by which Buyer or TS is
bound, or (b) give any party to any contract or agreement to which Buyer or TS
is a party or by which Buyer or TS is bound any right of termination,
cancellation, acceleration or modification thereunder.
Section 5.4. No Consents.
No consent of any other person, and no notice to, filing or registration
with, or consent, approval or authorization of, any court or Governmental
Authority, regulatory or self-regulatory agency is necessary or is required to
be made or obtained by Buyer or TS in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby.
Section 5.5. Litigation.
There is no litigation, arbitration proceeding, governmental investigation,
citation or action of any kind pending or, to the knowledge of Buyer, proposed
or threatened that involves Buyer or TS and that seeks restraint, prohibition,
damages or other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby.
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Section 5.6. Fees and Expenses of Brokers and Others.
Neither Buyer nor TS is committed to any liability for any brokers' or
finders' fees or any similar fees in connection with the transactions
contemplated hereby, and neither Buyer nor TS has retained any broker or other
intermediary to act on its behalf in connection with the transactions
contemplated by this Agreement.
ARTICLE VI COVENANTS AND OTHER MATTERS PENDING THE CLOSING
Section 6.1. Affirmative Covenants.
From the date hereof through the Closing Date, except as otherwise
permitted by this Agreement or consented to by Buyer or TS in writing, Seller
shall, and shall cause the Company to:
(a) conduct the business of the Company only in the ordinary course
and in accordance with past practices;
(b) keep full and complete Books and Records;
(c) maintain in full force and effect the insurance policies
heretofore maintained on the Assets (or policies providing substantially the
same coverage);
(d) take such commercially reasonable action as may be necessary to
(i) preserve intact the current business organization of the Company, (ii)
preserve the Assets in good condition, normal wear and tear excepted, (iii) keep
available the services of the current officers, employees and agents of the
Company and (iv) maintain the relations and goodwill with suppliers, customers,
landlords, creditors, employees, agents and others having business relationships
with the Company;
(e) confer with Buyer and TS concerning operational matters of a
material nature;
(f) promptly advise Buyer and TS in writing of any loss or threatened
loss of a material vendor or customer hereto or any other material adverse
change in the business or the Assets that has occurred or that Seller reasonably
believes will occur;
(g) comply with all Laws applicable to the Company in the conduct of
the business of the Company; and
(h) otherwise report periodically to Buyer and TS concerning the
status of the business, operations and finances of the Company.
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Section 6.2. Negative Covenants.
From the date hereof through the Closing Date, except as otherwise
permitted by this Agreement or consented to by Buyer or TS in writing, Seller
shall not, and shall cause the Company to, take any affirmative action, or fail
to take any reasonable action within its control, as a result of which any of
the changes or events listed in Section 4.24 is likely to occur. Notwithstanding
the foregoing or anything in this Agreement to the contrary, Buyer and TS agree
that H&R Acquisition shall forgive the intercompany obligation owed H&R
Acquisition by LGC in the aggregate amount of $250,000 on or before the Closing,
and H&R Acquisition will pay LGC its proportionate share of the quarterly
management fee on the Closing Date.
Section 6.3. Access.
From the date hereof through the Closing Date, Seller shall, and shall
cause the Company to, provide Buyer, TS and their authorized agents, officers
and representatives (a) reasonable access to the Books and Records, the
directors and officers of the Company, all customer and subscriber lists (past
and present) and the operations of the Company's business; provided, however,
that such examinations and investigations shall be conducted during the
Company's normal business hours and shall not unreasonably interfere with the
Company's operations and activities, (b) copies of all such Contracts, Books and
Records and other existing documents and data as Buyer or TS may reasonably
request and (c) such additional financial, operating and other data and
information as Buyer or TS may reasonably request.
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Section 6.4. Non-Solicitation.
From the date hereof through February 15, 2002, or the Closing Date,
whichever shall occur sooner, none of LGC, Seller, the Company or any of their
Affiliates shall, directly or indirectly, with respect to the business of the
Company: (a) solicit, initiate, encourage the submission of, respond to or
discuss inquiries or proposals of offers from any person relating to any
acquisition or purchase of any of the Assets or any equity interest in the
Company or any exchange offer, merger, consolidation, business combination or
sale of substantial assets, sale of securities or similar transactions involving
the Company's business (a "Competing Transaction"); (b) enter into or
participate in any discussions or negotiations regarding a Competing
Transaction, or furnish to any other person any information with respect to the
Company; or (c) otherwise cooperate in any way with, assist or participate in,
or facilitate or encourage, any effort or attempt by any other person to do or
seek a Competing Transaction. Seller shall, and shall cause the Company to,
immediately notify Buyer of any proposal relating to a Competing Transaction or
if any inquiry or contact with any person with respect thereto is made and
immediately deliver to Buyer and TS copies of any such written proposal or offer
and any communications made in response thereto. Notwithstanding the foregoing,
Seller and LGC covenant and agree that they will not (i) sell or enter into
agreement or understanding to sell any of the Option Shares or (ii) encumber,
pledge and or cause or allow any Lien to be placed on the Option Shares, in each
case, from the date hereof through the expiration of the Option Exercise Period.
Section 6.5. Cooperation; Best Efforts.
Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use its reasonable best efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper and
advisable under applicable Law, to consummate the transactions contemplated by
this Agreement.
Section 6.6. Confidentiality.
The Confidentiality Agreement between Buyer and LGC shall continue to
remain in full force and effect.
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Section 6.7. Election of Board of Directors; Grant of Proxies.
Buyer, LGC and Seller agree that from and after the Closing Date, the Board
of Directors of H&R Acquisition and the Board of Directors of H&R shall consist
of the persons set forth on Schedule 6.7 attached hereto. Seller, in its
capacity as a stockholder of H&R Acquisition, hereby agrees that during the
period commencing on the date hereof and continuing until the expiration of the
Option Exercise Period, at any meeting of the holders of any class or classes of
the capital stock of H&R Acquisition, however called, or in connection with any
written consent of the holders of any class or classes of the capital stock of
H&R Acquisition, Seller shall vote (or cause to be voted) the shares of Common
Stock owned by Seller in favor of the persons set forth on Schedule 6.7 to be
elected to the Board of Directors of H&R Acquisition and H&R, respectively.
Seller hereby appoints Buyer and any designee of Buyer, each of them
individually, Seller's proxy and attorney-in-fact, with full power of
substitution and resubstitution, to vote or act by written consent with respect
to the foregoing. This proxy is given to secure the performance of the duties of
LGC and Seller under this Agreement. Seller affirms that this proxy is coupled
with an interest and shall be irrevocable. LGC and Seller shall take such
further action or execute such other instruments as may be necessary to
effectuate the intent of this proxy. Seller represents and warrants that any
proxies heretofore given in respect of the shares of Common Stock are not
irrevocable, and that all such proxies have been or are hereby revoked. LGC and
Seller shall cause all officers and members of the Board of Directors of each of
H&R Acquisition and H&R who are not listed on Schedule 6.7 attached hereto to
resign effective as of the Closing.
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER AND TS
Each and every obligation of Buyer and TS to be performed on the Closing
Date and the Option Closing Date, as applicable, shall be subject to the
satisfaction prior to or at the Closing or the Option Closing, respectively, of
the following express conditions precedent:
Section 7.1. Compliance with Agreement.
Seller and LGC shall have performed and complied in all material respects
with all of their respective obligations under this Agreement which are to be
performed or complied with by them prior to or on the Closing Date or the Option
Closing Date, as applicable.
Section 7.2. Proceedings, Instruments and Due Diligence Satisfactory.
All proceedings, corporate or other, to be taken by LGC, Seller or the
Company in connection with the transactions contemplated by this Agreement, and
all documents incident thereto, shall be reasonably satisfactory in form and
substance to Buyer, TS and their counsel.
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Section 7.3. No Litigation.
No investigation, suit, action or other proceeding shall be threatened or
pending before any court or Governmental Authority that seeks restraint,
prohibition, damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby.
Section 7.4. Representations and Warranties.
Each of the representations and warranties of Seller and LGC contained in
this Agreement that is qualified by materiality shall be true and correct on and
as of the Closing Date, or the Option Closing Date, as applicable, as if made on
and as of such date (other than representations and warranties which address
matters only as of a certain date which shall be true and correct as of such
certain date), and each of the representations and warranties that is not so
qualified shall be true and correct in all material respects on and as of the
Closing Date, or the Option Closing Date, as applicable, as if made on and as of
such date (other than representations and warranties which address matters only
as of a certain date which shall be true and correct in all material respects as
of such certain date).
Section 7.5. Material Damage to Assets; Material Adverse Effect.
Between the date of this Agreement and the Closing Date, or the Option
Closing Date, as applicable, (a) the Assets shall not have been materially and
adversely affected by reason of any loss, taking, condemnation, destruction or
physical damage, whether or not insured against and (b) there shall not have
occurred any Material Adverse Effect.
Section 7.6. Shareholders Agreement.
LGC and Seller shall have satisfied in full on behalf of H&R Acquisition
all distributions or other amounts owed pursuant to Section 7 of the
Shareholders Agreement, or as otherwise set forth therein.
Section 7.7. Bottoms Stock Purchase Agreement.
TS, Buyer and Xxxxx X. Xxxxxxx, Xx. shall have executed a stock purchase
agreement in form and substance satisfactory to TS and Buyer in their sole
discretion.
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Section 7.8. Due Diligence.
Buyer and TS shall have completed their due diligence review of the Company
to the satisfaction of Buyer and TS in their sole discretion.
Section 7.9. Deliveries at Closing.
Seller and LGC shall have delivered to Buyer and TS the following
documents, each properly executed and dated as of the Closing Date by Seller,
LGC or the Company, as the case may be, and in form and substance reasonably
acceptable to Buyer:
(a) the certificates evidencing all of the Purchased Stock, which
certificates shall be duly endorsed in blank or accompanied by duly executed
stock powers;
(b) the charters of the Company and H&R, certified by the Secretary
of State of New York, and the bylaws of the Company and H&R, certified by the
President or Corporate Secretary of the Company and H&R, respectively;
(c) a current certificate of good standing from the Secretary of
State of New York with respect to the Company and H&R and from each jurisdiction
in which the Company or H&R is qualified to transact business as a foreign
corporation;
(d) evidence that all Permits required to operate the business of the
Company will remain in effect following the Closing;
(e) all Required Consents and other consents, approvals and waivers
from Governmental Authorities and other parties required to be obtained by
Seller, LGC or the Company;
(f) the Opinion of Seller's Counsel;
(g) the Seller's Closing Certificate;
(h) the Escrow Agreement; and
(i) such other documents and certificates as Buyer or TS shall
reasonably request.
Section 7.10. Deliveries at Option Closing.
Seller shall have delivered to Buyer and TS the following documents, each
properly executed and dated as of the Option Closing Date by Seller or LGC, as
the case may be, and in form and substance reasonably acceptable to Buyer:
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(2) the certificates evidencing all of the Option Shares, which
certificates shall be duly endorsed in blank or accompanied by duly executed
stock powers (which certificates will be held by the Escrow Agent and delivered
in accordance with the Escrow Agreement);
(vv) all Required Consents and other consents, approvals and waivers
from Governmental Authorities and other parties required to be obtained by
Seller, LGC or the Company;
(ww) the Seller's Closing Certificate; and (xx) such other documents
and certificates as Buyer and TS shall reasonably request.
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER
Each and every obligation of Seller to be performed on the Closing Date and
the Option Closing Date, as applicable, shall be subject to the satisfaction
prior to or at the Closing or the Option Closing, respectively, of the following
express conditions precedent:
Section 8.1. Compliance with Agreement.
Buyer and TS shall have performed and complied in all material respects
with all of their respective obligations under this Agreement which are to be
performed or complied with by them prior to or on the Closing Date or the Option
Closing.
Section 8.2. Proceedings and Instruments Satisfactory.
All proceedings, corporate or other, to be taken by Buyer and TS in
connection with the transactions contemplated by this Agreement, and all
documents incident thereto, shall be reasonably satisfactory in form and
substance to Seller and Seller's counsel.
Section 8.3. No Litigation.
No investigation, suit, action or other proceeding shall be threatened or
pending before any court or Governmental Authority that seeks restraint,
prohibition, damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby.
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Section 8.4. Representations and Warranties.
Each of the representations and warranties of Buyer and TS contained in
this Agreement that is qualified by materiality shall be true and correct on and
as of the Closing Date as if made on and as of such date (other than
representations and warranties which address matters only as of a certain date
which shall be true and correct as of such certain date) and each of the
representations and warranties that is not so qualified shall be true and
correct in all material respects on and as of the Closing Date, or the Option
Closing Date, as applicable, as if made on and as of such date (other than
representations and warranties which address matters only as of a certain date
which shall be true and correct in all material respects as of such certain
date).
Section 8.5. Deliveries at Closing.
Buyer and TS shall have delivered to Seller and LGC the following
documents, each properly executed and dated as of the Closing Date and in form
and substance reasonably acceptable to Seller:
(a) the Opinion of Buyer's Counsel;
(b) Buyer's Closing Certificate;
(c) the Escrow Agreement; and
(d) such other documents and certificates as Seller shall reasonably
request.
Section 8.6. Deliveries at Option Closing.
Buyer and TS shall have delivered to Seller the following documents, each
properly executed and dated as of the Option Closing Date and in form and
substance reasonably acceptable to Seller:
(a) Buyer's Closing Certificate; and
(b) such other documents and certificates as Seller shall reasonably
request.
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ARTICLE IX INDEMNIFICATION AND POST-CLOSING COVENANTS
Section 9.1. Indemnification of Buyer and the Company by Seller.
(a) LGC and Seller hereby, jointly and severally, indemnify and hold
Buyer and the Company (for purposes of this Section 9.1, Buyer, TS and the
Company and their respective officers, directors, Affiliates and shareholders
(but not officers, directors and shareholders of the Company prior to the
Closing) are referred to collectively as the "Indemnified Parties") harmless
from and against, and agrees to defend promptly the Indemnified Parties from and
reimburse the Indemnified Parties for, any and all losses, liabilities, claims,
damages (including incidental and consequential damages), costs, expenses
(including costs of investigation and defense and reasonable attorneys' fees)
and obligations (hereinafter referred to collectively as "Losses") that the
Indemnified Parties may at any time suffer or incur, or become subject to, as a
result of or in connection with: (i) any breach or inaccuracy of any of the
representations and warranties made by Seller or LGC in this Agreement or any
other agreement or instrument delivered by Seller, LGC or the Company pursuant
to this Agreement; (ii) any failure of Seller or LGC to carry out, perform,
satisfy and discharge any of their respective covenants, agreements,
undertakings, liabilities or obligations under this Agreement or under any of
the agreements and instruments delivered by Seller, LGC or the Company pursuant
to this Agreement; and (iii) any matter disclosed by Seller, LGC or the Company
on any Schedule attached hereto; provided, however, that the Indemnified Parties
shall have the right to be indemnified, held harmless from, defended or
reimbursed under Section 9.1(a)(i) in respect of the representations and
warranties made by Seller or LGC only if such right is asserted (whether or not
such Losses have actually been incurred) on or before the respective dates set
forth below:
For Representations and
Warranties Set Forth All Claims Must be
in the Following Sections Asserted by:
Sections 4.1, 4.2, 4.5, 4.6 and 4.9 No time limitation.
Section 4.20 Within 60 days after the expiration of
the statute of limitations (including
extensions) applicable to theTax in
issue.
Sections 4.21, 4.22 and 4.25 Five years after the Closing Date.
Other representations and warranties Three years after the Closing Date.
(b) The Indemnified Parties may assert a claim for indemnification
against Seller or LGC for any matter not involving a third party by giving
notice to Seller or LGC specifying in reasonable detail the basis for such
claim.
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(c) In the event a third-party claim against the Indemnified Parties
arises that is covered by the indemnity provisions of Section 9.1(a) of this
Agreement, notice shall be given promptly by the Indemnified Parties to Seller
or LGC. Provided that Seller or LGC admits in writing to the Indemnified Parties
that such claim is covered by the indemnity provisions of Section 9.1(a) hereof,
Seller and LGC shall have the right to contest and defend by all appropriate
legal proceedings such claim and to control all settlements (unless the
Indemnified Parties agrees to assume the cost of settlement and to forgo such
indemnity) and to select lead counsel to defend any and all such claims at the
sole cost and expense of Seller and LGC; provided, however, that neither Seller
nor LGC may effect any settlement that could result in any cost, expense or
liability to the Indemnified Parties unless the Indemnified Parties consent in
writing to such settlement and Seller and LGC agree to indemnify the Indemnified
Parties therefor. The Indemnified Parties may select counsel to participate in
any defense, in which event the Indemnified Parties' counsel shall be at its own
cost and expense. In connection with any such claim, action or proceeding, the
parties shall cooperate with each other and provide each other with access to
relevant books and records in their possession.
(d) Seller shall not be required to indemnify the Indemnified Parties
under Section 9.1(a) hereof unless and until the amount of all Losses for which
indemnification is sought by the Indemnified Parties hereunder first exceeds
$100,000, in which event all amounts sought by the Indemnified Parties hereunder
shall be subject to indemnification (including the first $100,000). In addition,
the aggregate amount of Losses for which the Indemnified Parties may recover
under Section 9.1(a) hereof is limited as follows:
For Losses Subject to The Maximum Aggregate
Indemnification Set Forth Recovery by the
in the Following Sections Indemnified Parties is:
Section 9.1(a)(i) (other than those
representations and warranties set
forth in Sections 4.1, 4.2, 4.5, 4.6,
4.9, 4.20, 4.21, 4.22 and 4.25) and
Section 9.1(a)(ii) Purchase Price
Section 9.1(a)(i) with respect to
representations and warranties set
forth in Sections 4.1, 4.2, 4.5, 4.6,
4.9, 4.20, 4.21, 4.22 and 4.25) and
Section 9.1(a)(iii) Unlimited
(e) Upon notice to Seller or LGC specifying in reasonable detail the
basis for such set-off, the Indemnified Parties shall have the right, but not
the obligation, to set-off against any amounts owed to Seller by the Indemnified
Parties the amount of any Losses with respect to which Seller may be required to
indemnify the Indemnified Parties pursuant to this Section 9.1(a).
Alternatively, the Indemnified Parties may give notice of a claim for such
Losses pursuant to the terms of the Escrow Agreement.
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Section 9.2. Indemnification of Seller by Buyer.
(a) Buyer and TS hereby, jointly and severely, indemnify and hold
Seller harmless from and against, and agrees to defend promptly Seller from and
reimburse Seller for, any and all Losses that Seller may at any time suffer or
incur, or become subject to, as a result of or in connection with: (i) any
breach or inaccuracy of any of the representations and warranties made by Buyer
in this Agreement or any other agreement or instrument delivered by Buyer or TS
pursuant to this Agreement; (ii) any failure by Buyer or TS to carry out,
perform, satisfy and discharge any of their respective covenants, agreements,
undertakings, liabilities or obligations under this Agreement or under any of
the agreements and instruments delivered by Buyer or TS pursuant to this
Agreement; provided, however, that Seller shall have no right to be indemnified,
held harmless from, defended or reimbursed under Section 9.2(a)(i) unless such
right is asserted (whether or not such Losses have actually been incurred) on or
before three years after the Closing Date except with respect to Sections 5.1
and 5.2 for which there is no time limitation for asserting such right.
(b) Seller may assert a claim for indemnification against Buyer or TS
for any matter not involving a third party by giving notice to Buyer or TS
specifying in reasonable detail the basis for such claim.
(c) In the event a third-party claim against Seller arises that is
covered by the indemnity provisions of Section 9.2(a) of this Agreement, notice
shall be given promptly by Seller to Buyer or TS. Provided that Buyer or TS
admits in writing to Seller that such claim is covered by the indemnity
provisions of Section 9.2(a) hereof, Buyer and TS shall have the right to
contest and defend by all appropriate legal proceedings such claim and to
control all settlements (unless Seller and LGC agree to assume the cost of
settlement and to forgo such indemnity) and to select lead counsel to defend any
and all such claims at the sole cost and expense of Buyer and TS; provided,
however, that neither Buyer nor TS may effect any settlement that could result
in any cost, expense or liability to Seller unless Seller consents in writing to
such settlement and Buyer and TS agree to indemnify Seller therefor. Seller may
select counsel to participate in any defense, in which event such counsel shall
be at the sole cost and expense of Seller. In connection with any such claim,
action or proceeding, the parties shall cooperate with each other and provide
each other with access to relevant books and records in their possession.
(d) Buyer shall not be required to indemnify Seller under Section
9.2(a) hereof (i) unless and until the amount of all Losses for which
indemnification is sought by Seller hereunder first exceeds $100,000, in which
event all amounts sought by Seller hereunder shall be subject to indemnification
(including the first $100,000), or (ii) from and after such time that the
aggregate amount of Losses for which Seller has been indemnified under Section
9.2(a) hereof exceeds the Purchase Price.
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Section 9.3. Additional Instruments.
At any time and from time to time after the Closing, at either party's
request and without further consideration, Seller, LGC, TS or Buyer, as the case
may be, shall execute and deliver such other instruments of sale, transfer,
conveyance, assignment and confirmation and take such other action as Seller,
LGC, TS or Buyer may reasonably deem necessary or desirable in order to more
effectively consummate the transactions contemplated herein.
Section 9.4. Access to Books and Records.
From and after the Closing Date, Buyer will authorize and permit Seller and
its representatives to have access during normal business hours, upon reasonable
notice and for reasonable purposes and in such manner as will not unreasonably
interfere with the conduct of Buyer's business, to all of the Books and Records.
From and after the Closing Date, Seller will authorize and permit Buyer and its
representatives to have access during normal business hours, upon reasonable
notice and for reasonable purposes and in such manner as will not unreasonably
interfere with the conduct of the Company's business, to all books, records,
files, documents and other correspondence related to the business of the Company
prior to the Closing that are not included among the Books and Records. Buyer
and Seller agree to (a) maintain all books, records, files, documents and other
correspondence related to the Company's business prior to the Closing accordance
with their respective normal document retention practices after the Closing Date
and (b) make available to each other, their counsel and accountants all
information and documents reasonably available to them which relate to any claim
that may be subject to indemnification hereunder and to render to each other
such assistance as may reasonably be required in order to ensure the proper and
adequate defense of any such claim.
Section 9.5. Nonsolicitation of Employees.
(a) Seller, LGC and their respective Affiliates shall not, for a
period of five years after the Closing Date, for itself or on behalf of any
other individual or entity, directly or indirectly solicit for employment any
employee who is a then current employee of the Company, Buyer, TS or any of
their Affiliates, or induce or attempt to induce any such employee to leave his
or her employment with the Company, Buyer, TS or any of its Affiliates.
(b) Buyer, TS and their Affiliates shall not, for a period of five
years after the Closing Date, for itself or on behalf of any other individual or
entity, directly or indirectly solicit for employment any employee who is a then
current employee of Seller, LGC or any of their Affiliates, or induce or attempt
to induce any such employee to leave his or her employment with Seller, LGC or
any of its Affiliates.
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Section 9.6. Transfer Taxes.
Seller and LGC shall pay (and shall indemnify and hold Buyer and TS
harmless from) all sales, stamp, recordation and transfer Taxes arising out of,
or related to, the transactions contemplated by this Agreement.
Section 9.7. Right to Setoff.
Any amounts for which Seller or LGC shall be finally determined to be
liable under Sections 8.1 or 9.2 hereof may, at the option of Buyer or TS, in
their sole discretion, first be satisfied through an offset of ")" (i) any
amounts due to Seller by Buyer or TS as part of the payment of the Put Exercise
Price or the Call Exercise Price on the Option Closing Date, or )" (ii) any
other amounts due and payable by Buyer, TS or their Affiliates to Seller or LGC.
ARTICLE X CERTAIN INCOME TAX MATTERS
Section 10.1. Federal Income Taxes in General.
(a) The income and other Tax items of the Company for all periods
ending on or before the Closing Date shall be included in the consolidated
federal income Tax Return of the affiliated group of which LGC is the common
parent. Seller and LGC shall be responsible for any federal income Taxes of the
Company for such periods and of any other member of such affiliated group not
heretofore paid. Neither Buyer nor the Company shall be required to reimburse
Seller or any other person for any such Taxes. Seller and LGC shall indemnify
and hold Buyer and the Company harmless from all liabilities for any such Taxes.
Seller shall be entitled to any refunds (except any resulting from carrybacks
from taxable periods ending after the Closing Date) not heretofore received for
taxable periods of the Company ending on or before the Closing Date; provided,
however, that any amount payable by Buyer or the Company to Seller in respect of
any such refund shall be reduced by the lesser of (i) the amount of any Taxes
incurred or (ii) the present value (based on a discount rate of 8%) of any Taxes
to be incurred, by Buyer or the Company as a result of the accrual or receipt of
the refund.
(b) Buyer and the Company shall be responsible for and shall indemnify
and hold Seller harmless from all federal income Taxes (except Taxes resulting
from any adjustments to or changes in Tax items relating to any taxable period
ending on or before the Closing Date) of the Company for any taxable period
beginning after the Closing Date and during which the Company is a member of
Buyer's affiliated group. Buyer and the Company shall be entitled to all refunds
of such Taxes.
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Section 10.2. Other Income Taxes in General.
(a) With respect to taxable periods of the Company ending on or before
the Closing Date, Seller shall prepare and file Tax Returns for and shall be
responsible for the payment of any state, local, or foreign income Taxes of the
Company not heretofore paid. Neither Buyer nor the Company shall be required to
reimburse Seller or any other person for any such Taxes. Seller and LGC shall
indemnify and hold Buyer and the Company harmless from all liabilities for any
such Taxes of the Company and any corporation with which the Company files or
has filed a unitary, consolidated, or combined return. Seller shall be entitled
to refunds (except any resulting from carrybacks from taxable periods ending
after the Closing Date) not heretofore received for taxable periods of the
Company ending on or before the Closing Date; provided, however, that any amount
payable by Buyer or the Company to Seller in respect of any such refund shall be
reduced by the lesser of (i) the amount of any Taxes incurred or (ii) the
present value (based on a discount rate of 8%) of any Taxes to be incurred, by
Buyer or the Company as a result of the accrual or receipt of the refund.
(b) Buyer and the Company shall be responsible for and shall indemnify
and hold Seller harmless from all state, local, or foreign income Taxes (except
Taxes resulting from any adjustments to or changes in Tax items relating to a
taxable period ending on or before the Closing Date) of the Company for any
taxable period beginning after the Closing Date and during which Buyer owns
Common Stock.. Buyer and the Company shall be entitled to all refunds of such
Taxes.
If the Company is required to file a state, local, or foreign income Tax Return
for a taxable period covering days before and after the Closing Date, Buyer
shall cause such Tax Return to be filed, but Seller shall pay to Buyer (as an
adjustment to the Purchase Price) the amount of the Tax attributable to the
period through, but not paid before, the Closing Date. The Tax attributable to
the period through the Closing Date shall be determined as if that period were a
separate taxable year. Buyer shall notify Seller in writing of the amount of
such Tax. Within 30 days after the date of such notification, Seller shall pay
such amount to Buyer. Any payment made more than 30 days after Buyer initially
notifies Seller of the amount of such Tax shall include interest at the rate of
8 percent per annum from the end of such 30-day period to the date of payment.
(c) For purposes of this Agreement, the term "state, local, or foreign
income Tax" means any Tax, however denominated, that is based on or measured by
net or gross income and imposed by any state, local, or foreign Governmental
Authority.
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Section 10.3. Section 338 Elections.
(a) If the Call Option is exercised on the Closing Date by Buyer or
the Put Option is exercised on the Closing Date by Seller as provided under
Article III of this Agreement and Buyer requests that Seller (and/or LCG, as
appropriate) join it in making elections under Section 338(h)(10) of the Code
with respect to H&R Acquisition and H&R, Seller (and/or LGC as appropriate)
shall join in making such elections (and shall join in making any corresponding
elections under state Law) for the period ending at the end of the Closing Date.
Seller and LCG shall prepare and file the returns for, be responsible for the
payment of, indemnify and hold Buyer and H&R Acquisition and H&R harmless from,
and be entitled to any refund of any federal and state income Taxes resulting
from such elections (and any corresponding elections under state Law). The
parties acknowledge that the effect of elections under Section 338(h)(10) of the
Code with respect to H&R Acquisition and H&R will be to cause each of them to be
treated as two corporations for federal income Tax purposes: (i) an "old"
corporation, which shall be treated (a) as having sold all of its assets in a
taxable transaction as of the end of the Closing Date while a member of Seller's
affiliated group, and (b) as having completely liquidated pursuant to Sections
332 and 337 of the Code, and (ii) a "new" corporation, which shall be treated as
having purchased (as of the beginning of the day after the Closing Date) the
assets deemed sold by the old corporation. The parties hereto further intend for
such elections to be effective, if possible, for state (as well as federal)
income Tax purposes, and they shall timely execute and file any documents that
may be required under any applicable Law for such elections (or any
corresponding elections under state Law) to be effective for state income Tax
purposes.
(b) If elections are made under Section 338(h)(10) pursuant to Section
10.3(a), Buyer and Seller shall cooperate as provided herein to determine, in
accordance with all applicable Treasury Regulations promulgated under Section
338 of the Code, the deemed sales prices of the assets of H&R Acquisition and
H&R. Buyer initially shall determine such deemed sales prices and shall notify
Seller in writing of the prices so determined ("Buyer's Deemed Sales Price
Notice") within 90 days after the Closing Date. Seller shall be deemed to have
accepted such determination unless, within 60 days after the date of Buyer's
Deemed Sales Price Notice, Seller notifies Buyer in writing of (i) each proposed
deemed sales price with which Seller disagrees, and (ii) for each such price,
the amount that Seller proposes as the deemed sales price. If Seller provides
such notice to Buyer, the parties shall proceed in good faith to determine
mutually the deemed sales prices in dispute. Except as otherwise agreed to by
both Buyer and Seller in writing, neither Buyer nor Seller shall take, nor shall
they permit any affiliated corporation (including, without limitation, H&R
Acquisition and H&R) to take, any position for income Tax purposes that is
inconsistent with the deemed sales prices as finally determined hereunder;
provided, however, that (i) the deemed purchase prices of the assets shall
differ from the deemed sales prices to the extent necessary to reflect the
inclusion in the total deemed purchase price of items (for example, Buyer's
capitalized acquisition costs) not included in the total deemed sales price and
(ii) the amount realized upon the deemed sale of assets may differ from the
deemed sales prices to reflect transaction costs that reduce the amount realized
for federal income Tax purposes.
(c) If elections are made under Section 338(h)(10) pursuant to Section
10.3(a), Buyer and Seller (and/or LCG, as appropriate) shall execute IRS Form
8023 (or any applicable
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successor form). Buyer shall retain custody of such form, and all required
attachments thereto, and shall file such form with the appropriate office(s) of
the IRS. Promptly after such filing, Buyer shall provide a photocopy of the form
(including all attachments) as filed to Seller.
Section 10.4. Cooperation.
(a) Buyer agrees to cooperate and to cause the Company to cooperate
with Seller to the extent reasonably required after the Closing Date in
connection with (i) the filing, amendment, preparation, and execution of all
income Tax Returns and other income Tax documents with respect to any taxable
period of the Company ending on or before the Closing Date, (ii) contests
concerning the application of any income Tax or the Tax due for any such period
and (iii) audits and other proceedings conducted by taxing authorities with
respect to any such period. Within a reasonable time after Buyer or the Company
receives official notice of any such contest, audit, or other proceeding, Buyer
shall notify or cause the Company to notify Seller of such contest, audit, or
other proceeding. In any case where the Company is responsible under applicable
law for the defense of such contest, audit, or other proceeding, Seller shall
have the right to conduct the defense at Seller's expense and in cooperation
with Buyer and the Company.
(b) Seller and LGC shall hold the Indemnified Parties harmless from
any increase in income Tax (for any taxable period) and any other liability
resulting from adjustments to or changes in Tax items relating to the Company
for any taxable period ending on or before the Closing Date, whether such
adjustments or changes are voluntarily made or are required by a taxing
authority. Except as may be required by law or as provided in Section 10.4(d)
hereof, no amended income Tax Return shall be filed, and no change in any income
Tax accounting method and no income Tax election shall be made, by, on behalf of
or with respect to the Company for any taxable period ending on or before the
Closing Date without the express written consent of Seller and Buyer, which
consents will not be unreasonably withheld.
(c) Seller and LGC agree to make available to Buyer and the Company
records in the custody of either Seller, LGC or any affiliated person, to
furnish other information (including, without limitation, all adjustments to and
changes in Tax items of the Company for taxable periods ending on or before the
Closing Date), and otherwise to cooperate to the extent reasonably required for
the preparation or filing of (i) Tax Returns and other income Tax documents
relating to the Company for taxable periods beginning on or ending after the
Closing Date or (ii) any required information return or report relating to
Buyer's acquisition of the Purchased Stock or the Option Shares from Seller.
(d) Seller acknowledges that the Company and Buyer shall be entitled
to the income Tax benefit of any loss, credit, or other item of the Company that
(i) arises after the Closing Date, although such loss, credit, or other item may
be carried back to a taxable period ending on or before the Closing Date or (ii)
has arisen or arises before the Closing Date but is reportable in or carried
forward to a taxable period ending after the Closing Date.
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Seller and LGC agree to cooperate with Buyer and the Company in taking such
action as may be necessary (including, without limitation, amending any Tax
Return and filing any claim for refund) for Buyer or the Company to realize the
Tax benefit of carrying a loss, credit, or other item arising after the Closing
Date back (if possible) to a taxable period ending on or before the Closing
Date. Seller and LGC promptly shall pay or cause to be paid to Buyer (i) any
amount received as a refund and (ii) if not realized as a refund, the amount of
any reduction in Tax liability (of the Company, Seller or any other member of
the affiliated group of which Seller is a member) resulting from the use of such
a loss, credit, or other item; provided, however, that the amount so payable by
Seller shall be reduced by the lesser of (i) the amount of any Taxes incurred or
(ii) the present value (based on a discount rate of 8%) of any Taxes to be
incurred, by Seller or any other such member of its affiliated group as a result
of the accrual or receipt of the refund.
Section 10.5. Termination of Tax-Sharing Agreements.
This Article X supersedes any and all tax-sharing or similar agreements to
which (a) the Company and (b) Seller or any affiliate of Seller are parties.
Neither the Company nor Seller (or any Affiliate of Seller or LGC) shall have
any obligation or right with respect to each other under any such agreement
after the Closing Date.
Section 10.6. Relationship of This Article X to Article IX.
The indemnities provided in this Article are in addition to, but not in
duplication of, the indemnities provided in Article IX. The time limitations in
Sections 9.1(a) and 9.2(a) hereof, and the threshold and cap amounts in Sections
9.1(d) and 9.2(d) hereof, shall not apply to any claim or liability to which
this Article X applies or for breach of any covenant under this Article X.
Sections 9.1(c) and 9.2(c) hereof shall apply to third-party claims subject to
indemnification under this Article X, except that the provisions of this Article
X (rather than the provisions of Sections 9.1(c) and 9.2(c)) shall apply in the
event and to the extent of any inconsistency between Sections 9.1(c) and 9.2(c)
and this Article X. Sections 9.1 and 9.2 shall apply to Tax claims and
liabilities to which this Article X does not apply.
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ARTICLE XI TERMINATION
Section 11.1. Termination.
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned only as follows: (a) at any time prior to the Closing by mutual
written agreement of Seller, LGC, TS and Buyer; (b) by Seller, LGC, TS or Buyer,
if the Closing Date shall not have occurred on or before February 15, 2002; (c)
by Buyer or TS if any of the conditions set forth in Article VII of this
Agreement shall not have been fulfilled by the Closing Date; or (d) by Seller or
LGC if any of the conditions set forth in Article VIII of this Agreement shall
not have been fulfilled by the Closing Date; provided, that, the right to
terminate this Agreement under this Section 11.1 shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or has resulted in, any of the conditions set forth in Article VII or
VIII of this Agreement not having been fulfilled by the Closing Date or the
failure of Closing Date to occur on or before the date specified in clause (b)
above.
Section 11.2. Rights on Termination; Waiver.
If this Agreement is terminated pursuant to Section 11.1, all further
obligations of the parties under or pursuant to this Agreement shall terminate
without further liability of either party to the other. Nothing contained in
this Section 11.2 shall relieve any party from liability for any breach of this
Agreement. If this Agreement is terminated other than pursuant to Section 11.1,
the parties hereto shall retain all of their respective rights under applicable
Law resulting from such termination.
ARTICLE XII MISCELLANEOUS
Section 12.1. Entire Agreement; Amendment; Waiver.
This Agreement and the documents referred to herein and to be delivered
pursuant hereto constitute the entire agreement between the parties pertaining
to the subject matter hereof and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions of the parties, whether
oral or written. There are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof, except as
specifically set forth herein. No amendment, supplement, modification or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision of this
Agreement, whether or not similar, nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
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Section 12.2. Expenses.
Each of the parties hereto shall pay the fees and expenses of their
respective counsel, accountants and other experts and the other expenses
incident to the negotiation and preparation of this Agreement and consummation
of the transactions contemplated hereby. Seller and LGC shall cause the Company
not to incur any out-of-pocket expenses in connection with this Agreement or
otherwise Seller and LGC shall bear the cost of such expenses of the Company.
Section 12.3. Governing Law; Consent to Jurisdiction.
This Agreement shall be construed and interpreted according to the laws of
the Commonwealth of Virginia, without regard to the conflicts of law rules
thereof. Each of the parties hereto, in respect of itself and its properties,
agrees to be subject to (and hereby irrevocably submits to) the nonexclusive
jurisdiction of any United States federal or Virginia state court sitting in
Richmond, Virginia, in respect of any suit, action or proceeding arising out of
or relating to this Agreement or the transactions contemplated herein, and
irrevocably agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined in any such court. Each of the parties
hereto irrevocably waives, to the fullest extent it may effectively do so under
applicable Law, any objection to the laying of the venue of any such suit,
action or proceeding brought in any such court and any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. Either party hereto may make service on the other party by
sending or delivering a copy of the process to the party to be served at the
address and in the manner provided for the giving of notices in Section 12.6
hereof. Nothing in this Section 12.3, however, shall affect the right of any
party to bring any action or proceeding arising out of or relating to this
Agreement in any other court or to serve legal process in any other manner
permitted by Law or in equity.
Section 12.4. Further Assurances.
In case at any time after the Closing any further action is necessary or
desirable to carry out the purposes of this Agreement, each party to this
Agreement shall take all such necessary action. The parties hereto shall execute
any additional instruments necessary to consummate the transactions contemplated
hereby.
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Section 12.5. Assignment.
This Agreement and each party's respective rights hereunder may not be
assigned, by operation of Law or otherwise, without the prior written consent of
the other party, except that Buyer may assign any of its rights under this
Agreement to any Affiliate of Buyer. This Agreement shall be binding upon and
inure solely to the benefit of the parties hereto and their successors and
permitted assigns.
Section 12.6. Notices.
All notices, requests, claims, demands, disclosures and other
communications required or permitted by this Agreement shall be in writing and
shall be deemed to have been given at the earlier of the date (a) when delivered
personally, by messenger or by overnight delivery service by a recognized
commercial carrier to an officer of the other party, (b) five days after being
mailed by registered or certified United States mail, postage prepaid, return
receipt requested, or (c) when received via facsimile or electronic mail
(confirmed by telephone in each case), in all cases addressed to the person for
whom it is intended at his address set forth below or to such other address as a
party shall have designated by notice in writing to the other party in the
manner provided by this Section 12.6:
To Buyer or TS: Third Security Management Corporation
Third Security, LLC
The Governor Tyler
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esquire
With a Copy to: Hunton & Xxxxxxxx
Riverfront Plaza, East Tower
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: X. Xxxxxx Xxxxxxx, Esquire
To Seller or LGC: Xxxxxxx Global Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxxxx
With a Copy to: Beckman, Millman, Barandes & Xxxxxxx, LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx, Esquire
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Section 12.7. Counterparts.
This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but such counterparts shall together constitute but one
and the same Agreement. The execution of this Agreement by any of the parties
may be evidenced by way of a facsimile transmission of such party's signature,
or a photocopy of such facsimile transmission, and such facsimile signature
shall be deemed to constitute the original signature of such party hereto.
Section 12.8. Interpretation.
Unless the context requires otherwise, all words used in this Agreement in
the singular number shall extend to and include the plural, all words in the
plural number shall extend to and include the singular and all words in any
gender shall extend to and include all genders. All references to contracts,
agreements, leases or other understandings or arrangements shall refer to oral
as well as written matters. The table of contents and article and section
headings in this Agreement are inserted for convenience of reference only and
shall not constitute a part hereof.
Section 12.9. Severability.
If any provision, clause or part of this Agreement, or the application
thereof under certain circumstances, is held invalid or unenforceable by any
court of competent jurisdiction, the remainder of this Agreement, or the
application of such provision, clause or part under other circumstances, shall
not be affected thereby and shall remain in full force and effect.
Section 12.10. No Third Party Rights.
Nothing in this Agreement, express or implied, is intended to or shall
confer upon any person other than the parties to this Agreement and their
successors and permitted assigns any rights, benefits or remedies of any nature
whatsoever under, or by reason of, this Agreement. No third party is entitled to
rely on any of the representations, warranties and agreements contained in this
Agreement. Buyer and Seller assume no liability to any third party because of
any reliance on the representations, warranties and agreements of Buyer or
Seller contained in this Agreement.
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Section 12.11. Specific Performance.
The parties hereto agree that irreparable damage would occur in the event
any of the provisions of this Agreement were not performed in accordance with
the terms hereof and that the parties shall be entitled to specific performance
of the terms hereof, in addition to any other remedy at law or in equity.
[Signature Page Follows]
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed in its name by a duly authorized officer as of the day and year first
above written.
XXXXXXX HOLDINGS, INC.
By:
------------------------------
Xxxxx X. Xxxxxxxx
Chairman
XXXXXXX GLOBAL CORPORATION
By:
------------------------------
Xxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
THIRD SECURITY MANAGEMENT CORPORATION
By:
------------------------------
Xxxxxx X. Xxxx
Title:
THIRD SECURITY, LLC
By:
------------------------------
Xxxxxx X. Xxxx
Manager
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