Exhibit 2.1
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[EXECUTION COPY]
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PURCHASE AGREEMENT
BY AND AMONG
THE PLANK COMPANIES, L.P.,
THE PLANK COMPANIES, INC.,
PLANK MANAGEMENT, INC.,
XXXXXXX X. XXXXX,
AND
NES SHORING ACQUISITION, INC.
DATED AS OF JULY 31, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS......................................................... 1
1.1 Definitions.................................................... 1
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1.2 Other Definitional Provisions.................................. 6
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1.3 Cross Reference of Other Definitions........................... 7
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ARTICLE II
PURCHASE AND SALE OF OWNERSHIP INTERESTS............................ 8
2.1 Purchase of Partnership Interests.............................. 8
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2.2 Purchase Price for Acquired Interests and Acquired Shares...... 8
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2.3 Purchase Price Adjustments..................................... 9
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2.4 Closing Transactions........................................... 10
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ARTICLE III
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY AND SELLER... 12
3.1 Organization and Corporate Power.............................. 12
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3.2 Authorization of Transactions................................. 13
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3.3 Capitalization................................................ 14
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3.4 Subsidiaries; Investments..................................... 15
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3.5 Absence of Conflicts.......................................... 15
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3.6 Financial Statements and Related Matters...................... 15
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3.7 Absence of Undisclosed Liabilities............................ 16
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3.8 Absence of Certain Developments............................... 16
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3.9 Title to Properties........................................... 18
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3.10 Taxes......................................................... 19
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3.11 Contracts and Commitments..................................... 20
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3.12 Proprietary Rights............................................ 22
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3.13 Litigation; Proceedings....................................... 22
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3.14 Brokerage..................................................... 22
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3.15 Governmental Licenses and Permits............................. 23
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3.16 Employees..................................................... 23
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3.17 Employee Benefit Plans........................................ 23
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3.18 Insurance..................................................... 25
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3.19 Officers and Directors; Bank Accounts......................... 25
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3.20 Affiliate Transactions........................................ 25
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3.21 Compliance with Laws.......................................... 25
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3.22 Environmental Matters......................................... 25
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3.23 Disclosure.................................................... 27
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3.24 Closing Date.................................................. 27
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER AND
THE SHAREHOLDER.................................................... 27
4.1 Authorization of Transactions................................. 27
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4.2 Absence of Conflicts.......................................... 27
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4.3 Brokerage..................................................... 28
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4.4 Partnership Interests......................................... 28
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4.5 Closing Date.................................................. 28
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
CONCERNING THE PURCHASER........................................... 28
5.1 Organization and Corporate Power.............................. 28
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5.2 Authorization................................................. 28
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5.3 No Violation.................................................. 29
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5.4 Governmental Authorities and Consents......................... 29
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5.5 Litigation.................................................... 29
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5.6 Brokerage..................................................... 29
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5.7 Closing Date.................................................. 29
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5.8 Investment Intent............................................. 29
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ARTICLE VI
INDEMNIFICATION AND RELATED MATTERS................................ 29
6.1 Survival...................................................... 29
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6.2 Indemnification............................................... 30
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ARTICLE VII
ADDITIONAL AGREEMENTS.............................................. 34
7.1 Continuing Assistance......................................... 34
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7.2 Tax Matters................................................... 34
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7.3 Press Releases and Announcements.............................. 35
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7.4 Further Transfers............................................. 35
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7.5 Specific Performance.......................................... 35
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7.6 Transition Assistance......................................... 36
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7.7 Expenses...................................................... 36
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7.8 Exclusivity................................................... 36
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7.9 Books and Records............................................. 37
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7.10 Non-competition, Non-solicitation and Confidentiality......... 37
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7.11 United Rentals Litigation..................................... 40
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7.12 Employee Benefits............................................. 41
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7.13 No Set-Off.................................................... 41
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7.14 No Duplication................................................ 41
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ARTICLE VIII
MISCELLANEOUS...................................................... 42
8.1 Amendment and Waiver.......................................... 42
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8.2 Notices....................................................... 42
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8.3 Binding Agreement; Assignment................................. 43
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8.4 Severability.................................................. 43
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8.5 No Strict Construction........................................ 43
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8.6 Captions...................................................... 43
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8.7 Entire Agreement.............................................. 43
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8.8 Counterparts.................................................. 43
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8.9 Governing Law................................................. 44
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8.10 Parties in Interest........................................... 44
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8.11 Arbitration................................................... 44
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INDEX OF EXHIBITS
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Exhibit A - Form of Escrow Agreement
Exhibit B - Form of Assignment of Partnership Interests
Exhibit C - Form of Employment Agreement
Exhibit D - Form of Opinion of Counsel to the Company, the Seller and the
Shareholder
Exhibit E - Form of Lease Agreement
Exhibit F - Form of Supply Agreement
Exhibit G - Form of Opinion of Counsel to the Purchaser
INDEX OF SCHEDULES
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Estimated Purchase Price Schedule
Excluded Assets Schedule
Schedule of Partners
Organization Schedule
Schedule of Shares
Subsidiaries Schedule
Conflicts Schedule
Financial Statements Schedule
Absence of Undisclosed Liabilities Schedule
Developments Schedule
Real Property Schedule
Assets Schedule
Taxes Schedule
Contracts Schedule
Proprietary Rights Schedule
Litigation Schedule
Brokerage Schedule
Permits Schedule
Employees Schedule
Benefit Plans Schedule
Insurance Schedule
Officers, Directors, Partners and Bank Accounts Schedule
Affiliated Transactions Schedule
Environmental Schedule
National Accounts Schedule
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is made as of July31, 1999, by and among The
Plank Companies, L.P., a Delaware limited partnership (the "Operating Company"),
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Plank Management, Inc., a Texas corporation (the "Management Company," and
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together with the Operating Company, the "Company"), The Plank Companies, Inc.,
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a Delaware corporation (the "Seller"), Xxxxxxx X. Xxxxx (the "Shareholder") and
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NES Shoring Acquisition, Inc., a Delaware corporation (the "Purchaser"). The
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Company, the Seller, the Shareholder and the Purchaser are referred to herein
collectively as the "Parties" and individually as a "Party."
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WHEREAS, the Seller and the Management Company collectively own
beneficially and of record 100% of the outstanding partnership interests of the
Company (the "Partnership Interests");
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WHEREAS, the Seller owns beneficially and of record 100% of the
outstanding shares of capital stock of the Management Company;
WHEREAS, the Shareholder, together with trusts for the benefit of his
children, owns beneficially and of record 100% of the outstanding shares of
capital stock of the Seller; and
WHEREAS, the Purchaser desires to acquire from the Seller, and the
Seller desires to sell to the Purchaser, all of the Partnership Interests owned
by the Seller (collectively, the "Acquired Partnership Interests") and all of
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the shares of capital stock of the Management Company owned by the Seller (the
"Acquired Shares").
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes hereof, the following terms, when used
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herein with initial capital letters, shall have the respective meanings set
forth herein:
"Affiliate" of any Person means any other Person controlling,
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controlled by or under common control with such first Person, where "control"
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means the possession, directly or indirectly, of the power to direct the
management and policies of a Person whether through the ownership of voting
securities or otherwise.
"Affiliated Group" means an affiliated group as defined in Section
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1504 of the Code (or any similar combined, consolidated or unitary group defined
under state, local or foreign income Tax law).
"Agreement" means this Purchase Agreement, including all Exhibits and
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Schedules hereto, as it may be amended from time to time in accordance with its
terms.
"CERCLA" means the Comprehensive Environmental Response, Compensation
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and Liability Act of 1980, as amended.
"Code" means the United States Internal Revenue Code of 1986, as
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amended.
"Environmental Affiliates" of any Person means, with respect to any
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particular matter, all other Persons whose liabilities or obligations with
respect to that particular matter have been assumed by, or are otherwise deemed
by law to be those of, such first Person.
"Environmental and Safety Requirements" means all federal, state,
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local and foreign statutes, regulations, ordinances and similar provisions
having the force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning public
health and safety, worker health and safety and pollution or protection of the
environment relating to the presence, use, production, generation, handling,
transport, treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control, or cleanup of any
hazardous materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum products or by-
products, asbestos, polychlorinated biphenyls (or PCBs), noise or radiation, any
of the above as in effect as of the Closing Date.
"Environmental Liabilities" means liabilities, losses, damages,
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penalties, fines, obligations, judgments, liens, costs and expenses, claims,
actions, causes of action, demands, filings, settlements, investigations,
proceedings, arbitrations, mediations, suits or other legal or administrative
proceedings, whether civil or criminal, or based on negligence, trespass,
intentional tort, strict liability, contribution or indemnification, common or
decisional law or otherwise, for or in connection with, or arising in any way
from: (i) any obligations arising under or related to Environmental and Safety
Requirements; (ii) the exposure of any individual, including without limitation,
any Employee, to any Environmental Material; (iii) damage to natural resources,
wildlife or the environment; (iv) any Environmental Release or the presence of
any Environmental Material on, at, in, upon, under, about, to or from the
Company's Assets; (v) the manufacture, distribution in commerce, labeling or use
of any Environmental Material; (vi) the generation, disposal, treatment,
recycling, storage or transportation, or the arrangement for treatment,
recycling, storage, disposal or transportation of any Environmental Material at,
in, upon, about, into, to or from any location, or any Environmental Release of
any Environmental Material; or (vii) any other matter relating to human health,
natural resources, wildlife or the environment.
"Environmental Lien" means any Lien, whether recorded or unrecorded,
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in favor of any governmental entity or any department, agency or political
subdivision thereof relating to any liability of the Company or any Seller or
any Environmental Affiliate of the Company or any Seller arising under any
Environmental and Safety Requirement.
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"Environmental Material" means any substance, product, waste or other
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material of any nature whatsoever (a) which is identified, listed, published or
defined as a toxic pollutant or hazardous substance, or is otherwise regulated,
restricted or addressed under any Environmental and Safety Requirement or (b)
which otherwise has any adverse effect upon human health, natural resources,
wildlife or the environment.
"Environmental Matter" means any matter concerning Environmental and
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Safety Requirements, Environmental Liabilities, Environmental Liens,
Environmental Permits or Environmental Releases.
"Environmental Permit" means any permit, license, franchise, consent,
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certificate of financial responsibility or other authorization or approval of or
by any government entity under applicable Environmental and Safety Requirement,
application therefor or filing in connection therewith.
"Environmental Release" means any actual or threatened spilling,
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leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, migrating, dumping or disposing into the air, surface water,
groundwater, soil, land surface, sub-surface strata (including the abandonment
or discarding of barrels, containers and other closed receptacles).
"ERISA" means the Employee Retirement Income Security Act of 1974,
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as amended.
"Excluded Assets" means the assets listed on the Excluded Assets
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Schedule.
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"GAAP" means, at a given time, United States generally accepted
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accounting principles, consistently applied.
"Hazardous Substance" shall have the meaning ascribed to it under
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CERCLA.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
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1976, as amended.
"Indebtedness" of any Person means, without duplication: (a)
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indebtedness for borrowed money or for the deferred purchase price of property
or services in respect of which such Person is liable, contingently or
otherwise, as obligor or otherwise (other than trade payables and other current
liabilities incurred in the ordinary course of business) and any commitment by
which such Person assures a creditor against loss, including contingent
reimbursement obligations with respect to letters of credit; (b) indebtedness
guaranteed in any manner by such Person, including a guarantee in the form of an
agreement to repurchase or reimburse; (c) obligations under capitalized leases
in respect of which such Person is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which obligations such Person
assures a creditor against loss; and (d) any unsatisfied obligation of such
Person for "withdrawal liability" to a "multiemployer plan," as such terms are
defined under ERISA.
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"Insider" means, any officer, director, stockholder, partner or
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Affiliate, as applicable, of the Company or any of its Affiliates or any
immediate family member of such Person (including, without limitation, any
Person related by marriage or adoption to any such individual) or any entity in
which any such Person owns a 10% or greater interest.
"Knowledge" means with respect to an individual, the actual knowledge
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without any implied duty of investigation, and with respect to the Company, the
actual knowledge of the Shareholder or any director or executive officer of the
Company or the Seller without any implied duty to investigate.
"Licenses" means all permits, licenses, franchises, certificates,
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approvals and other authorizations of foreign, federal, state and local
governments or other similar rights.
"Lien" means any mortgage, pledge, security interest, encumbrance,
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easement, restriction, charge, or other lien.
"Loss" means, with respect to any Person, any diminution in value,
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liability, demand, claim, action, cause of action, cost, damage, deficiency,
Tax, penalty, fine or other loss or expense, whether or not arising out of a
third party claim, including all interest, penalties, reasonable attorneys' fees
and expenses and all amounts paid or incurred in connection with any action,
demand, proceeding, investigation or claim by any third party (including any
governmental entity or any department, agency or political subdivision thereof)
against or affecting such Person or which, if determined adversely to such
Person, would give rise to, evidence the existence of, or relate to, any other
Loss and the investigation, defense or settlement of any of the foregoing.
"Material Adverse Effect" means any material adverse effect on the
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business, financial condition, operations, or results of operations of the
Company and its Subsidiaries taken as a whole.
"NES" means National Equipment Services, Inc., a Delaware corporation.
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"Net Equity" means (i) the book value of the Operating Company's
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assets minus (ii) the book value of the Operating Company's liabilities
(excluding (1) all Indebtedness of the Operating Company and its Subsidiaries
and all fees, expenses and prepayment premiums and penalties (if any) which are
or would be incurred by the Operating Company and its Subsidiaries in connection
with the repayment of such Indebtedness and the release of any guaranties
related thereto, but not including accrued income taxes and (2) all inter-
company Indebtedness owing to any Affiliates of the Operating Company (which
shall exclude trade payables incurred in the Ordinary Course of Business),
determined on a consolidated basis in a manner consistent with the Operating
Company's accounting practices exhibited in the formulation of the Latest
Balance Sheet attached to the Financial Statements Schedule.
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"Ordinary Course of Business" means the ordinary course of the
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Company's or its Subsidiaries' business consistent with past practice
(including, without limitation, with respect to collection of accounts
receivable, purchases of inventory and supplies, repairs and maintenance,
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payment of accounts payable and accrued expenses, levels of capital expenditures
and operation of cash management practices generally).
"Partnership Agreement" means the Limited Partnership Agreement of the
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Operating Company.
"Permitted Encumbrances" means: (A) statutory liens for current taxes
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or other governmental charges with respect to the Real Property not yet due and
payable or the amount or validity of which is being contested; (B) mechanics,
carriers, workers, repairers and similar statutory liens arising or incurred in
the ordinary course of business for amounts which are not delinquent and which
could not, individually or in the aggregate, have a Material Adverse Effect; (C)
zoning, entitlement, building and other land use regulations imposed by
governmental agencies having jurisdiction over the Real Property which are not
violated by the current use and operation of the Real Property; and (D)
covenants, conditions, restrictions, easements and other matters of record
affecting title to the Real Property which do not unreasonably interfere with
the current use, occupancy, or value, or the marketability of title, of the Real
Property.
"Person" means an individual, a partnership, a corporation, an
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association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization, a governmental entity or any
department, agency or political subdivision thereof and any other entity.
"Post-Closing Environmental Liability" means Environmental Liabilities
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resulting solely from acts or omissions occurring or conditions created after
the Closing Date.
"Pre-Closing Environmental Liability" means Environmental Liabilities
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relating to or resulting from acts or omissions occurring or conditions created
prior to the Closing Date under laws in existence on the Closing Date.
"Proprietary Rights" means any and all patents, patent applications,
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trademarks, internet domain names, service marks, trademark or service xxxx
applications and registrations, trade and corporate names, copyrights, copyright
applications and registrations, trade secrets, know-how, technology, computer
software and software systems, business and marketing plans, customer and
supplier lists, confidential information and all other proprietary property,
rights and interests.
"Release" shall have the meaning set forth in CERCLA.
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"Subsidiary" means, with respect to any Person, any corporation a
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majority of the total voting power of shares of stock of which is entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or any partnership, association or
other business entity a majority of the partnership or other similar ownership
interest of which is at the time owned or controlled, directly or indirectly, by
that Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes of this definition, a Person is deemed to have a majority ownership
interest in a partnership, association or other business entity if such Person
is allocated a majority of the
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gains or losses of such partnership, association or other business entity or is
or controls a managing director or general partner of such partnership,
association or other business entity.
"Tax Returns" means returns, declarations, reports, claims for refund,
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information returns or other documents (including any related or supporting
schedules, statements or information) filed or required to be filed in
connection with the determination, assessment or collection of Taxes of any
party or the administration of any laws, regulations or administrative
requirements relating to any Taxes.
"Taxes" means any federal, state, local, or foreign income, gross
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receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, or other tax, fee, assessment or charge of any
kind whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
"Transaction Documents" means this Agreement, and all other
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agreements, instruments, certificates and other documents to be entered into or
delivered by any Party in connection with the transactions contemplated to be
consummated pursuant to this Agreement.
"Treasury Regulations" means the United States Treasury Regulations
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promulgated pursuant to the Code.
1.2 Other Definitional Provisions.
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(a) Accounting Terms. Accounting terms which are not otherwise
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defined in this Agreement have the meanings given to them under GAAP. To the
extent that the definition of accounting term that is defined in this Agreement
is inconsistent with the meaning of such term under GAAP, the definition set
forth in this Agreement will control.
(b) "Hereof," etc. The terms "hereof," "herein" and "hereunder" and
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terms of similar import are references to this Agreement as a whole and not to
any particular provision of this Agreement. Section, clause, Schedule and
Exhibit references contained in this Agreement are references to Sections,
clauses, Schedules and Exhibits in or to this Agreement, unless otherwise
specified.
(c) Successor Laws. Any reference to any particular Code section or
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any other law or regulation will be interpreted to include any revision of or
successor to that section regardless of how it is numbered or classified.
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1.3 Cross Reference of Other Definitions. Each capitalized term
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listed below is defined in the corresponding Section of this Agreement:
Term Section
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Acquired Partnership Interests Recitals
Acquired Shares Recitals
Actual Net Equity 2.3(b)
Applicable Limitation Date 6.1
Arbitrators 8.11
Cap 9.2(b)(ii)
Cash Portion 2.2
Closing 2.4(a)
Closing Date 2.4(a)
Closing Review 2.3(b)
Closing Transactions 2.4(b)
COBRA 3.17(a)
Company Preface
Confidential Information 7.10(c)
Creditors Rights Exception 3.2 (a)
Disputing Person 8.11
Draft Computation 2.3(b)
Employment Agreement 2.4 (a)
ERISA 3.17(a)
Escrow Agent 2.2
Escrow Agreement 2.2
Estimated Net Equity 2.1
Final Determination 8.11
Financial Statements 3.6(a)
Firm 2.3(b)
Indemnified Party 6.2(e)
Indemnifying Party 6.2(e)
Escrow Account 2.2
HSR Filing 3.5
Institute 8.11
Latest Balance Sheet 3.6(a)
Leased Properties 3.9(b)
Leases 2.4(a)
Marks 7.10(d)
Net Equity Shortfall 2.3(b)
Net Stockholders Equity 2.3(c)
Non-compete Period 7.10 (a)
Non-compete Payment 7.10 (a)
Non-competing Parties 7.10 (a)
Notice of Arbitration 8.11
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Objection Notice 2.3(b)
Party Preface
Partnership Interests Recitals
Pending Claim 2.4
Permitted Affiliates 7.10(d)
Purchase Price 2.2
Purchaser Preface
Purchaser Parties 9.2(a)
Rules 8.11
Seller Preface
Seller Parties 6.2(c)
Services 7.10(d)
Shareholder Preface
Shares 3.3
Supply Agreement 2.4(a)
Transaction Expenses 7.7
URI Suit 7.11
ARTICLE II
PURCHASE AND SALE OF OWNERSHIP INTERESTS
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2.1 Purchase of Partnership Interests. On and subject to the
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terms and conditions set forth in this Agreement, on the Closing Date, the
Purchaser shall purchase from the Seller, and the Seller shall sell and transfer
to the Purchaser, all of the Partnership Interests owned by such Seller as such
ownership is set forth on the Schedule of Partners attached hereto, free and
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clear of any Liens (other than those under the Partnership Agreement or the
Delaware Revised Uniform Limited Partnership Act), and the Purchaser shall
purchase from the Seller, and the Seller shall sell and transfer to the
Purchaser, all of the Shares owned by such Seller as such ownership is set forth
on the Schedule of Shares, free and clear of any Liens. Attached as the
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Estimated Purchase Price Schedule is a good faith estimate, using the Operating
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Company's available financial information, of the Net Equity as of the close of
business on June 30, 1999 (such estimate in the amount of $21,837,690 is
referred to as the "Estimated Net Equity").
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2.2 Purchase Price for Acquired Interests and Acquired Shares. The
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aggregate purchase price to be paid to the Seller for the Acquired Partnership
Interests and the Acquired Shares (the "Purchase Price") is $86,486,938, which
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is the sum of (a) (i) $82,200,000 plus (ii) $1,736,938 (which is the amount
equal to the excess of the Estimated Net Equity over $20,100,752) (as adjusted,
the "Cash Portion") and (b) the Purchaser shall deposit $2,550,000 into an
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escrow account (the "Escrow Account") established pursuant to the terms
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and conditions of the escrow agreement in the form of Exhibit A attached hereto
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by and among the parties hereto and American National Bank and Trust Company, as
escrow agent, dated as of the date hereof, a copy of which is attached hereto.
The Escrow Account shall be available to satisfy any amounts owing to the
Purchaser pursuant to Section 2.3 and/or Section 6.2. In addition, the
Purchaser shall make the $250,000 Non-compete Payment described in Section 7.10
(a). The Cash Portion is subject to adjustment pursuant to Section 2.3.
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Ninety-nine percent (99%) of the Purchase Price shall be for the Acquired
Partnership Interests and one percent (1%) of the Purchase Price shall be for
the Acquired Shares.
2.3 Purchase Price Adjustments.
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(a) Post-Closing Adjustment for Net Equity. Within 90 days after the
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Closing Date, the Purchaser and its auditors will conduct a review (the "Closing
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Review") of the Net Equity as of the close of business on July 31, 1999 and will
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prepare and deliver to the Seller a computation of the Net Equity as of the
close of business on July 31, 1999 (the "Draft Computation"). The Purchaser and
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its auditors will give the Seller and its auditors an opportunity to observe the
Closing Review and will make available to such Persons all records and work
papers used in preparing the Draft Computation. The Purchaser and its auditors
shall provide full cooperation to the Seller and its auditors, including,
without limitation, making available and providing reasonable access to the
premises, books and records and employees of the Company. If the Seller
disagrees with the computation of the Net Equity reflected on the Draft
Computation, the Seller may, within 30 days after receipt of the Draft
Computation, deliver a notice (an "Objection Notice") to the Purchaser setting
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forth the Seller's calculation of the amount of the Net Equity as of the close
of business on July 31, 1999. The Purchaser and the Seller will use reasonable
efforts to resolve any disagreements as to the computation of the Net Equity,
but if they do not obtain a final resolution within 30 days after the Purchaser
has received the Objection Notice, the Purchaser and the Seller will jointly
retain an independent accounting firm of recognized national or regional
standing (the "Firm") to resolve any remaining disagreements. If the Purchaser
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and the Seller are unable to agree on the choice of the Firm, the Firm will be a
"big-five" accounting firm selected by lot (after excluding one firm designated
by the Purchaser and one firm designated by the Seller). The Purchaser and the
Seller will direct the Firm to render a determination within 15 days of its
retention and the Purchaser, the Seller and their respective agents will
cooperate with the Firm during its engagement. The Firm will consider only
those items and amounts in the Draft Computation set forth in the Objection
Notice which the Purchaser and the Seller are unable to resolve. The Firm's
determination will be based on the definition of Net Equity included herein.
The determination of the Firm will be conclusive and binding upon the Purchaser
and the Seller. The Purchaser and the Seller shall bear the costs and expenses
of the Firm based on the percentage which the portion of the contested amount
not awarded to each Party bears to the amount actually contested by such Party.
The amount of the Net Equity, as finally determined pursuant to this Section
2.3(a), is referred to herein as the "Actual Net Equity." If the Actual Net
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Equity is less than Estimated Net Equity, the Purchaser shall be entitled to
receive from the Escrow Account, within two (2) business days after the
determination thereof, the amount of such shortfall (the "Net Equity
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Shortfall"); provided, however, that if the amount then left in the Escrow
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Account is less than the amount of the Net Equity Shortfall, the Seller shall
pay to the Purchaser, within two (2) business days after the determination of
the Actual Net Equity, the amount by which the Escrow Account is less than Net
Equity Shortfall by wire transfer or delivery of other immediately available
funds. Additionally, if the Actual Net Equity are greater than the Estimated
Net Equity, the Purchaser shall pay to the Seller, within two (2) business days
after the determination of the Actual Net Equity, the amount of such excess by
wire transfer or delivery of other immediately available funds.
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(b) Accounts Receivable Adjustment. In addition to any other
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adjustments set forth in this Agreement, the Purchase Price will be reduced
dollar-for-dollar by the aggregate amount of the accounts receivable of the
Company taken into account in determining Actual Net Equity (net of any
aggregate amount accrued for doubtful accounts in accordance with GAAP and net
of any applicable credits for sales tax and returns of items consistent with
past custom and practice, but in each case, to the extent such allowances and
credits are taken into account as deductions in determining Actual Net Equity)
(the "Net Accounts Receivable"), which are uncollected by the Company or its
-----------------------
Subsidiaries (the "Uncollected Receivables Amount") as of the 120th day
------------------------------
following the Closing Date (the "Receivables Determination Date"). If there is
------------------------------
an Uncollected Receivables Amount, the Purchaser shall be entitled to receive
the Uncollected Receivables Amount from the Escrow Account within two (2)
business days after the Receivables Determination Date; provided, however, that
-------- -------
if the amount then left in the Escrow Account is less than the amount of the
Uncollected Receivables Amount, the Seller shall pay to the Purchaser, within
two (2) business days after the Receivables Determination Date, the amount by
which the Escrow Account is less than Uncollected Receivables Amount by wire
transfer or delivery of other immediately available funds. If the amounts
collected in respect of Net Accounts Receivable exceeds the amount of Net
Accounts Receivable, then the Purchaser shall pay to the Seller, within two
business days after the determination of such amount, the amount of any such
excess by wire transfer or delivery of other immediately available funds. The
Company shall not be required to retain a collection agency, bring any suit, or
take any other action out of the Ordinary Course of Business to collect any of
the Net Accounts Receivable; provided that the Company shall use efforts equal
to those it then employs with respect to the collection of accounts receivable
consistent with the Company's practices prior to the Closing to collect such Net
Accounts Receivable, and it shall not, without the written consent of the
Shareholder, compromise, forgive, delay the time for collection or otherwise
lessen any other obligation with respect to the Net Accounts Receivable, except
where to do so would be consistent with past practices and would not involve in
excess of 10% of the amount then outstanding for the account in question. To
the extent that the Company has not collected the full amount of the Net
Accounts Receivable and the Purchaser has been compensated therefor in
accordance with this Section, the Company shall (i) assign any such uncollected
Net Accounts Receivable to the Seller, (ii) reasonably assist in the collection
of such Net Accounts Receivables, (iii) give the Seller any records or other
written, electronic or other data used in connection with its efforts to collect
such Net Accounts Receivable, and (iv) shall immediately remit to the Seller any
amounts received by and in respect of any Net Accounts Receivable following the
time of the assignment of such uncollected Net Accounts Receivable. For the
purpose of determining amounts collected by the Company with respect to the Net
Accounts Receivable, (i) if an account debtor specifies that a payment should be
applied to a particular invoice, such payment shall be applied to such invoice
and (ii) if an account debtor does not specify to which invoice payment should
be applied, such payment shall be applied to the oldest outstanding invoice due
from that account debtor.
2.4 Closing Transactions.
--------------------
(a) Closing. The closing of the transactions contemplated by this
-------
Agreement (the "Closing") shall take place at a mutually agreeable place
-------
commencing at 10:00 a.m. on the date hereof. The date and time of the Closing
are herein referred to as the "Closing Date."
------------
-10-
(b) Closing Transactions. The Parties shall consummate the
--------------------
following transactions (the "Closing Transactions") on the Closing Date:
--------------------
(i) Seller shall deliver to the Purchaser an Assignment of
Partnership Interest in substantially the form of Exhibit B and shall
---------
deliver to the Purchaser certificates representing the Acquired Shares
owned by such Seller, duly endorsed for transfer or accompanied by duly
executed stock powers with all requisite state and federal transfer stamps
affixed thereto;
(ii) Purchaser shall deliver to Seller the Cash Portion in
immediately available funds;
(iii) Seller shall pay-off all of the Company's interest bearing
Indebtedness for borrowed money as of the Closing Date in immediately
available funds, as long as such Indebtedness was taken into account in
determining Actual Net Equity, and the Seller shall provide the Purchaser
with appropriate pay-off letters and Lien releases with respect to such
Indebtedness, to the extent reasonably available;
(iv) Purchaser shall deliver to the Shareholder the Non-compete
Payment;
(v) Seller shall deliver copies of all written consents given by
third parties that are required for the transfer of the Acquired
Partnership Interests and Acquired Shares to the Purchaser, and the
consummation of the other transactions contemplated hereby or that are
required in order to prevent a breach of, a default under, a termination or
modification of, or any acceleration of, any obligations under any material
contract to which the Company or any of its Subsidiaries is a party to the
extent identified on the Contracts Schedule with an asterisk;
------------------
(vi) Seller shall deliver copies of the resignations of each of the
Company's directors and officers effective as of the Closing Date;
(vii) Seller shall deliver a copy of the employment agreement
entered into between the Company and Xxxxxx X. Xxxxxxx (the "Employment
----------
Agreement"), substantially in the form of Exhibit C attached hereto, and
--------- ---------
the Employment Agreement shall be in full force and effect;
(viii) An opinion, dated as of the Closing Date, from Xxxxx & Xxxxx,
LLP, counsel to the Company, the Seller and the Shareholder, shall be
delivered substantially in the form of Exhibit D attached hereto;
---------
(ix) Seller shall deliver copies of revised Lease agreements, with
respect to each facility from which the Company now conducts its business
(and to the extent that either Xxxxxxx X. Xxxxx or his mother is the lessor
of such facility) (the "Leases"), substantially in the form of Exhibit E
------ ---------
attached hereto, and the Leases shall be in full force and effect;
-11-
(x) The Operating Company and Speed Shore shall have entered into
a supply agreement (the "Supply Agreement") substantially in the form of
----------------
Exhibit F attached hereto.
---------
(xi) An opinion, dated as of the Closing Date, from Xxxxxxxx &
Xxxxx, counsel to the Purchaser, shall be delivered substantially in the
form of Exhibit G attached hereto;
---------
(xii) Seller shall deliver copies of any written third party and
governmental consents, approvals, filings, releases and terminations
required in connection with the consummation of the transactions
contemplated herein;
(xiii) Seller shall deliver certified copies of the resolutions of
the Company's partners approving the transactions contemplated by this
Agreement;
(xiv) with respect to the Company and each of its Subsidiaries,
Seller shall deliver certificates of the secretary of state of such
company's jurisdiction of formation or incorporation;
(xv) Seller shall deliver landlord consents and estoppel
certificates from the Company's and each of its Subsidiaries' landlords in
form and substance satisfactory to the Purchaser;
(xvi) Purchaser shall deliver certified copies of the resolutions of
the Purchaser's board of directors approving the transactions contemplated
by this Agreement;
(xvii) Seller shall execute and deliver an Assignment of all of its
right, title and interest in the service xxxx "The Underground Equipment
Specialist" in form and substance satisfactory to the Purchaser; and
(xviii) such other documents or instruments as the Purchaser or Seller
may reasonably request to effect the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY AND SELLER
---------------------------------
As a material inducement to Purchaser to enter into this Agreement,
each of the Seller and the Shareholder hereby jointly and severally represents
and warrants that as of the date hereof:
3.1 Organization and Corporate Power. The Company and each of
--------------------------------
its Subsidiaries is a partnership or corporation duly organized, validly
existing and in good standing under the laws of its state of formation or
incorporation. The jurisdictions of formation or incorporation of the Company
and each of its Subsidiaries are set forth on the "Organization Schedule"
---------------------
attached hereto. The Company and each of its Subsidiaries has all requisite
partnership or corporate power and authority and all licenses, permits and
authorizations necessary to own and
-12-
operate its properties and to carry on its business as now conducted. Correct
and complete copies of the Company's and each of its Subsidiaries' articles of
incorporation, by-laws, certificate of limited partnership and Partnership
Agreement have been furnished to NES, which documents reflect all amendments
made thereto at any time prior to the date of this Agreement. Correct and
complete copies of the minute books containing the records of meetings of the
stockholders and board of directors, the stock certificate books and the stock
record books of the Company and each of its Subsidiaries have been furnished to
the NES. Neither the Company nor any of its Subsidiaries is in default under or
in violation of any provision of its certificate of limited partnership,
Partnership Agreement, articles of incorporation and by-laws.
3.2 Authorization of Transactions.
-----------------------------
(a) The Operating Company has all requisite partnership power
and authority to execute and deliver the Transaction Documents and to consummate
the transactions contemplated hereby and thereby. Each partner of the Operating
Company has made all approvals required by it of the Transaction Documents to
which it is a party and has made all authorizations required by it for the
execution and delivery of the Transaction Documents to which it is a party and
the consummation of the transactions contemplated thereby. No other proceedings
on the part of the Company or any of its partners or Subsidiaries are necessary
to approve and authorize the execution and delivery of the Transaction Documents
and the consummation of the transactions contemplated thereby. This Agreement
has been and all of the Transaction Documents to which the Operating Company is
a party will, at the Closing, have been duly executed and delivered by the
Operating Company and when executed and delivered by the other parties thereto,
constitute the valid and binding agreements of the Operating Company,
enforceable against the Operating Company in accordance with their terms, except
as that enforceability may be (i) limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) subject to general principles of equity
(regardless of whether that enforceability is considered in a proceeding in
equity or at law) (the "Creditors Rights Exception").
--------------------------
(b) The Management Company has all requisite corporate power
and authority to execute and deliver the Transaction Documents and to consummate
the transactions contemplated hereby and thereby. The Management Company has
all corporate approvals required by it of the Transaction Documents to which it
is a party and has made all authorizations required by it for the execution and
delivery of the Transaction Documents to which it is a party and the
consummation of the transactions contemplated thereby. No other proceedings on
the part of the Company or any of its Subsidiaries are necessary to approve and
authorize the execution and delivery of the Transaction Documents and the
consummation of the transactions contemplated thereby. This Agreement has been
and all of the Transaction Documents to which the Management Company is a party
will, at the Closing, have been duly executed and delivered by the Management
Company and when executed and delivered by the other parties thereto, constitute
the valid and binding agreements of the Management Company, enforceable against
the Management Company in accordance with their terms, except for the Creditors
Rights Exception.
(c) Seller has all requisite corporate power and authority to
execute and deliver the Transaction Documents and to consummate the transactions
contemplated hereby and thereby.
-13-
Seller has made all approvals required by it of the Transaction Documents to
which it is a party and has made all authorizations required by it for the
execution and delivery of the Transaction Documents to which it is a party and
the consummation of the transactions contemplated thereby. No other proceedings
on the part of the Seller is necessary to approve and authorize the execution
and delivery of the Transaction Documents and the consummation of the
transactions contemplated thereby. This Agreement has been and all of the
Transaction Documents to which the Seller is a party will, at the Closing, have
been duly executed and delivered by the Seller and when executed and delivered
by the other parties thereto, constitute the valid and binding agreements of the
Seller, enforceable against the Seller in accordance with their terms, except
for the Creditors Rights Exception.
3.3 Capitalization.
--------------
(a) The authorized, issued and outstanding shares of Management
Company consist of 1,000 shares (the "Shares"), of which 1,000 Shares are issued
------
and outstanding. All of the issued and outstanding Shares have been duly
authorized, are validly issued, fully paid, and non-assessable, and are held of
record and beneficially by the Seller in the amounts set forth on the Schedule
--------
of Shares, and are not subject to, nor were they issued in violation of, any
---------
preemptive rights or rights of first refusal, and are owned of record and
beneficially by Seller free and clear of all Liens. There are no outstanding
or authorized options, warrants, rights, contracts, calls, puts, rights to
subscribe, conversion rights or other agreements or commitments to which the
Management Company is a party or which are binding upon the Management Company
providing for the issuance, disposition or acquisition of any of its Shares
(other than this Agreement). There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to the Management
Company. There are no voting trusts, proxies or any other agreements or
understandings with respect to the voting of the Shares of the Management
Company. The Management Company is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of its Shares.
(b) All of the issued and outstanding Partnership Interests are
held of record and beneficially by the Seller and the Management Company in the
amounts set forth on the Schedule of Partners and are not subject to, nor were
--------------------
they issued in violation of, any preemptive rights or rights of first refusal,
and are owned of record and beneficially by the Seller and the Management
Company as set forth on the Schedule of Partners free and clear of all Liens
--------------------
(other than those under the Partnership Agreement or the Delaware Revised
Uniform Limited Partnership Act). There are no outstanding or authorized
options, warrants, rights, contracts, calls, puts, rights to subscribe,
conversion rights or other agreements or commitments to which the Company is a
party or which are binding upon the Company providing for the issuance,
disposition or acquisition of any of its Partnership Interests (other than this
Agreement or the Partnership Agreement). There are no outstanding or authorized
stock appreciation, phantom stock or similar rights with respect to the Company.
There are no voting trusts, proxies or any other agreements (other than the
Partnership Agreement) or understandings with respect to the voting of the
Partnership Interests of the Company. The Company is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its Partnership Interests.
-14-
3.4 Subsidiaries; Investments. Except as set forth on the
-------------------------
"Subsidiaries Schedule" attached hereto, the Operating Company does not own or
----------------------
hold any shares of stock or any other equity interest in any other Person or any
rights to acquire any such stock or other equity interest (except Management
Company owns a general partnership interest in the Operating Company). All of
the authorized, issued and outstanding shares of capital stock of each of the
Operating Company's Subsidiaries (the "Subsidiary Stock") and the class and par
----------------
value of such Subsidiary Stock are set forth on the Subsidiaries Schedule. All
---------------------
of the issued and outstanding shares of Subsidiary Stock have been duly
authorized, are validly issued, fully paid, and non-assessable, and are held of
record and beneficially by the Persons and in the amounts set forth on the
Subsidiaries Schedule and are not subject to, nor were they issued in violation
---------------------
of, any preemptive rights or rights of first refusal, and are owned of record
and beneficially by the respective Persons as set forth on the Subsidiaries
------------
Schedule free and clear of all Liens. There are no outstanding or authorized
--------
options, warrants, rights, contracts, calls, puts, rights to subscribe,
conversion rights or other agreements or commitments to which the Operating
Company or any of its Subsidiaries is a party or which are binding upon the
Operating Company or any of its Subsidiaries providing for the issuance,
disposition or acquisition of any capital stock of any of the Operating
Company's Subsidiaries. There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to the Operating
Company's Subsidiaries. There are no voting trusts, proxies or any other
agreements or understandings with respect to the voting of the Subsidiary Stock.
Neither the Operating Company nor any of its Subsidiaries is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of Subsidiary Stock.
3.5 Absence of Conflicts. Except as set forth on the "Conflicts
-------------------- ---------
Schedule" attached hereto, and except for the filing requirements under the HSR
--------
Act (the "HSR Filing"), the execution, delivery and performance of the
----------
Transaction Documents and the consummation of the transactions contemplated
thereby by the Company and the Seller do not and shall not (a) conflict with or
result in any breach of any of the terms, conditions or provisions of, (b)
constitute a default under, (c) result in a violation of, (d) give any third
party the right to modify, terminate or accelerate any obligation under, (e)
result in the creation of any Lien upon the Acquired Partnership Interests or
the assets of the Company or any of its Subsidiaries, or (f) require any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or other
governmental body or agency, under the provisions of the certificate of limited
partnership or Partnership Agreement of the Operating Company, the articles of
incorporation or by-laws of the Management Company or any of its Subsidiaries or
any indenture, mortgage, lease, loan agreement or other agreement or instrument
to which the Company or any of the Company's Subsidiaries is bound or affected,
or any law, statute, rule or regulation to which the Company or any of the
Company's Subsidiaries is subject or any judgment, order or decree to which the
Company or any of the Company's Subsidiaries is subject.
3.6 Financial Statements and Related Matters.
----------------------------------------
(a) Financial Statements. Attached hereto as the "Financial
-------------------- ---------
Statements Schedule" are copies of (i) the Operating Company's unaudited balance
-------------------
sheet as of June 30, 1999 (the "Latest Balance Sheet") and the related
--------------------
statements of income and cash flows for the six-month period then ended and (ii)
certain information relating to the Operating Company that was included in
-15-
the audited consolidated balance sheet and statements of income of Seller for
the fiscal years ended December 31, 1998 and December 31, 1997 relating to the
Operating Company. Each of the foregoing financial statements (including in all
cases the notes thereto, if any) (the "Financial Statements") is accurate and
--------------------
consistent with the Operating Company's and its Subsidiaries' books and records
(which, in turn, are accurate), present fairly in all material respects the
Operating Company's financial condition and results of operations as of the
times and for the periods referred to therein, and has been prepared on a
consistent basis, subject to changes resulting from normal year-end adjustments
for recurring accruals (which shall not be material individually or in the
aggregate) and to the absence of footnote disclosure.
(b) Receivables. The Operating Company's and its Subsidiaries' notes
-----------
and accounts receivable contained in the Latest Balance Sheet are valid
receivables and are subject to no valid counterclaims or setoffs, at the
aggregate amount recorded on the Operating Company's or its Subsidiaries' books
and records as of the Closing, net of an amount of allowances for doubtful
accounts and returns which relate to those receivables computed in a manner
consistent with GAAP and the accounting practices used in the preparation of the
Latest Balance Sheet.
(c) Inventory. The Company's and its Subsidiaries' inventory, net of
---------
the reserves applicable to such inventory, consists of a quantity and quality
which, except as reflected in such reserve, is usable and saleable in the
Ordinary Course of Business.
3.7 Absence of Undisclosed Liabilities. Except as set forth on
----------------------------------
the Absence of Undisclosed Liabilities Schedule, neither the Company nor any of
-------------------------------------------
its Subsidiaries has any obligations or liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise, whether or not known, whether due or to
become due and regardless of when asserted) arising out of transactions entered
into at or prior to the Closing, or any action or inaction at or prior to the
Closing, or any state of facts existing at or prior to the Closing, except (i)
obligations under contracts or commitments described on the Contracts Schedule
------------------
attached hereto or under contracts and commitments which are not required to be
disclosed thereon (but not liabilities for breaches thereof), (ii) liabilities
reflected on the liabilities side of the Latest Balance Sheet, and (iii)
liabilities which have arisen after the date of the Latest Balance Sheet in the
Ordinary Course of Business or otherwise in accordance with the terms and
conditions of this Agreement (none of which is, except as otherwise disclosed in
the Schedules, a liability for breach of contract, tort or infringement or a
claim or lawsuit); provided, however, that any disclosure set forth on the
-------- -------
Absence of Undisclosed Liabilities Schedule is for disclosure purposes only and
-------------------------------------------
shall not be deemed an exception for purposes of the indemnity provisions set
forth in Section 6.2. This Section 3.7 does not include Environmental Matters.
Representations and warranties regarding Environmental Matters shall be governed
by Section 3.22.
3.8 Absence of Certain Developments. Except as set forth on the
-------------------------------
"Developments Schedule" attached hereto and except as expressly contemplated by
---------------------
this Agreement, since June 30, 1999, neither the Company nor any of its
Subsidiaries has:
(a) suffered any change (other than a change generally affecting
companies having similar lines of business as the Company) that has had or could
reasonably be expected to have a
-16-
Material Adverse Effect or suffered any theft, damage, destruction or casualty
loss in excess of $50,000, to its assets, whether or not covered by insurance or
suffered any substantial destruction of the its books and records;
(b) redeemed or repurchased, directly or indirectly, any Partnership
Interests or declared, set aside or paid any dividends or made any other
distributions (whether in cash or in kind) with respect to any Partnership
Interests;
(c) issued, sold or transferred any Partnership Interests, or any
securities convertible, exchangeable or exercisable into Partnership Interests
or other equity securities, or warrants, options or other rights to acquire
Partnership Interests or any kind of equity interest in the Company or its
Subsidiaries;
(d) incurred or become subject to any liabilities, except liabilities
incurred in the Ordinary Course of Business or contemplated by this Agreement;
(e) subjected any portion of its properties or assets to any Lien
(except Permitted Encumbrances or those arising in the Ordinary Course of
Business);
(f) sold, leased, assigned or transferred (including, without
limitation, transfers to any Seller or any Insider) a portion of its tangible
assets that are material to the Company, except for sales of inventory or
leases, rentals, assignments or transfers made in the Ordinary Course of
Business, or canceled without fair consideration any material debts or claims
owing to or held by it;
(g) sold, assigned, licensed or transferred (including, without
limitation, transfers to any Seller or any Insider) any Proprietary Rights owned
by, issued to or licensed to the Company or any of its Subsidiaries (except for
transactions contemplated by this Agreement) or disclosed any confidential
information (other than pursuant to agreements requiring the disclosure to
maintain the confidentiality of and preserving all rights of the Company and its
Subsidiaries in such confidential information) or to its Knowledge, received any
confidential information of any third party in violation of any obligation of
confidentiality binding upon the Company;
(h) suffered any extraordinary losses or waived any rights of
material value;
(i) incurred any indebtedness for borrowed money (other than
indebtedness to finance its working capital needs);
(j) entered into, amended or terminated any material lease, contract,
agreement or commitment, or entered into any other transaction, other than in
the Ordinary Course of Business or as contemplated under this Agreement;
(k) entered into any other material transaction, or materially
changed any fundamental business practice;
-17-
(l) made or granted any bonus or any wage, salary or compensation
increase to any director, officer, employee or sales representative, group of
employees or consultant or made or granted any increase in any employee benefit
plan or arrangement, in each case, other than in the Ordinary Course of
Business, or amended or terminated any existing employee benefit plan or
arrangement or adopted any new employee benefit plan or arrangement;
(m) made any other change in employment terms for any of its
directors, officers, and employees outside the Ordinary Course of Business;
(n) incurred material inter-company charges or conducted its cash
management customs and practices, in each case, other than in the Ordinary
Course of Business (including, without limitation, with respect to collection of
accounts receivable, purchases of inventory and supplies, repairs and
maintenance, and payment of accounts payable and accrued expenses);
(o) made any capital expenditures or commitments for capital
expenditures that aggregate in excess of $150,000;
(p) made any loans or advances to, or guarantees for the benefit of,
any Persons;
(q) made charitable contributions or pledges, in each case other than
in the Ordinary Course of Business or those that do not in the aggregate exceed
$20,000;
(r) changed (or authorized any change) in its certificate of limited
partnership, Partnership Agreement, articles of incorporation or by-laws; or
(s) agreed or committed to do any of the foregoing.
3.9 Title to Properties.
-------------------
(a) Owned Properties. Neither the Company nor any of its Subsidiaries
----------------
owns any real property.
(b) The leases and subleases described on the "Real Property
-------------
Schedule" attached hereto (the "Leased Properties,") constitute all of the
-------- -----------------
leases and subleases under which the Company or any of its Subsidiaries holds
leasehold or subleasehold interests in real property. The real property leases
and subleases described on the Real Property Schedule are valid, binding,
----------------------
enforceable and in full force and effect and have not been modified (except to
the extent disclosed in the documents delivered to NES), and the Company or one
or more of its Subsidiaries holds a valid and existing leasehold interest under
such leases or subleases to which it is a party for the term set forth on the
Real Property Schedule. The Company has delivered to NES complete and accurate
----------------------
copies of each of the leases or subleases described on the Real Property
-------------
Schedule. With respect to each lease and sublease listed on the Real Property
-------- -------------
Schedule and except as contemplated by the Leases or contemplated by this
--------
Agreement:
-18-
(i) the lease or sublease shall continue to be legal, valid,
binding, enforceable against the lessor party thereto (other than as a
result of the Creditors Rights Exception) and in full force and effect on
identical terms immediately following the Closing;
(ii) neither the Company, any of its Subsidiaries nor any other
party to the lease or sublease is in material breach or default, and no
event has occurred which, with notice or lapse of time, would constitute
such a breach or default or permit termination, modification or
acceleration under the lease or sublease;
(iii) no party to the lease or sublease has to the Knowledge of the
Company repudiated any provision thereof and there are no disputes, oral
agreements or forbearance programs in effect as to the lease or sublease;
(iv) neither the Company nor any of its Subsidiaries has assigned,
transferred, conveyed, mortgaged, deeded in trust or encumbered any
interest in the leasehold or subleasehold;
(v) all buildings, improvements or other property leased or
subleased thereunder have received all approvals of governmental
authorities required in connection with the operation thereof and have been
operated and maintained in accordance with applicable laws, rules and
regulations; and
(c) The real property described on the Real Property Schedule
----------------------
constitutes all of the real property used or occupied by the Company or any of
its Subsidiaries.
(d) Except as set forth on the "Assets Schedule" attached hereto,
the Company or one or more of its Subsidiaries owns good and marketable title
to, or a valid leasehold interest in, free and clear of all Liens (other than
Permitted Encumbrances), all of the personal property and assets which are shown
on the Latest Balance Sheet or acquired thereafter which it purports to own.
(e) The buildings, machinery, equipment, personal properties,
vehicles and other tangible assets of the Company or its Subsidiaries purported
to be owned or used in connection with the Real Property are operated in
substantial conformity with all applicable laws and regulations, are in good
condition and repair, reasonable wear and tear excepted, and are usable in the
Ordinary Course of Business. To the Company's knowledge, the Company or one or
more of its Subsidiaries owns or leases under valid leases all buildings,
machinery, equipment and other tangible assets necessary for the conduct of the
business of the Company and its Subsidiaries.
(f) This Section 3.9 does not include Environmental Matters.
Representations and warranties regarding Environmental Matters shall be covered
by Section 3.22.
3.10 Taxes. Except as set forth on the "Taxes Schedule" attached
----- --------------
hereto, (i) the Company and each of its Subsidiaries has timely filed or shall
timely file all Tax Returns which are required to be filed on or before the
Closing Date, and all such Tax Returns are true, complete and accurate, (ii) all
Taxes due and payable by the Company or any of its Subsidiaries have been paid
-19-
or shall be paid by the Company, such Subsidiary or the Seller on or before the
Closing Date and all Taxes accrued but not yet due are shown on the Latest
Balance Sheet or are set forth on the Taxes Schedule and no Taxes are
--------------
delinquent, (iii) no deficiency for any amount of Tax has been asserted or
assessed by a taxing authority against the Company or any of its Subsidiaries
and neither the Company nor any Seller reasonably expects that any such
assertion or assessment of Tax liability will be made, (iv) neither the Company
nor any of its Subsidiaries has consented to extend the time in which any Tax
may be assessed or collected by any taxing authority, (v) neither the Company
nor any of its Subsidiaries has been a member of an Affiliated Group, (vi) no
claim has ever been made by a taxing authority in a jurisdiction where the
Company or any of its Subsidiaries does not file Tax Returns that the Company or
such Subsidiary is or may be subject to Taxes assessed by such jurisdiction,
(vii) neither the Company nor any of its Subsidiaries has any liability for
Taxes of any other Person under Treasury Regulations Section 1.1502-6 (or any
similar provision or state, local or foreign Tax law), as a transferee, by
contract, or otherwise, and (viii) the Company and each of its Subsidiaries has
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party. The Taxes Schedule contains a list
--------------
of states, territories and jurisdictions (whether foreign or domestic) in which
the Company and each of its Subsidiaries is required to file Tax Returns.
3.11 Contracts and Commitments.
-------------------------
(a) Except as specifically contemplated by this Agreement and
except as set forth on the "Contracts Schedule" attached hereto, neither the
------------------
Company nor any of its Subsidiaries is a party to or bound by, whether written
or oral, any:
(i) collective bargaining agreement or contract with any labor
union or any bonus, pension, profit sharing, retirement or any other form
of deferred compensation plan or any stock purchase, stock option,
hospitalization insurance or similar plan or practice, whether formal or
informal;
(ii) any contract for the employment of any officer, individual
employee or other person on a full-time or consulting basis or any
severance agreements providing for an annual salary in excess of $50,000;
(iii) agreement or indenture relating to the borrowing of money or to
mortgaging, pledging or otherwise placing a Lien (other than Permitted
Encumbrances) on any of its assets;
(iv) agreements with respect to the lending or investing of funds;
(v) royalty agreements;
(vi) guaranty of any obligation, other than endorsements made for
collection;
-20-
(vii) lease or agreement under which it is lessee of, or holds or
operates, any personal property owned by any other party calling for
payments in excess of $50,000 annually;
(viii) lease or agreement under which it is lessor of or permits any
third party to hold or operate any property, real or personal, owned or
controlled by it (other than leases of equipment in the Ordinary Course of
Business);
(ix) contract or group of related contracts with the same party
continuing over a period of more than six months from the date or dates
thereof, not terminable by it on 30 days or less notice without penalties
and involving more than $50,000 annually;
(x) contract which prohibits it from freely engaging in business
anywhere in the world (other than agreements which prescribe sales
territories to the Company); or
(xi) other agreement material to it not entered into in the Ordinary
Course of Business other than those contracts set forth in the Schedules
hereto and specifically cross-referenced on the Contracts Schedule.
------------------
(b) Except as disclosed on the Contracts Schedule, (i) to the
------------------
Knowledge of the Company, no contract or commitment required to be disclosed on
the Contracts Schedule has been breached or cancelled by the other party and the
------------------
Company, its Subsidiaries and the Seller have no Knowledge of any anticipated
breach by any other party to any contract required to be set forth on the
Contracts Schedule, (ii) no customer or supplier has indicated in writing or
------------------
orally to the Company, any of its Subsidiaries or any Seller that it shall stop
or decrease the rate of business done with the Company or any of its
Subsidiaries or that it desires to renegotiate its contract or current
arrangement with the Company of any of its Subsidiaries, (iii) the Company and
each of its Subsidiaries has, and to the Company's Knowledge each other party
has, in all material respects performed all the obligations required to be
performed by it in connection with the material contracts or commitments
required to be disclosed on the Contracts Schedule and is not in default under
------------------
or in breach of any contract or commitment required to be disclosed on the
Contracts Schedule, and no event has occurred which with the passage of time or
------------------
the giving of notice or both would result in a default or breach thereunder,
(iv) neither the Company nor any of its Subsidiaries has any present expectation
or intention of not fully performing any obligation pursuant to any contract
required to be set forth on the Contracts Schedule, and (v) each agreement
------------------
required to be set forth on the Contracts Schedule is, to the Company's
------------------
Knowledge, a valid and binding obligation of the other parties thereto other
than as a result of the Creditors Rights Exception.
(c) The Seller has provided NES with a true and correct copy of all
written contracts which are required to be disclosed on the Contracts Schedule,
------------------
in each case together with all amendments, waivers or other changes thereto (all
of which are disclosed on the Contracts Schedule). The Contracts Schedule
------------------ ------------------
contains an accurate in all material respects and complete description of all
material terms of all oral contracts required to be set forth thereon.
-21-
3.12 Proprietary Rights.
------------------
(a) The "Proprietary Rights Schedule" attached hereto sets forth a
---------------------------
complete and correct list of: (i) all patented, registered or applied for
Proprietary Rights currently owned or used by the Company or any of its
Subsidiaries; (ii) all trade names, unregistered trademarks and material
unregistered copyrights currently owned or used by the Company or any of its
Subsidiaries; (iii) all licenses or other agreements to which the Company or any
of its Subsidiaries is a party, either as licensee or licensor, for any
Proprietary Rights.
(b) Except as set forth on the Proprietary Rights Schedule, (i) the
---------------------------
Company or one or more of its Subsidiaries owns or has the right to use all
Proprietary Rights necessary for the operation of the Company's and each of its
Subsidiaries' businesses as currently conducted; (ii) neither the Company nor
any of its Subsidiaries has received within the last two years any written
notices of invalidity, infringement or misappropriation from any third party
with respect to any such Proprietary Rights; (iii) to the Company's Knowledge,
neither the Company nor any of its Subsidiaries has interfered with, infringed
upon, misappropriated or otherwise come into conflict with any Proprietary
Rights of any third parties; and (iv) to the actual knowledge of each of the
officers, directors and persons charged with the responsibility for maintaining
the Proprietary Rights of the Company and its Subsidiaries, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Proprietary Rights of the Company or any of its Subsidiaries.
(c) The transactions contemplated by this Agreement shall have no
material adverse effect on the Company's or any of its Subsidiaries' right,
title and interest in and to any of their Proprietary Rights.
3.13 Litigation; Proceedings. Except as set forth on the
-----------------------
"Litigation Schedule" attached hereto, there are no actions, suits, proceedings,
--------------------
orders, judgments, decrees or investigations pending or, to the actual knowledge
of the officers, directors and persons charged with overseeing the legal affairs
and risk management of the Company and its Subsidiaries, threatened to which the
Company or any of its Subsidiaries is or may be a party at law or in equity, or
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, and
to the Knowledge of the Company or any of its Subsidiaries there is no basis for
any of the foregoing. Neither the Company nor any of its Subsidiaries is in
violation of any outstanding order, judgment or decree issued by any court or
quasi-judicial or administrative agency of any federal, state, local or foreign
jurisdiction or any arbitrator. This Section 3.13 does not include
Environmental Matters. Representations and warranties regarding Environmental
Matters shall be governed exclusively by Section 3.22.
3.14 Brokerage. Except as set forth on the "Brokerage Schedule"
--------- ------------------
attached hereto, there are no claims for brokerage commissions, finders' fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement made by or on behalf of the
Company or any of its Subsidiaries.
-22-
3.15 Governmental Licenses and Permits. The "Permits Schedule"
--------------------------------- ----------------
attached hereto contains a complete listing of all material Licenses owned or
possessed by the Company or any of its Subsidiaries or used by the Company or
any of its Subsidiaries in the conduct of their respective businesses. Except
as indicated on the Permits Schedule, the Company and each of its Subsidiaries
----------------
owns or possesses all Licenses which are reasonably necessary to conduct its
business as presently conducted. No loss or expiration of any License is
pending or, to the Company's or any of its Subsidiaries' Knowledge, threatened
(including, without limitation, as a result of the transactions contemplated
hereby) other than expiration in accordance with the terms thereof. This
Section 3.15 does not include Environmental Matters. Representations and
warranties regarding Environmental Matters shall be governed exclusively by
Section 3.22.
3.16 Employees. Except as set forth on the "Employees Schedule"
--------- ------------------
attached hereto, to the Knowledge of the Company or any of its Subsidiaries, no
key executive employee and no group of employees or independent contractors of
the Company or any of its Subsidiaries has any plans to terminate his, her or
its employment or relationship as an independent contractor with the Company or
such Subsidiary within six months of the Closing Date. Except as set forth on
the Employees Schedule, the Company and each of its Subsidiaries have complied
------------------
with all applicable laws relating to the employment of personnel and labor.
Except as set forth on the Employees Schedule, neither the Company nor any of
------------------
its Subsidiaries has in the past year experienced any strikes, grievances,
unfair labor practices claims or other material employee or labor disputes.
Neither the Company nor any of its Subsidiaries has engaged in any unfair labor
practice. Neither the Company nor any of its Subsidiaries has any Knowledge of
any organizational effort presently being made or threatened by or on behalf of
any labor union with respect to employees of the Company or any of its
Subsidiaries.
3.17 Employee Benefit Plans.
----------------------
(a) Except as set forth on the "Benefit Plans Schedule" attached
----------------------
hereto, with respect to current or former employees of the Company and each of
its Subsidiaries, neither the Company nor any of its Subsidiaries maintains or
contributes to or has any actual or potential liability with respect to any (i)
deferred compensation or bonus or retirement plans or arrangements, (ii)
qualified or nonqualified defined contribution or defined benefit plans or
arrangements which are employee pension benefit plans (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA")), (iii)
-----
employee benefit plans, (as defined in Section 3(1) of ERISA), or (iv) stock
option or stock purchase plans, or material fringe benefit plans or programs
whether in writing or oral and whether or not terminated. Neither the Company
nor any of its Subsidiaries has ever contributed to any multiemployer plan (as
defined in Section 3(37) of ERISA), and neither the Company nor any of its
Subsidiaries has ever maintained or contributed to any defined benefit plan (as
defined in Section 3(35) of ERISA). Neither the Company nor any of its
Subsidiaries maintains or contributes to any employee benefit plan which
provides health, accident or life insurance benefits to former employees, their
spouses or dependents, other than in accordance with Section 4980B of the Code
("COBRA").
-----
(b) The employee benefit plans (and related trusts and insurance
contracts) set forth on the Benefit Plans Schedule comply in form and in
----------------------
operation in all respects with the
-23-
requirements of applicable laws and regulations, including ERISA and the Code
and the nondiscrimination rules thereof. All contributions, premiums or payments
under or with respect to each employee benefit plan listed on the Benefit Plans
-------------
Schedule which are due on or the Closing Date have been paid on a timely basis.
--------
(c) All required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports and Summary Plan Descriptions) with
respect to the employee benefit plans set forth on the Benefit Plans Schedule
----------------------
have been properly and timely filed with the appropriate government agency and
distributed to participants as required. The Company and each of its
Subsidiaries have complied with the requirements of COBRA.
(d) With respect to each employee benefit plan set forth on the
Benefit Plans Schedule, (i) there have been no prohibited transactions as
----------------------
defined in Section 406 of ERISA or Section 4975 of the Code, (ii) the Company
has no liability to any fiduciary (as defined in Section 3(21) of ERISA) that
has any liability for breach of fiduciary duty or any other failure to act or
comply in connection with the administration or investment of the assets of such
plans, and (iii) no actions, investigations, suits or claims with respect to the
assets thereof (other than routine claims for benefits) are pending or
threatened, and neither the Company nor any of its Subsidiaries has any
knowledge of any facts which would give rise to or could reasonably be expected
to give rise to any such actions, suits or claims.
(e) With respect to each of the employee benefit plans listed on the
Benefit Plans Schedule, the Seller has furnished to NES true and complete copies
----------------------
of (i) the plan documents, summary plan descriptions and summaries of material
modifications and other material employee communications, (ii) the Form 5500
Annual Report (including all schedules and other attachments for the most recent
three years), (iii) all related trust agreements, insurance contracts or other
funding agreements which implement such plans and (iv) all contracts relating to
each such plan, including, without limitation, service provider agreements,
insurance contracts, investment management agreements and recordkeeping
agreements.
(f) Each employee benefit plan listed on the Benefit Plans
-------------
Schedule which is intended to be qualified under section 401(a) of the Code (i)
--------
has been amended to reflect all requirements of the Tax Reform Act of 1986 and
all subsequent legislation which is required to be adopted prior to the end of
the applicable remedial amendment period and (ii) has received from the Internal
Revenue Service a favorable determination letter which considers the terms of
the Plan as amended for such changes in the law.
(g) The Company has not incurred and has no reason to expect that it
will incur, any liability to the Pension Benefit Guaranty Corporation (other
than premium payments) or otherwise under Title IV of ERISA (including any
withdrawal liability) or under the Code with respect to any employee pension
benefit plan (as defined in Section 3(2) of ERISA) that the Company or any other
entity, that together with the Company is treated as a single employer under
section 414 of the Code, maintains or ever has maintained or to which any of
them contributes, ever has contributed, or ever has been required to contribute.
No actual or potential withdrawal liability exists with respect to any
multiemployer plan (as defined in Section 3(37) of ERISA, including
-24-
without limitation, any liability which would exist if the Company withdrew from
all multiemployer plans as of the Closing Date.
3.18 Insurance. The "Insurance Schedule" attached hereto lists
--------- ------------------
each insurance policy maintained by the Company and each of its Subsidiaries
with respect to its properties, assets and business. All of such insurance
policies are in full force and effect, and neither the Company nor any of its
Subsidiaries is in default with respect to its obligations under any such
insurance policies and neither the Company nor any of its Subsidiaries has been
denied insurance coverage during the past five years. Except as set forth on
the Insurance Schedule, neither the Company nor any of its Subsidiaries has any
------------------
self-insurance or co-insurance programs, and the reserves set forth on the
Latest Balance Sheet are adequate to cover all reasonably anticipated
liabilities with respect to self-insurance or coinsurance programs.
3.19 Officers and Directors; Bank Accounts. The "Officers,
------------------------------------- ---------
Directors, Partners and Bank Accounts Schedule" attached hereto lists all
----------------------------------------------
officers, directors and partners of the Company and each of its Subsidiaries,
and all bank accounts, safety deposit boxes and lock boxes (designating each
authorized signatory with respect thereto) for the Company and each of its
Subsidiaries.
3.20 Affiliate Transactions. Except as disclosed on the
----------------------
"Affiliated Transactions Schedule" attached hereto or as contemplated by this
---------------------------------
Agreement, no Insider is a party to any material agreement, contract, commitment
or transaction with the Company or any of its Subsidiaries or has any interest
in any property, real or personal or mixed, tangible or intangible, used in or
pertaining to the business of the Company or any of its Subsidiaries that was
not entered into on an arm's length basis.
3.21 Compliance with Laws. The Company and each of its
--------------------
Subsidiaries have complied with and are in substantial compliance with all
applicable laws, regulations and ordinances of foreign, federal, state and local
governments and all agencies thereof which are applicable to the business,
business practices (including, but not limited to, the Company's and its
Subsidiaries' marketing and sales of their respective products and services) or
any owned or leased properties of the Company or any of its Subsidiaries and to
which the Company or any of its Subsidiaries may be subject, and to the
Company's Knowledge, no claims have been filed against the Company or any of its
Subsidiaries alleging a violation of any such laws or regulations, and neither
the Company nor any of its Subsidiaries has received written notice of any such
violations. This Section 3.21 does not include Environmental Matters.
Representations and warranties regarding Environmental Matters shall be governed
exclusively by Section 3.22.
3.22 Environmental Matters. Except as set forth on the
---------------------
"Environmental Schedule" attached hereto:
-----------------------
(a) The Company and each of its Subsidiaries have complied with and
are currently in compliance with all Environmental and Safety Requirements, and
neither the Company nor any of its Subsidiaries has received written notice,
report or information regarding any liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) or any corrective, investigatory
-25-
or remedial obligations arising under Environmental and Safety Requirements
which relate to the Company or to any of its Subsidiaries or to any of their
respective properties or facilities.
(b) Without limiting the generality of the foregoing, the Company
and each of its Subsidiaries have obtained and materially complied with, and are
currently in material compliance with, all Environmental Permits required for
occupancy of their respective properties or facilities or the operation of their
respective businesses. A list of all such permits, licenses and other
authorizations which are material to the Company or to any of its Subsidiaries
is set forth on the Environmental Schedule.
----------------------
(c) Neither this Agreement or the other Transaction Documents nor
the consummation of the transactions contemplated hereby and thereby shall
impose any obligations on the Company or any of its Subsidiaries or otherwise
for site investigation or cleanup, or notification to or consent of any
government agencies or third parties under any Environmental and Safety
Requirements (including, without limitation, any so called "transaction-
triggered" or "responsible property transfer" laws and regulations).
(d) Except as set forth in the Environmental Schedule, none of the
----------------------
following exists at any property or facility owned, occupied or operated by the
Company or any of its Subsidiaries: (i) underground storage tanks or surface
impoundments; (ii) asbestos-containing material in any form or condition; (iii)
materials or equipment containing polychlorinated biphenyls; or (iv) landfills.
(e) Except as set forth in the Environmental Schedule, neither the
----------------------
Company nor any of its Subsidiaries have treated, stored, disposed of, arranged
for or permitted the disposal of, transported, handled or Released any substance
(including, without limitation, any hazardous substance) or owned, occupied or
operated any facility or property, so as to give rise to liabilities of the
Company or any of its Subsidiaries for response costs, natural resource damages
or attorneys' fees pursuant to CERCLA or any other Environmental and Safety
Requirements.
(f) Except as set forth in the Environmental Schedule, without
----------------------
limiting the generality of the foregoing, no facts, events or conditions
relating to the past or present properties, facilities or operations of the
Company or any of its Subsidiaries shall prevent, hinder or limit continued
material compliance with Environmental and Safety Requirements, give rise to any
corrective, investigatory or remedial obligations pursuant to Environmental and
Safety Requirements or give rise to any other liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise) pursuant to Environmental and
Safety Requirements, including, without limitation, those liabilities relating
to onsite or offsite Releases or threatened Releases of hazardous materials,
substances or wastes, personal injury, property damage or natural resources
damage.
(g) Neither the Company nor any of its Subsidiaries have, either
expressly or by operation of law, assumed or undertaken any liability or
corrective, investigatory or remedial obligation of any other Person relating to
any Environmental and Safety Requirements.
-26-
(h) No Environmental Lien has attached to any property owned, leased
or operated by the Company or any of its Subsidiaries.
3.23 Disclosure. As of the date hereof, the written information
----------
provided to the Purchaser by the Company prior to the date of this Agreement in
connection with the transactions contemplated hereby, taken together, does not
contain any untrue statement of a material fact or omit a material fact
necessary to make each statement contained therein, in light of the
circumstances under which they were made, not misleading in any material
respect.
3.24 Closing Date. All of the representations and warranties
------------
contained in this Article III and all information delivered by the Company in
any schedule, attachment or Exhibit hereto or in any writing delivered by the
Company to the Purchaser or NES, to the Company's Knowledge and when taken
together, are true and correct in all material respects as of the date hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
CONCERNING THE SELLER AND THE SHAREHOLDER
As a material inducement to the Purchaser to enter into this
Agreement, each of the Seller and the Shareholder severally represents and
warrants, as applied solely to itself, to the Purchaser that as of the date
hereof:
4.1 Authorization of Transactions. Each of the Seller and the
-----------------------------
Shareholder has all requisite corporate or legal power, authority and legal
capacity to execute and deliver the Transaction Documents to which such Seller
or Shareholder is a party and to consummate the transactions contemplated
thereby and hereby. Each of the Seller and the Shareholder has duly executed
and delivered this Agreement and all of the other Transaction Documents to which
such Seller or Shareholder is a party and such Transaction Documents, when
executed and delivered by the other parties thereto, will constitute the valid
and binding agreements of such Seller or Shareholder, enforceable against such
Seller or Shareholder in accordance with their terms, subject to the Creditors
Rights Exception.
4.2 Absence of Conflicts. Except for the HSR Filing, neither the
--------------------
execution and the delivery of this Agreement and the other documents
contemplated hereby to which such Seller or Shareholder is a party, nor the
consummation of the transactions contemplated hereby and thereby, shall (a)
conflict with, result in a breach of any of the provisions of, (b) constitute a
default under, (c) result in the violation of, (d) give any third party the
right to terminate or to accelerate any obligation under, (e) result in the
creation of any Lien upon the Acquired Partnership Interests owned by such
Seller, or (f) require any authorization, consent, approval, execution or other
action by or notice to any court or other governmental body, under the
provisions of any indenture, mortgage, lease, loan agreement or other material
agreement or instrument to which such Seller or Shareholder is bound, or any
statute, regulation, rule, judgment, order, decree or other restriction of any
government, governmental agency or court to which such Seller or Shareholder is
subject. Except
-27-
for the HSR Filing, no notice to, filing with or authorization, consent or
approval of any government or governmental agency by such Seller or Shareholder
is necessary for the consummation of the transactions contemplated by this
Agreement and the other documents contemplated hereby to which such Seller or
Shareholder is a party.
4.3 Brokerage. Except as set forth on the Brokerage Schedule,
--------- ------------------
there are no claims for brokerage commissions, finders' fees or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement or agreement made by or on behalf of such Seller or
Shareholder.
4.4 Partnership Interests. Such Seller holds of record and owns
---------------------
beneficially the Partnership Interests as indicated on the Schedule of Partners,
--------------------
free and clear of any Liens (other than those under the Partnership Agreement or
the Delaware Revised Uniform Limited Partnership Act). Such Seller is not a
party to any option, warrant, right, contract, call, put or other agreement or
commitment providing for the disposition or acquisition of any Partnership
Interests of the Company (other than this Agreement and the Partnership
Agreement). Such Seller is not a party to any voting trust, proxy or other
agreement or understanding with respect to the voting of any Partnership
Interests of the Company (other than the Partnership Agreement).
4.5 Closing Date. All of the representations and warranties
------------
concerning such Seller and Shareholder contained in this Article IV are true and
correct in all material respects as of the date hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES CONCERNING THE PURCHASER
-------------------------------------------------------
As a material inducement to the Seller and the Shareholder to enter
into this Agreement, the Purchaser hereby represents and warrants to the Seller
and the Shareholder that:
5.1 Organization and Corporate Power. The Purchaser is a
--------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with full corporate power and authority to execute and
deliver this Agreement and the other Transaction Documents and agreements
contemplated hereby to which the Purchaser is a party and perform its
obligations hereunder and thereunder.
5.2 Authorization of Transaction. The execution, delivery and
----------------------------
performance of this Agreement and the other Transaction Documents and agreements
contemplated hereby to which the Purchaser is a party have been duly and validly
authorized by all requisite corporate action on the part of the Purchaser, and
no other corporate proceedings on its part are necessary to authorize the
execution, delivery or performance of this Agreement or those other Transaction
Documents and agreements. This Agreement constitutes, and each of the other
Transaction Documents and agreements contemplated hereby to which the Purchaser
is a party shall, when executed by the other parties thereto, constitute, a
valid and binding obligation of the Purchaser, enforceable in accordance with
their terms, subject to the Creditors Rights Exception.
-28-
5.3 No Violation. The Purchaser is not subject to or obligated
------------
under its certificate of incorporation, its by-laws, any applicable law, or rule
or regulation of any governmental authority, or any agreement or instrument, or
any license, franchise or permit, or subject to any order, writ, injunction or
decree, which would be breached or violated by its execution, delivery or
performance of this Agreement and the other Transaction Documents and agreements
contemplated hereby to which the Purchaser is a party.
5.4 Governmental Authorities and Consents. Except for the HSR
-------------------------------------
Filing, the Purchaser is not required to submit any notice, report or other
filing with any governmental authority in connection with the execution or
delivery by it of this Agreement and the other Transaction Documents and
agreements contemplated hereby to which the Purchaser is a party or the
consummation of the transactions contemplated hereby or thereby. Except for the
HSR Filing, no consent, approval or authorization of any governmental or
regulatory authority or any other party or person is required to be obtained by
the Purchaser in connection with its execution, delivery and performance of this
Agreement and the other Transaction Documents and agreements contemplated hereby
to which the Purchaser is a party or the transactions contemplated hereby or
thereby.
5.5 Litigation. There are no actions, suits, proceedings or
----------
orders pending or, to the Purchaser's knowledge, threatened against or affecting
the Purchaser at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which would adversely affect the
Purchaser's performance under this Agreement and the other Transaction Documents
and agreements contemplated hereby to which the Purchaser is a party or the
consummation of the transactions contemplated hereby or thereby.
5.6 Brokerage. There are no claims for brokerage commissions,
---------
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Purchaser.
5.7 Closing Date. All of the representations and warranties
------------
contained in this Article V and elsewhere in this Agreement and all information
delivered in any schedule, attachment or Exhibit hereto or in any writing
delivered to Seller are true and correct as of the date hereof.
5.8 Investment Intent. The Purchaser is acquiring the Acquired
-----------------
Partnership Interests and Acquired Shares for its own account, for investment
and not with a view to resale in connection with any distribution thereof, and
is not participating in and does not have a participation in any such
distribution or the underwriting of any such distribution and will not transfer
such Acquired Partnership Interests or Acquired Shares in violation of any
applicable securities law.
ARTICLE VI
INDEMNIFICATION AND RELATED MATTERS
-----------------------------------
6.1 Survival. All representations, warranties, covenants and
--------
agreements set forth in this Agreement or in any writing or certificate
delivered in connection with this Agreement shall
-29-
survive the Closing Date and the consummation of the transactions contemplated
hereby and shall not be affected by any examination made for or on behalf of any
Party, the knowledge of any of such Party's officers, directors, stockholders,
partners, employees or agents, or the acceptance of any certificate or opinion.
Notwithstanding the foregoing, no Party shall be entitled to recover for any
Loss pursuant to Section 6.2(a)(i) or Section 6.2(c)(i) unless written notice of
a claim thereof is delivered to the other Party prior to the Applicable
Limitation Date. For purposes of this Agreement, the term "Applicable Limitation
---------------------
Date" shall mean the second anniversary of the Closing Date; provided that the
----
Applicable Limitation Date with respect to the following Losses shall be as
follows: (i) with respect to any Loss arising from or related to a breach of the
representations and warranties set forth in Section 3.10 (Taxes), the Applicable
Limitation Date shall be the 30th day after expiration of the statute of
limitations (including any extensions thereto to the extent that such statute of
limitations may be tolled) applicable to the Tax which gave rise to such Loss,
(ii) with respect to any Loss arising from or related to a breach of the
representations and warranties set forth in Section 3.22 (Environmental), the
Applicable Limitation Date shall be the third anniversary of the Closing Date,
and (iii) with respect to any Loss arising from or related to a breach of the
representations and warranties set forth in Section 3.1 (Organization and
Corporate Power), Section 3.2 (Authorization of Transactions), Section 3.3
(Capitalization), Section 3.14 (Brokerage) or Section 4.1, (Authorization of
Transactions), Section 4.3 (Brokerage) or Section 4.4 (Partnership Interests)
and with respect to any Loss arising from or related to a breach of the
representations and warranties of Purchaser set forth in Section 5.1
(Organization and Corporate Power), 5.2 (Authorization of Transactions), 5.3 (No
Violation) or 5.6 (Brokerage), there shall be no Applicable Limitation Date
(i.e., such representations and warranties shall survive forever).
6.2 Indemnification.
---------------
(a) Each of the Seller and the Shareholder shall to the extent set
forth herein jointly and severally indemnify the Purchaser, and the Company and
each of their respective officers, directors, stockholders, employees, agents,
affiliates, successors and assigns (collectively, the "Purchaser Parties") and
-----------------
hold each of them harmless from and against and pay on behalf of or reimburse
such Purchaser Parties in respect of any Loss which any such Purchaser Party may
suffer, sustain or become subject to, as a result of or relating to:
(i) the breach of any representation or warranty made by the
Company, the Seller or the Shareholder contained in this Agreement or any
certificate delivered by the Company, the Seller or the Shareholder to the
Purchaser with respect thereto in connection with the Closing;
(ii) the breach of any covenant or agreement made by the Company,
the Seller or the Shareholder contained in this Agreement, the other
Transaction Documents, any Exhibit hereto or any certificate delivered by
the Company, the Seller or the Shareholder to the Purchaser with respect
thereto in connection with the Closing; and
(iii) Pre-Closing Environmental Liabilities.
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The Purchaser Party's remedy for any indemnification of Losses hereunder may be
satisfied by proceeding against the Seller individually for all or any portion
of any such Loss or against the Shareholder.
(b) The indemnification provided for in Sections 6.2(a)(i) and
6.2(a)(iii) above is subject to the following limitations:
(i) Each of the Seller and the Shareholder will be liable to the
Purchaser Parties with respect to claims referred to in Section 6.2(a)(i)
only if the Purchaser Party gives the Seller written notice thereof within
the Applicable Limitation Date; and
(ii) The aggregate amount of all payments made by the Seller and
Shareholder in satisfaction of claims for indemnification pursuant to
Section 6.2(a)(i) and Section 6.2(a)(iii) collectively shall not exceed
$21,250,000 (the "Cap");
---
(ii) The Seller and the Shareholder shall not be liable to indemnify
any Purchaser Parties pursuant to 6.2(a)(i) unless and until the Purchaser
Parties have collectively suffered Losses pursuant to such Section in
excess of a $200,000 aggregate basket ("Basket") (at which point, subject
------
to the other limitations herein, the Seller and the Shareholder will be
liable to the Purchaser Parties for all Losses in excess of such Basket);
(iv) If the Seller's and Shareholder's indemnification obligation
under this Section 6.2 arises in respect of any indemnifiable event (A) for
which a Purchaser Party receives indemnification from the Seller or
Shareholder and (B) which results in any Tax benefit to such Purchaser
Party for any taxable period (or portion thereof) beginning and ending
after the Closing Date which would not, but for such indemnifiable event,
be available, such Purchaser Party shall pay, or shall cause to be paid, to
the Seller or Shareholder an amount equal to the actual Tax saving produced
by such Tax benefit reduced by the amount of any Tax detriment to such
Purchaser Party as a result of the receipt of such indemnification. Tax
benefits and detriments shall be taken into account as and when actually
realized. The amount of any such Tax saving for any taxable period shall
be the amount of the reduction in Taxes payable to a Tax authority by such
Purchaser Party with respect to such Tax period (net of any Tax detriment
resulting from the receipt of the indemnity payment) as compared to the
Taxes that would have been payable to a Tax authority by such Purchaser
Party with respect to such Tax period in the absence of such Tax benefit;
and
(v) Any payment made by the Seller or Shareholder to a Purchaser
Party pursuant to this Section 6.2 in respect of any indemnifiable event
shall be net of any insurance proceeds realized by and paid to such
Purchaser Party in respect of such claim. Such Purchaser Party shall use
its reasonable efforts to make insurance claims relating to any
indemnifiable event for which it is seeking indemnification pursuant to
this Section 6.2; provided that such Purchaser Party shall not be obligated
to make such an insurance claim if the cost of pursuing such an insurance
claim together with any corresponding increase in insurance premiums or
other chargebacks to such Purchaser Party, as the case may be, would exceed
the value of the claim for which such Purchaser Party is seeking
indemnification. If
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a Purchaser Party receives an amount under insurance coverage or from such
other party with respect to Losses at any time subsequent to any
indemnification provided by the Seller or the Shareholder pursuant to this
Section 6.2, then such Purchaser Party shall promptly reimburse the Seller,
or the Shareholder as the case may be, for any payment made or expense
incurred by the Seller in connection with providing such indemnification up
to such amount received by the Purchaser Party or the Shareholder.
Notwithstanding any implication to the contrary contained in this Agreement, so
long as the Purchaser Party delivers written notice of a claim to the Seller no
later than the Applicable Limitation Date, the Seller and the Shareholder shall
be subject to the terms and conditions hereof required to indemnify the
Purchaser Parties for all Losses (up to the Cap) which the Purchaser Parties may
incur in respect of the matters which are the subject of such claim, regardless
of when incurred. Any such written notice shall contain sufficient information
and detail, to the extent it is then in the indemnified party's possession, to
substantiate the nature, scope and validity of the claim.
(c) The Purchaser shall indemnify the Seller and the Shareholder and
hold each of the Seller, the Shareholder and any of their officers, directors,
stockholders, employees, partners, agents, affiliates, successors and assigns
(collectively, the "Seller Parties") harmless from and against and pay on behalf
--------------
of or reimburse such Seller Party in respect of any Loss which any Seller Party
may suffer, sustain or become subject to, as a result of or relating to:
(i) the breach of any representation or warranty made by the
Purchaser contained in this Agreement or any certificate delivered by the
Purchaser to the Seller or the Shareholder with respect thereto in
connection with the Closing;
(ii) the breach of any covenant or agreement made by the Purchaser
contained in this Agreement, the other Transaction Documents, any Exhibit
hereto or any certificate delivered by the Purchaser to the Seller or the
Shareholder with respect thereto in connection with the Closing; or
(iii) any Post-Closing Environmental Liabilities.
(d) The indemnification provided for in Section 6.2(c)(i) above is
subject to the following limitations:
(i) The Purchaser will be liable to the Seller Parties with respect
to claims referred to in Section 6.2(c)(i) only if the Seller gives the
Purchaser written notice thereof within the Applicable Limitation Date;
(ii) The aggregate amount of all payments made by the Purchaser in
satisfaction of claims for indemnification pursuant to Section 6.2(c)(i)
shall not exceed the Cap; and
(ii) The Purchaser shall not be liable to indemnify any Seller
Parties pursuant to Section 6.2(c)(i) unless and until the Seller Parties
have collectively suffered Losses pursuant to such Section in excess of the
Basket (at which point, subject to the other limitations
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herein, the Purchaser will be liable to the Seller Parties for all Losses
in excess of such Basket).
Notwithstanding any implication to the contrary contained in this Agreement, so
long as the Seller delivers written notice of a claim to the Purchaser no later
than the Applicable Limitation Date, the Purchaser shall be required to
indemnify the Seller Parties for all Losses (up to the Cap) which the Seller
Parties may incur in respect of the matters which are the subject of such claim,
regardless of when incurred.
(e) If a party hereto seeks indemnification under this Article IX,
such party (the "Indemnified Party") shall give prompt written notice to the
-----------------
other party (the "Indemnifying Party") after receiving written notice of any
------------------
action, lawsuit, proceeding, investigation or other claim against it (if by a
third party) or discovering the liability, obligation or facts giving rise to
such claim for indemnification, describing the claim, the amount thereof (if
known and quantifiable), and the basis thereof; provided that the failure to so
notify the Indemnifying Party shall not relieve the Indemnifying Party of its or
his obligations hereunder except to the extent such failure shall have harmed
the Indemnifying Party. In that regard, if any action, lawsuit, proceeding,
investigation or other claim shall be brought or asserted by any third party
which, if adversely determined, would entitle the Indemnified Party to indemnity
pursuant to this Article IX, the Indemnified Party shall promptly notify the
Indemnifying Party of the same in writing, specifying in detail the basis of
such claim and the facts pertaining thereto and the Indemnifying Party shall be
entitled to control the defense of such action, lawsuit, proceeding,
investigation or other claim giving rise to the Indemnified Party's claim for
indemnification at its expense, and at its option (subject to the limitations
set forth below) shall be entitled to appoint lead counsel of such defense with
reputable counsel reasonably acceptable to the Indemnified Party; provided that,
if the Indemnifying Party assumes control of such defense, the Indemnifying
Party will be fully responsible for all Losses relating to such claims and that
it will provide full indemnification to the Indemnified Party for all Losses
relating to such claim, and, provided further that, the Indemnifying Party shall
not have the right to assume control of such defense and shall pay the
reasonable fees and expenses of counsel retained by the Indemnified Party, if
the claim over which the Indemnifying Party seeks to assume control (i) is a
claim that primarily seeks non-monetary relief, (ii) primarily involves
criminal or quasi-criminal allegations, (iii) primarily involves a claim to
which the Indemnified Party reasonably believes an adverse determination would
be materially detrimental to or materially injure the Indemnified Party's
reputation or future business prospects rather than a claim for monetary
damages, or (iv) involves a claim which, upon petition by the Indemnified Party,
the appropriate court rules that the Indemnifying Party failed or is failing to
vigorously prosecute or defend.
The Indemnifying Party shall have the right to fully participate in any
investigation by the Indemnified Party which is intended to elicit information
that would form the basis for any claim for indemnity under this Agreement. If
the Indemnifying Party is permitted to assume and control the defense and elects
to do so, the Indemnified Party shall have the right to employ counsel separate
from counsel employed by the Indemnifying Party in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
employed by the Indemnified Party shall be at the expense of the Indemnified
Party unless the employment thereof has been specifically authorized by the
Indemnifying Party in writing.
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If the Indemnifying Party shall control the defense of any such claim, the
Indemnifying Party shall obtain the prior written consent of the Indemnified
Party (which shall not be unreasonably withheld) before entering into any
settlement of a claim or ceasing to defend such claim, if pursuant to or as a
result of such settlement or cessation, injunction or other equitable relief
will be imposed against the Indemnified Party or if such settlement does not
expressly unconditionally release the Indemnified Party from all liabilities and
obligations with respect to such claim, without prejudice.
(f) Amounts paid to or on behalf of Seller, the Shareholder or
Purchaser as indemnification shall be treated as adjustments to the Purchase
Price for Tax purposes.
(g) The Seller and the Shareholder hereby acknowledge that neither
they nor their Affiliates have any claims or rights to contribution or indemnity
from the Company with respect to any amount paid by any of them pursuant to this
Section 6.2.
(h) The Indemnifying Party and the Indemnified Party shall
cooperate fully in all aspects of any investigation, defense, pretrial
activities, trial, compromise, settlement or discharge of any claim in respect
of which indemnity is sought pursuant to this Article VI, including, but not
limited to, providing the other party with reasonable access to employees and
officers (including as witnesses) and other information.
ARTICLE VII
ADDITIONAL AGREEMENTS
---------------------
7.1 Continuing Assistance. Subsequent to the Closing, the Seller
---------------------
and the Purchaser (at their own cost) shall assist each other (including making
records available) in the preparation of their respective Tax Returns and the
filing and execution of Tax elections, if required, as well as any audits or
litigation that ensue as a result of the filing thereof, to the extent that such
assistance is reasonably requested.
7.2 Tax Matters.
-----------
(a) All transfer, documentary, sales, use, stamp, registration and
other such Taxes and fees (including any penalties and interest thereon)
incurred in connection with this Agreement shall be paid by the Seller or the
Shareholder when due, and each Seller or Shareholder shall, at its or his own
expense, file all necessary Tax Returns and other documentation with respect to
all such transfer, documentary, sales, use, stamp, registration and other Taxes
and fees, and if required by applicable law, the Purchaser shall, and shall
cause its affiliates to, join in the execution of any such Tax Returns and other
documentation.
(b) The Seller or the Shareholder shall reimburse the Purchaser for
all Taxes of the Company and its Subsidiaries with respect to any period (or
portion thereof) ending on or before the Closing Date within ten days of payment
by the Purchaser, the Company or any of its Subsidiaries of such Taxes , but
only to the extent that the Taxes exceed the amount of accrued Taxes used in
determining Net Equity for purposes of Section 2.3. For purposes of this Section
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7.2(b), in the case of any Taxes that are imposed on a periodic basis and are
payable for a Taxable period that includes (but does not end on) the Closing
Date, the portion of such Tax which is respect to the portion of such Taxable
period ending on the Closing Date shall (x) in the case of any Taxes other than
Taxes based upon or related to income or receipts, be deemed to be the amount of
such Tax for the entire Taxable period multiplied by a fraction the numerator of
which is the number of days in the Taxable period ending on the Closing Date and
the denominator of which is the number of days in the entire Taxable period, and
(y) in the case of any Tax based upon or related to income or receipts be deemed
equal to the amount which would be payable if the relevant Taxable period ended
on the Closing Date.
(c) Each of the Seller, the Shareholder and the Purchaser (at their
own cost) shall assist each other (including making records available) in the
preparation of their respective Tax Returns and the filing and execution of Tax
elections, if required, as well as any audits or litigation that ensue as a
result of the filing thereof, to the extent that such assistance is reasonably
requested.
(d) Consistent with the requirements of Section 708(b)(1) (B) of the
Code (1) the Company's taxable year shall terminate as of the Closing Date and
(ii) net income or net loss of the Company shall be determined based upon the
actual operations of the Company as of the Closing Date. Net income or net loss
of the Company arising prior to the Closing Date shall be allocated to the
Seller for Tax purposes. Net income and net loss of the Company arising on or
after the Closing Date shall be allocated to Purchaser for Tax purposes.
7.3 Press Releases and Announcements. After the Closing Date, no
--------------------------------
press releases related to this Agreement and the transactions contemplated
herein, or other announcements to the employees, customers or suppliers of the
Company or any of its Subsidiaries shall be issued without the Purchaser's
consent (which shall not be unreasonably withheld). Neither the Purchaser nor
any of its Affiliates shall make any public disclosure of the Company's prior
revenues or of the Purchase Price, except (i) with the consent of the
Shareholder, (ii) as may be required by applicable law, or (iii) as disclosed in
connection with the disclosure of several acquisitions together, in a manner in
which such information is not specific to any individual acquisition.
7.4 Further Transfers. Each party shall execute and deliver such
-----------------
further instruments of conveyance and transfer and take such additional action
as may be reasonably requested by the other party to effect, consummate, confirm
or evidence the transfer to the Purchaser of the Acquired Partnership Interests
and the Acquired Shares and any other transactions contemplated hereby.
7.5 Specific Performance. Each of the Seller and the Shareholder
--------------------
acknowledges that the Company's and each of its Subsidiaries' businesses is
unique and recognizes and affirms that in the event of a breach of this
Agreement by such Seller or Shareholder, money damages may be inadequate and
Purchaser may have no adequate remedy at law. Accordingly, each of the Seller
and the Shareholder agrees that Purchaser shall have the right, in addition to
any other rights and remedies existing in its favor, to enforce its rights and
such Seller's obligations hereunder not only by an action or actions for damages
but also by an action or actions for specific performance, injunctive and/or
other equitable relief.
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7.6 Transition Assistance. During the five year period following
---------------------
the Closing Date, each of the Seller and the Shareholder shall not in any manner
take any action which is designed, intended, or might be reasonably anticipated
to have the effect of discouraging customers, suppliers, lessors, licensors and
other business associates from maintaining the same business relationships with
the Company and/or any of its Subsidiaries after the date of this Agreement as
were maintained with the Company and/or any of its Subsidiaries prior to the
date of this Agreement, except that nothing herein shall restrict any activity
with respect to Speed Shore that is not otherwise prohibited by Section 7.10
(Non-Competition, Non-Solicitation and Confidentiality) of this Agreement.
7.7 Expenses. Except as otherwise provided herein, each of the
--------
Seller, the Shareholder and the Purchaser shall pay all of their own fees, costs
and expenses (including, without limitation, fees, costs and expenses of legal
counsel, investment bankers, brokers or other consultants and appraisal fees,
costs and expenses) incurred in connection with the negotiation of this
Agreement and the other agreements contemplated hereby, the performance of its
obligations hereunder and thereunder, and the consummation of the transactions
contemplated hereby and thereby (collectively, the "Transaction Expenses"); it
--------------------
being understood that the Seller and the Shareholder shall pay the fees, costs
and expenses of the Company and its Subsidiaries and that the Company shall pay
any of the Seller's fees, costs and expenses (including, without limitation,
legal and accounting fees, costs and expenses) arising in connection with the
transactions contemplated hereby if the transactions are not consummated. At
the request of the Seller and the Shareholder, the fees, costs and expenses for
which they are liable pursuant to this Section 7.7 may be deducted from the Cash
Purchase Price and paid directly to the Seller's legal counsel, investment
bankers and other agents of Seller. To the extent that the Company pays or
becomes liable with respect to any Transaction Expenses of the Company, any of
its Subsidiaries, the Seller or the Shareholder, the Cash Purchase Price shall
be reduced dollar-for-dollar.
7.8 Exclusivity. Until this Agreement is terminated by its terms,
-----------
neither the Company, any of its Subsidiaries nor the Seller or the Shareholder
shall (and neither the Company nor the Seller or the Shareholder shall cause or
permit any Insider or agent or any other Person acting on behalf of any Seller,
the Shareholder, the Company or its Affiliates to) (a) solicit, initiate or
encourage the submission of any proposal or offer from any Person (including any
of them) relating to any (i) liquidation, dissolution or recapitalization of,
(ii) merger or consolidation with or into, (iii) acquisition or purchase of
assets (other than in the Ordinary Course of Business) of or any equity interest
in or (iv) similar transaction or business combination involving the Company or
(b) participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any other Person to do or seek any of the
foregoing. Each of the Company, the Seller and the Shareholder agrees to
discontinue immediately (and will cause any Insider or agent or any other Person
acting on behalf of any Seller, the Shareholder, the Company, or its Affiliates
to discontinue immediately) any negotiations or discussion with respect to any
of the foregoing. Until this Agreement is terminated by its terms, the Seller,
the Shareholder and the Company shall notify the Purchaser immediately if any
Person makes any proposal, offer, inquiry or contact with respect to any of the
foregoing.
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7.9 Books and Records. Unless otherwise consented to in writing by
-----------------
the Seller and the Purchaser, the Purchaser, the Seller and the Shareholder
will not, for a period of seven years following the date hereof, destroy, alter
or otherwise dispose of any of the books and records of the Company acquired by
the Purchaser hereunder or retained by any Seller or the Shareholder without
first offering to surrender to the other Party such books and records or any
portion thereof of which the Seller, the Shareholder or the Purchaser may intend
to destroy, alter or dispose. The Purchaser, the Seller and the Shareholder
will allow the other party's attorneys and accountants access to such books and
records, upon reasonable request during such party's normal business hours, for
the purpose of examining and copying the same in connection with any matter
whether or not related to or arising out of this Agreement or the transactions
contemplated hereby.
7.10 NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY.
-----------------------------------------------------
(a) Non-competition. In consideration of the mutual covenants
---------------
provided for herein to the Seller at the Closing, during the period beginning on
the Closing Date and ending on the fifth anniversary of the Closing Date (the
"Non-compete Period"), neither the Seller nor the Shareholder (collectively, the
------------------
"Non-competing Parties") shall engage (whether as an owner, operator, manager,
---------------------
employee, officer, director, consultant, advisor, Seller or otherwise) directly
or indirectly in any of the following businesses that the Company or any of its
Subsidiaries conduct as of the Closing Date in the United States: the rental of
hydraulic shoring equipment, trench shielding equipment, road plates, lasers,
confined space technology (including gas monitors and blowers), air and
hydraulic testing equipment, trenchless technology (including piercing and
boring equipment) and compaction equipment, and the provision of engineering
services in conjunction with the foregoing rental activity, as of the Closing
Date in the United States, except: (1) the Non-competing Parties shall not be
precluded from manufacturing shoring equipment and related products (but shall
be precluded from using the name "The Plank Company" or any similar name in
connection with any business involving the rental of shoring, trench safety and
related equipment or any other business described in the preceding part of this
sentence until 18 months following the Closing Date), (2) as expressly permitted
under any employment agreement with the Company executed at the Closing as
contemplated hereunder; provided that ownership of less than 2% of the
outstanding stock of any publicly-traded corporation shall not be deemed to be
engaging solely by reason thereof in any of its businesses and (3) the Non-
competing Party shall not be precluded from directly or indirectly continuing
any activities or operations of or ownership in Speed Shore or any Subsidiaries
of Speed Shore or otherwise engaging in activity permitted under the Supply
Agreement (subject to the prohibitions contained therein) (but in no event shall
the Non-competing Party engage in the rental of hydraulic shoring equipment,
trench shielding equipment, road plates, lasers, confined space technology
(including gas monitors and blowers), air and hydraulic testing equipment,
trenchless technology (including piercing and boring equipment) and compaction
equipment and the provision of engineering services in conjunction with the
foregoing rental activity. The parties hereto agree that the covenant set forth
in this Section 7.10 is reasonable with respect to its duration, geographical
area and scope. If the final judgment of a court of competent jurisdiction
declares that any term or provision of this Section 7.10(a) is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes
-37-
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed. As further
consideration for the obligations of the Seller pursuant to this Section 7.10,
the Purchaser shall pay to the Shareholder $250,000 in cash on the Closing Date
(the "Non-compete Payment").
-------------------
(b) Non-solicitation. Each of the Seller and the Shareholder agrees
----------------
that, during the Non-compete Period, such Seller or Shareholder shall not, shall
cause the other Non-competing Parties to not, and shall use its or his best
efforts not to permit such Seller's affiliates to, hire (whether as an employee,
consultant, agent, independent contractor or otherwise) any person employed by
the Company or any of its Subsidiaries at the Closing Date or during the Non-
compete Period, without the prior written consent of the Purchaser. The
Purchaser agrees that, during the Non-compete Period, such Purchaser shall not,
and shall cause its Affiliates to use their best efforts not to permit such
Purchaser's affiliates to, hire (whether as an employee, consultant, agent,
independent contractor or otherwise) Xxxxx Xxxxxx or any person employed by the
Seller or any of its Affiliates at the Closing Date or during the Non-compete
Period, without the prior written consent of the Seller.
(c) Confidentiality. Each of the Seller and the Shareholder shall,
---------------
and shall cause the other Non-competing Parties to, treat and hold as
confidential any information concerning the business and affairs of the Company
or any of its Subsidiaries that is not already generally available to the public
(the "Confidential Information"), refrain from using any of the Confidential
------------------------
Information except in connection with this Agreement, and deliver promptly to
the Purchaser or destroy, at the request and option of the Purchaser, all
tangible embodiments (and all copies) of the Confidential Information which are
in his possession or under his control other than Confidential Information that
the Seller or Shareholder reasonably believe may be necessary for use in
connection with this Agreement, the Lease, the Supply Agreement or other
transactions contemplated hereby or with respect to any Taxes or other matters
which may effect the Seller and Shareholder after the Closing. Additionally,
notwithstanding the above, information subject to the operation of this Section
7.10(c) shall not include information that (i) becomes generally available to
the public other than as a result of a prohibited disclosure by the party
seeking to make such disclosure or use or (ii) is rightfully disclosed to the
parties seeking to make such disclosure for use on a non-confidential basis by a
source other than a party seeking to dispute such disclosure or use. In the
event that any Non-competing Party is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, the Seller and the Shareholder shall cause such Non-
competing Party to notify the Purchaser promptly of the request or requirement
so that the Purchaser may seek an appropriate protective order or waive
compliance with the provisions of this Section 7.10(c). If, in the absence of a
protective order or the receipt of a waiver hereunder, any Non-competing Party
is, on the advice of counsel, compelled to disclose any Confidential Information
to any tribunal or else stand liable for contempt, such Non-competing Party may
disclose the Confidential Information to the tribunal; provided that the Non-
competing Party shall use his or its best efforts to obtain, at the request of
the Purchaser, an order or other assurance that confidential treatment shall be
accorded to such portion of the Confidential Information required to be
disclosed as the Purchaser shall designate. Except to the extent the information
becomes publicly available through no fault
-38-
of the Shareholder or Seller or their Affiliates, the Seller and the Shareholder
agree to keep the terms of this Agreement and the transactions contemplated
herein, including the amount of the Purchase Price, strictly confidential, and
they shall not disclose such information (except such information as is
necessary to complete their respective Tax Returns) without the prior written
consent of Purchaser (unless either of them in good faith believes that
disclosure is required by applicable law or is ordered to do so by a court of
law with jurisdiction over such Seller or Shareholder).
(d) Trade Names and Service Marks. For a period of eighteen (18)
-----------------------------
months beginning on the Closing Date, Seller grants to the Company and its
Affiliates (as defined in the Supply Agreement) an exclusive, royalty-free
license to use the Plank Company logo service xxxx and the trade name "The Plank
Company" (collectively, the "Marks") in the United States in connection with the
-----
provision of Services in Existing Markets (as defined in the Supply Agreement).
As used herein, the term "Services" shall mean the following services that the
Company provides as of the Closing Date: the rental of hydraulic shoring
equipment, trench shielding equipment, road plates, lasers, confined space
technology, (including gas monitors and blowers), air and hydraulic testing
equipment, trenchless technology (including piercing and boring equipment) and
compaction equipment and the provision of engineering services in conjunction
with the foregoing rental activity (the "Services"). Nothing in this Agreement
--------
shall be construed to be a transfer or assignment of Seller's rights, title and
interest in or to the Marks. During the eighteen months following the Closing
Date, the Company and its Affiliates (as defined in the Supply Agreement) may
use, with the Seller's prior written consent (which consent will not be
unreasonably withheld or delayed), such Marks in connection with the provision
of Services at any start-up operations operating under the Supply Agreement
during such period in any New Markets (as defined in the Supply Agreement) that
are not being serviced by other Speed Shore distributors. The Company recognizes
the goodwill associated with the Marks and will not permit the quality of the
Services with which the Company and its Affiliates use the Marks to deteriorate
so as to adversely affect the goodwill associated with the Marks; provided,
--------
however, the Company has no obligation to use or continue to use such Marks
-------
during the entire eighteen month period following the Closing Date. The Company
and its Affiliates shall maintain quality standards for all permitted uses of
the Marks which shall be substantially equivalent to those standards used by the
Company in connection with the Services immediately prior to the Closing Date.
The Company shall, upon the reasonable request of Seller, from time to time
furnish Seller, without charge, information and materials to enable Seller to
ensure compliance with the foregoing requirement. All ownership of the Marks
shall at all times belong to Seller and all use of the Marks by Company and its
Affiliates will inure to the benefit of Seller. Company and its Affiliates
agree not to claim or to assert any right of ownership in or to the Marks and
shall not initiate any regulatory or other action that could destroy, damage, or
impair in any way the ownership or rights of Seller in or to the Marks.
Company and its Affiliates shall cooperate in the execution of any documents,
and the taking of other actions that Seller reasonably requests to create,
record or perfect Seller's sole and exclusive ownership of the Marks, including
without limitation taking actions necessary to apply for or obtain, defend,
litigate, or protect trademark, service xxxx and trade name rights and
registrations. Seller shall reimburse the Company's reasonable out-of-pocket
expenses in taking actions requested by Seller under this Section 7.10(d).
Eighteen months from the Closing Date, Company and its Affiliates shall cease
and discontinue all use of the Marks (including, without limitation, any use of
the Marks as a company name) and any Marks confusingly similar thereto,
including but not limited to Marks comprising or using the word "PLANK."
Nothing
-39-
contained in this Agreement shall be construed as (a) a warranty or
representation of Seller as to the validity or scope of the Marks; (b) a
warranty or representation that any good or service using the Marks will not
infringe any right of any third party; or (c) an agreement to defend the Company
and its Affiliates against actions or suits of any nature brought by any third
parties regarding the Marks. Company agrees that during the term of this
Agreement, Company shall be responsible for complying with and assuring
compliance with all laws and regulations applicable to the Company or its
Affiliates' or designees' performance of the Services. Company agrees to
indemnify and hold Seller and its Affiliates harmless against any action,
claims, damages, injuries, losses, costs and expenses, including reasonable
attorneys' fees and disbursements, arising from or claimed to arise from (i) the
Services and (ii) any material breach by Company or its Affiliates of its
obligations or warranties under this Section 7.10(d).
(e) Remedy for Breach. Each of the Seller and the Shareholder
-----------------
acknowledges and agrees that in the event of a breach by any Seller or the
Shareholder of any of the provisions of this Section 7.10, monetary damages
shall not constitute a sufficient remedy. Consequently, in the event of any
such breach, the Company, the Purchaser and/or their respective Subsidiaries,
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions hereof, in each case without the
requirement of posting a bond or proving actual damages.
7.1 United Rentals Litigation. The Purchaser shall be responsible
-------------------------
for, and shall pay, (1) all of its own fees and expenses and (2) within five
business days of a written request therefor, all of the Shareholder's reasonable
out-of-pocket expenses incurred after the Closing Date in connection with the
lawsuit filed by the Company against U.S. Rentals, Inc. (filed in the District
Court of Jefferson County, Texas, 58/th/ Judicial District and captioned as
Cause No. A-157577, The Plank Company and Speed Shore Corporation vs. U.S.
------------------------------------------------------
Rentals, Inc.) (including any appeals, subsequent or related litigation) (the
-------------
"URI Suit"). Within five business days of any monetary award received by the
Company, the Purchaser or any of their Affiliates in the URI Suit, the Purchaser
--------
shall pay to the Shareholder a cash payment in immediately available funds equal
to 25% of the amount of such award net of the lesser of (i) all of the
Purchaser's out-of-pocket expenses and any of Shareholder's out-of-pocket
expenses (to the extent such expenses are borne by Purchaser) or (ii) $250,000.
In the event of any non-cash award in favor of the Company or non-cash
settlement entered into by the Company (i.e., equitable relief), the Purchaser
or any of its Affiliates in respect of the URI Suit, the Purchaser shall pay to
the Shareholder $75,000. In the event that the Company obtains an award or
settlement which consists of a mix of monetary (e.g., compensatory damages) and
non-monetary (e.g., equitable relief, such as injunctive relief) elements, then
the Purchaser shall pay to the Shareholder the greater of (1) $75,000 or (2) 25%
of the amount of such award net of the lesser of (i) all of the Purchaser's out-
of-pocket expenses and any of the Shareholder's out-of-pocket expenses (to the
extent such expenses are borne by Purchaser) or (ii) $250,000. The Purchaser
shall be entitled to control all aspects of litigating the URI Suit, including
but not limited to the selection of counsel, the decisions to proceed to trial,
to make or reject settlement offers, to appeal any verdict, assert or remove
claims or counter-claims, and any other aspect that is material to the handling
of the URI Suit. Each of the Shareholder and the Seller shall have a duty to
cooperate with the Purchaser with respect to the handling of the URI Suit,
including but not limited to providing full
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cooperation with respect to all aspects of investigating, prosecuting, and
defending any aspects of the claim, handling pre-trial, trial and appellate
activities, and reaching any compromise or settlement of the URI Suit, which
shall also include providing the Purchaser with reasonable access to employees
and officers (including as witnesses at any stage of the proceeding) and all
documents necessary to prosecute this claim through appeal. To the actual
knowledge of the Shareholder and Seller (without any duty to investigate),
neither the Shareholder nor the Seller has destroyed or spoiled any records
which may be relevant to the prosecution or defense of the URI Suit, and the
Shareholder and the Seller agree to exert their reasonable best efforts not to
destroy or spoil any records which may be relevant to the prosecution or defense
of this claim.
7.12 Employee Benefits. Effective as of the Closing Date, the
-----------------
Seller shall (A) have made matching contributions on behalf of the Company
employees in the amount of 15% of such Company employees' 401(k) salary
deferral, taking into account a maximum of 6% of each such Company employees'
compensation which is so deferred, through the period of June 30, 1999 (and the
Seller shall make matching contributions on behalf of the Company employees in
the amount of 15% of such Company employees' 401(k) salary deferral, taking into
account a maximum 6% of each such Company employees' compensation which is so
deferred, for the period of July 1, 1999 through July 30, 1999) and (B) assume
sponsorship of each employee benefit plan set forth on the Benefit Plans
-------------
Schedule (collectively, the "Employee Benefit Plans") and shall retain all
--------
liabilities and obligations with respect to such plans, including, without
limitation, the obligation to provide medical continuation coverage to those
individuals who were receiving or were entitled to receive continuation coverage
under Section 4980B of the Code. On and after the Closing Date, employees of
the Company (and their covered dependents) shall cease active participation
under the Employee Benefit Plans, and Purchaser shall provide the Company
employees (and their covered dependents) with benefits that are substantially
similar in the aggregate to those provided to similarly situated employees of
Purchaser and its Affiliates. Purchaser shall cause its benefit plans to (i)
waive any waiting period and any restrictions or limitations for pre-existing
conditions, (ii) give credit for any deductible or out-of-pocket expenses
incurred by the employees (and their covered dependents) under the Employee
Benefit Plans during the current plan year and (iii) credit Company employees
with service with the Company and its Affiliates for all purposes other than
accrual of benefits, including eligibility to participate or to receive benefits
for which a specified period of service is required. Effective as of the Closing
Date, Seller shall fully vest all Company employees' account balances under The
Plank Companies, Inc. Employee Savings Plan and shall, within 60 days following
the Closing Date, transfer such account balances to the NES Profit Sharing and
401(k) Plan.
7.13 No Set-Off. Neither the Purchaser nor the Seller shall have
----------
any right to set-off any Losses against any payments to be made by either of
them pursuant to this Agreement or any of the other transactions entered into in
connection with the consummation of this transaction.
7.14 No Duplication. No liability for indemnification hereunder
---------------
shall be determined to result in duplication of recovery by reason of the state
of facts giving rise to such liability constituting a breach of more than one
representation, warranty, covenant or agreement or previously resulting in a
purchase price adjustment.
-41-
ARTICLE VII
MISCELLANEOUS
-------------
8.1 Amendment and Waiver. This Agreement may be amended and any
--------------------
provision of this Agreement may be waived, provided that any such amendment or
waiver shall be binding upon a Party only if such amendment or waiver is set
forth in a writing executed by the Purchaser and the Seller. No course of
dealing between or among any persons having any interest in this Agreement shall
be deemed effective to modify, amend or discharge any part of this Agreement or
any rights or obligations of any Party under or by reason of this Agreement.
8.2 Notices. All notices, demands and other communications given or
-------
delivered under this Agreement shall be in writing and shall be deemed to have
been given when personally delivered, mailed by first class mail, return receipt
requested, or delivered by express courier service or telecopied (with hard copy
to follow). Notices, demands and communications to each Seller shall, unless
another address is specified in writing, or unless receipt of notice has been
specifically delegated to the Seller under this Agreement, be sent to the
address or telecopy number indicated on the signature page attached hereto, and
notices, demands and communications to the Seller, the Company and the Purchaser
shall, unless another address is specified in writing, be sent to the address or
telecopy number indicated below:
Notice to the Seller: With a Copy to:
-------------------- --------------
c/o Xxxxxxx X. Xxxxx Xxxxx & Xxxxx, LLP
0000 X. Xxx Xxxxxxx Xxxxxxx Xxxx 000 Xxxxxxxxx, Xxxxx # 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Notices to the Company: with a copy to:
---------------------- --------------
The Plank Company Xxxxx & Xxxxx, LLP
0000 Xxxx Xxxxxxx 000 Xxxxxxxxx, Xxxxx # 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxx Attention: Xxxxxxx X. Xxxxxx, Esq.
Notices to Purchaser: with a copy to:
-------------------- --------------
c/o National Equipment Services, Inc. Xxxxxxxx & Xxxxx
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000 000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
Attention: Chief Executive Officer Attention: Xxxxxxx X. Perl, Esq.
-42-
8.3 Binding Agreement; Assignment. This Agreement and all of the
-----------------------------
provisions hereof shall be binding upon and inure to the benefit of the Parties
and their respective successors and permitted assigns; provided that neither
this Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any Seller or the Shareholder without the prior written consent of
Purchaser or by Purchaser (except as otherwise provided in this Agreement)
without the prior written consent of each Seller. Without limiting the
generality of the foregoing:
(a) the Purchaser may at any time prior to the Closing, at its sole
discretion, assign, in whole or in part, its rights (but not its obligations)
pursuant to this Agreement to one or more of its wholly-owned Subsidiaries,
provided, however, that the Purchaser shall remain liable for all of its
-------- -------
obligations hereunder;
(b) the Purchaser may assign its rights under this Agreement for
collateral security purposes to any lender providing financing to the Purchaser,
the Company, or any of their Affiliates and any such lender may exercise all of
the rights and remedies of the Purchaser hereunder, provided, however, that the
-------- -------
Purchaser shall remain liable for all of its obligations hereunder; and
(c) the Purchaser may assign its rights under this Agreement, in
whole or in part, to any subsequent purchaser of the Company or substantially
all of its assets (whether such sale is structured as a sale of stock, a sale of
assets, a merger or otherwise), provided, however, that the Purchaser shall
-------- -------
remain liable for all of its obligations hereunder.
8.4 Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Agreement.
8.5 No Strict Construction. The language used in this Agreement
----------------------
shall be deemed to be the language chosen by the Parties to express their mutual
intent, and no rule of strict construction shall be applied against any Person.
8.6 Captions. The captions used in this Agreement are for
--------
convenience of reference only and do not constitute a part of this Agreement and
shall not be deemed to limit, characterize or in any way affect any provision of
this Agreement, and all provisions of this Agreement shall be enforced and
construed as if no captions had been used in this Agreement.
8.7 Entire Agreement. This Agreement and the documents referred
----------------
to herein contain the entire agreement between the Parties and supersede any
prior understandings, agreements or representations by or between the Parties,
written or oral, which may have related to the subject matter hereof in any way.
8.8 Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
-43-
8.9 Governing Law. All questions concerning the construction,
-------------
validity and interpretation of this Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision (whether of the State
of Illinois or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Illinois.
8.10 Parties in Interest. Nothing in this Agreement, express
-------------------
or implied, is intended to confer on any person other than the Parties and their
respective successors and assigns any rights or remedies under or by virtue of
this Agreement.
8.11 Arbitration.
-----------
(a) The Parties agree that the arbitration procedure set forth
below shall be the sole and exclusive method for resolving and remedying claims
for money damages arising out of the provisions this Agreement (the "Disputes")
--------
following the Closing; provided that nothing in this Section 8.11 shall prohibit
-------- ----
a party hereto from instituting litigation to enforce any Final Determination
(as defined below). The parties hereby acknowledge and agree that, except as
otherwise provided in this Section 8.11 or in the Rules for Non-Administered
Arbitration of Business Disputes (the "Rules") promulgated by the Center for
-----
Public Resources Institute for Dispute Resolutions (the "Institute") as in
---------
effect from time to time, the arbitration procedures and any Final Determination
hereunder shall be governed by, and shall be enforced pursuant to, the United
States Arbitration Act, 9 U.S.C. (S)1 et. seq.
--- ----
(b) In the event that any Party asserts that there exists a Dispute,
such Party shall deliver a written notice to each other Party involved therein
specifying the nature of the asserted Dispute and requesting a meeting to
attempt to resolve the same. If no such resolution is reached within ten
business days after the delivery of such notice, the Party delivering such
notice of Dispute (the "Disputing Person") may, within 45 business days after
----------------
delivery of such notice, commence arbitration hereunder by delivering to each
other Party involved therein a notice of arbitration (a "Notice of
---------
Arbitration"). Such Notice of Arbitration shall specify the matters as to which
-----------
arbitration is sought, the nature of any Dispute, the claims of each party to
the arbitration and shall specify the amount and nature of any damages, if any,
sought to be recovered as a result of any alleged claim, and any other matters
required by the Rules as in effect from time to time to be included therein. The
Parties shall mutually agree upon one arbitrator to resolve any Dispute pursuant
to the procedures set forth in the Section and the Rules, or if unable to so
agree, each of the Purchaser and the Seller shall select an independent and
impartial arbitrator, and a third impartial and independent arbitrator shall be
selected by the two arbitrators selected by each of the Purchaser and the
Seller; these three arbitrators (if one arbitrator, the "Arbitrator," or if
----------
three, the "Arbitrators") will conduct the arbitration in accordance the Rules.
-----------
The Arbitrator(s) shall permit and facilitate such discovery as the Party
initiating such claim shall reasonably request.
(c) The Arbitrator(s) selected pursuant to Section 8.11(b) will
determine the allocation of the costs and expenses of arbitration based upon the
percentage which the portion of the contested amount not awarded to each party
bears to the amount actually contested by such party.
-44-
For example, if the Purchaser submits a claim for $1,000 and if the Seller
contests only $500 of the amount claimed by the Purchaser, and if the
Arbitrator(s) ultimately resolves the dispute by awarding the Purchaser $300 of
the $500 contested, then the costs and expenses of arbitration will be allocated
60% (i.e., 300 / 500) to the Seller and 40% (i.e., 200 / 500) to the Purchaser.
(d) The arbitration shall be conducted in New York, New York
under the Rules as in effect from time to time. The Arbitrator(s) shall conduct
the arbitration so that a final result, determination, finding, judgment and/or
award (the "Final Determination") is made or rendered as soon as practicable,
-------------------
but in no event later than 90 days after the delivery of the Notice of
Arbitration nor later than 10 days following completion of the arbitration. The
Final Determination shall be final and binding on all parties and there shall be
no appeal from or reexamination of the Final Determination, except for fraud,
perjury, evident partiality or misconduct by the Arbitrator(s) prejudicing the
rights of any party and to correct manifest clerical errors.
(e) Either party may enforce any Final Determination in any
state or federal court in the continental United States. For the purpose of any
action or proceeding instituted with respect to any Final Determination, each
party hereto hereby irrevocably submits to the jurisdiction of such courts,
irrevocably consents to the service of process by registered mail or personal
service and hereby irrevocably waives, to the fullest extent permitted by law,
any objection which it may have or hereafter have as to personal jurisdiction,
the laying of the venue of any such action or proceeding brought in any such
court and any claim that any such action or proceeding brought in any court has
been brought in an inconvenient forum.
* * * * *
-45-
IN WITNESS WHEREOF, the Parties have executed this Purchase Agreement
as of the date first written above.
NES SHORING ACQUISITION, INC.
By: s/ Xxxxx X. Xxxxxxx
--------------------------
Its: Chief Executive Officer
--------------------------
THE PLANK COMPANIES, L.P.
By: Plank Management, Inc.
Its: General Partner
By: s/ Xxxxxxx X. Xxxxx
--------------------------
Its: __________________________
THE PLANK COMPANIES, INC.
By: s/ Xxxxxxx X. Xxxxx
--------------------------
Its: President
--------------------------
PLANK MANAGEMENT, INC.
By: s/ Xxxxxxx X. Xxxxx
--------------------------
Its: __________________________
s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
[Signature Page to the Purchase Agreement]
