AGREEMENT
FOR SALE AND PURCHASE
OF BUSINESS ASSETS
AGREEMENT, dated the 5th day of October, 2000 (the "Agreement") by and
between InSys Technology Inc. a Delaware Corporation with offices at 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 (the "Purchaser") and ATC InSys
Technology Inc., a Delaware corporation with offices at 000 Xxxxxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxxxx, 00000 (the "Seller") and ATC Group Services Inc., a
Delaware corporation with offices at 000 Xxxx Xxxxxxxx Xxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxxxxxxx 00000, Seller's parent corporation and sole shareholder ("ATC
Group Services Inc.").
Purchaser desires to purchase certain business assets of Seller in
exchange for cash and other consideration as hereinafter provided.
I. SALE AND PURCHASE OF ASSETS
Section 1.01 Basic Terms of Sale and Purchase of Assets
On the basis of the representations, warranties, covenants, and
agreements in this Agreement and subject to the terms and conditions of this
Agreement:
(a) At Closing (as defined below), Seller agrees to sell, convey, assign,
deliver and transfer to Purchaser, and Purchaser agrees to acquire,
accept and purchase, Seller's properties and assets as set forth below,
tangible and intangible, personal and mixed, (such properties and
assets to be purchased by Purchaser from Seller, are collectively
referred to herein as the "Purchased Assets"):
(1) Seller's supply inventory including but not limited to field
and office supplies, processing supplies, labeling supplies,
packaging and shipping materials as listed in Schedule
1.01(a)(1).
(2) Seller's tangible assets, all furniture, fixtures, office and
field production equipment, computers, and computer software
as listed in Schedule 1.01(a)(2).
(3) All of Seller's right, title and interest to its telephone
number (including fax numbers). Purchaser shall have the
exclusive right to apply for changes in telephone numbers or
in location of telephone numbers.
(4) All of Seller's interest in the real property lease which is
assumed as an Assumed Liability pursuant to the Assumption
Agreement attached hereto as Exhibit 1.02 ("Assumed Premises
Lease") and all rights to fixtures, tenant improvements,
pre-payments and/or deposits pertaining to the Assumed
Premises Lease.
(5) All of Seller's right, title and interest in and to Seller's
customer contracts and agreements, whether written or oral (as
listed in Schedule 1.01(a)(5) hereto) ("Customer Contracts")
and customer business arrangements and relationships.
At Closing, Seller shall deliver a copy of each such contract
(copies shall be considered delivered by surrendering
possession of such contracts to Purchaser at their then
current location).
(6) All of Seller's interest in those contracts of Seller other
than Customer Contracts which are assumed by Purchaser as
Assumed Liabilities pursuant to the Assumption Agreement
attached hereto as Exhibit 1.02 ("Assumed Contracts").
(7) All of Seller's business and goodwill, including Seller's
right, title, and interest in, if any, the names indicated in
Schedule 1.01(a)(7).
(8) Copies of such of Seller's business records, including (but
not necessarily limited to) accounting records, job files,
invoices, correspondence, sales records, technical records,
litigation and claims files, customer records and other data
and records relating to sales, customers, the Purchased Assets
and the Assumed Liabilities, as are necessary to enable
Purchaser to carry out its obligations under the Assumed
Liabilities as defined in the Assumption Agreement attached
hereto as Exhibit 1.02, to realize the value from the
Purchased Assets, and to conduct the business associated with
the Purchased Assets and Assumed Liabilities ("Records").
(9) Seller's right, title, interest or proprietary interest
claims, if any, in and to any patents or unpatented
proprietary technology or processes used by or developed for
use or sale by Seller as set forth in Schedule 1.01(a)(9).
(10) Seller's right, title, interest or proprietary interest
claims, if any, in and to all copyrights and to all reports,
forms, archives, data bases, studies, methods, research,
technical and other books, journals, handbooks, etc. and
Seller's rights in and to all other intellectual property in
whatever form used in Seller's business, whether or not
copyrighted or proprietary to Seller, as set forth in Schedule
1.01(a)(10).
(11) Seller's right, title, interest or proprietary interest
claims, if any, in and to any and all business or technical
computer software associated with Seller's business or the
subject matter thereof; provided that any such software for
which Seller is obligated to pay royalties or license fees to
a party not a party to this Agreement or which contain
assignability restrictions, shall be acquired by Purchaser
only to the extent assumed as an Assumed Liability as set
forth in Schedule 1.01(a)(11).
(12) Seller's right title, interest or proprietary interest claims,
if any, in and to any and all trademarks, whether registered
or unregistered, domain names and other intangible property as
set forth in Schedule 1.01(a)(12).
(13) Seller's complete customer and contact lists and order
backlog. At Closing, Seller shall deliver as Schedule
(1.01(a)(13) hereto a list of all known past and current: (i)
customers and (ii) customer prospects. The list shall include
at a minimum, to the extent readily available to Seller, the
complete name, address, contact person,
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any quantity, credit, price or other term of contract with
them and any contracts then in effect.
Seller will also provide in Schedule 1.01(a)(13) a schedule
detailing its order backlog. This schedule will include the
customer's name, total xxxxxxxx expected, and amount billed to
date. The term "backlog" means indications of customer intent
to hire the performance of services by Seller.
(14) Seller's vendor list as indicated on Schedule (1.01(a)(14).
Purchaser shall assume contracts with Seller's vendors only to
the extent assumed as Assumed Liabilities.
(15) Accounts receivable (an aging of which shall be provided as
Schedule (1.01(a)(15) as of the close of business on the
business day prior to the Closing Date) and unbilled work in
process as indicated on Schedule 1.01 (a)(15).
(16) Seller's interest in tangible assets subject to leases assumed
as Assumed Liabilities (such leased tangible assets are listed
on the schedule of Assumed Liabilities to the Assumption
Agreement ("Assumed Leased Assets"). Either Schedule
(1.01(a)(16) or the schedule of Assumed Liabilities shall
include the information specified in Section 2.05(b) with
respect to Assumed Leased Assets.
Seller agrees to use its best efforts to provide complete information
on the schedules provided for in this Section 1.01(a) and to complete
all of the Exhibits attached hereto on the date of execution hereof,
but in no event later than the Closing Date. In those cases where the
asset is to be acquired only to the extent a coupled liability is to be
assumed as an Assumed Liability (which such assets are noted on the
Schedule on which they appear) it will be deemed included, for purposes
of the relevant schedule, only if the liability is specifically assumed
as an Assumed Liability, and the omission of any such asset shall not
alleviate Purchaser's obligation to pay the Purchase Price (as defined
below); provided, however, that the Purchase Price will be reduced by
the book value of such asset deemed not included minus the amount of
the relevant Assumed Liability. For purposes of this Agreement, the
liabilities of Seller not being assumed by Purchaser pursuant to the
Assumption Agreement are referred to as the "Retained Liabilities".
(b) As consideration for the Purchased Assets and the other promises,
agreements, warranties, and covenants hereof Purchaser shall:
(1) Enter into the Related Agreements (seeSection 7.1);
(2) Pay to the Escrow Agent, as escrow agent for Seller,
immediately after execution of this Agreement the amount of
$667,000 (the "Purchase Price") in immediately available
funds; and
(3) Pay to Seller, on the Closing Date, the amount of any positive
Net Cash Adjustment in immediately available funds; provided,
however, that the amount of any negative Net Cash Adjustment
shall be distributed to Purchaser by the Escrow Agent on the
Closing Date in immediately available funds.
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(The aggregate amount of the Purchase Price and any Net Cash Adjustment
being the "Adjusted Purchase Price.")
Purchaser shall deliver the Purchase Price, in immediately available
funds, to Rosenman & Colin LLP (the "Escrow Agent"), as escrow agent
for Seller, which shall be held by the Escrow Agent pursuant to the
terms of the Initial Escrow Agreement, attached as Exhibit A hereto. At
the Closing an aggregate of $200,000 in immediately available funds
representing a portion of the Adjusted Purchase Price shall be retained
by the Escrow Agent pursuant to the terms of the Escrow Agreement,
attached as Exhibit B hereto. Such escrow funds shall be held for a
period not to exceed one year after the Closing Date.
(c) The Adjusted Purchase Price shall be allocated to the Purchased Assets
by Seller and Purchaser as they mutually agree and each agrees that
such allocation shall be used and respected for all purposes, including
income tax and reporting purposes.
(d) Notwithstanding anything to the contrary (including Section
1.01(a)(2)), the Purchased Assets will not include the following:
(1) Cash belonging to Seller.
(2) Any federal, state or local income tax refunds which may be
due to Seller and claims therefor.
(3) The retained tort, contract or insurance claims of Seller
specified on Schedule 1.01(d)(3) (the "Retained Claims").
(4) Seller's corporate minute books and stock records and
financial, tax and accounting records relating to periods
prior to the Closing Date except that Purchaser is entitled to
copies of certain Records pursuant to Section 1.01(a)(8).
(e) The Purchase Price shall be adjusted, either upward or downward, by the
net cash either used by Seller, or net cash generated by Seller, as the
case may be, between September 1, 2000 and the Closing Date, as defined
below,(the "Net Cash Adjustment").
(f) The Net Cash Adjustment will be, for the period from September 1, 2000
to the Closing Date, an amount calculated as cash disbursed by Seller,
as recorded in Seller's financial books and records, ("Cash
Disbursements") less cash received by Seller, as recorded in Seller's
financial books and records ("Cash Receipts"). On the Closing Date,
Seller shall provide a certificate executed by the President of Seller
certifying the Net Cash Adjustment.
(g) Cash Receipts and Cash Disbursements will not include cash transfers
between Seller and ATC Group Services Inc.
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Section 1.02 Power of Attorney.
Seller hereby constitutes and appoints Purchaser the true and lawful
attorney of Seller with full power of substitution, in the name of Seller or in
the name of Purchaser, for the benefit of Purchaser and at no cost, expense or
liability to Seller, subject to Section 1.03 hereof, after the Closing Date (a)
to collect, assert or enforce any claim, right or title of any kind in or to the
Purchased Assets, to after the Closing, institute and prosecute all actions,
suits and proceedings which Purchaser may reasonably deem proper in order to
collect, assert or enforce any such claim, right or title, and to do all such
acts and things in relation thereto as Purchaser shall reasonably deem advisable
and (b) to take all action which Purchaser may reasonably deem proper in order
to provide for Purchaser the benefits of or under any of the Purchased Assets
where any required consent of a third party to the assignment thereof to
Purchaser shall not have been obtained. Seller acknowledges that such powers are
coupled with an interest and shall not be revocable by it in any manner or for
any reason, and that Purchaser shall be entitled to retain for its own account
any amounts collected pursuant to such powers, including any amounts payable as
interest in respect thereof.
Section 1.03 Liabilities of Seller and Purchaser
(a) Purchaser has not, and shall not be construed to have, assumed, adopted
or taken over any obligations, debts, liabilities or responsibilities
of Seller whatsoever, including (but not limited to) liabilities for
local, state or federal taxes, except for the Assumed Liabilities
expressly assumed under the Assumption Agreement attached hereto as
Exhibit 1.02 and except such future (i.e. post-Closing) performance as
is obligated under the terms and conditions of Customer Contracts and
Assumed Contracts purchased hereunder, the amendment or renegotiation
of which Purchaser is free to pursue in its sole discretion.
Notwithstanding Purchaser's acceptance of a Customer Contract and the
obligation of future performance, Seller, as its interests are defined
by such contracts or by law (which shall not be altered or enlarged
with respect to third parties by virtue of this Agreement), shall
retain responsibility and liability for all work performed or goods
supplied by it pursuant to all Customer Contracts prior to Closing.
Except for the Assumed Liabilities, Seller agrees to retain and,
pursuant to the provisions of Section 1.04, to indemnify, defend, and
hold Purchaser harmless from, all of Seller's pre-Closing obligations,
losses, liabilities, debts, responsibilities or claims thereof (and the
costs of defense against such claims by Purchaser including reasonable
attorneys fees and settlement and defense costs incurred in connection
therewith), including (but not limited to) any such liability for trade
payables and other accounts payable, federal, state or local taxes,
employment taxes, tort or contract claims, and employee compensation or
benefits.
Section 1.04 Indemnity Against Liabilities, etc.
(a) Seller and ATC Group Services Inc. (collectively, the "Seller
Indemnitors") agree, jointly and severally, to indemnify and hold
harmless Purchaser (the "Seller Indemnitee") against and in = respect
of any and all:
(1) Claims, suits, actions, proceedings (formal or informal),
investigations, judgments, deficiencies, set-offs, damages,
settlements, liabilities, and legal and
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other expenses (collectively, "Agreement Claims") (including
reasonable legal fees and = expenses of counsel reasonably
acceptable to Seller Indemnitee) as and when incurred arising
out of or based upon any breach of any representation,
warranty, covenant, or agreement of Seller Indemnitors
contained in this Agreement or any of the Related Agreements;
and
(2) Debts or liabilities of any kind and claims, liens, set-off,
suits, actions, and proceedings (formal and informal) of
persons or entities and related judgments, deficiencies,
damages, settlements, set-off, liens, liabilities, and legal
and other expenses (including reasonable legal fees and
expenses of counsel chosen by Seller Indemnitee)
(collectively, "Retained Liability Claims") as and when
incurred but solely to the extent arising out or relating to
any Retained Liabilities.
(b) Purchaser (the "Purchaser Indemnitor" and collectively with the "Seller
Indemnitor", an "Indemnitor") agrees to indemnify and hold harmless
Seller and ATC Group Services Inc. (The "Purchaser Indemnitees" and
collectively with the "Seller Indemnitee", the "Indemnitees") against
and in respect of any and all:
(1) Agreement Claims (including reasonable legal fees and expenses
of counsel chosen by any Purchaser Indemnitee) as and when
incurred arising out of or based upon any breach of any
representation, warranty, covenant, or agreement of Purchaser
contained in this Agreement or any of the Related Agreements;
and
(2) Debts or liabilities of any kind and claims, liens, set-offs,
suits, actions, and proceedings (formal and informal) of
persons or entities and related judgments, deficiencies,
damages, settlements, set-offs, liens, liabilities, and legal
and other expenses (including reasonable legal fees and
expenses of counsel chosen by any Purchaser Indemnitee)
(collectively, "Assumed Liability Claims"; Assumed Liability
Claims, Agreement Claims and Retained Liability Claims are
collectively referred to as "Claims") as and when incurred,
but solely to the extent arising out of or relating to the
Assumed Liabilities.
(c) The representations and warranties contained in or made pursuant to
this Agreement and the parties respective obligations to indemnify
hereunder shall survive for a one-year period after Closing.
(d) The parties' respective indemnity obligations hereunder shall be
subject to the following:
(1) An Indemnitee shall give the Indemnitor prompt notice of any
allegedly indemnified item incurred, asserted or threatened
and the basis of which such Indemnitee intends to seek
indemnification from Indemnitor as provided herein, provided
however that the obligation of Indemnitor shall be reduced for
the failure to give notice at any particular time only to the
extent that Indemnitor has been actually prejudiced thereby.
(2) If an allegedly indemnified event involves the claim of any
third party, the Indemnitor shall have the sole control over,
and shall assume all expense with respect to, the defense,
settlement, adjustment or compromise of any claim as to
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which this provision requires it to indemnify the other party
provided that (i) the Indemnitee may, if it so desires, employ
counsel at its own expense to assist in the handling of such
claim and the reasonable expenses incurred by the Indemnitee
in employing such counsel shall be borne by the Indemnitor
only if the Indemnitor shall have failed to assume the defense
of such claim or shall have a conflict of interest which
prevents counsel from zealously representing the interests of
both the Indemnitor and the Indemnitee, or fails to take
reasonable efforts to settle such claim, and (ii) the
Indemnitor shall obtain the prior written approval of the
Indemnitee, which shall not be unreasonably withheld or
delayed, before entering into any settlement, adjustment or
compromise of such claim or ceasing to defend against such
claim, if pursuant thereto or as a result thereof, there would
be imposed injunctive or other equitable relief against the
Indemnitee or the Purchased Assets.
(3) In no event shall the Indemnitee be subject to any liability
or limitation of any right or remedy for any settlement made
without its consent. Notwithstanding the foregoing, in no
event shall an Indemnitor be liable for any sum in excess of a
proposed settlement if consent to such settlement is
unreasonably withheld by an Indemnitee. No party shall without
the consent of the other consent to the entry of any judgment
or enter into any settlement which does not include as a term
thereof the giving by the claimant or plaintiff to the
Indemnitor and Indemnitee of a release of the other party from
all liability with respect to such claim or litigation.
(4) The parties' respective indemnity obligations hereunder shall
be limited to: (i) individual claims having a value of 1 or
more (an "Indemnified Claim"); and (ii) losses, claims, etc.
after the first * in the aggregate, of Indemnified Claims (the
"Indemnity Deductible"), in which event only the aggregate
amount of Indemnified Claim(s) in excess of the Indemnity
Deductible shall be subject to indemnification hereunder.
Anything in this Agreement to the contrary notwithstanding,
the obligation of Seller Indemnitors to Purchaser for any and
all Indemnified Claims pursuant to this section or any other
provision of this Agreement (including but not limited to the
foregoing items) shall be limited to and shall not exceed * in
Indemnified Claims on a cumulative basis, and Seller
Indemnitors shall not, under any circumstances, be obligated
to Purchaser any further once Seller Indemnitors shall have
made aggregate payments * (irrespective of whether such
payments have been made to Purchaser or to third parties and
irrespective of whether such payments are in respect of
judgments, settlements, attorneys' fees, costs, expenses or
otherwise).
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* Information has been omitted and filed separately with the Securities and
Exchange Commission.
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(5) With respect to any claim for which an Indemnitor shall
indemnify any Indemnitee, the Indemnitor shall be subrogated
to all rights of Indemnitees against any and all third parties
up to the amount paid by Indemnitor to Indemnitees.
(6) No party shall be liable for that portion of any claim for
which an Indemnitee actually receives insurance proceeds
covering such claim (the deductible pertaining to any such
insurance shall not be considered to be insurance proceeds).
(7) The indemnity agreements contained in this Agreement shall
inure only to the benefit of Purchaser and Seller respectively
and those persons or entities included as "Indemnitees" in
thisSection 1.03 and shall not be for the benefit of any other
person or entity. These indemnity provisions shall not be
construed to abrogate the corporate liability shield as
provided by law, to extend a right of action to any third
party not otherwise available, or to enlarge the underlying
liability of any Indemnitor or Indemnitee to any third party
and shall be the sole and exclusive remedy of the parties with
respect to this Agreement.
II. REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Purchaser to enter into this Agreement,
Seller represents and warrants to Purchaser as follows:
Section 2.01 Organization and Qualification
(a) Seller is a corporation in good standing under the laws of the state of
Delaware with the full power and authority to enter into contracts, to
sell its assets and to perform the other agreements and covenants as
provided in this Agreement. Seller is authorized to do business and is
in good standing in each jurisdiction in which it maintains an office
except to the extent the failure to be in good standing would not
reasonably be expected to have a material adverse effect. The
certificate of incorporation and by-laws of Seller and all amendments
thereto provided to Purchaser at Closing are each as presently in
effect, are true and correct copies and have been certified by the
president of the corporation. Seller is not, and will not be as a
result of executing and performing this Agreement and Related
Agreements, in violation or breach of, or in default with respect to,
any term of its certificate of incorporation, by-laws or other charter
document.
Section 2.02 Financial Statements
(a) Seller has delivered to Purchaser and attached hereto as Schedule 2.02
true and correct copies of the following: (i) unaudited balance sheets
and statements of income of Seller for Seller's last three (3)
completed fiscal years and (ii) the unaudited balance sheet and
statement of income of Seller for the stub period beginning on March 1,
2000 ending as close as practicable to the Closing Date of this
Agreement (the "Financial Statements").
(b) The Financial Statements referred to in Section 2.02 have been prepared
in accordance with GAAP consistently applied throughout the periods
involved (except for adjustments thereto which are disclosed on
Schedule 2.02 if any, and except for footnote disclosures),
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are correct and complete in all material respects, and are materially
in accordance with the books and records of Seller.
Section 2.03 Tax and Other Liabilities
(a) Except as indicated on Schedule 2.03, Seller has duly filed or obtained
extensions for filing, all payroll and other federal, state, local, and
foreign tax returns required to be filed by it.
(b) Except as disclosed on the Financial Statements provided pursuant
toSection 2.02 or on Schedule 2.03, Seller has no liability of any
nature, accrued or contingent, including without limitation liabilities
for payroll and other employee taxes, federal, state, local, or foreign
taxes or liabilities to customers or suppliers. Except as indicated on
Schedule 2.03, Seller has paid all taxes, assessments, and other
governmental charges payable or remittable by it or levied upon it or
its properties, assets, or income, which are due and payable. Except
for any specifically Assumed Liability for taxes, Purchaser shall incur
no liability, cost or expense in connection with Seller's federal,
state, local or employee-related taxes, including any cost or expense
arising from investigations, audits, proceedings or actions taken by
taxing authorities against Seller.
Section 2.04 Litigation and Claims
Except as set forth on Schedule 2.04, there is no litigation,
arbitration, claim, governmental or other proceeding (formal or informal), or
investigation pending, or, to Seller's knowledge, threatened with respect to
Seller or ATC Group Services Inc. or any of their respective business,
properties, or assets which is reasonably expected to have a material adverse
effect on Seller's business, properties or assets. Seller is not affected by any
present or, to Seller's knowledge, threatened strike or other labor disturbance
nor to the knowledge of Seller is any union currently representing or attempting
to represent any employee of Seller as collective bargaining agent. Seller is
not in material violation of or in default with respect to, any material law,
rule, regulation, order, judgment, or decree, including any environmental laws
or regulations. Except for liabilities assumed under the Assumption Agreement,
Purchaser will incur no liability for any of the above as a result of this
transaction.
Section 2.05 Accounts Receivable and Properties
Except as set forth on Schedule 2.05 or except as Purchaser has
expressly assumed such lien, mortgage, security interest, pledge, charge or
encumbrance (collectively, "Liens") as an Assumed Liability, Seller has or will
have on the Closing Date good title to all Purchased Assets transferred by this
Agreement free and clear of all Liens, claims or judgements or the like.
(a) Accounts receivable and work in process of Seller which are shown on
Schedule 1.01(a)(15) arose from valid transactions in the ordinary
course of Seller's business and to Seller's knowledge, are correct in
amount, and to Seller's knowledge, in aggregate, there is no contest,
claim or right of set-off by any payor of such receivables in excess of
the accounts receivable and work in process reserve (the "Reserve")
used in determining the Purchase Price. For purposes of this Agreement
only, the Reserve will be $87,000.
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(b) Attached as the schedule of Assumed Leased Assets to the Assumption
Agreement, is a list of all material properties and assets owned,
leased, or licensed by Seller and a description of such lease or
license.
(c) Schedule 2.05(c) lists all permits and government licenses which Seller
holds.
Section 2.06 Contracts and Other Instruments
(a) Schedule 2.06 and the schedules described inSection 1.01 set forth all
material contracts to which Seller is a party, including material
leases and licenses and all material supply, distribution, agency,
financing or other arrangements and understandings. Seller has
furnished to Purchaser, the following: (i) true copies of all material
written contracts, agreements, and instruments to which Seller is a
party; (ii) true copies of all material leases and licenses to which
Seller is a party; and (iii) true written descriptions of all material
non-written supply, distribution, agency, financing, or other
arrangements or understandings to which Seller is a party. Any of the
foregoing not disclosed on the schedules described in Section 1.01 are
listed on Schedule 2.06. Neither Seller nor, to Seller's knowledge, any
other party to any such contract, agreement, instrument, lease, or
license to which Seller is a party is now or is expected as of or
immediately after Closing by Seller to be in violation or breach of, or
in default with respect to complying with, any material provision
thereof. Each such contract, agreement, instrument, lease, or license
is in full force and is the legal, valid, and binding obligation of the
parties thereto and is enforceable as to them in accordance with its
terms, except as disclosed on Schedule 2.06 or the schedules described
in Section 1.01. Neither Seller nor any other party to any such
arrangement or understanding has given notice of termination or taken
any action inconsistent with the continuance of such arrangement or
understanding.
(b) Seller enjoys peaceful and undisturbed possession under all leases and
licenses under which it is operating. Seller is not a party to or bound
by any contract, agreement, instrument, lease, license, arrangement, or
understanding, or subject to any charter or other restriction, which
has had a material adverse effect on the Purchased Assets or the
operations or business associated therewith.
(c) Seller is not a material beneficiary of any contract, agreement,
instrument or other business arrangement (in each case whether written
or oral) to which it is not a party.
(d) ATC Group Services Inc. is the sole shareholder of Seller's capital
stock.
(e) Neither Seller nor ATC Group Services Inc. is subject to any contract
or other agreement not-to-compete which restricts the geographic area
in which line of business or group of customers with which Seller may
solicit or conduct busineSection
Section 2.07 Employees and Employee Liabilities
(a) Seller has set forth in Schedule 2.07 a description of all of its
pension, profit-sharing, option, other incentive plans, or any other
type of employee benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA")), and all
obligations to, or arrangements with, employees for wages, salary,
bonuses, incentive
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compensation, vacations, severance pay, insurance, or other benefits.
Seller has furnished to Purchaser true and correct copies of all
documents evidencing such plans, obligations or arrangements referred
to in Schedule 2.07 (or written summaries of such plans, obligations,
or arrangements to the extent not evidenced by documents) and true and
correct copies of all documents evidencing trusts relating to any such
plans, and Purchaser acknowledges receipt thereof. Schedule 2.07 also
contains a true and correct statement of the names, present rates of
compensation of each director, officer, employee or sales agent of
Seller. All obligations, debts and liabilities associated with all of
the above have been properly reflected to the extent required by GAAP
as liabilities on the financial statements provided inSection 2.02.
(b) Except for the Assumed Liabilities assumed by Purchaser under the
Assumption Agreement, Purchaser will not incur any liability to or on
behalf of Seller's employees arising out of their employment with
Seller or out of Seller's acts or omissions prior to Closing (as
distinguished from Purchaser's acts or omissions after Closing),
including (but not limited to) any liability: under ERISA or the
Internal Revenue Code; for obligations to, or arrangements with
employees for wages, salary, bonuses, incentive compensation, vacation,
severance pay, insurance, or other benefits, or employee taxes; for
personal injury; or for discrimination, harassment, or wrongful
discharge under federal, state or local law. Except as disclosed in
Schedule 2.07(b), there is no litigation, arbitration, claim,
governmental or other proceedings (formal or informal), or
investigation pending, or to Seller's knowledge threatened, or any
basis therefore known to Seller with respect to any such employee
benefit plan, compensation arrangement or Seller's acts or omissions
with respect to its employees or its work environment.
(c) Seller has delivered to Purchaser copies of all non-disclosure and/or
work-for-hire agreements with any of its employees or consultants.
Other than such agreements, Seller has no non-disclosure or
work-for-hire agreements with any party.
Section 2.08 Intellectual Property.
(a) General. Seller owns free and clear of all liens or other encumbrances,
possesses and has the right to use trade names, service marks, domain
names, copyrights, know-how, licenses, trade secrets, proprietary
processes, computer programs, source code, and other computer software,
technology and formulae (the "Proprietary Rights") necessary or
required for the conduct of the business of Seller as presently
conducted. Other than as noted on Schedule 2.08(a), Seller (i) is not
bound by or a party to any options, licenses, or agreements of any kind
with respect to the Proprietary Rights and (ii) has not assigned,
licensed or in any manner encumbered or impaired any rights in the
Proprietary Rights. To Seller's knowledge, no Proprietary Right
infringes or violates any personal, property, statutory or common law
or any other rights of any third parties (including, without
limitation, copyright, trademark and the rights of privacy and
publicity), and no claim alleging any such infringement or violation by
Seller or its Proprietary Rights has been received by Seller.
(b) Software. Schedule 2.08(b) sets forth a complete and accurate list of
all software programs, systems and applications (i) designed or
developed (or in the process of being
11
designed or developed) by employees of Seller or by consultants on
Seller's behalf (the "Seller Owned Software") or (ii) licensed by
Seller from any third party (other than "off-the-shelf" software) (the
"Licensed Software") pursuant to the License Agreements specified on
Schedule 2.06 or the Schedule described inSection 1.01, in each case
that is manufactured, developed or used by Seller in the operation of
Seller's business or integrated into Seller Owned Software or marketed,
licensed or sold by Seller to third parties (collectively, the
"Software").
Seller owns all right, title and interest in and to Seller Owned
Software, free and clear of any Liens and, except as set forth on Schedule
2.08(b) hereof, has not sold, assigned, licensed, distributed or in any other
way disposed of Seller Owned Software or subjected Seller Owned Software to any
lien or other encumbrance, and none of Seller's employees or consultants has any
interest or claim whatsoever to any of Seller Owned Software or any component or
constituent part thereof.
The Licensed Software is validly held and used by Seller and is fully
and freely utilizable by Seller to the extent specified in the license agreement
with respect thereto. Seller is in compliance with all material terms and
conditions of each license with respect to the Licensed Software, and Seller has
not received any notice that Seller is in breach of any such license.
Seller neither owns nor has pending, or is licensed under, any patent,
patent application, trademark, trademark application, trade name, service xxxx,
copyright, franchise, or other intangible property or asset, other than as
described in the schedules to Section 1.01(a) or in Schedule 2.08. The schedules
to Section 1.01(a) and Section 2.08 together accurately set forth a description
of any intangibles owned by Seller and with respect to intangibles licensed by
Seller from or to a third party, a description of such license. Except as
disclosed on such schedules to Seller's knowledge, no person other than Seller
or such licensers own any interest in any such intangibles.
Section 2.09 Authority to Sell; Consents
Seller has all requisite power and authority to execute, deliver, and
perform this Agreement. All necessary corporate proceedings of Seller have been
or as of the Closing Date will have been duly taken to authorize the execution,
delivery, and performance of this Agreement by Seller. This Agreement has been
duly authorized, executed, and delivered by Seller, constitutes the legal,
valid, and binding obligation of Seller and is enforceable as to Seller in
accordance with its terms.
Section 2.10 Books and Records
Except as described in Schedule 2.10, the books and records of Seller
are in all material respects complete and correct. Seller has made complete
copies of all material books and records available to Purchaser for review.
Seller and Purchaser shall retain responsibility and liability for care and
custody of business records of Seller that remain in their respective
possession. The liability of Seller and Purchaser for loss, theft or destruction
of records of Seller in their respective possession that may be required by the
other party shall be limited to costs that may actually be incurred for
reconstruction of the lost, stolen or destroyed records up to a cumulative
maximum cost of $100,000. Seller and Purchaser shall have no responsibility or
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liability whatsoever for consequential damages that may be suffered by the other
party as a result of any such loss, theft or destruction. Seller and Purchaser
agree to retain the respective records of Seller of which they have possession
for a period of six years following the date of Closing.
Section 2.11 Real Property; Leases
Seller does not own or lease any real property other than the leased
premises described on Schedule 2.11. Seller has delivered to Purchaser a true
and complete copy of the lease for such premises together with all amendments
thereto, including written descriptions of any oral terms or amendments of such
lease. There are no disputes, forbearances or other agreements in effect
regarding the lease, and Seller has not assigned, conveyed or otherwise
transferred or encumbered any interest in the leasehold. To Seller's knowledge
the leased premises have received all necessary permits and governmental
approvals and have been operated and maintained in accordance with material
applicable laws and regulations. The facilities leased are supplied with
utilities and other services necessary for operation of said facilities, other
than as noted on Schedule 2.11.
Section 2.12 Insurance
Seller has insurance for the assets and operations of Seller in amounts
and for coverages customary for businesses of its kind and size. Schedule 2.12
hereto is a complete and correct list of all policies of insurance carried by
Seller or pursuant to which Seller is a named beneficiary or pursuant to which
the assets and operations are insured.
III. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As a material inducement to Seller to enter into this Agreement,
Purchaser represents and warrants as follows:
Section 3.01 Organization and Good Standing
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and duly qualified to engage
in business in the State of New Jersey, with full power and authority to enter
into and perform each of the transactions contemplated by this Agreement.
Section 3.02 Execution and Performance Authorized
This Agreement and all other documents and agreements contemplated
hereunder have been duly executed and delivered by Purchaser, such execution and
delivery and the consummation by Purchaser of the transactions contemplated
hereunder have been duly authorized by all necessary corporate action, and no
further action is required by law, its corporate charter, bylaws or otherwise to
authorize all action to be taken by Purchaser with respect to this Agreement and
the consummation of the transactions contemplated hereunder. The Agreement and
the other documents contemplated hereunder are binding and are enforceable
against Purchaser in accordance with their terms.
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Section 3.03 Absence of Litigation
There is no action, lawsuit, proceeding or investigation of any kind or
nature pending or, to Purchaser's knowledge, threatened against Purchaser before
any court, tribunal or administrative agency or board which might, individually
or in the aggregate, materially and adversely (i) affect Purchaser's solvency or
its ability to perform hereunder, or (ii) render any one or more of the
transactions contemplated hereunder void or voidable.
Section 3.04 No Other Default
The execution and delivery of this Agreement by Purchaser and the
consummation of the transactions contemplated hereunder will not conflict with
or violate or require any consent under and will not result in any breach or
termination of Purchaser's corporate articles, bylaws or minutes or any
agreement to which Purchaser is a party or by which any of its property is
subject or by which it is bound.
Section 3.05 Permits and Filings
There is no requirement applicable to Purchaser to make any filing
with, or to obtain any permit, authorization, consent or approval of any third
party or any governmental or other regulatory authority as a condition of the
lawful consummation of the transactions contemplated under this Agreement.
Purchaser represents that, after reviewing relevant facts regarding Purchaser
and Seller and their operations, including Seller's Financial Statements
referenced under Section 2.02(a), Purchaser has determined that a filing under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 relating to the
transactions contemplated by this Agreement is not necessary or required.
Purchaser agrees to indemnify and hold harmless and defend Seller against any
and all penalties that may be assessed against Seller as a result of a breach of
this representation. The foregoing is in addition to Purchaser's obligations
under Article 1 and shall survive indefinitely notwithstanding the provisions of
Article 1 and shall not be subject to the indemnification limit of Section
1.03(d)(4).
Section 3.06 Absence of Lien
The monies to be paid by Purchaser under Section 1.01 shall be paid by
Purchaser and received by Seller free and clear of any lien, charge or
encumbrance arising out of any agreement or instrument to which Purchaser is
subject or by which its properties is bound.
Section 3.07 Financial Condition of Purchaser
Following the consummation of the transactions contemplated by this
Agreement, Purchaser will have sufficient capital and property remaining to
conduct its business and to fulfill its obligations to Seller hereunder
including any obligations under the Related Agreements.
Section 3.08 Solvency
At the Closing and after payment of the Purchase Price as required
under Section 1.01(b) (2), Purchaser will be and will remain solvent under all
applicable federal and state laws and regulations.
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IV. COVENANTS
Section 4.01 Termination of Seller's Employees
Seller shall terminate all of its employees as of or before the Closing
Date.
Section 4.02 Hiring of Seller's Employees
Purchaser shall hire all of Seller's employees. All of Seller's
employees are listed on Schedule 4.02. Purchaser shall hire and maintain for a
sufficient period of time, a sufficient number of employees at each
establishment so that Seller does not violate the federal WARN Act (29 U.S.C.
Section 2101 et seq.) or any similar act under state or federal law.
Section 4.03 Transaction Costs and Expenses
Purchaser and Seller shall each bear and pay all of their respective
costs, fees and expenses incurred in connection with bringing about this
transaction including, without limitation, all legal, accounting, auditing and
appraisal fees in negotiating and preparing the documents and in consummating,
closing and carrying out the transactions contemplated hereby.
Section 4.04 Access to Information and Records
Each party shall provide to the other, with reasonable promptness
following a request in writing (not to exceed ten (10) business days), such
information and data with respect to Seller's business before Closing and/or the
Purchased Assets (whether before or after Closing) as may from time to time be
reasonably requested by the other party. In the event either Purchaser or Seller
is required to prepare statements or to produce or compile information for a
government agency which requires access to information or for any other
reasonable purpose including the desire to verify any information provided to
the other party relative to this Agreement, the parties agree to allow the other
party reasonable access to records (during normal business hours and with
reasonable advance notice), and to provide reasonable cooperative assistance in
the preparation of reports, documents, etc. without charge except for
reimbursement of any actual, out-of-pocket expenses, exclusive of the cost of
in-house staff time. Notwithstanding the foregoing, in the event that a party is
or anticipates becoming a party to litigation, this Section 4.04 or any other
provision of this Agreement shall not be construed to require such party to
provide information to the other which could prevent such party from making a
bona fide claim of attorney/client privilege or such other privileges as may be
applicable with respect to such information.
Section 4.05 Addresses, Mail and Deliveries
After the Closing Date, Purchaser shall have the right to receive and
open for inspection all mail and deliveries addressed to any address to the
names of "ATC InSys Technology Inc." or "InSys" or otherwise reasonably
appearing from the outside to contain Purchased Assets or documents which would
customarily be received by the owner of the Purchased Assets. After the Closing
Date, Purchaser shall have the right to receive and open for inspection all mail
and deliveries delivered to its premises (including the premises assumed
hereunder) addressed to "ATC InSys Technology Inc." or any person who was an
employee or former employee of Seller
15
unless it is clear from the envelope that the contents belong to Seller or are
personal in nature. Purchaser and Seller shall each use their best efforts to
avoid opening mail or deliveries which rightfully belongs to the other and shall
turn over to the other party any property, including checks or money, belonging
to the other party within five business days after determining its rightful
ownership. After the Closing Date, Purchaser shall have the exclusive right to
apply for change of address, change of telephone numbers or location of
telephone numbers applicable to the purchased names or Purchased Assets. After
the Closing Date, Seller agrees to execute and return to Purchaser within five
business days after receipt thereof such assignment or consent forms as
Purchaser reasonably requests to effect such changes of address, telephone
number location or telephone numbers.
Section 4.06 Related Agreements
Seller and Purchaser each agree to execute, to deliver at Closing and
to faithfully and fully perform the Related Agreements referenced in Section
7.01.
Section 4.07 Assignment of Agreements - Benefits of Ownership to be
Provided Where Assignment or Novation Not Possible
(a) Seller shall use its best efforts to secure (and to assist Purchaser in
securing) all consents and approvals required to effect the assignment
of the Customer Contracts and other agreements to be transferred to
Purchaser hereunder or under the Assumption Agreement. Seller agrees
that upon the written request of Purchaser, it will execute and return
to Purchaser each and every assignment, consent to assignment or
novation, or other document reasonably necessary to effect the transfer
of any Customer Contract or other contract, asset or benefit to be
conveyed hereunder within five (5) business days after receipt of such
document provided that such documents are reasonable in form and
substance.
(b) With respect to any Customer Contract or Assumed Liability to be
conveyed hereunder to which Seller and Purchaser are not able to obtain
a consent to assign or novate or which are otherwise not capable of
assignment or novation, Purchaser shall nevertheless be deemed to be
entitled to all beneficial interest in such Customer Contract or
Assumed Liability, and Seller shall use its best efforts to cooperate
in any reasonable and lawful arrangement to provide to Purchaser all
the benefits of such Customer Contract or Assumed Liability.
Section 4.08 Successor Payroll Issues
Purchaser shall be the successor employer to Seller for purposes of
post-Closing FICA taxes and reporting, FUTA taxes and reporting, and
corresponding state payroll laws and regulations. Purchaser agrees to perform
the obligations of a successor employer for such taxes and reporting purposes
and will indemnify, defend and hold Seller harmless (pursuant to Section 1.03)
from and against any and all liabilities or obligations arising out of
Purchaser's failure to perform or properly perform all of Purchaser's
obligations as a successor employer of Seller for the purposes set forth in this
section, including but not limited to completing accurately and completely all
Forms 941, 940, W-2, W-3, related to obligations accruing after Closing
16
required of Purchaser in its status as successor employer. Seller shall perform
such obligations for pre-Closing accruals. This section shall not be construed
to imply that Purchaser is liable as a successor employer or otherwise as a
successor to Seller for any purpose except for the limited purposes set forth in
this section. Seller does not represent or warrant that Purchaser will, in fact,
be treated as the successor employer but Seller will not take any affirmative
actions that would reasonably be expected to compromise Purchaser's ability to
be treated as a successor employer.
Section 4.09 Proprietary Information/Interference with Business:
Competitive Activities
(a) Defined. "ATC Proprietary Information" is all proprietary, secret, or
confidential information pertaining to the business of ATC Group
Services Inc. and its subsidiaries other than Seller. "Seller
Proprietary Information" is all proprietary secret or confidential
information solely pertaining to the business of Seller.
(b) General Restrictions on Use. Purchaser agrees to hold all ATC
Proprietary Information, and ATC Group Services Inc. agrees to hold all
Seller Proprietary Information, in strict confidence and not, directly
or indirectly, to disclose, use, copy, publish, summarize, any such
Proprietary Information except to the extent that such Proprietary
Information is made generally available to the public other than as a
result of a violation of this Section 4.09.
(c) Purchaser acknowledges that employees of Seller have developed special
relationships with ATC Group Services Inc. or its subsidiaries'
customers, and have been privy to ATC Proprietary Information,
including without limitation, trade secrets, business practices,
pricing and strategies, and customer information and practices. ATC
Group Services Inc. acknowledges that its employees have developed
special relationships with Seller's customers, and have been privy to
Seller Proprietary Information, including, without limitation, trade
secrets, business practices, pricing and strategies and customer
information and strategies.
As such, in consideration of the terms and conditions of this Agreement,
=
(1) Purchaser, its affiliates, successors, assigns, agree that for
a period of one (1) year following the Closing Date not to,
either directly or indirectly, for itself or for a third party
employ, or solicit for employment any employee of ATC Group
Services Inc. or its subsidiaries (other than Seller) during
such employee's employment by ATC Group Services Inc. or its
subsidiaries (other than Seller) and for a one year period
after such employee terminates employment with ATC Group
Services Inc. or its subsidiaries (other than Seller).
(2) ATC Group Services Inc., its affiliates, successors and
assigns, agree that for a period of one (1) year following the
Closing Date, not to, either directly or indirectly, for
itself or for a third party, employ, or solicit for
employment, any employee of Purchaser during such employee's
employment by Purchaser and for a one-year period after such
employee terminates employment with Purchaser.
(3) Purchaser agrees to provide ATC Group Services Inc. and its
subsidiaries (other than Seller) a right of first refusal on
all environmental related opportunities that they become aware
of during the one-year period following the Closing Date.
17
(4) ATC Group Services Inc. agrees to provide Purchaser a right of
first refusal on all environmentally related programming
and/or data management services that they become aware of
during the one-year period following the Closing Date in the
event that ATC seeks to outsource this portion of any
opportunity. ATC Group Services Inc. shall not be required to
offer opportunities to Purchaser with respect to the following
entities: Peracon, NAI Direct and Peakstar.
(5) Purchaser agrees that it will not directly or indirectly
solicit the following ATC Group Services Inc. clients for a
two year period following the Closing Date: Bank of America,
Indiana Department of Environmental Management and Boston
Housing Authority.
(d) Equitable Remedies. Purchaser expressly acknowledges and understands
that the remedy at law for any breach by Purchaser ofSection 4.09 will
be inadequate, and that the damages flowing from such breach are not
readily susceptible to being measured in monetary terms. Further, it is
the desire and intent of the parties that the restrictions ofSection
4.09 may be enforced by Seller or ATC Group Services Inc. to the
fullest extent permissible under the laws of each jurisdiction in which
enforcement is sought. Accordingly, it is acknowledged that,
notwithstanding anything contained in this Agreement to the contrary,
upon Purchaser's breach or threatened breach ofSection 4.09, Seller and
ATC Group Services Inc. will be entitled to immediate injunctive relief
and may obtain a temporary order restraining any further breach. Upon a
judicial finding that Purchaser has breached any of the restrictions
ofSection 4.09, Seller and ATC Group Services Inc. shall be entitled to
reimbursement, by Purchaser, of Seller's or ATC Group Services Inc.'s
attorneys' fees incurred in connection with the enforcement ofSection
4.09. Nothing in this Section shall be deemed to limit Seller's or ATC
Group Services Inc.'s remedies at law or in equity for any breach or
threatened breach by Purchaser of any part ofSection 4.09 which may be
pursued or availed of by Seller or ATC Group Services Inc.
(e) Modifications. If any of the restrictions of Section 4.09 shall for any
reason be held by a court or arbitrator to be excessively broad as to
duration, geographical scope, activity, or subject, then such
restriction shall be construed or judicially modified so as to
thereafter be limited or reduced to the extent required to be
enforceable in accordance with applicable law; it being understood and
agreed that by execution of this Agreement, the parties hereto regard
such restrictions as reasonable and compatible with their respective
rights.
Section 4.10 License
Purchaser agrees to provide ATC Group Services Inc. and its
subsidiaries an unlimited, irrevocable, perpetual, royalty free, non-exclusive
license to the following software as existing at the Closing Date:
- All software on the atc-enviro website
18
- All software developed for ATC/InSys clients during the last 3 fiscal
years
- All software developed for *
The license will include, but not be limited to, the right to use, modify,
transfer, rent, re-license, resell, or incorporate the software into new
products for the use of ATC Group Services Inc., its subsidiaries and their
customers. ATC Group Services Inc. shall have the right to transfer its rights
under this license in any sale of its assets, merger or other similar
transaction.
Purchaser acknowledges that the source code for the software shall be delivered
to ATC Group Services Inc. on or before the Closing Date on CD-ROM and where
appropriate be organized in a directory structured identical to the functional
structure used in the production environment.
Purchaser disclaims any and all liability for ATC Group Services Inc.'s use of
the software under the license granted hereunder, including, but not limited to,
any damages ATC Group Services Inc. may be subject to upon a third party's claim
that the software infringes on such third party's intellectual property rights.
V. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligation of Seller to close and to perform the covenants and
actions required of it on the Closing Date shall be subject to the satisfaction
at or prior thereto of the following conditions precedent:
Section 5.01 Truth of Representations and Warranties
Purchaser's representations and warranties contained in this Agreement
shall be true in all material respects at and as of the Closing Date as though
such representations and warranties were made at and as of the Closing Date and
Seller shall have received certificates signed by Purchaser dated the date of
the Closing to that effect in form satisfactory to Seller.
Section 5.02 Performance
Purchaser shall have performed and complied in all material respects
with its obligations under this Agreement which are to be performed or complied
with by it prior to or on the Closing Date; and Seller shall have received
certificates signed by Purchaser dated the date of the Closing to that effect in
form satisfactory to Seller.
Section 5.03 Documents
Purchaser shall provide to Seller all of the documents and shall
perform such acts as are prescribed in Section 8.03 or elsewhere in this
Agreement.
----------
* Information has been omitted and filed separately with the Securities and
Exchange Commission.
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Section 5.04 Authorization
Any consent, approval, authorization, order or filing with any court or
governmental agency or administrative body required for the consummation of the
transactions contemplated by this Agreement shall have been obtained or made and
shall be in effect on the Closing Date.
Section 5.05 Absence of Suit
No action, suit or proceeding before any court or any governmental or
regulatory authority shall have been commenced or threatened against Purchaser
or Seller or any of the officers or directors of any of them, seeking to
restrain, prevent or change the transactions contemplated hereby or challenging
the validity or legality of any such transactions, or seeking damages in
connection with any of such transactions.
Section 5.06 Payment of Purchase Price
Purchaser shall have tendered the cash and other consideration required
to be paid or delivered at Closing under Section 1.01(b) or otherwise in amounts
not less than such amounts.
Section 5.07 Assumption of Liabilities
Purchaser shall have executed and delivered to Seller an Assumption
Agreement in the form of Exhibit 1.02 hereto providing for the assumption by
Purchaser of the Assumed Liabilities.
Section 5.08 Approval by Lenders
Seller and ATC Group Services Inc. shall have obtained the written
consent from their banks for Seller and ATC Group Services Inc. to execute this
Agreement and transfer title to the assets.
Section 5.09 Master Agreement for Services
Purchaser shall have executed and delivered to Seller the Master
Agreement for Services in the form of Exhibit 5.09 hereto.
VI. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to close and to perform the covenants and
actions required of it on the Closing Date are subject to the satisfaction at or
prior thereto of following conditions precedent:
Section 6.01 Truth of Representations and Warranties
All representations and warranties of Seller contained in this
Agreement shall be true in all material respects at and as of the Closing Date
and Purchaser shall have received certificates signed by Seller and ATC Group
Services Inc. dated the date of the Closing to that effect in form satisfactory
to Purchaser.
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Section 6.02 Performance
As of the Closing, Seller and ATC Group Services Inc. shall have
performed and complied in all material respects with its obligations under this
Agreement to be performed and complied with by it at or on the Closing Date; and
Purchaser shall have received certificates signed by Seller and ATC Group
Services Inc. dated the date of the Closing to that effect in form satisfactory
to Purchaser.
Section 6.03 Approval by Lenders
Seller and ATC Group Services Inc. shall have obtained the written
consent from their banks for Seller and ATC Group Services Inc. to execute this
Agreement and transfer title to the assets.
Section 6.04 Bankruptcy Information
Purchaser shall have received a copy of the ATC Group Services Inc.
Fourth Amended Joint Consolidated Plan of Reorganization under Chapter 11 of the
Bankruptcy Code and the Order Confirming Debtors' Fourth Amended Joint
Consolidated Plan of Reorganization under Chapter 11 of the Bankruptcy Code.
Section 6.05 Absence of Suit
No action, suit or proceeding before any court or any governmental or
regulatory authority shall have been commenced or threatened against Seller or
Purchaser or any of the officers or directors of any of them, seeking to
restrain, prevent or change the transactions contemplated hereby or challenging
the validity or legality of any such transactions, or seeking damages in
connection with any of such transactions.
VII. RELATED AGREEMENTS
Section 7.01 Related Agreements
The following related agreements (the "Related Agreements") shall be
executed at Closing by the applicable parties:
(a) The Assumption Agreement in the form of Exhibit 1.02 hereto, pursuant
to which Purchaser shall agree to assume and pay the scheduled Assumed
Liabilities.
(b) The Master Agreement for Services substantially in the form of Exhibit
5.09 hereto.
(c) The Escrow Agreement in the form of Exhibit B hereto.
VIII. CLOSING
Section 8.01 Closing and Closing Date
The Closing of the transactions contemplated hereunder (the "Closing")
shall take place within ten business days after the date hereof (the "Closing
Date") and after satisfaction or
21
waiver of the conditions precedent set forth in Articles 5 and 6 at the offices
of Rosenman & Colin LLP, 575 Madison Avenue, New York, New York, or on such
other date, time and place as the parties hereto may mutually agree upon in
writing.
Section 8.02 Seller's Obligations at Closing
At or prior to the Closing, Seller shall deliver or cause to be
delivered to Purchaser, in form reasonably satisfactory to Purchaser, the
following:
(a) A Xxxx of Sale substantially in the form set forth in Exhibit 8.02(a)
and sufficient to effect and evidence the transfer, conveyance and
delivery of the Purchased Assets.
(b) An assignment of contracts, leases, licenses, certificates, names or
other registrations or instruments intended to be transferred to
Purchaser hereunder. Seller agrees to execute, for no further
consideration, such additional assignments as Purchaser, clients or
other parties to instruments to be conveyed hereunder shall reasonably
require to effect the transfer thereof.
(c) A release and satisfaction (or agreement to provide the same) of each
security interest, lien or encumbrance against any of the Purchased
Assets except those for which Purchaser has expressly assumed in full
as an Assumed Liability either the obligation underlying such security
interest, lien or encumbrance or the responsibility for obtaining the
release of such security interest.
(d) Certificates, executed by the President of each of Seller and ATC Group
Services Inc. certifying that: (i) all representations and warranties
of Seller or ATC Group Services Inc., as the case may be, contained in
this Agreement are true and correct in all material respects in
accordance with their terms at and as if made as of the Closing Date;
and (ii) there has been full compliance in all material respects by
Seller or ATC Group Services Inc., as the case may be, with all of its
covenants and agreements in this Agreement.
(e) A resolution of Seller's Board of Directors authorizing the execution,
delivery and performance of this Agreement and all Related Agreements
by Seller.
(f) A resolution of ATC Group Services Inc.'s Board of Directors
authorizing the execution, delivery and performance of this Agreement
and all Related Agreements by ATC Group Services Inc.
(g) All other schedules, certificates and other documents required by this
Agreement to be delivered by or on behalf of Seller on or before
Closing.
(h) An executed certificate changing the name of Seller, and evidence that
such has been transmitted to the appropriate agency for filing.
(i) An executed copy of the Assumption Agreement.
(j) An executed copy of the Master Services Agreement.
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Section 8.03 Purchaser's Obligations at Closing
At Closing, Purchaser shall deliver or cause to be delivered to Seller,
in form reasonably satisfactory to it, all documents and instruments required to
be delivered by Purchaser to Seller by this Agreement and shall pay the Adjusted
Purchase Price payable at Closing pursuant to Section 1.01(b).
In addition, at Closing, Purchaser shall deliver or cause to be
delivered to Seller:
(a) Its certificate, executed by an authorized officer certifying that: (i)
all representations and warranties of Purchaser contained in this
Agreement are true and correct in all material respects in accordance
with their terms at and as if made as of the Closing Date; (ii) there
has been full compliance in all material respects by Purchaser with all
of its covenants and agreements in this Agreement; and (iii) approval
of Purchaser's shareholders is not required for Purchaser's execution
and performance of this Agreement and the Related Agreements.
(b) A resolution of the Board of Directors of Purchaser authorizing
execution, delivery and performance of this Agreement and all Related
Agreements by Purchaser.
(c) An executed original of the Assumption Agreement.
(d) An executed original of the Master Agreement for Services.
IX. MISCELLANEOUS
Section 9.01 Brokerage Fees
Neither Purchaser nor Seller has consented to or authorized any broker,
or third party to act on its behalf, directly or indirectly, as a broker or
finder in connection with the transaction contemplated by this Agreement. In the
event any claim is made for a broker's or finder's fee in connection with the
transactions contemplated hereunder, the party responsible for retaining or
securing said broker or finder shall be solely responsible for the payment of
any broker's or finder's fees incurred as a result thereof. Further, the
responsible party shall indemnify the other party(ies) against any loss or
liabilities by reason of such broker's or finder's fees.
Section 9.02 Further Actions
At any time and from time to time, each party agrees, at its expense,
to take such actions and to execute and deliver such documents as may be
reasonably necessary to effectuate the transfer of the Purchased Assets and
assumption of the Assumed Liabilities hereunder.
Section 9.03 Survival
Except as otherwise provided herein, the obligations covenants,
agreements, representations, and warranties contained in or made pursuant to
this Agreement shall survive the Closing and any delivery of the Purchase Price
by Purchaser irrespective of any investigation made by or on behalf of any
party.
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Section 9.04 Merger - Modification
This Agreement and the attachments, exhibits, schedules and Related
Agreements hereto set forth the entire understanding of the parties with respect
to the subject matter hereof, supersede all existing agreements, whether written
or oral, among them concerning such subject matter, and may be modified only by
a written instrument duly executed by each party.
Section 9.05 Notices
All notices, elections, payments, reports or other correspondence
required or permitted hereunder shall be in writing and deemed to have been
properly given or delivered when personally delivered, mailed by certified mail
or delivered by a nationally recognized overnight express courier, postage fees
prepaid, to the party to whom directed at the below specified addresses:
A. If to Seller or ATC Group Services Inc.:
Xxxx X. Xxxxxx
Executive Vice President and Chief Financial Officer
ATC Group Services Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000
With a copy to:
Xxxxx X. Xxxxxx
General Counsel
ATC Group Services Inc.
000 X. Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxx, XX 00000
B. If to Purchaser:
Xxxxxxx X. X'Xxxxxxx
InSys Technology Inc.
000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
With a copy to:
Xxxxx Xxxxxxxxx, Esq.
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Any such notice shall be deemed given at the time of personal delivery, three
days after deposit with the mail or one day following deposit with an overnight
express courier. The address of a party may be changed in accordance with the
notice provisions of this section.
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Section 9.06 Waiver
Any waiver by any party of a breach of any provision of this Agreement
shall not operate as or be construed to be a waiver of any other breach of that
provision or of any breach of any other provision of this Agreement. The failure
of a party to insist upon strict adherence to any term of this Agreement on one
or more occasions will not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. Any waiver must be in writing.
Section 9.07 Binding Effect
The provisions of this Agreement shall be binding upon and inure to the
benefit of Seller and Purchaser and their respective successors, and shall inure
to the benefit of the Indemnitees and their respective successors, assigns,
heirs, and personal representatives.
Section 9.08 No Third-Party Beneficiaries
This Agreement does not create, and shall not be construed as creating,
any rights enforceable by any person not a party to this Agreement other than
those specified in Section 9.07.
Section 9.09 Severability
If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances unless the result
thereof would result in an unjust modification of the balance of rights and
obligations hereunder.
Section 9.10 Headings
The headings of this Agreement are solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.
Section 9.11 Governing Law; Venue; Jurisdiction
To the extent permitted by law, this Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to conflict of laws. The parties acknowledge that New York is the proper
forum for the litigation of any dispute arising out of or in connection with
this Agreement and the transactions contemplated hereby and hereby consent to
the exercise of jurisdiction over them by the courts of the State of New York or
the Federal courts, in each case located in New York County, and agree that any
service upon them under the procedures of the New York "long arm" court rule
and/or law will be proper to give jurisdiction to the courts of the State of New
York.
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Section 9.12 Separate Counterparts
This Agreement is being executed in several identical counterparts,
each one of which shall be considered an original and all of which when taken
together shall constitute but one instrument.
Section 9.13 Incorporation of Recitals, Exhibits and Schedules
All exhibits, schedules and Related Agreements attached hereto are
incorporated herein by this reference and expressly made a part of this
Agreement. For the purposes of this Agreement, disclosure of information or
statements made under any schedule or exhibit to this Agreement shall constitute
disclosure under this Agreement and any and all other schedules or exhibits to
this Agreement or in any Related Agreements where such information or statements
may be deemed to be relevant.
Section 9.14 Non-Working Dates
When any date on which payment or any other performance is due under
this Agreement or in any Related Agreements falls on a Saturday, Sunday or
national holiday, such payment or performance shall be due on the next business
day following such date.
Section 9.15 Opportunity to Cure
All parties to this Agreement shall be afforded a period of five (5)
days following notice thereof to cure any alleged breach of this Agreement
unless the loss threatened by such breach is of such gravity to require
immediate action.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date set forth in the opening paragraph hereof.
ATC InSys Technology Inc. Inys Technology, Inc.
By /s/ Xxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------------- ------------------------------
Xxxx X. Xxxxxx, Chief Financial Xxxxxx X. Xxxxxxxxxxx, Chief
Officer Financial Officer
ATC Group Services Inc.
By /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx, Chief Financial
Officer
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