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EXHIBIT 10.14
STOCK PURCHASE AGREEMENT
AMONG
NATG HOLDINGS, LLC
AND
THE SHAREHOLDERS OF
XXXXXX UNDERGROUND CABLE, INC.
FEBRUARY 19, 1999
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TABLE OF CONTENTS
1. DEFINITIONS.......................................................................... 1
2. PURCHASE AND SALE TRANSACTION........................................................ 5
(a) BASIC TRANSACTION........................................................... 5
(b) CONSIDERATION............................................................... 5
(c) THE CLOSING................................................................. 5
(d) DELIVERIES AT CLOSING....................................................... 5
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION............................ 5
(a) REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS.......................... 5
(b) REPRESENTATIONS AND WARRANTIES OF THE BUYER................................. 6
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY................................ 7
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER............................ 7
(b) CAPITALIZATION.............................................................. 8
(c) NONCONTRAVENTION............................................................ 8
(d) BROKERS' FEES............................................................... 8
(e) TITLE TO ASSETS............................................................. 8
(f) SUBSIDIARIES................................................................ 9
(g) FINANCIAL STATEMENTS........................................................ 9
(h) EVENTS SUBSEQUENT TO MOST RECENT FISCAL PERIOD END.......................... 9
(i) UNDISCLOSED LIABILITIES..................................................... 11
(j) LEGAL COMPLIANCE............................................................ 11
(k) TAX MATTERS................................................................. 11
(l) REAL PROPERTY............................................................... 12
(m) INTELLECTUAL PROPERTY....................................................... 14
(n) TANGIBLE ASSETS............................................................. 16
(o) CONTRACTS................................................................... 16
(p) NOTES AND ACCOUNTS RECEIVABLE............................................... 17
(q) POWERS OF ATTORNEY.......................................................... 17
(r) INSURANCE................................................................... 17
(s) LITIGATION.................................................................. 17
(t) COMMITMENTS AND WARRANTIES.................................................. 17
(u) LIABILITY FOR SERVICES PERFORMED............................................ 18
(v) EMPLOYEES................................................................... 18
(w) EMPLOYEE BENEFITS........................................................... 18
(x) GUARANTIES.................................................................. 20
(y) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS................................... 20
(z) CERTAIN BUSINESS RELATIONSHIPS WITH THE COMPANY............................. 21
(aa) CUSTOMERS AND SUPPLIERS..................................................... 21
5. PRE-CLOSING COVENANTS................................................................ 21
(a) GENERAL..................................................................... 21
(b) NOTICES AND CONSENTS........................................................ 21
(c) OPERATION OF BUSINESS....................................................... 22
(d) PRESERVATION OF BUSINESS.................................................... 22
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(e) FULL ACCESS................................................................. 22
(f) NOTICE OF DEVELOPMENTS...................................................... 22
(g) EXCLUSIVITY................................................................. 22
(h) NO TERMINATION OF SHAREHOLDERS'S OBLIGATION BY SUBSEQUENT
INCAPACITY.................................................................. 22
6. POST-CLOSING COVENANTS............................................................... 22
(a) GENERAL..................................................................... 22
(b) LITIGATION SUPPORT.......................................................... 23
(c) TRANSITION.................................................................. 23
(d) INDEPENDENT ACCOUNTANTS..................................................... 23
(e) TAX MATTERS................................................................. 23
(f) EMPLOYEE BONUSES............................................................ 23
(g) STOCK OPTION PLAN........................................................... 24
(h) AUDITED FINANCIAL STATEMENTS................................................ 24
7. CONDITIONS TO OBLIGATION TO CLOSE.................................................... 24
(a) CONDITIONS TO OBLIGATION OF THE BUYER....................................... 24
(b) CONDITIONS TO OBLIGATION OF THE SHAREHOLDERS................................ 26
8. REMEDIES FOR BREACHES OF THIS AGREEMENT.............................................. 27
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................................. 27
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER......................... 27
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SHAREHOLDERS.................. 27
(d) MATTERS INVOLVING THIRD PARTIES............................................. 28
(e) DETERMINATION OF ADVERSE CONSEQUENCES....................................... 29
(f) OTHER INDEMNIFICATION PROVISIONS............................................ 29
9. POST-CLOSING ADJUSTMENT OF CONSIDERATION............................................. 29
10. TAX MATTERS.......................................................................... 30
(a) TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE............................ 30
(b) TAX PERIODS BEGINNING BEFORE AND ENDING AFTER THE CLOSING
DATE........................................................................ 30
(c) COOPERATION ON TAX MATTERS.................................................. 31
(d) TAX SHARING AGREEMENTS...................................................... 31
(e) CERTAIN TAXES............................................................... 31
11. TERMINATION.......................................................................... 31
(a) TERMINATION OF AGREEMENT.................................................... 31
(b) EFFECT OF TERMINATION....................................................... 32
(c) CERTAIN PAYMENTS UPON TERMINATION........................................... 32
12. MISCELLANEOUS........................................................................ 32
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS..................................... 32
(b) NO THIRD-PARTY BENEFICIARIES................................................ 33
(c) ENTIRE AGREEMENT............................................................ 33
(d) SUCCESSION AND ASSIGNMENT................................................... 33
(e) COUNTERPARTS................................................................ 33
(f) HEADINGS.................................................................... 33
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(g) NOTICES..................................................................... 33
(h) AMENDMENTS AND WAIVERS...................................................... 34
(i) SEVERABILITY................................................................ 34
(j) EXPENSES.................................................................... 34
(k) CONSTRUCTION................................................................ 34
(l) INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES........................... 34
(m) SPECIFIC PERFORMANCE........................................................ 34
(n) SUBMISSION TO JURISDICTION.................................................. 35
(o) WAIVER OF JURY TRIAL........................................................ 35
Exhibit A: Form of Employment Agreements
Exhibit B: Form of Non-Competition Agreement
Exhibit C: Form of Seller's opinion
Exhibit D: Form of Buyer's opinion
Exhibit E: Excluded Assets
Exhibit F: Financial Statements
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into as of February 19, 1999
by and among NATG Holdings, LLC, a Delaware limited liability company (the
"Buyer"), and certain shareholders of Xxxxxx Underground Cable, Inc., a
Missouri corporation (the "Company") listed on the signature page to this
Agreement (the "Shareholders"). The Buyer and the Shareholders are referred to
collectively herein as the "Parties."
The Shareholders in the aggregate own a majority of the outstanding
capital stock of the Company. This Agreement contemplates the sale by the
Shareholders of the issued and outstanding capital stock of the Company that
they own to Buyer. The Shareholders will receive cash in exchange for their
shares of capital stock of the Company. A separate agreement between the Buyer
and the other shareholders of the Company will be entered into providing for
the purchase by the Buyer of the remaining capital stock of the Company.
Simultaneously herewith, Buyer will acquire all of the issued and
outstanding shares of North American Tel-Com Group, Inc., a Florida corporation
("North American"), from the shareholders of North American, and Buyer is
entering into stock exchange agreements with the shareholders of Network
Cabling Services, Inc. ("NCS"), Copenhagen Utilities & Construction, Inc.
("CUC") and DAS-CO of Idaho, Inc. ("DAS-CO") to acquire all of the issued and
outstanding capital stock of NCS, CUC and DAS-CO (collectively with this
Agreement, the "Exchange Agreements"). All of the parties to the Exchange
Agreements intend for the transfers contemplated thereunder to be treated as a
single transaction qualifying under Section 351 of the Code (as hereinafter
defined).
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses, and any other cost of enforcing a party's rights under this
Agreement.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the
meaning of Code Section 1504(a) or any similar group defined under a similar
provision of state, local or foreign law.
"Applicable Rate" means the corporate base rate of interest
publicly announced from time to time by PNC Bank, N.A.
"Basis" means any past or present fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction that forms or could form the
basis for any specified consequence.
"Closing" has the meaning set forth in Section below.
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"Closing Date" has the meaning set forth in Section below.
"Closing Date Balance Sheet" has the meaning set forth in
Section below.
"Consideration" has the meaning set forth in Section below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the preface above.
"Company Share" means any share of the Common Stock, $1.00
par value, of the Company.
"Controlled Group of Corporations" has the meaning set forth
in Code Section 1563.
"Disclosure Schedule" has the meaning set forth in Section
below.
"Draft Closing Date Balance Sheet" has the meaning set forth
in Section below.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), (d) Employee Welfare Benefit Plan or (e)
bonus, incentive, stock purchase, stock ownership, stock option, stock
appreciation right, severance, salary continuation, termination, change of
control or other material fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in
ERISA Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in
ERISA Section 3(1).
"Employment Agreements" means the Employment Agreements in
the form attached hereto as Exhibit A.
"Environmental, Health, and Safety Requirements" shall mean
all federal, state, local and foreign statutes, regulations, ordinances and
other 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, including without limitation all
those relating to the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control, or cleanup of any
Hazardous Materials (which, for purposes of this Agreement, shall mean any
hazardous materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls, noise or radiation), each as
amended and as now or hereafter in effect.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means (i) any corporation included with the
Company in a controlled group of corporations within the meaning of Section
414(b) of the Code; (ii) any trade or business (whether or not incorporated)
which is under common control with the Company within the meaning of
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Section 414(c) of the Code; (iii) any member of an affiliated service group of
which the Company is a member within the meaning of Section 414(m) of the Code;
or (iv) any other person or entity treated as an affiliate of the Company under
Section 414(o) of the Code.
"Estimated Closing Balance Sheet" has the meaning given that
term in Section hereof.
"Excluded Assets" means those assets owned by the Company and
identified hereto as Exhibit E, attached hereto and incorporated by reference.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Financial Statement" has the meaning set forth in Section
below.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"Indemnified Party" has the meaning set forth in Section
below.
"Indemnifying Party" has the meaning set forth in Section
below.
"Intellectual Property" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (b)
all trademarks, service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (f) all computer software (including data and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Knowledge" means that which is known by a person and that of
which a person has constructive knowledge based upon information readily
available to that person in the performance of such person's duties after
reasonable investigation and inquiry of such person. In the case of the Buyer,
"Knowledge" means the Knowledge of its executive officers. In the case of the
Company, "Knowledge" means the Knowledge of the Shareholders.
"Liability" means any liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Material Adverse Effect" means, individually or together
with other adverse effects, any material adverse effect on the assets,
liabilities, results of operations, business condition (financial or otherwise)
or prospects of the Company or on the Company's ability to consummate the
transactions contemplated hereby or the ability of the Buyer to operate the
business of the Company immediately after the Closing in substantially the same
manner as such business is conducted prior to Closing.
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"Most Recent Balance Sheet" means the balance sheet contained
within the Most Recent Financial Statements.
"Most Recent Fiscal Year End" has the meaning set forth in
Section below.
"Most Recent Fiscal Period End" has the meaning set forth in
Section below.
"Most Recent Financial Statements" has the meaning set forth
in Section below.
"Multiemployer Plan" has the meaning set forth in ERISA
Section 3(37).
"Non-Competition Agreements" means the Non-Competition
Agreements in the form attached hereto as Exhibit B.
"New Leases" has the meaning given that term in Section
hereof.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"Prohibited Transaction" has the meaning set forth in ERISA
Section 406 and Code Section 4975.
"Reportable Event" has the meaning set forth in ERISA Section
4043.
"Securities Act" means the Securities Act of 1933, as
amended.
"Securities Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens that could not reasonably be expected to have
a Material Adverse Effect, (b) liens for Taxes not yet due and payable or for
Taxes that the taxpayer is contesting in good faith through appropriate
proceedings disclosed on Section of the Disclosure Schedule, (c) purchase money
liens and liens securing rental payments under capital lease arrangements
disclosed in the Most Recent Financial Statements, and (d) other liens arising
in the Ordinary Course of Business and not incurred in connection with the
borrowing of money, so long as such liens could not reasonably be expected to
have a Material Adverse Effect.
"Shareholders" has the meaning set forth in the preface
above.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities to elect
a majority of the directors.
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"Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Code Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not,
and any obligations under any agreements or arrangements with respect to any of
the foregoing.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section
below.
2. PURCHASE AND SALE TRANSACTION.
(a) BASIC TRANSACTION. On and subject to the terms and
conditions ofthis Agreement, the Buyer agrees to purchase from the Shareholders,
and the shareholders agree to sell to the Buyer, all of their respective Company
Shares for the consideration specified below in this Section .
(b) CONSIDERATION. The Buyer agrees to (i) deliver at Closing
to the Shareholders cash in the amount of Fourteen Million Four Hundred
Thousand Dollars ($14,400,000.00) payable by wire transfer or other immediately
available funds (the "Consideration"). Notwithstanding the foregoing, the
Consideration shall be subject to adjustment pursuant to the provisions of
Section hereof. The Consideration shall be allocated among the Shareholders in
proportion to their respective holdings of the Company Shares as set forth in
Section to the Disclosure Schedule.
(c) THE CLOSING. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Holland &
Knight LLP in Ft. Lauderdale, Florida, commencing at 9:00 a.m. local time on
February 26, 1999 or such other date, time and place as the Parties may
mutually determine (the "Closing Date").
(d) DELIVERIES AT CLOSING. At the Closing, (i) the
Shareholders will deliver to the Buyer the various certificates, instruments,
and documents referred to in Section below, (ii) the Buyer will deliver to the
Shareholders the various certificates, instruments, and documents referred to
in Section below, and (iii) the Shareholders will deliver to the Buyer stock
certificates representing all of their the Company Shares, endorsed in blank or
accompanied by duly executed assignment documents, and (iv) the Buyer will
deliver to the Shareholders the Consideration specified in Section above.
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.
(a) REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each
Shareholder represents and warrants to the Buyer that the statements contained
in this Section are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section ), except as set forth on Section of the Disclosure
Schedule (as hereinafter defined).
(i) AUTHORIZATION OF TRANSACTION. Such Shareholder
has full power and authority to execute and deliver this Agreement and to
perform his obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of such Shareholder, enforceable in accordance with
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its terms and conditions except to the extent enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency or moratorium
laws, or other laws affecting the enforcement of creditors' rights or by the
principles governing the availability of equitable remedies. Such Shareholder
need not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency or any other
Person in order to consummate the transactions contemplated by this Agreement.
(ii) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which such Shareholder is
subject or (B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
such Shareholder is a party or by which he is bound or to which any of his
assets is subject.
(iii) BROKERS' FEES. Such Shareholder has, or prior
to Closing will have, paid any fees or commissions due from Shareholders to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement. Such Shareholder agrees that he will pay any additional amounts that
may become due from him or the Company to any such broker, finder or agent in
the future, including as a result of any indemnification obligations.
(iv) THE COMPANY SHARES. Such Shareholder holds of
record and owns beneficially the number of the Company Shares set forth
opposite such Shareholder's name, in Section of the Disclosure Schedule, free
and clear of any restrictions on transfer (other than any restrictions under the
Securities Act and state securities laws), Taxes, security interests liens or
other encumbrances, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. Such Shareholder is not a party to any option,
warrant, purchase right, or other contract or commitment that could require such
Shareholder to sell, transfer, or otherwise dispose of any capital stock of the
Company (other than this Agreement). Such Shareholder is not a party to any
voting trust, proxy, shareholders agreement, or other agreement or understanding
with respect to the voting of any capital stock of the Company.
(v) DISCLOSURE. To the Shareholders's Knowledge,
neither this Agreement nor any of the exhibits, attachments, written
statements, documents, certificates or other items prepared for or supplied to
the Buyer by such Shareholder with respect to the transactions contemplated
hereby contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make each statement contained herein or
therein not misleading. There is no fact which such Shareholder has not
disclosed to the Buyer herein and of which the Shareholders is aware which
could be anticipated to have a Material Adverse Effect.
(b) REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer
represents and warrants to the Shareholders that the statements contained in
this Section are correct and complete in all material respects as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section ), except as set forth in the
disclosure schedule delivered by the Buyer to the Shareholders on or before
February 19, 1999 (the "Buyer Disclosure Schedule").
(i) ORGANIZATION OF THE BUYER. The Buyer is a
limited liability company duly organized, validly existing, and in good
standing under the laws of the State of Florida. Correct and
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complete copies of the governing documents of the Buyer (as amended to date)
are included as part of the Buyer Disclosure Schedule. The names and titles of
each officer and director of the Buyer is set forth on the Buyer Disclosure
Schedule.
(ii) AUTHORIZATION OF TRANSACTION. The Buyer has
full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of the Buyer, enforceable in accordance with its terms and
conditions except to the extent enforcement thereof may be limited by
applicable bankruptcy, reorganization, insolvency or moratorium laws, or other
laws affecting the enforcement of creditors' rights or by the principles
governing the availability of equitable remedies. The Buyer need not give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency or any other Person in order
to consummate the transactions contemplated by this Agreement.
(iii) NONCONTRAVENTION. Neither the execution and
the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Buyer is subject
or any provision of their respective charter or bylaws or (B) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party or by which the
Buyer is bound or to which any of its assets is subject.
(iv) BROKERS' FEES. The Buyer has, or prior to the
Closing will have, paid any fees or commissions due from the Buyer to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement. The Buyer agrees that it will pay any additional amounts that may
become due from the Buyer to any such broker, finder or agent in the future,
including as a result of any indemnification obligations.
(v) DISCLOSURE. Neither this Agreement nor any of
the exhibits, attachments, written statements, documents, certificates or other
items prepared for or supplied to the Shareholders by the Buyer with respect to
the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make
each statement contained herein or therein not misleading. There is no fact
which the Buyer has not disclosed to the Shareholders herein and of which the
Buyer or any of the its officers or directors is aware and which could be
anticipated to have a Material Adverse Effect on the operations of the Buyer
after the Closing.
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY. The
Shareholders jointly and severally represent and warrant to the Buyer that the
statements contained in this Section are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section ), except as set forth in the
Disclosure Schedule delivered by the Shareholders to the Buyer on or before
February 19, 1999 and initialed by the Parties (the "Disclosure Schedule"). The
Disclosure Schedule shall be effective to modify only those representations and
warranties to which the Disclosure Schedule makes explicit reference. The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section .
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its
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incorporation. The Company is duly authorized to conduct business and is in
good standing under the laws of each jurisdiction where such qualification is
required. The Company has full corporate power and authority and all licenses,
permits, and authorizations necessary to carry on the businesses in which it is
engaged and in which it presently proposes to engage and to own and use the
properties owned and used by it. Section of the Disclosure Schedule lists the
directors and officers of the Company. Correct and complete copies of the
charter and bylaws of the Company (as amended to date) are included as part of
Section of the Disclosure Schedule. The minute books (containing the records of
meetings of the stockholders, the board of directors, and any committees of the
board of directors), the stock certificate books, and the stock record books of
the Company are correct and complete and an true and correct copy thereof has
been provided to the Buyer. The Company is not in default under or in violation
of any provision of its charter or bylaws.
(b) CAPITALIZATION. The entire authorized capital stock of
the Company consists of 30,000 Company Shares, of which 1,000 are issued and
outstanding and no the Company Shares are held in treasury. All of the issued
and outstanding the Company Shares have been duly authorized, are validly
issued, fully paid, and nonassessable, and are held of record and owned
beneficially by the Shareholders in the amounts set forth in Section of the
Disclosure Schedule. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights,
preemptive rights or other contracts or commitments that could require the
Company to issue, sell, or otherwise cause to become outstanding any of its
capital stock or securities convertible or exchangeable for, or any options,
warranties, or rights to purchase, any of such capital stock. There are no
outstanding obligations of the Company to repurchase, redeem or otherwise
acquire any capital stock or any securities convertible into or exchangeable
for such capital stock or any options, warrants or rights to purchase such
capital stock or securities. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to the Company. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting, transfer, dividend or
other rights (such as registration rights under the Securities Act) of the
capital stock of the Company.
(c) NONCONTRAVENTION. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which the Company is subject
or any provision of the charter or bylaws of the Company or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Company is a party or by which it
is bound or to which any of its assets is subject (or result in the imposition
of any Security Interest upon any of its assets). The Company need not give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any Person, government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement.
(d) BROKERS' FEES. The Company has, or prior to Closing will
have, paid any fees or commissions due from the Company to any broker, finder,
or agent with respect to the transactions contemplated by this Agreement.
Shareholders agree that he will pay any additional amounts that may become due
from the Company to any such broker, finder or agent in the future, including
as a result of any indemnification obligations.
(e) TITLE TO ASSETS. The Company has good and marketable
title to, or a valid leasehold interest in, the properties and assets used by
it, located on its premises, or shown on the Most Recent Balance Sheet or
acquired after the date thereof, free and clear of all Security Interests
(other than
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the Security Interests disclosed on the face of the Most Recent Balance Sheet),
except for (i) properties and assets disposed of in the Ordinary Course of
Business since the date of the Most Recent Balance Sheet, none of which
disposals are expected to have a Material Adverse Effect and (ii) the Excluded
Assets. The consummation of the transactions contemplated by this Agreement
will not affect the Company's good and marketable title to, or valid leasehold
interest in, the properties and assets described in the preceding sentence.
(f) SUBSIDIARIES. Except as set forth in Section of the
Disclosure Schedule, the Company does not currently have, and has never had,
any Subsidiaries and does not own any securities of any other Person.
(g) FINANCIAL STATEMENTS. Attached hereto as Exhibit F are
the following financial statements (collectively the "Financial Statements"):
(i) audited consolidated balance sheets and statements of income, including the
independent accountant's report thereon as of and for the fiscal year ended
1997 (the "Most Recent Fiscal Year End") for the Company; (ii) audited
consolidated balance sheets and statements of income, including the independent
accountant's report thereon as of and for the fiscal years ended December 31,
1995, December 31, 1996 and December 31, 1997 and (iii) unaudited consolidated
balance sheets and statements of income, (the "Most Recent Financial
Statements") as of and for the period from January 1, 1998, through November
30, 1998 for the Company (the "Most Recent Fiscal Period End"). The Financial
Statements (including the notes thereto) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby,
present fairly the financial condition of the Company as of such dates and the
results of operations of the Company for such periods, are correct and complete
in all material respects, and are consistent with the books and records of the
Company (which books and records are correct and complete in all material
respects).
(h) EVENTS SUBSEQUENT TO MOST RECENT FISCAL PERIOD END. Since
the Most Recent Fiscal Period End and except as disclosed in the Disclosure
Schedule, there has not occurred any Material Adverse Effect. Without limiting
the generality of the foregoing, since that date:
(i) The Company has not sold, leased, transferred,
or assigned any of its assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business;
(ii) The Company has not entered into any
agreements, contracts, leases, or licenses either involving more than $100,000
in the aggregate, having a term greater than 12 months or outside the Ordinary
Course of Business;
(iii) No party (including any of the Company) has
accelerated, terminated, modified, or cancelled any agreements, contracts,
leases, or licenses involving more than $100,000 in the aggregate to which the
Company is a party or by which it is bound;
(iv) The Company has not imposed or allowed to be
imposed any Security Interest upon any of its assets, tangible or intangible;
(v) The Company has not made any capital
expenditures involving more than $25,000 per expenditure and $100,000 in the
aggregate or outside the Ordinary Course of Business;
(vi) The Company has not made any capital investment
in, any loan to, or any acquisition of the securities or assets of, any other
Person;
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(vii) The Company has not issued any note, bond, or
other debt security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation involving more
than $100,000 in the aggregate;
(viii) The Company has not delayed or postponed the
payment of accounts payable and other Liabilities outside the Ordinary Course
of Business;
(ix) The Company has not cancelled, compromised,
waived, or released any right or claim either involving more than $100,000 in
the aggregate and outside the Ordinary Course of Business;
(x) The Company has not granted any license or
sublicense of any rights under or with respect to any Intellectual Property;
(xi) There has been no change made or authorized in
the charter or bylaws of any of the Company;
(xii) The Company has not issued, sold, or otherwise
disposed of any of its capital stock or securities convertible into or
exchangeable for such stock, or granted any options, warrants, or other rights
to purchase or obtain any of such capital stock or securities;
(xiii) The Company has not declared, set aside, or
paid any dividend or made any distribution with respect to its capital stock
(whether in cash or in kind) or redeemed, purchased, or otherwise acquired any
of its capital stock or other securities;
(xiv) The Company has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to its property
involving more than $100,000 in the aggregate;
(xv) The Company has not made any loan to, or
entered into any other transaction with, any of its directors, officers, and
employees or their "Associates" (as defined in Rule 12b-2 under the Exchange
Act);
(xvi) The Company has not entered into any
employment contract or collective bargaining agreement, written or oral, or
modified the terms of any existing such contract or agreement;
(xvii) The Company has not granted any increase in
any compensation of any of its directors, officers, or other employees;
(xviii) The Company has not adopted, amended,
modified, or terminated any bonus, profit-sharing, incentive, severance, or
other plan, contract, or commitment for the benefit of any of its directors,
officers, and employees (or taken any such action with respect to any other
Employee Benefit Plan);
(xix) The Company has not made any other change in
employment terms for any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xx) The Company has not made or pledged to make any
charitable or other capital contribution outside the Ordinary Course of
Business;
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(xxi) There has not been any other material
occurrence, event, incident, action, failure to act, or transaction outside the
Ordinary Course of Business involving the Company; and
(xxii) The Company has not increased, or experienced
any change in assumptions underlying or method of calculating, any bad debt,
contingency, tax or other reserves or changed its accounting practices, methods
or assumptions (including changes in estimates or valuation methods); or
written down the value of any assets; and
(xxiii) The Company has not committed to do any of
the foregoing.
(i) UNDISCLOSED LIABILITIES. Except as disclosed in Section of
the Disclosure Schedule, to the best of the Shareholders' Knowledge, the
Company does not have any Liability, except for (i) Liabilities set forth on
the face of the Most Recent Balance Sheet (rather than in any notes thereto)
and (ii) Liabilities which have arisen after the Most Recent Fiscal Period End
in the Ordinary Course of Business (none of which results from, arises out of,
relates to, is in the nature of, or was caused by any breach of contract,
breach of warranty, tort, infringement, or violation of law and none of which
could reasonably be expected to have a Material Adverse Effect).
(j) LEGAL COMPLIANCE. Except as disclosed in Section 4(j) of
the Disclosure Schedule, to the best of the Shareholders' Knowledge, the Company
and its predecessors and Affiliates has complied, in all material respects,
with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof), and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure so to comply.
(k) TAX MATTERS.
(i) The Company has filed all Tax Returns that it
was required to file. All such Tax Returns were correct and complete in all
material respects. All Taxes owed by the Company (whether or not shown on any
Tax Return) have been paid or are fully and adequately accrued and adequately
disclosed on the Most Recent Balance Sheet. The Company is not currently the
beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by an authority in a jurisdiction where the Company
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the assets of the
Company that arose in connection with any failure (or alleged failure) to pay
any Tax.
(ii) The Company 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.
(iii) Neither Shareholders nor the Company has
Knowledge that any authority expects to assess any additional Taxes for any
period for which Tax Returns have been filed. There is no action, suit or
proceeding, investigation, dispute or claim now pending or threatened
concerning any Tax Liability of the Company or proposed adjustment to the
taxable income of the Company either (A) claimed or raised by any authority in
writing or (B) as to which any of the Shareholders and the Company has
Knowledge based upon personal contact with any agent of such authority. Section
of the Disclosure Schedule contains a summary of all Tax Returns filed with
respect to the Company for the completed tax years 1995, 1996 and 1997,
indicates those Tax Returns that have been audited, and indicates those Tax
Returns that currently are the subject of audit. The Shareholders have made
available to the Buyer
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correct and complete copies of all Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by the Company since
January 1, 1994.
(iv) The Company has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(v) The Company has not filed a consent under Code
Section 341(f) concerning collapsible corporations. The Company has not made any
payments, is not obligated (under this Agreement or otherwise) to make any
payments, or is not a party to any agreement that under certain circumstances
could obligate it to make any payments that will not be deductible under Code
Section 280G or that would give rise to any obligation to indemnify any Person
for any excise tax payable pursuant to Code Section 4999. The Company has not
been a United States real property holding corporation within the meaning of
Code Section 897(c)(2) during the applicable period specified in Code Section
897(c)(1)(A)(ii). The Company has disclosed on its federal income Tax Returns
all positions taken therein that could give rise to a substantial understatement
of federal income Tax within the meaning of Code Section 6662. Neither the
Company nor any predecessor or affiliate thereof is a party to any Tax
allocation, sharing, indemnification or similar agreement. Except as disclosed
in Section of the Disclosure Schedule, the Company has not been a member of an
Affiliated Group filing a consolidated federal income Tax Return (other than a
group the common parent of which was the Company). The Company does not have any
Liability for the Taxes of any Person (other than any of the Company and its
Subsidiaries) under Reg. Section 1.1502-6 (or any similar provision of state,
local, or foreign law), as a transferee or successor, by contract, or otherwise.
No indebtedness of the Company consists of "corporate acquisition indebtedness"
within the meaning of Code Section 279.
(vi) Section of the Disclosure Schedule sets forth as
of the most recent practicable date the basis for Federal income tax purposes of
the Company in its assets.
(vii) The unpaid Taxes of the Company (A) did not,
as of the Most Recent Fiscal Period End, exceed the reserve for Tax Liability
set forth on the face of the Most Recent Balance Sheet (rather than in any
notes thereto) and (B) do not, and will not as of the Closing Date, exceed that
reserve as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of the Company in filing its Tax
Returns.
(l) REAL PROPERTY.
(i) Section of the Disclosure Schedule lists and
describes briefly all real property that the Company owns. With
respect to each such parcel of owned real property:
(A) the identified owner has good and
marketable title to the parcel of real property, free and
clear of any Security Interest, easement, covenant, or other
restriction, except for installments of special assessments
not yet delinquent and recorded Security Interests,
easements, covenants, and other restrictions which do not
impair the current use, occupancy, or the marketability of
title, of the property subject thereto;
(B) there are no pending or threatened
condemnation proceedings, lawsuits, or administrative actions
relating to the property or other matters affecting
materially and adversely the current use, occupancy, or value
thereof;
(C) the legal description for the parcel
contained in the deed thereof describes such parcel fully and
adequately, the buildings and improvements are located
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within the boundary lines of the described parcels of land,
are not in violation of applicable setback requirements,
zoning laws, and ordinances (and none of the properties or
buildings or improvements thereon are subject to "permitted
non-conforming use" or "permitted non-conforming structure"
classifications), and do not encroach on any easement which
may burden the land, and the land does not serve any
adjoining property for any purpose inconsistent with the use
of the land, and the property is not located within any flood
plain or subject to any similar type restriction for which
any permits or licenses necessary to the use thereof have not
been obtained;
(D) all facilities have received all
approvals of governmental authorities (including licenses and
permits) required in connection with the ownership or
operation thereof and have been operated and maintained in
accordance with applicable laws, rules, and regulations;
(E) except as disclosed in Section 4(l)(i)
(E) of the Disclosure Schedule, there are no leases,
subleases, licenses, concessions, or other agreements, written
or oral, granting to any party or parties the right of use or
occupancy of any portion of the parcel of real property;
(F) there are no outstanding options or
rights of first refusal to purchase the parcel of real
property, or any portion thereof or interest therein;
(G) there are no parties (other than the
Company) in possession of the parcel of real property, other
than tenants under any leases disclosed in Section of the
Disclosure Schedule who are in possession of space to which
they are entitled;
(H) all facilities located on the parcel
of real property are supplied with utilities and other
services necessary for the operation of such facilities,
including gas, electricity, water, telephone, sanitary sewer,
and storm sewer, all of which services are adequate in
accordance with all applicable laws, ordinances, rules, and
regulations and are provided via public roads or via
permanent, irrevocable, appurtenant easements benefitting the
parcel of real property; and
(I) each parcel of real property abuts on
and has direct vehicular access to a public road, or has
access to a public road via a permanent, irrevocable,
appurtenant easement benefitting the parcel of real property,
and access to the property is provided by public right-of-way
with adequate curb cuts available.
(ii) Section of the Disclosure Schedule lists and
describes briefly all real property leased or subleased to the
Company. The Shareholders have delivered to the Buyer correct and
complete copies of the leases and subleases listed in Section of the
Disclosure Schedule (as amended to date). With respect to each lease
and sublease listed in Section of the Disclosure Schedule:
(A) The lease or sublease is legal, valid,
binding, enforceable, and in full force and effect;
(B) The lease or sublease will continue to
be legal, valid, binding, enforceable, and in full force and
effect on identical terms following the consummation of the
transactions contemplated hereby;
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(C) No party to the lease or sublease is
in breach or default, and no event has occurred which, with
notice or lapse of time, would constitute a breach or default
or permit termination, modification, or acceleration
thereunder;
(D) No party to the lease or sublease has
repudiated any provision thereof;
(E) There are no disputes, oral
agreements, or forbearance programs in effect as to the lease
or sublease;
(F) The Company has not received a notice
from the lessor indicating that the lease will not be renewed
at the end of its current term for any additional terms
provided for in the lease;
(G) Except for those leases disclosed in
Section of the Disclosure Schedule, the term of the lease will
continue for a minimum of six months past the Closing Date;
(H) With respect to each sublease, the
representations and warranties set forth in subsections (A)
through (G) above are true and correct with respect to the
underlying lease;
(I) The Company has not assigned,
transferred, conveyed, mortgaged, deeded in trust, or
encumbered any interest in the leasehold or subleasehold;
(J) All facilities leased or subleased
thereunder have received all approvals of governmental
authorities (including licenses and permits) required in
connection with the operation thereof and have been operated
and maintained in accordance with applicable laws, rules, and
regulations;
(K) All facilities leased or subleased
thereunder are supplied with utilities and other services
necessary for the operation of said facilities; and
(L) The Shareholders are not aware of any
pending or threatened foreclosure or other enforcement
proceedings relating to the real property underlying the
leases or subleases set forth in Section of the Disclosure
Schedule that could result in the Company's loss of
possession of such real property.
(m) INTELLECTUAL PROPERTY.
(i) To the best of the Shareholders' Knowledge, the
Company owns or has the right to use pursuant to license, sublicense,
agreement, or permission in writing all Intellectual Property necessary for the
operation of the businesses of the Company as presently conducted and as
presently proposed to be conducted. To the best of the Shareholders' Knowledge,
each item of Intellectual Property owned or used by the Company immediately
prior to the Closing hereunder will be owned or available for use by the
Company on identical terms and conditions immediately subsequent to the Closing
hereunder. To the best of the Shareholders' Knowledge, the Company has taken
all necessary action to maintain and protect each item of Intellectual Property
that it owns or uses.
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(ii) To the best of the Shareholders' Knowledge, the
Company has not interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of third parties, and
none of the Shareholders and the directors and officers (and employees with
responsibility for Intellectual Property matters) of the Company has ever
received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including any claim
that the Company must license or refrain from using any Intellectual Property
rights of any third party). To the Knowledge of Shareholders and the Company,
no third party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of the
Company.
(iii) Section of the Disclosure Schedule identifies
each patent or registration which has been issued to the Company with respect to
any of its Intellectual Property, identifies each pending patent application or
application for registration which the Company has made with respect to any of
its Intellectual Property, and identifies each license, agreement, or other
permission which the Company has granted to any third party with respect to any
of its Intellectual Property (together with any exceptions). The Shareholders
have delivered to the Buyer correct and complete copies of all such patents,
registrations, applications, licenses, agreements, and permissions (as amended
to date) and have made available to the Buyer correct and complete copies of all
other written documentation evidencing ownership and prosecution (if applicable)
of each such item. Section of the Disclosure Schedule also identifies each trade
name or unregistered trademark used by the Company in connection with any of its
businesses. With respect to each item of Intellectual Property required to be
identified in Section of the Disclosure Schedule:
(A) To the best of the Shareholders'
Knowledge, the Company possesses all right, title, and interest in and to the
item, free and clear of any Security Interest, license, or other restriction;
(B) The item is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge;
(C) No action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or is threatened
which challenges the legality, validity, enforceability, use, or ownership of
the item; and
(D) The Company has never agreed to
indemnify any Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
(iv) Section of the Disclosure Schedule identifies
each item of Intellectual Property that any third party owns and that the
Company uses pursuant to license, sublicense, agreement, or permission. The
Shareholders have delivered to the Buyer correct and complete copies of all such
licenses, sublicenses, agreements, and permissions (as amended to date). With
respect to each item of Intellectual Property required to be identified in
Section of the Disclosure Schedule:
(A) The license, sublicense, agreement, or
permission covering the item is legal, valid, binding, enforceable, and in full
force and effect;
(B) The license, sublicense, agreement, or
permission will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby;
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(C) No party to the license, sublicense,
agreement, or permission is in breach or default, and no event has occurred
which with notice or lapse of time would constitute a breach or default or
permit termination, modification, or acceleration thereunder;
(D) No party to the license, sublicense,
agreement, or permission has repudiated any provision thereof;
(E) With respect to each sublicense, the
representations and warranties set forth in subsections (A) through (D) above
are true and correct with respect to the underlying license;
(F) The underlying item of Intellectual
Property is not subject to any outstanding injunction, judgment, order, decree,
ruling, or charge;
(G) No action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or is threatened
which challenges the legality, validity, or enforceability of the underlying
item of Intellectual Property; and
(H) The Company has never granted any
sublicense or similar right with respect to the license, sublicense, agreement,
or permission.
(v) To the Knowledge of Shareholders and the
Company, the Company will not interfere with, infringe upon, misappropriate, or
otherwise come into conflict with, any Intellectual Property rights of third
parties as a result of the continued operation of its businesses as presently
conducted and as presently proposed to be conducted.
(vi) None of the Shareholders and the Company has
any Knowledge of any new products, inventions, procedures, or methods of
manufacturing or processing that any competitors or other third parties have
developed which reasonably could be expected to supersede or make obsolete any
product or process of any of the Company.
(n) TANGIBLE ASSETS. The Company owns or leases all
buildings, machinery, equipment, and other tangible assets necessary for the
conduct of its business as presently conducted and as presently proposed to be
conducted. Each such tangible asset has been maintained in accordance with
normal industry practice, is in good operating condition and repair (subject to
normal wear and tear), and is suitable for the purposes for which it presently
is used and presently is proposed to be used. Section of the Disclosure Schedule
lists all tangible assets owned by the Company with an individual value in
excess of $1,000.
(o) CONTRACTS. Section 4(o) of the Disclosure Schedule lists
all of the material contracts anD other agreements to which the Company is a
party. The Shareholders have delivered to the Buyer a correct and complete copy
of each written agreement listed in Section 4(o) of the Disclosure Schedule (as
amended to date). With respect to each such agreement, to the best of the
Shareholders' Knowledge: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) the agreement will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions contemplated hereby; (C) no
party is in breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (D) no party has
repudiated any provision of the agreement. Section 4(o) of the Disclosure
Schedule lists each currently outstanding bid or proposal for business submitted
by the Company in excess of $1,000,000.
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(p) NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts
receivable of the Company are reflected properly on the Most Recent Balance
Sheet in accordance with GAAP, are valid receivables subject to no setoffs or
counterclaims, are current and collectible, and, will be collected in
accordance with their terms at their recorded amounts, subject only to billing
adjustments and the reserve for bad debts set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the Company.
(q) POWERS OF ATTORNEY. There are no outstanding powers of
attorney executed on behalf of the Company.
(r) INSURANCE. Section 4(r) of the Disclosure Schedule
includes a true, correct and complete list of all policies of insurance
(including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which the Company is
a party, a named insured, or otherwise the beneficiary of coverage. Genuine and
complete copies of each of the insurance policies listed in Section 4(r) of the
Disclosure Schedule have been provided to the Buyer. With respect to each such
insurance policy, to the best of the Shareholders' Knowledge: (A) the policy is
legal, valid, binding, enforceable, and in full force and effect; (B) the policy
will continue to be legal, valid, binding, enforceable, and in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby; (C) neither the Company nor any other party to the policy
is in breach or default (including with respect to the payment of premiums or
the giving of notices), and no event has occurred which, with notice or the
lapse of time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; (D) neither the Company, any
ERISA Affiliate nor the Buyer shall be subject to a retroactive rate adjustment,
loss sharing arrangement or other actual or contingent liability and (E) to
Shareholders' or the Company's Knowledge, no party to the policy has repudiated
any provision thereof. To the best of the Shareholders' Knowledge, the Company
has been fully covered at all times during the past 5 years by insurance in
scope and amount customary and reasonable for the businesses in which it has
engaged during the aforementioned period. Section 4(r) of the Disclosure
Schedule describes any self-insurance arrangements affecting the Company.
(s) LITIGATION. Section 4(s) of the Disclosure Schedule sets
forth each instance in which the Company (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party, or
to the Knowledge of Shareholders or the Company, is threatened to be made a
party to any claim, action, suit, proceeding, hearing, or investigation of, in,
or before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator. Except as set
forth in Section 4(s) of the Disclosure Schedule, there is no other pending, or
to the knowledge of Shareholders or the Company, threatened claim, arbitration
proceeding, action, suit, investigation or other proceeding against or involving
the Company or any property or rights of the Company or any officer or director
or the Company. To the best of the Shareholders' Knowledge, none of the actions,
suits, proceedings, hearings, and investigations set forth in Section 4(s) of
the Disclosure Schedule could result in any material adverse change in the
business, financial condition, operations, results of operations, or future
prospects of the Company. The Shareholders have no reason to believe that any
such action, suit, proceeding, hearing, or investigation may be brought or
threatened against the Company.
(t) COMMITMENTS AND WARRANTIES. All services provided by the
Company have been performed in conformity with all applicable contractual
commitments (written or oral) and all express and implied warranties (written
or oral), and the Company has no Liability and, to the Knowledge of the
Shareholders and the Company, there is no Basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rise to any
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Liability) in connection with any such services. Section 4(t) of the Disclosure
Schedule includes copies of the standard forms of agreement entered into
between the Company and its customers. The Company has not entered into any
written or oral agreements with any of its customers that include guaranties,
warranties, or indemnity provisions other than those included in the agreements
included as part of Section 4(t) of the Disclosure Schedule.
Neither the Company nor the Shareholders has received notice (written
or oral) from any of its customers stating that the customer intends to reduce
the volume of business that it currently conducts with the Company or to cease
doing business with the Company.
(u) LIABILITY FOR SERVICES PERFORMED. The Company has no
Liability (and, to Shareholders' knowledge, there is no Basis for any present
or future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any of them giving rise to any Liability) arising out
of any injury to individuals or property as a result of or in connection with
any services provided by the Company.
(v) EMPLOYEES. To the Knowledge of the Shareholders or the
Company, no executive, key employee, or group of employees has any plans to
terminate employment with the Company. The Company is not currently, nor at any
prior time has been, a party to or bound by any collective bargaining
agreement, nor has the Company experienced any strikes, contractual grievances,
claims of unfair labor practices, or other collective bargaining disputes. The
Company has not committed any unfair labor practice. Neither the Shareholders
nor the Company have 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. The Company has not experienced any material employment dispute
with any employee.
(w) EMPLOYEE BENEFITS.
(i) Section 4(w) of the Disclosure Schedule lists
each Employee Benefit Plan that the Company or any ERISA Affiliate maintains,
contributes to, or is required to contribute to or under which the Company or
any ERISA Affiliate has any liability.
(A) To the best of the Shareholders'
Knowledge, each such Employee Benefit Plan (and each related trust, insurance
contract, or fund) complies in form and in operation in all respects with the
applicable requirements of ERISA, the Code, and other applicable laws.
(B) To the best of the Shareholders'
Knowledge, all required reports and disclosures (including Form 5500 Annual
Reports, Summary Annual Reports, PBGC-1's, and Summary Plan Descriptions) have
been filed or distributed appropriately with respect to each such Employee
Benefit Plan. The requirements of Part 6 of Subtitle B of Title I of ERISA and
of Code Section 4980B have been met with respect to each such Employee Benefit
Plan which is an Employee Welfare Benefit Plan.
(C) To the best of the Shareholders'
Knowledge, all contributions (including all employer contributions and employee
salary reduction contributions) which are due have been paid to each such
Employee Benefit Plan which is an Employee Pension Benefit Plan and all
contributions for any period ending on or before the Closing Date which are not
yet due have been paid to each such Employee Pension Benefit Plan or accrued in
accordance with the past custom and practice of the Company and in accordance
with GAAP. All premiums or other payments for all periods ending
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on or before the Closing Date have been paid with respect to each such Employee
Benefit Plan which is an Employee Welfare Benefit Plan.
(D) To the best of the Shareholders'
Knowledge, each such Employee Benefit Plan which is an Employee Pension Benefit
Plan now meets and at all times since inception have met the requirements of a
"qualified plan" under Code Section 401(a) and has received, within the last two
years, a favorable determination letter from the Internal Revenue Service.
(E) To the best of the Shareholders'
Knowledge, as of the Closing Date, the market value of assets under each such
Employee Benefit Plan which is an Employee Pension Benefit Plan (other than any
Multiemployer Plan) will equal or exceed the present value of all vested and
nonvested Liabilities thereunder determined in accordance with PBGC methods,
factors, and assumptions applicable to an Employee Pension Benefit Plan
terminating on such date.
(F) To the best of the Shareholders'
Knowledge, the Shareholders have delivered to the Buyer correct and complete
copies of the plan documents and summary plan descriptions including all
amendments thereto, the most recent determination letter received from the
Internal Revenue Service, the three most recent Form 5500 Annual Reports
(including all schedules thereto), the three most recent annual premium payment
forms filed with the PBGC, and all related trust agreements, insurance
contracts, and other funding agreements which implement each such Employee
Benefit Plan.
(ii) With respect to each Employee Benefit Plan that
the Company or any ERISA Affiliate maintains, contributes to, or is required to
contribute to or under which the Company or any ERISA Affiliate has any
liability, to the best of the Shareholders' Knowledge:
(A) No such Employee Benefit Plan which is
an Employee Pension Benefit Plan (other than any Multiemployer Plan) has been
completely or partially terminated or been the subject of a Reportable Event as
to which notices would be required to be filed with the PBGC. No proceeding by
the PBGC to terminate any such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or threatened.
(B) There have been no Prohibited
Transactions with respect to any such Employee Benefit Plan. No Fiduciary 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 any
such Employee Benefit Plan. No action, suit, proceeding, hearing, or
investigation with respect to any such Employee Benefit Plan (other than
routine claims for benefits) is pending or threatened. Neither the Shareholders
nor the Company has any Knowledge of any Basis for any such action, suit,
proceeding, hearing, or investigation.
(C) Neither the Company nor any ERISA
Affiliate has incurred, and none of the Shareholders and the directors and
officers (and employees with responsibility for employee benefits matters) of
the Company has any reason to expect that the Company or any ERISA Affiliate
will incur, any Liability to the PBGC (other than PBGC premium payments) or
otherwise under Title IV of ERISA (including any withdrawal Liability) or under
the Code with respect to any such Employee Benefit Plan which is an Employee
Pension Benefit Plan.
(iii) Neither the Company nor any ERISA Affiliate
contributes to, ever has contributed to, or ever has been required to
contribute to any Multiemployer Plan or has any Liability (including withdrawal
Liability) under any Multiemployer Plan.
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(iv) Neither the Company nor any ERISA Affiliate
maintains or contributes to, or has ever been required to contribute to any
Employee Welfare Benefit Plan providing medical, health, or life insurance or
other welfare-type benefits for current or future retired or terminated
employees, their spouses, or their dependents (other than in accordance with
Code Section 4980B).
(x) GUARANTIES. The Company is not a guarantor or otherwise
is liable for any Liability or obligation (including indebtedness) of any other
Person.
(y) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS. Except as
disclosed in Section 4(y) of the Disclosure Schedule, to the best of the
Shareholders' Knowledge:
(i) The Company and its predecessors and Affiliates
have complied and are in compliance with all Environmental, Health, and Safety
Requirements.
(ii) Without limiting the generality of the
foregoing, the Company and its Affiliates have obtained and complied with, and
are in compliance with, all permits, licenses and other authorizations that are
required pursuant to Environmental, Health, and Safety Requirements for the
occupation of its facilities and the operation of its business; a list of all
such permits, licenses and other authorizations is set forth on the attached
"Environmental and Safety Permits Schedule."
(iii) Neither the Company nor its predecessors or
Affiliates has received any written or oral notice, report or other information
regarding any actual or alleged violation of Environmental, Health, and Safety
Requirements, or any liabilities or potential liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise), including any investigatory,
remedial or corrective obligations, relating to any of them or its facilities
arising under Environmental, Health, and Safety Requirements.
(iv) None of the following exists at any property or
facility owned or operated by the Company: (1) underground storage tanks, (2)
asbestos-containing material in any form or condition, (3) materials or
equipment containing polychlorinated biphenyls, or (4) landfills, surface
impoundments, or disposal areas.
(v) None of the Company or its predecessors or
Affiliates has 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 or operated any property or
facility (and no such property or facility is contaminated by any such
substance) in a manner that has given or would give rise to liabilities,
including any liability for response costs, corrective action costs, personal
injury, property damage, natural resources damages or attorney fees, pursuant
to the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), the Solid Waste Disposal Act, as amended ("SWDA")
or any other Environmental, Health, and Safety Requirements.
(vi) Neither this Agreement nor the consummation of
the transaction that is the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification to or consent of
government agencies or third parties, pursuant to any of the so-called
"transaction-triggered" or "responsible property transfer" Environmental,
Health, and Safety Requirements.
(vii) Neither the Company nor its predecessors or
Affiliates has, either expressly or by operation of law, assumed or undertaken
any liability, including without limitation any
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obligation for corrective or remedial action, of any other Person relating to
Environmental, Health, and Safety Requirements.
(viii) No facts, events or conditions relating to
the past or present facilities, properties or operations of the Company or any
of its predecessors or Affiliates will prevent, hinder or limit continued
compliance with Environmental, Health, and Safety Requirements, give rise to
any investigatory, remedial or corrective obligations pursuant to
Environmental, Health, and Safety Requirements (whether on-site or off-site),
or give rise to any other liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise) pursuant to Environmental, Health, and Safety
Requirements, including without limitation any relating to onsite or offsite
releases or threatened releases of hazardous materials, substances or wastes,
personal injury, property damage or natural resources damage.
(z) CERTAIN BUSINESS RELATIONSHIPS WITH THE COMPANY. Neither
the Shareholders, their respective Affiliates, any director or employee of the
Company, or any relatives of the Shareholders, or any person living in the same
residence as such persons, has been involved in any business arrangement or
relationship with the Company within the past 12 months, and neither the
Shareholders nor their respective Affiliates nor any of such other persons own
leases, licenses, or otherwise has any interest in any asset, tangible or
intangible, which is used in the business of the Company or any contract, lease
or commitment to which the Company is a party. Except as disclosed in Section of
the Disclosure Schedule, the Company is not indebted to any officer, director
or employee of the Company for any liability or obligation. No officer,
director or employee of the Company is indebted to the Company for any
liability or obligation.
(aa) CUSTOMERS AND SUPPLIERS. To the best of the
Shareholders' Knowledge, no purchase order or commitment of the Company is in
excess of normal requirements, nor are prices provided therein in excess of
current market prices for the products or services to be provided thereunder.
No material supplier of the Company has advised the Company in writing within
the past year that it will stop, or decrease the rate of, supplying materials,
products or services to the Company and no material customer of the Company has
advised the Company in writing within the past year that it will stop, or
decrease the rate of buying materials, products or services from the Company.
Section 4(aa) of the Disclosure Schedule sets forth a list of (a) each customer
that accounted for more than 5% of the consolidated revenues of the Company
during the last full fiscal year or the interim period through the date of the
Most Recent Financial Statements and the amount of revenues accounted for by
such customer during each such period and (b) each supplier that is the sole
supplier of any significant product or component to the Company. To the best of
the Shareholders' Knowledge, the consummation of the transactions contemplate
hereby will not have a material adverse effect on the Company's relationship
with any customer or supplier listed in Section 4(aa) of the Disclosure
Schedule.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use his or its best
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions
set forth in Section below).
(b) NOTICES AND CONSENTS. The Shareholders will cause the
Company to give any notices to third parties, and will cause the Company to use
its best efforts to obtain any third party consent required in connection with
the matters referred to in Section above. Each of the Parties will (and the
Shareholders will cause the Company to) give any notices to, make any filings
with, and use its best
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efforts to obtain any authorizations, consents, and approvals of governments
and governmental agencies in connection with the matters referred to in Section
and Section above.
(c) OPERATION OF BUSINESS. The Shareholders will not cause or
permit the Company to engage in any practice, take any action, or enter into
any transaction outside the Ordinary Course of Business except for (i) the
transfer of the Excluded Assets to the Shareholders and (ii) the accrual of a
bonus for certain officers. Without limiting the generality of the foregoing,
the Shareholders will not cause or permit the Company to (i) declare, set
aside, or pay any dividend or make any distribution with respect to its capital
stock or redeem, purchase, or otherwise acquire any of its capital stock or
(ii) otherwise engage in any practice, take any action, or enter into any
transaction of the sort described in Section above. The Shareholders will
immediately notify the Buyer in writing with respect to any proposed capital
expenditures in excess of $50,000.
(d) PRESERVATION OF BUSINESS. The Shareholders will use their
best efforts to keep the Company's business and properties substantially
intact, including its present operations, physical facilities, working
conditions, and relationships with lessors, licensors, suppliers, customers,
and employees.
(e) FULL ACCESS. The Shareholders will permit, and will cause
the Company to permit, representatives of the Buyer to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of the Company, to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to the Company. At the request of the Buyer, Shareholders will
permit, and will cause the Company to permit, the Buyer's lenders, and their
respective counsel, to have the same access as permitted to the Buyer in
accordance with the immediately preceding sentence.
(f) NOTICE OF DEVELOPMENTS. The Shareholders will give prompt
written notice to the Buyer of any breach of any of the representations and
warranties in Section above. Each Party will give prompt written notice to the
others of any breach of any of his or its own representations and warranties in
Section above. No disclosure by any Party pursuant to this Section , however,
shall be deemed to amend or supplement the Buyer Disclosure Schedule or the
Disclosure Schedule or to prevent or cure any misrepresentation, breach of
warranty, or breach of covenant.
(g) EXCLUSIVITY. The Shareholders will not (and the
Shareholders will not cause or permit the Company to) (i) solicit, initiate, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities, or any
substantial portion of the assets, of the Company (including any acquisition
structured as a merger, consolidation, or share exchange) or (ii) 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 Person to do or seek any of the foregoing. The
Shareholders will notify the Buyer immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing.
(h) NO TERMINATION OF SHAREHOLDERS'S OBLIGATION BY SUBSEQUENT
INCAPACITY. Shareholders specifically agrees that his obligations hereunder,
including, without limitation, the obligations pursuant to Section hereof, shall
not be eliminated by his or her death or incapacity.
6. POST-CLOSING COVENANTS. The Parties agree as follows with respect
to the period following the Closing.
(a) GENERAL. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action
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(including the execution and delivery of such further instruments and
documents) as any other Party reasonably may request, all at the sole cost and
expense of the requesting Party (unless the requesting Party is entitled to
indemnification therefor under Section below). The Shareholders acknowledge and
agree that from and after the Closing the Buyer will be entitled to possession
of all documents, books, records (including Tax records), agreements, and
financial data of any sort relating to the Company.
(b) LITIGATION SUPPORT. In the event and for so long as any
Party actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, each of the other Parties will
cooperate with him or it and his or its counsel in the contest or defense, make
reasonably available their personnel, and provide such testimony and access to
their books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Section below).
(c) TRANSITION. The Shareholders will not take any action
that is designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier, or other business associate of the Company from
maintaining the same business relationships with the Company after the Closing
as it maintained with the Company prior to the Closing. The Shareholders will
refer all customer inquiries relating to the businesses of the Company to the
Buyer from and after the Closing.
(d) INDEPENDENT ACCOUNTANTS. After the Closing, Shareholders
shall (i) use reasonable efforts to cause the Company's past and present
independent auditors and accounting personnel to make available to the Buyer
and its representatives all financial information, including the right to
examine all working papers pertaining to audits or reviews previously or
hereafter made by such auditors, and (ii) provide such cooperation as the Buyer
and its representatives may request in connection with any audit or review of
the Company that the Buyer may direct its representatives to make. Without
limiting the generality of the foregoing, the Shareholders agree that they will
cooperate with, and use reasonable best efforts to cause the Company's past and
present independent auditors, accounting personnel and other necessary persons
to cooperate with the Buyer in the preparation of any documents filed by the
Buyer with the U.S. Securities and Exchange Commission in connection with an
offering of securities, all at the sole cost and expense of the Buyer, to the
extent information about the Company is required therein.
(e) TAX MATTERS. The Shareholders covenant and agree not to
take any action, or fail to take any action, with respect to Taxes, that would
have an adverse effect on the Buyer on or after the Closing Date, including,
without limitation, amending or otherwise supplementing any Tax Return or
report of the Company with respect to any period prior to the Closing Date
without the consent of the Buyer. If any taxing authority conducts any audit or
investigation relating to the Company prior to the Closing Date, the Buyer may,
in its sole election, have the right to supervise such audit or investigation
and provide any response required in connection therewith.
(f) EMPLOYEE BONUSES. If (i) employee bonuses that are
accrued prior to the Closing are not distributed prior to the Closing and (ii)
payment of such bonuses has been approved by a vote of the shareholders of the
Company who owned, immediately before the Closing Date, more than 75% of the
voting power of all outstanding stock of the Company, then such bonuses will be
paid at the Closing, but only up to the amount by which the cash shown on the
Estimated Closing Balance Sheet Exceeds $1,000,000. To the extent that there is
insufficient cash to satisfy any unpaid bonuses at the Closing, such amounts
shall be paid by the Company not later than sixty days following the Closing.
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(g) STOCK OPTION PLAN. After the closing, employees of the
Company shall be eligible for participation in any stock option plan generally
available to employees of the Buyer or of any subsidiary of the Buyer,
including without limitation, stock option plans of any corporate parent of
Buyer that participates in a public offering of its capital stock.
(h) AUDITED FINANCIAL STATEMENTS. Shareholders shall cause
the Company's auditors to prepare audited consolidated balance sheets and
statements of income, changes in stockholders' equity, and cash flow including
the audit report thereon as of and for the three-year period ending December
31, 1998 for the Company. All costs associated with the preparation and audit
of the Company's December 31, 1998 financial statements shall be paid by the
Company.
(i) NEW LEASES. Prior to the Closing, the Buyer and the
Shareholders will agree on the form of leases into which the Company shall
enter with the Shareholders (the "New Leases"). The Company will not execute
the New Leases without the approval of the Buyer, which approval will not be
unreasonably withheld. The New Leases will relate to the property and will
include lease terms described generally below:
Property General Lease Terms
Nixa, Missouri five years; monthly rental amount
not to exceed $2,550 for first
year; monthly rental to increase
5% on annual basis each year
thereafter; Company to be
responsible for costs, including
real estate taxes, utilities,
maintenance and insurance.
Villa Ridge, Missouri five years; monthly rental amount
not to exceed $2,000 for first
year; monthly rental to increase
5% on annual basis each year
thereafter; Company to be
responsible for costs, including
real estate taxes, utilities,
maintenance and insurance.
7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of
the Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) The representations and warranties set forth in
Section and Section above shall be true and correct in all material respects at
and as of the Closing Date and there shall not have occurred any Material
Adverse Effect;
(ii) The Shareholders and the Company shall have
performed and complied with all of his covenants hereunder in all material
respects through the Closing;
(iii) The Company shall have procured all of the
third party consents specified in Section above;
(iv) No action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction, or before any arbitrator,
wherein an unfavorable injunction, judgment, order, decree, ruling, or charge
would (A) prevent consummation of any of the transactions contemplated by this
Agreement, (B) cause
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any of the transactions contemplated by this Agreement to be rescinded
following consummation, (C) affect adversely the right of the Company to own
its assets and to operate its businesses (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect);
(v) The Shareholders shall have delivered to the
Buyer a certificate, to the effect that each of the conditions specified above
in Section through is satisfied in all respects;
(vi) The Buyer shall have received from counsel to
the Shareholders an opinion in form and substance as set forth in Exhibit C
attached hereto, addressed to the Buyer and dated as of the Closing Date;
(vii) All actions to be taken by the Shareholders in
connection with the consummation of the transactions contemplated hereby and
all certificates, opinions, instruments, and other documents required to effect
the transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Buyer.
(viii) At least five business days prior to the
Closing, the Buyer shall have received a balance sheet prepared by the Company,
estimating the assets, liabilities and shareholders' equity of the Company as
of the Closing Date (the "Estimated Closing Balance Sheet"). The Estimated
Closing Balance Sheet shall be prepared in accordance with the method set forth
in Section for the preparation of the Draft Closing Date Balance Sheet and will
reflect (A) Shareholders' Equity of not less than $5,500,000, (B) cash of not
less than approximately $1,000,000 and (C) interest bearing debt of not greater
than $7,300,000, including $1,330,000 of debt to the Shareholders. The Buyer
shall not have objected to, challenged or otherwise repudiated any of the
amounts included in the Estimated Closing Balance Sheet.
(ix) At least five business days prior to the
Closing, the Buyer shall have received projections based upon the Shareholders'
best information, Knowledge and belief, reflecting increases in revenue and
pre-tax income for the fiscal years ending 1998, 1999, 2000 and 2001 of at
least 10% per year. Shareholders will make no representations or warranties
projecting the performance of the Company.
(x) At least five business days prior to the
Closing, the Buyer shall have received an appraisal, from an appraiser selected
by the Buyer, that states that the fair market value of the Company's tangible
assets listed in Section of the Disclosure Schedule is at least equal to the
book value of such assets reflected in the Closing Balance Sheet.
(xi) The Company shall have delivered evidence of
its qualification to do business in each jurisdiction where it is so qualified
and a certificate of good standing issued by the Secretary of State of each
such jurisdiction demonstrating that the Company is in good standing in that
jurisdiction;
(xii) Xxxxx Xxxxxx shall have entered into the
Employment Agreement;
(xiii) The Shareholders, and certain key employees
of the Company to be designated by the Buyer, shall have entered into the
Non-Competition Agreements;
(xiv) The Company shall have entered into the New
Leases;
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(xv) The Buyer shall have purchased all of the
outstanding shares of stock of the Company held by persons or entities other
than the Shareholders;
(xvi) Buyer's lenders shall have approved the form
and substance of this Agreement and the other agreements contemplated thereby
(including, without limitation the Leases, Non- Competition Agreements and the
Employment Agreements);
(xvii) All actions to be taken by the Shareholders
in connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Buyer; and
The Buyer may waive any condition specified in this Section if it executes a
writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SHAREHOLDERS. The
obligation of the Shareholders to consummate the transactions to be performed
by them in connection with the Closing is subject to satisfaction of the
following conditions:
(i) The representations and warranties set forth in
Section above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) The Buyer shall have performed and complied
with all of its covenants hereunder in all material respects through the
Closing;
(iii) No action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction, or before any
arbitrator, wherein an unfavorable injunction, judgment, order, decree, ruling,
or charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation (and no
such injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(iv) The Buyer shall have delivered to the
Shareholders a certificate to the effect that each of the conditions specified
above in Section - is satisfied in all respects;
(v) The Shareholders shall have received from
counsel to the Buyer an opinion in form and substance as set forth in Exhibit D
attached hereto, addressed to the Shareholders, and dated as of the Closing
Date;
(vi) The Buyer shall have entered into the
Employment Agreements in the form attached;
(vii) The Company shall have entered into the New
Leases;
(viii) The Shareholders shall have been released
from any personal liability with respect to obligations of the Company (such
as, by way of example, guarantees of bank debt, bonds, or leases);
(ix) Except as otherwise agreed to in Section ,
payment of any accrued but unpaid bonuses by the Company;
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(x) Repayment of any outstanding notes due to the
Shareholders from the Company;
(xi) All actions to be taken by the Buyer in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Shareholders; and
The Shareholders may waive any condition specified in this Section if they
execute a writing so stating at or prior to the Closing.
8. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations, warranties, covenants and agreements of the Parties contained
in this Agreement or in any certificate, document, instrument or agreement
delivered pursuant to this Agreement shall survive the Closing hereunder
(notwithstanding any due diligence investigations that may have been undertaken
by the damaged Party) and continue in full force and effect through all
statutes of limitations.
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER.
(i) In the event the Shareholders breach (or in the
event that any third party alleges facts that, if true, would mean that the
Shareholders have breached) any of their representations, warranties (or any of
such representations or warranties is untrue or inaccurate), covenants and
agreements contained herein or in any certificate, document, instrument or
agreement delivered pursuant to this Agreement, and, provided that the
Indemnified Buyers (as hereafter defined) make a written claim for
indemnification against the Shareholders pursuant to Section below within the
applicable claim period provided in Section above, then the Shareholders agree
to indemnify the Buyer and each of its officers, directors, employees,
representatives and shareholders (the "Indemnified Buyers") from and against the
entirety of any Adverse Consequences the Indemnified Buyers may suffer through
and after the date of the claim for indemnification (including any Adverse
Consequences the Indemnified Buyers may suffer after the end of any applicable
claim period) resulting from, arising out of, relating to, in the nature of, or
caused by the breach (or the alleged breach); provided, however, that the
Shareholders shall not have any obligation to indemnify the Buyer from and
against any Adverse Consequences resulting from, arising out of, relating to, in
the nature of, or caused by the breach (or alleged breach) of any representation
or warranty of the Shareholders contained in Section , , -, , 4(p), 4(t), and
above until the Buyer has suffered Adverse Consequences by reason of all such
breaches (or alleged breaches) in excess of the Indemnification Threshold
(defined below). Notwithstanding anything in this Agreement to the contrary, the
Buyer shall not be deemed to have suffered any Adverse Consequences as a result
of Buyer's inability to take full advantage of the deferred income tax benefits
relating to accrued officer bonuses reflected on the Closing Date Balance Sheet.
(ii) For purposes of this Agreement, the
"Indemnification Threshold" shall be equal to $250,000, less any amount of
Taxes that Buyer is required to pay pursuant to Section .
(iii) All of the indemnification obligations of
Shareholders under this Section shall be joint and several.
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(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE
SHAREHOLDERS.
In the event the Buyer breaches (or in the event any
third party alleges facts that, if true, would mean the Buyer had breached) any
of their representations, warranties (or any of such representations or
warranties is untrue or inaccurate), covenants and agreements contained herein
or in any certificate, document, instrument or agreement delivered pursuant to
this Agreement, and, provided that the Shareholders makes a written claim for
indemnification against the Buyer pursuant to Section below within the
applicable claim period provided in 8(a) above, then the Buyer agrees to
indemnify the Shareholders and each of his representatives (the "Indemnified
Shareholders") from and against the entirety of any Adverse Consequences the
Indemnified Shareholders may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the Indemnified Shareholders
may suffer after the end of any applicable claim period) resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the alleged
breach).
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any party
entitled to indemnification hereunder (the "Indemnified Party") with respect to
any matter (a "Third Party Claim") which may give rise to a claim for
indemnification against any other Party (the "Indemnifying Party") under this
Section then the Indemnified Party shall promptly notify each Indemnifying Party
thereof in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then solely to the
extent) the Indemnifying Party thereby is materially prejudiced.
(ii) Any Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing within 15 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim, (B) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder, (C) the Third Party
Claim involves only money damages and does not seek an injunction or other
equitable relief, (D) settlement of, or an adverse judgment with respect to,
the Third Party Claim is not, in the good faith judgment of the Indemnified
Party, likely to establish a precedential custom or practice materially adverse
to the continuing business interests of the Indemnified Party, (E) the named
parties to the Third Party Claim do not include both the Indemnified Party and
the Indemnifying Party, and (F) the Indemnifying Party conducts the defense of
the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is
conducting the defense of the Third Party Claim in accordance with Section
above, (A) the Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (not to be withheld unreasonably), and (C) the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in Section
above is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it reasonably
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may deem appropriate (and the Indemnified Party need not consult with, or
obtain any consent from, any Indemnifying Party in connection therewith), (B)
the Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim
(including reasonable attorneys' fees and expenses), and (C) the Indemnifying
Parties will remain responsible for any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in the nature of,
or caused by the Third Party Claim to the fullest extent provided in this
Section .
(e) DETERMINATION OF ADVERSE CONSEQUENCES. The Parties shall
take into account the time cost of money (using the Applicable Rate as the
discount rate) in determining Adverse Consequences for purposes of this Section.
All indemnification payments under this Section shall be deemed adjustments to
the Consideration.
(f) OTHER INDEMNIFICATION PROVISIONS. The foregoing
indemnification provisions are exclusive and cumulative, and in derogation of,
any statutory, equitable, or common law remedy (including without limitation
any such remedy arising under Environmental, Health, and Safety Requirements)
any Party may have with respect to the Company, or the transactions
contemplated by this Agreement. Each Shareholder hereby agrees that he will not
make any claim for indemnification against the Company by reason of the fact
that he was a director, officer, employee, or agent of the Company or was
serving at the request of the Company as a partner, trustee, director, officer,
employee, or agent of another entity (whether such claim is for judgments,
damages, penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise and whether such claim is pursuant to any statute, charter
document, bylaw, agreement, or otherwise) with respect to any action, suit,
proceeding, complaint, claim, or demand brought by the Buyer against such
Shareholder (whether such action, suit, proceeding, complaint, claim, or demand
is pursuant to this Agreement, applicable law, or otherwise).
9. POST-CLOSING ADJUSTMENT OF CONSIDERATION.
(a) Within 60 days after the Closing Date, the Shareholders
will prepare and deliver to the Buyer a draft balance sheet (the "Draft Closing
Date Balance Sheet") for the Company as of the close of business on the Closing
Date (determined as though the Parties had not consummated the transactions
contemplated by this Agreement), prepared in accordance with GAAP applied on a
basis consistent with the preparation of the Financial Statements; except that
the Draft Closing Date Balance Sheet shall include all of the same types of
adjustments as were made in connection with the preparation of the Most Recent
Fiscal Year End Financial Statements.
(b) If the Buyer has any objections to the Draft Closing Date
Balance Sheet, it will deliver a detailed statement describing its objections
to the Shareholders within 30 days after receiving the Draft Closing Date
Balance Sheet. The Buyer and the Shareholders will use reasonable efforts to
resolve any such objections themselves. If the Parties do not obtain a final
resolution within 30 days after the Shareholders have received the statement of
objections, however, the Buyer and Shareholders will select an accounting firm
mutually acceptable to them to resolve any remaining objections. If the Buyer
and the Shareholders are unable to agree on the choice of an accounting firm,
they will select a nationally-recognized accounting firm by lot (after
excluding their respective regular outside accounting firms). The determination
of any accounting firm so selected will be set forth in writing and will be
conclusive and binding upon the Parties. The Shareholders will revise the Draft
Closing Date Balance Sheet as appropriate to reflect the resolution of any
objections thereto pursuant to this Section .
(c) In the event the Parties submit any unresolved objections
to an accounting firm for resolution as provided in Section above, any expenses
relating to the engagement of the accounting firm
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shall be allocated between the Shareholders and the Buyer by the accounting
firm in proportion to the amount in dispute which is decided in favor of the
challenging party.
(d) The Shareholders will make the work papers and back-up
materials used in preparing the Draft Closing Date Balance Sheet available to
the Buyer and its accountants and other representatives at reasonable times and
upon reasonable notice during (A) the preparation by the Shareholders of the
Draft Closing Date Balance Sheet, (B) review by the Buyer of the Draft Closing
Date Balance Sheet, and (C) the resolution by the Parties of any objections
thereto.
(e) The "Closing Date Balance Sheet" shall mean the Draft
Closing Date Balance Sheet together with any revisions thereto pursuant to
Section . If the Shareholder's Equity set forth in the Closing Date Balance
Sheet is less than $5,500,000, then the Shareholders will pay to the Buyer an
amount equal to such deficiency (plus interest thereon at the Applicable Rate
from the Closing Date) within three business days after the date on which the
Closing Date Balance Sheet is determined pursuant to Section or thereafter
adjusted as determined pursuant to Section within the time period set forth in
Section .
10. TAX MATTERS. The following provisions shall govern the allocation
of responsibility as between the Buyer and Shareholders for certain tax matters
following the Closing Date:
(a) TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE.
Shareholders shall prepare or cause to be prepared and timely file or cause to
be timely filed all Tax Returns for the Company for all periods ending on or
prior to the Closing Date which are filed after the Closing Date (the
"Pre-Closing Period"). Such Tax Returns shall be prepared by treating items on
such Tax Return in a manner consistent with the past practices with respect to
such items, unless otherwise required by law. Shareholders shall permit the
Buyer to review and comment on each such Tax Return described in the preceding
sentence prior to filing. The Buyer shall pay the amounts due for Taxes of the
Company with respect to the Pre-Closing Periods, up to the amount reflected in
the reserve for Tax Liability shown on the face of the Most Recent Balance
Sheet, plus any amount that exceeds the reserve up to the Indemnification
Threshold. Shareholders jointly and severally agree that they will pay, when
due, all amounts due for Taxes of the Company with respect to Pre-Closing
Periods, that exceed the reserve for Tax Liability in excess of the
Indemnification Threshold.
(b) TAX PERIODS BEGINNING BEFORE AND ENDING AFTER THE CLOSING
DATE. The Buyer shall prepare or cause to be prepared and file or cause to be
filed any Tax Returns of the Company for Tax periods which begin before the
Closing Date and end after the Closing. The Buyer shall permit Shareholders to
review and comment on each such Tax return described in the preceding sentence
prior to filing. Shareholders shall pay to the Buyer within fifteen (15) days
after the date on which Taxes are paid with respect to such periods an amount
equal to the portion of such Taxes which relates to the portion of such Taxable
periods ending on the Closing Date to the extent such Taxes are not reflected
in the reserve for such periods for Tax Liability shown on the face of the Most
Recent Balance Sheet. For purposes of this Section, 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
relates to the portion of such Taxable period ending on the Closing Date shall
(x) in the case of any real and personal property Taxes, 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 other Tax be deemed equal to the
amount which would be payable if the relevant Taxable period ended on the
Closing Date. Any credits relating to a Taxable period that begins before and
ends after the Closing Date shall be taken into account as though the relevant
Taxable period ended
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on the Closing Date. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with prior practice
of the Company.
(c) COOPERATION ON TAX MATTERS.
(i) The Buyer, the Company and Shareholders shall
cooperate fully, as and to the extent reasonably requested by the other party,
in connection with the filing of Tax Returns pursuant to this Section and any
audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. The Company and Shareholders agree (A) to retain
all books and records with respect to Tax matters pertinent to the Company
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified by the
Buyer or Shareholders, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
taxing authority, and (B) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the other party so requests, the Company or Shareholders, as the case may
be, shall allow the other party to take possession of such books and records.
(ii) The Buyer and Shareholders further agree, upon
request, to use their best efforts to obtain any certificate or other document
from any governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including, but not
limited to, with respect to the transactions contemplated hereby).
(iii) The Buyer and Shareholders further agree, upon
request, to provide the other party with all information that either party may
be required to report pursuant to Section 6043 of the Code and all Treasury
Department Regulations promulgated thereunder.
(d) TAX SHARING AGREEMENTS. All tax sharing agreements or
similar agreements with respect to or involving the Company shall be terminated
as of the Closing Date and, after the Closing Date, the Company shall not be
bound thereby or have any liability thereunder.
(e) CERTAIN TAXES. All transfer, documentary, sales, use,
stamp, registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement, shall be paid by
Shareholders when due, and Shareholders will, at its 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 Buyer will, and will cause its
affiliates to, join in the execution of any such Tax Returns and other
documentation.
11. TERMINATION.
(a) TERMINATION OF AGREEMENT. The Parties may terminate this
Agreement as provided below:
(i) The Buyer and the Shareholders may terminate
this Agreement by mutual written consent at any time prior to the Closing;
(ii) The Buyer may terminate this Agreement by
giving written notice to the Shareholders at any time prior to the Closing (A)
in the event the Shareholders have breached any
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representation, warranty, or covenant contained in this Agreement in any
material respect, the Buyer has notified the Shareholders of the breach, and
the breach has continued without cure for a period of 30 days after the notice
of breach or (B) if the Closing shall not have occurred on or before February
26, 1999 by reason of the failure of any condition precedent under Section
hereof (unless the failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
(iii) The Shareholders may terminate this Agreement
by giving written notice to the Buyer at any time prior to the Closing (A) in
the event the Buyer has breached any representation, warranty, or covenant
contained in this Agreement in any material respect, the Shareholders have
notified the Buyer of the breach, and the breach has continued without cure for
a period of 30 days after the notice of breach or (B) if the Closing shall not
have occurred on or before February 26, 1999 by reason of the failure of any
condition precedent under Section hereof (unless the failure results primarily
from the Shareholders himself breaching any representation, warranty, or
covenant contained in this Agreement).
(b) EFFECT OF TERMINATION. If any Party terminates this
Agreement pursuant to Section above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other
Party, except as set forth in Section hereof.
(c) CERTAIN PAYMENTS UPON TERMINATION.
(i) If the Closing has not occurred on or before
February 26, 1999, then Buyer shall pay the Shareholders the aggregate amount
of $250,000 (the "Liquidated Damages Amount") as liquidated damages (but not as
a penalty), but such payment shall be due only so long as, on February 26, 1999
all of the following are true:
(A) The conditions set forth in Section
(except the condition in Section ) are satisfied or waived,
unless the failure of such conditions to be satisfied or
waived is caused by the actions or inactions of Buyer;
(B) the failure of the Closing to occur is
not the result of force majeure.
(ii) Upon payment of the Liquidated Damages Amount,
Buyer shall have no further obligation to Shareholders and shall not be liable
to Shareholders for any breach of this Agreement other than the payment of the
Liquidated Damages Amount, the intent of the parties being that payment of such
amount shall be the sole remedy of Shareholder for Buyer's failure to close.
(iii) The parties agree that the Liquidated Damages
Amount is a reasonable estimation of the damages likely to be suffered by
Shareholders for the failure of Buyer to close the transaction by February 26,
1999.
12. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall
issue any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written
approval of the Buyer and the Shareholders; provided, however, that any Party
may make any public disclosure it believes in good faith is required by
applicable law or any listing or
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trading agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its best efforts to advise the other Parties prior to
making the disclosure).
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns and the Indemnified Parties
referred to in Section hereof.
(c) ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the Parties
named herein and their respective successors and permitted assigns. No Party
may assign either this Agreement or any of his or its rights, interests, or
obligations hereunder without the prior written approval of the Buyer and the
Shareholders; provided, however, that the Buyer may (i) assign any or all of
its rights and interests hereunder to one or more of its Affiliates, (ii)
designate one or more of its Affiliates to perform its obligations hereunder
(in any or all of which cases the Buyer nonetheless shall remain responsible
for the performance of all of its obligations hereunder) and (iii) without the
approval of the Shareholders assign its rights and interests hereunder to its
lenders (and any agent for the lenders), and the Parties consent to any
exercise by such lenders (and such agents) of their rights and remedies with
respect to such collateral.
(e) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to the Shareholders: Copy to:
Xxxxx and Xxxxxxx Xxxxxx XxXxxxxx, Xxxxxxx, Xxxxxxxxx
0000 Xxxxx'x Xxxx Xxxx, Xxxxxx & XxXxxxxx, X.X.
Xxxxx Xxxxx, XX 00000 00000 Xxxxxxxx Xxxxx Xxxx, 000
Xxxxxxxxxxxx, XX 00000
If to the Buyer: Copy to:
NATG Holdings, LLC Holland & Knight LLP
0000 Xxxxx Xxx, Xxxxx 000 One Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, XX 00000 Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx Attn: Xxxx Xxxxxx, Esq.
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Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended recipient.
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
(h) AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
the Buyer and the Shareholders. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(i) SEVERABILITY. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(j) EXPENSES. Each of the Parties will bear his or its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. The Shareholders
agree that the Company has not borne nor will bear any of the Shareholders'
costs and expenses (including, without limitation, any of their legal,
accounting or investment banking fees and expenses) in connection with this
Agreement or any of the transactions contemplated hereby.
(k) CONSTRUCTION. The Parties have participated jointly in
the negotiation of this Agreement. In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
(l) INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES. The
Exhibits, Annexes, Schedules and Certificates identified in this Agreement are
incorporated herein by reference and made a part hereof.
(m) SPECIFIC PERFORMANCE. Each of the Parties acknowledges
and agrees that the other Parties would be damaged irreparably in the event any
of the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
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jurisdiction over the Parties and the matter (subject to the provisions set
forth in Section below), in addition to any other remedy to which they may be
entitled, at law or in equity.
(n) SUBMISSION TO JURISDICTION. Each of the Parties submits
to the jurisdiction of any state or federal court sitting in Palm Beach County,
Florida, in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding
shall be heard and determined in any such court. Each of the Parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required
of any other Party with respect thereto. Any Party may make service on any
other Party by sending or delivering a copy of the process to the Party to be
served at the address and in the manner provided for the giving of notices in
Section above. Each Party agrees that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law or at equity.
In any action or proceeding arising out of or relating to this
Agreement, the prevailing party shall be entitled to recover reasonable
attorney's fees and costs from the other party to the action or proceeding.
(o) WAIVER OF JURY TRIAL. THE PARTIES HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND TO
THE FULLEST EXTENT PERMITTED BY LAW WAIVE ANY RIGHTS THAT THEY MAY HAVE TO
CLAIM OR RECEIVE CONSEQUENTIAL OR SPECIAL DAMAGES IN CONNECTION WITH ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
*****
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
BUYER
NATG Holdings LLC
By:
-------------------------------
Xxxxxxx X. Xxxxxxxx
President
SHAREHOLDERS:
-------------------------------------
Xxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx
00
