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ASSET PURCHASE AGREEMENT
This Agreement is made and entered into this 27th day of October,
1994, by and between MASADA SECURITY, INC., a Delaware corporation
("Purchaser") and KENMAR ELECTRONICS, INC., a Texas corporation d/b/a Houston
Alarm ("Seller").
RECITALS
Seller is engaged in the business of operating a security alarm system
monitoring business in and around Xxxxxx County, Texas (the "Business").
WHEREAS, the Purchaser and the Seller negotiated to enter into this
Agreement whereby Seller desires to sell to Purchaser and Purchaser desires to
buy from Seller certain of the customer account contracts and certain other
assets of Seller pertaining to the Business, and Purchaser and Seller desire to
make certain other arrangements between them relating to the purchase and sale
of such assets, all upon the terms and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, the parties hereto in consideration of the mutual
covenants, agreements and specific considerations set forth below, the
sufficiency and adequacy of which is hereby acknowledged, and intending to be
legally bound, agree as follows:
SECTION 1. AGREEMENT TO PURCHASE AND SELL. In accordance with
the terms and conditions contained herein and in reliance on the respective
representations and warranties of the parties hereto (it being acknowledged and
agreed by the parties hereto that Seller makes no warranties or representations
other than as expressly set forth herein and in the other instruments and
documents delivered by Seller in connection herewith), Seller hereby agrees to
sell, convey, transfer, and assign to Purchaser, and Purchaser hereby agrees to
purchase, accept, and acquire from Seller in the manner provided herein, the
assets described below (the "Purchased Assets"):
(a) Contracts. Subject to the provisions of Section 8, all right,
title and interest of Seller in and to the contracts for the rendering of alarm
related and monitoring services based on recurring charges (including charges
for commercial and residential leased equipment, commercial and residential
alarm monitoring, open and close monitoring, inspections, maintenance, computer
reports, long range radio monitoring, police direct connect monitoring, and
additions, add-ons, or extensions, whether evidenced by contract, service
report, or otherwise), to existing customers of Seller specifically set forth
on Schedule 1 (a) hereto (the "Contracts");
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(b) Inventory. All right, title and interest of Seller in and to
all alarm equipment and parts inventory pertaining to the Business maintained
by Seller at its offices (whether or not allocated to contracts in progress)
specifically set forth on Schedule 1(b) hereto (the "Inventory"), with the
Inventory, including without limitation, items purchased by Seller for resale;
(c) Fixed Assets. All right, title and interest of Seller in and
to the fixed assets used in connection with the Business as specifically set
forth on Schedule 1(c) hereto (the "Fixed Assets");
(d) Equipment. All right, title and interest of Seller in and to
the equipment used in connection with the Business as specifically set forth on
Schedule 1(d) hereto (the "Equipment");
(e) Vehicles. All right, title and interest of Seller in and to
the vehicles specifically set forth on Schedule 1(e) hereto (the "Vehicles"),
WITH ALL SUCH VEHICLES BEING SOLD "AS IS, WHERE IS" AND WITH SELLER DISCLAIMING
AND ALL WARRANTIES AND REPRESENTATIONS, OTHER THAN THOSE CONCERNING TITLE,
RELATING TO THE VEHICLES, INCLUDING ANY WARRANTY OF MERCHANTABILITY AND FITNESS
FOR ANY PARTICULAR PURPOSE;
(f) Other Contracts. All right, title and interest of Seller in
and to those contracts and benefits of Seller specifically set forth on
Schedule 1(f) hereto (the "Other Contracts"), with the Other Contracts,
including, without limitation, all accepted orders for the sale or installation
by Seller of alarm systems which are not yet installed or not completely
installed as of the Closing Date (as defined in Section 5(a));
(g) Receivables. Subject to the provisions of Section 2(c), the
accounts receivable, trade accounts, notes receivable and other debts owed to
Seller for (i) monthly recurring charges owed under the Contracts, (ii) service
call charges pertaining to the Contracts, and (iii) installations and add-ons
pertaining to the Contracts, (collectively the "Receivables") as specifically
set forth on Schedule 1(g) hereto, with no more than ten (10) separate accounts
receivables being more than sixty (60) days past due from the applicable due
date; and with no individual service call, installation or add-on charge
exceeding two hundred fifty ($250.00) dollars;
(h) Intangible Personal Property. The unexpired trademarks
(whether registered or unregistered), trade names, and logos, including, but
not limited to "Kenmar Electronics, Inc." and "Houston Alarm," copyrights and
licenses owned by or accruing to the benefit of Seller pertaining to the
Business, and all non-competition or non-solicitation agreements accruing to
the benefit of Seller and pertaining to the Business to which it is a party
(the "Intangible Personal Property"), all of which is specifically set forth on
Schedule 1(h) hereto;
(i) Telephone Lines and Numbers. All right, title and interest of
Seller in and to the local and long distance telephone numbers, and digital
dialer telephone lines that transmit signals
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from customer locations to Seller's central station, specifically set forth on
Schedule 1(i) hereto (the "Telephone Lines and Numbers"); and
(j) Other Assets; Records. All files, records and incidental
documentation of Seller pertaining to the Contracts (the "Contract
Information"), including without limitation, all computer lists, contract
information, accounting history, service records and information, credit
records and information, and purchase and sales records and information.
Purchaser warrants and represents to Seller that said business, the assets of
said business, and the financial records of said business described above or
otherwise in this Agreement have been inspected by Purchaser and its agents,
and that said business and the assets of said business subject to this
Agreement are being purchased by Purchaser as a result of such inspection and
the representations and warranties of Seller that are incorporated in this
Agreement.
SECTION 2. PURCHASE PRICE AND PAYMENT.
(a) Purchase Price - Purchased Assets. The purchase price for the
Purchased Assets, excluding subsection (b) (the Vehicles) and (c) (the
Receivables) shall be the product of thirty-four (34) times the aggregate
Monthly Revenue Equivalent of each Contract less an amount equal to the prepaid
revenue relating to each Contract (as set forth on Schedule 2(a) hereto)
computed on a per diem basis to the Closing Date.
(b) Purchase Price - Vehicles. The purchase price for the
Vehicles purchased by Purchaser from Seller (as set forth in Schedule 1(e)),
shall be as follows:
1991 Ford Ranger P/U with Gem Top $ 4,650.00
1991 Ford Ranger P/U with Gem Top $ 4,650.00
1991 Ford Ranger P/U with Gem Top $ 4,650.00
1992 Ford Ranger P/U with Gem Top $ 5,025.00
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Totalling $18,975.00
(c) Purchase Price - Receivables. Subject to the further
requirements of this Section 2(c), the purchase price for the Receivable shall
be eighty percent (80%) of the amount due to Seller as of the September 30,
1994 pursuant to each individual Receivable set forth on Schedule 1(g) which is
not more than sixty (60) days past due as of September 30, 1994 from the
applicable due date; plus eighty percent (80%) of the amount due to Seller for
service calls, installations and add-on's conducted from October 1, 1994
through the Closing Date; plus forty percent (40%) of the amount due to Seller
as of September 30, 1994 pursuant to each individual Receivable set forth on
Schedule 1(g) which is more than sixty (60) days past from the applicable due
date; provided, however, that the total purchase price for the Receivables
shall not exceed Twenty Four Thousand Dollars ($24,000.00), and that no
individual Receivable for invoices pertaining to installations, service calls
and add-on's exceeds Two Hundred Fifty Dollars ($250.00).
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(d) Purchase Price - All Purchased Assets. The aggregate sums
computed pursuant to (a) through and including (c) of this section, subject to
the adjustments set forth in Sections 2(f), (g), (h) and (i), shall hereinafter
be referred to as the "Purchase Price."
(e) Payment of Purchase Price. The Purchase Price for the
Purchased Assets acquired by Purchaser shall be paid to Seller in the manner
set forth below:
(i) Simultaneous with the execution of this Agreement,
Purchaser shall pay to Seller the sum of Twenty Five Thousand Dollars ($25,000)
as an xxxxxxx money deposit and a component of the Purchase Price (the "Xxxxxxx
Money"). The Xxxxxxx Money shall be retained by Seller as a component of the
Purchase Price and be credited to the Purchase Price, or shall be refunded to
Purchaser, all in accordance with Section 5(d) hereof;
(ii) A sum equal to ninety-five (95%) of the Purchase Price
less the Xxxxxxx Money (the "Initial Payment") shall be paid by Purchaser to
Seller by wire transfer or by certified or cashier's check on the Closing Date;
and
(iii) The remainder of the Purchase Price (the "Deferred
Payment Amount") shall be paid in accordance with Section 3 hereof.
(f) Adjustment to Purchase Price. The Purchase Price shall be
adjusted for items of expense and income prorated as of the Closing Date in the
manner provided below:
(i) Liabilities or credits for personal property taxes, if
any, in respect of the Purchased Assets shall be prorated on the basis of the
current taxable year, to and including the Closing Date; provided that if the
assessed value of any Purchased Asset or rate of tax with respect thereto shall
not have been determined prior to the Closing Date, the value and rate shall be
determined on the basis of the amount of the previous year in which the same
was determined, and
(ii) Other liabilities or credits, prepaid items and deferred
charges relating to the Purchased Assets existing on the Closing Date shall be
adjusted as of the Closing Date by prorating the aforementioned items for
credit to Seller or Purchaser, as the case may be, in accordance with generally
accepted accounting principles.
(g) Chip Changes. Purchaser shall receive a credit of Thirty-Two
Dollars ($32.00) to be applied in computing the Purchase Price for each
customer location set forth on Schedule 2(g) hereto which will require a site
visit for a "chip change" (i.e. replacement of computer chips and/or software
in alarm panels that will not be transferred when digital receiver lines "swing
over" to Purchaser's central monitoring station).
(h) Per-Diem Adjustment. The Purchase Price shall be increased by
the dollar amount obtained by (i) multiplying the number of days beginning
October 1, 1994 and ending on the Closing Date by the quotient achieved from
dividing the "Monthly Revenue Equivalent" as of
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October 1, 1994 (as defined in Section 4(a)) by thirty-one (31) and (ii)
subtracting from the dollar amount obtained pursuant to (i) the amount of all
revenues received by Seller beginning October 1, 1994 and ending the Closing
Date in payment for any services on which the "Monthly Revenue Equivalent" is
based.
(i) Services Other than Monitoring. Purchaser shall forward to
Seller, within thirty (30) days after the receipt thereof, all revenue for
installation, service calls and add-ons provided by Seller to customers under
the Contracts, provided in the ordinary course of Seller's business, consistent
with past practices and pricing, during the period beginning October 1, 1994
and ending the Closing Date, for those individual accounts receivable amounts
over Two Hundred Fifty Dollars ($250.00), as detailed in Schedule 2(i).
(j) Allocation of Purchase Price. The Purchase Price shall be
allocated as set forth in Schedule 2(j). Purchaser and Seller agree for income
tax purposes that each shall report the transactions contemplated by this
Agreement in a manner consistent with such allocations.
SECTION 3. DEFERRED PAYMENT AMOUNT.
(a) Escrow Agreement. Seller and purchaser shall execute on the
Closing Date an Escrow Agreement in the form attached hereto as Schedule 3(a)
and Purchaser shall deposit with Texas Commerce Bank - Houston, N.A. as escrow
agent (the "Escrow Agent") the Deferred Payment Amount to be held in an escrow
account (the "Escrow Account") pursuant to the terms of the Escrow Agreement
(the Deferred Payment Amount along with all earnings thereon shall hereinafter
be referred to as the "Escrow Amount").
(b) (i) Payment and Escrow Amount. On the one hundred twentieth
(120th) day after the Closing Date (the "Reconciliation Date"), Purchaser shall
submit to Seller on the form attached hereto as Schedule 3(b), along with all
appropriate supporting documentation, a report reflecting (i) the Deferred
Payment Amount, (ii) the total Monthly Revenue Equivalent Upward Adjustment
credited to Seller pursuant to Section 4(b), (iii) the total Monthly Revenue
Equivalent Downward Adjustment credited to Purchaser pursuant to Section 4(c),
and (iv) the resulting sum (the "Resulting Sum"). If Seller does not notify
Purchaser of a dispute regarding such report with ten (10) business days from
the date such report is deemed received by Seller or Seller notifies Purchaser
of its assent to such report, such report shall be deemed complete and accurate
and Seller and Purchaser shall notify Escrow Agent to pay the sums computed
below to Seller or Purchaser, as the case may be, and that the Escrow Account
shall be closed after the payment by the Escrow Agent of all funds held by it
in the Escrow Account. If the Resulting Sum is greater than the Deferred
Payment Amount, then Seller and Purchaser shall instruct Escrow Agent to pay
Seller the entire Escrow Amount and Purchaser shall immediately pay Seller the
amount by which the Resulting Sum is greater than the Escrow Amount. If the
Resulting Sum is a negative amount, then Seller and Purchaser shall instruct
the Escrow Agent to pay Purchaser the entire Escrow Amount and Seller shall owe
no further amount to Purchaser. If the Resulting Sum is a positive amount but
less than the Deferred Payment Amount, then Seller and Purchaser
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shall instruct the Escrow Agent to (i) pay Seller the Resulting Sum, (ii) pay
Purchaser the amount by which the Deferred Payment Amount exceeds the Resulting
Sum (the "Deferred payment Excess"), and (iii) pay to Seller and Purchaser the
earnings on the Deferred Payment Amount in accordance with the following
formula:
Resulting Sum
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Deferred Payment Amount x total earnings on = Seller's portion of
Deferred Payment Amount earnings on Deferred
Payment Amount
Deferred Payment Excess
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Deferred Payment Amount x total earnings on = Purchaser's portion of
Deferred Payment earnings on Deferred
Amount Payment Amount
(ii) Purchaser shall also, on or before the sixtieth (60th) day after the
Closing Date and at least ten (10) days prior to the one hundred twentieth
(120th) day after the Closing Date, submit to Seller on the form attached
hereto as Schedule 3(b), along with all appropriate supporting documentation, a
report reflecting the current good faith estimate by Purchaser of the
information required by Section 3(b)(i); provided, however, that the only
information controlling between the parties hereto and which will be relevant
for the determination required by Section 3(b)(i) (and disputes, if any,
resulting therefrom) shall be that contained in the report required by Section
3(b)(i).
(c) Dispute. All disputes and difference with respect only to the
computations set for on the report on Schedule 3(b) hereunder shall be
determined by binding arbitration under the rules of the American Arbitration
Association. The arbitration proceedings shall be heard by three (3)
arbitrators selected as follows. From the proposed panel of arbitrators issued
by the American Arbitration Association, Seller, on the one hand, and
Purchaser, on the other hand, shall within five (5) business days following the
issuance of the list of potential arbitrators by the American Arbitration
Association, each select an arbitrator. The two (2) persons selected shall
appoint a third person from the list, and such three (3) arbitrators so
selected shall be the arbitrators for the dispute. Each arbitrator so selected
shall be a person who holds a law degree from an accredited institution.
Notwithstanding anything contained herein to the contrary, in the event that
Purchaser or Seller fails to select an arbitrator pursuant to this Section
3(c), then the arbitrator selected by the other party hereto shall solely
determine such dispute. All arbitration awards shall include an award of
reasonable expenses, including, but not limited to, legal and accounting fees.
The place of arbitration shall be Houston, Xxxxxx County, Texas.
SECTION 4. DEFERRED PAYMENT AMOUNT ADJUSTMENT.
(a) Monthly Revenue Equivalent. For purposed of this Agreement,
the term "Monthly Revenue Equivalent" with respect to the Contracts acquired
from Seller by Purchaser shall be the charge from alarm related and monitoring
services based on recurring charges (including charges for commercial and
residential leased equipment, commercial and residential alarm monitoring, open
and close monitoring, inspections, maintenance, computer reports, long range
radio
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monitoring, police direct connect monitoring, and additions, add-ons, or
extensions, whether evidenced by contract, service report, or otherwise),
exclusive of sales or intangible taxes, if any, and any direct wire telephone
line charges associated with monitoring, payable by the customer for each
applicable billing period expressed in terms of a monthly amount regardless of
whether the billing period is annual, semi-annual, quarterly or monthly.
Notwithstanding the above, Monthly Revenue Equivalent shall not include
recurring charges for guard response and any subscriber telephone line
circuits, other than digital telephone lines for central station
communications.
(b) Monthly Revenue Equivalent Upward Adjustment. A credit shall be
made in the manner set forth on Schedule 3(b) for the benefit of Seller for
each Contract for which it is determined before the Reconciliation Date that
the actual Monthly Revenue Equivalent for such Contracts as of the Closing Date
exceeded the Monthly Revenue Equivalent for such Contracts utilized in
computing the Purchase Price. The amount of such credit shall be determined by
computing the amount by which the actual Monthly Revenue Equivalent of such
Contracts exceeds the Monthly Revenue Equivalent for such Contracts utilized in
computing the Purchase Price and multiplying such sum by thirty-four (34) (the
"Monthly Revenue Equivalent Upward Adjustment").
(c) Monthly Revenue Equivalent Downward Adjustment. A credit
shall be made in the manner set forth on Schedule 3(b) for the benefit of
Purchaser for each Contract for which it is determined before the
Reconciliation Date that the Monthly Revenue Equivalent for such Contracts
utilized in computing the Purchase price exceeded the actual Monthly revenue
Equivalent for such Contracts as of the Closing Date. The amount of such
credit shall be determined by computing the amount by which the Monthly Revenue
Equivalent for such Contracts utilized in computing the Purchase Price exceeds
the actual Monthly Revenue Equivalent for such Contracts as of the Closing Date
and multiplying such sum by thirty-four (34) (the "Monthly Revenue Equivalent
Downward Adjustment").
(d) Adjustment Cutoff Date. The Reconciliation Date is the last
date that any adjustments to be made under this Agreement shall be allowed,
except for Seller's and Purchaser's representations and warranties contained
herein.
SECTION 5. THE CLOSING.
(a) Time and Place. The closing of the purchase and sale is to
take place on November 1, 1994, or at such other time and date as shall be
mutually acceptable to Purchaser and Seller (the "Closing Date") and shall take
place at a location mutually agreeable to Seller and Purchaser in Houston,
Xxxxxx County, Texas.
(b) Closing Deliveries. On the Closing Date, Seller shall make
the deliveries specified by Section 11 and Purchaser shall make the deliveries
specified by Section 12.
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(c) Closing Procedure. All proceedings to be taken and all
documents to be delivered and executed on the Closing Date shall be deemed to
have been taken, delivered and executed simultaneously, and no proceeding shall
be deemed taken or documents deemed executed or delivered until all have been
taken, delivered and executed. Purchaser and Seller shall each designate
appropriate and adequate personnel at or immediately after Closing to jointly
inventory all Purchased Assets, and each party shall maintain a signed original
of such inventory being transferred. Purchaser shall make all arrangements, at
Purchaser's sole cost, to transfer and remove all the Purchased Assets on the
Closing Date. Purchaser will cause to be transferred title of the Vehicles no
later than seven (7) days of the Closing Date.
(d) Termination. In the event that any of the conditions set
forth in Section 11 are not satisfied or waived in writing prior to or on the
Closing Date, and at such time all of the conditions set forth in Section 12
are fulfilled and Purchaser is otherwise willing to close the transaction
contemplated hereby, then Purchaser may terminate this Agreement by written
notice to Seller and Seller shall immediately, by wire transfer or certified
funds, refund the Xxxxxxx Money to Purchaser. In the event that any of the
conditions set forth in Section 12 are not fulfilled prior to or on the Closing
Date, and at such time all of the conditions set forth in Section 11 are
fulfilled and Seller is otherwise willing to close the transactions
contemplated hereby, then Seller may terminate this Agreement by written notice
to Purchaser and the Xxxxxxx Money shall be forfeited to Seller. In the event
that any of the conditions set forth in Section 11 are not satisfied or waived
in writing prior to or on the Closing Date and any of the conditions set forth
in Section 12 are not satisfied or waived in writing prior to or on the Closing
Date and at such time purchaser and Seller are unable to agree in writing upon
a subsequent Closing Date, this Agreement shall be automatically terminated and
Seller shall immediately, by wire transfer or certified funds, refund the
Xxxxxxx Money to Purchaser. In the event that any party hereto exercises such
right of termination, this Agreement thereupon shall become wholly void and be
of no further force or effect, except for the confidentiality provisions
contained in Section 16(c) and there shall be no further liability on the part
of Seller or Purchaser or their respective officers, directors or stockholders
with respect to the transactions contemplated hereby.
SECTION 6. ASSUMPTION OF LIABILITIES. Purchaser shall not
assume any liability, debt or obligation of Seller except the responsibility of
rendering security monitoring services pursuant to the Contracts set forth on
Schedule 1(a) subsequent to the Closing Date and those liabilities and
obligations of Seller arising after the Closing Date that are set forth on
Schedule 6 hereto. Purchaser shall not assume any liability, debt or
obligation of Seller except those set forth on Schedules 1(a) and 6, and Seller
shall continue to be responsible for, and shall indemnify and same harmless
Purchaser from and against, all of Seller's known and unknown liabilities,
debts and obligations, arising prior to or on the Closing Date that are not
specifically assumed by Purchaser. Subject to the other provisions of this
Section 6, Purchaser shall indemnify and save harmless Seller from and against
all claims, liabilities, debts and obligations which arise, in whole or in
part, after the Closing Date and which are the result of the operation by
Purchaser of its business utilizing the Purchased Assets.
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SECTION 7. MONITORING SERVICES. Whereas Seller is unwilling to
sell the Purchased Assets unless Purchaser enters into a monitoring services
agreement as a part of this Asset Purchase Agreement, and for separate and
adequate consideration in hand paid and received, Purchaser agrees to enter
into an irrevocable monitoring services agreement, with the exceptions listed
within in this paragraph, (the "Monitoring Services Agreement") with Alarm
Processing Corporation, whereby Alarm Processing Corporation shall perform
after the Closing Date all security monitoring services for the customers set
forth on Schedule 1(a), less any customers that may from time to time
disconnect their service with Purchaser, upon the terms and conditions set
forth in the Monitoring Services Contract set forth on Schedule 7. The period
of time during which Alarm Processing Corporation shall perform security
monitoring services for the benefit of purchaser shall be referred to herein as
the "APC Monitoring Period." Purchaser shall be obligated to pay the sums
called for hereunder regardless of circumstances, except that Purchaser shall
be relieved of any such obligation to pay only to the extent that Alarm
Processing Corporation is physically unable to perform the contracted-for
monitoring services, for a time period greater than twenty-four (24)
consecutive hours, and then only for such period of actual inability.
SECTION 8. QUALIFIED CONTRACTS AND NON-CONFORMING CONTRACTS.
(a) A Contract constitutes a "Qualified Contract" if (i) such
Contract is evidenced by a monitoring agreement which is a valid, properly
executed, and to the best of Seller's knowledge, information, and belief, an
enforceable monitoring agreement, (ii) such Contract has not, as of the Closing
Date, been repudiated by the customer, (iii) such Contract has generated cash
receipts representing service charges for at least one (1) full billing cycle
or prepayment for at least one (1) month's service, (iv) the account balance
for such Contract has not been written off or materially compromised other than
in respect of service disruptions or other legitimate customer claims, and (v)
such Contracts have no charges that have been outstanding and unpaid for more
than sixty (60) days from the invoice due date as of Closing Date.
(b) A Contract constitutes a "Non-Conforming Contract" if (i) such
Contract is evidenced by a monitoring agreement which is a valid, properly
executed, and to the best of Seller's knowledge, information, and belief, an
enforceable monitoring agreement, (ii) such Contract has not, as of the Closing
Date, been repudiated by the customer, (iii) the account balance for such
Contract has not been written off or materially compromised other than in
respect of service disruptions or other legitimate customer claims, and (iv)
such Contract otherwise fails to fulfill any of the criteria for Qualified
Contracts set forth in Section 8(a).
(c) For the purpose of this Agreement, a Contract shall be deemed
repudiated if as of the Closing Date (i) if the customer has abandoned the
premises at which the security monitoring system has been installed, (ii) if
the customer has filed bankruptcy proceedings, or (iii) if the customer has
cancelled or issued notice to termination of the Contract notwithstanding the
fact that the Contract may remain enforceable against the customer.
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(d) Schedule 1(a) identifies each Contract as either a Qualified
Contract or a Non-Conforming Contract. Notwithstanding anything contained in
this Agreement to the contrary, Purchaser shall not be obligated to purchase
any Contract which does not constitute a Qualified Contract; provided, however,
Purchaser shall review all Non-Conforming Contracts on or before the third
(3rd) day prior to the Closing Date, and in the exercise of its sole discretion
and subject to its review of relevant documentation, deem any acceptable
Non-Conforming Contracts as a "Qualified Contract" for and among the following
reasons, (i) the Contract is new and has not generated cash receipts as of the
date of review, or (ii) the Contract has unpaid charges con outstanding for
more than 60 days from Closing Date. Otherwise, those "Non-Conforming
Contracts" that are not deemed by Purchaser to be "Qualified Contracts" will
either be disconnected or terminated by Seller (within the constraints and the
obligations of Seller within the Contract) or purchased by Purchaser at a
discounted amount, subject to negotiations between Seller and Purchaser on an
individual Contract basis on or before the third (3rd) day prior to the Closing
Date. Purchaser agrees to accept no more than ten (10) Contracts as Qualified
Contracts that have charges outstanding more than sixty (60) days from the
invoice due date, as of the Closing Date.
(e) Attached hereto as Schedule 8(e) is a copy of each form of
monitoring agreement which Seller has utilized which comprises a Contract.
(f) In the event any Contract is found after the Closing Date to
be repudiated by the customer prior to the Reconciliation Date, such Contract
will be, upon Purchaser's receipt of the full Monthly Revenue Equivalent
Downward Adjustment, returned to Seller by Purchaser without charge, with
Seller having full right, title and interest in the Contract.
SECTION 9 REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to Seller that on the date hereof and
on each day thereafter to the Closing Date:
(a) Organization and Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and Purchaser has all requisite corporate power and authority to own,
operate and lease its properties and carry on it business as now being
conducted and to enter into this Agreement and to perform its obligations
hereunder.
(b) Authority Relative to this Agreement. The execution, delivery
and performance by Purchaser of this Agreement has been duly authorized by the
board of directors of the sole stockholder of Purchaser, and no further
corporate action is necessary on the part of Purchaser to make this Agreement
valid and binding upon Purchaser in accordance with its terms.
(c) No Violation. Neither the execution nor the delivery of this
Agreement by Purchaser nor the consummation of the transactions contemplated
herein, nor compliance by Purchaser with any of the provisions hereof, violates
or conflicts with or results in the breach or
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termination of any term or provision of, nor constitutes a default or
acceleration of the performance required under, the articles of incorporation,
bylaws or resolutions of the Purchaser, or any indenture, mortgage, deed, trust
or other contract or agreement to which Purchaser is a party or by which its
properties are bound, or violates any order, writ, injunction or decree of any
court, administrative agency or governmental body.
(d) Brokerage Fees. Purchaser is not obligated nor has it agreed
to pay any brokerage commissions, finders fees or other similar fee or charge
in connection with the purchase of the assets pursuant to this Agreement, other
than as specifically set forth on Schedule 9(d).
(e) Compliance with the Law. The business of Purchaser has been
and is being conducted in compliance with all applicable laws, regulations and
requirements of each jurisdiction in which Purchaser's business is carried on
and is not in breach of any such laws, regulations or requirements, and
Purchaser warrants to hold Seller harmless from and against any violations of
applicable laws, regulations or requirements arising out of non-compliance
therewith prior to the Closing Date.
SECTION 10. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
hereby represents and warrants to Purchaser that on the date hereof and on each
day thereafter to the Closing Date:
(a) Organization and Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Texas, and Seller has all requisite corporate power and authority to own,
operate and lease its properties and carry on it business as now being
conducted and to enter into this Agreement and to perform its obligations
hereunder.
(b) Authority Relative to this Agreement. The execution, delivery
and performance by Seller of this Agreement has been duly authorized by the
board of directors of the stockholders of Seller, and no further corporate
action is necessary on the part of Seller to make this Agreement valid and
binding upon Seller in accordance with its terms.
(c) No Violation. Neither the execution nor the delivery of this
Agreement by Seller nor the consummation of the transactions contemplated
herein, nor compliance by Seller with any of the provisions hereof, (i)
violates or conflicts with or results in the breach or termination of any term
or provision of, nor constitutes a default or acceleration of the performance
required under, the articles of incorporation, bylaws or resolutions of the
Purchaser, or any indenture, mortgage, deed, trust or other contract or
agreement to which Purchaser is a party or by which its properties are bound,
(ii) violates any order, writ, injunction or decree of any court,
administrative agency or governmental body, or (iii) requires consent from any
other person, entity or governmental authority.
(d) Brokerage Fees. Seller is not obligated nor has it agreed to
pay any brokerage commissions, finders fees or other similar fee or charge in
connection with the purchase of the assets pursuant to this Agreement.
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(e) Title to Purchased Assets. Seller warrants that on the
Closing Date it shall have good and marketable title to all of the Purchased
Assets, and the Purchased Assets shall not be subject to any pledge, option,
conditional sale agreement, security interest, consensual lien, judgment lien,
encumbrance or charge of any kind. Seller warrants that to its best knowledge,
information and belief, the Contracts are acquired by Purchaser are valid and
are binding upon and enforceable against the customers of Seller executing same
in accordance with their terms, and the obligations of the customers of Seller
thereunder are not subject to set-off or claims resulting from the conduct of
Seller's business prior to their conveyance to Purchaser.
(f) Compliance with the Law. The business of Seller has been and
is being conducted in compliance with all applicable laws, regulations and
requirements of each jurisdiction in which Purchaser's business is carried on
and is not in breach of any such laws, regulations or requirements, and Seller
warrants to hold Purchaser harmless from and against any violations of
applicable laws, regulations or requirements arising out of non-compliance
therewith prior to the Closing Date.
(g) Actions, etc.
(i) Other than as set forth on Schedule 10(g)(i) hereto,
there are no actions, suits, proceedings or investigations pending against or
relating to the business of Seller or the Purchased Assets and Seller has not
received any notice or written or oral communications reflecting an intention
or threat to institute any such action, proceeding or investigation. Schedule
10(g)(i) contains a summarization of each such action, suit, proceeding or
investigation.
(ii) There are no suits, actions or proceedings pending
before any court or governmental agency in which it is sought to restrain or
prohibit the carrying out of this Agreement or the consummation of the
transactions contemplated herein in connection therewith and here is no such
suit, action or proceeding threatened.
(iii) Seller is not subject to any judgment, order, writ,
court decree, governmental decree or injunction relating to the business of
Seller.
(iv) Other than non-material defects or deficiencies related
to routine service calls generated in the normal course of business and not
requiring substantial repair or expenditure of money, there are no known
defects or deficiencies in the products or services provided by Seller prior to
the date hereof as a result of which any claim or suit may arise.
(h) Tax Returns. Seller has timely filed all tax reports and
returns required to be filed and has timely paid all taxes (including, without
limitation, income, payroll withholding, and sales and use taxes) and all other
charges due or claimed to be due from it by Federal, State or local taxing
authorities in respect of the periods covered by such returns.
(i) Qualified Contracts. Except as specifically denoted as a
Non-Conforming Contract on Schedule 1(a), each of the Contracts identified on
Schedule 1(a) is a Qualified
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Contract which fulfills all of the criteria for Qualified Contracts set forth
in Section 8 hereof.
(j) Non-Conforming Contracts. Each of the Contracts specifically
denoted as a Non-Conforming Contract on Schedule 1(a) fulfills the criteria for
Non-Conforming Contracts set forth in Section 8 hereof.
(k) Benefit Plans. No employee benefit or other plan maintained
by Seller shall obligate Purchaser to make any contributions thereto or
payments in respect thereof with regard to employees of Seller hired by
Purchaser on or after the Closing Date.
(l) Disclosure. No representation, warranty or statement of
Seller contained in this Agreement and no information contained in any schedule
furnished to Purchaser by or on behalf of Seller pursuant to this Agreement,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading. Each of the separate representations and warranties set forth in
the various subsections of this Section 10 in intended to be, and shall be
interpreted as, an independent representation and warranty as to matters
referred to therein, and the applicability or inapplicability of any particular
subsection of this Section 10 shall not affect the interpretation of any other
such subsection.
(m) Seller's Limitation of Liability. Seller's liability under
Section 10 shall not exceed beyond three (3) years after the Closing Date.
SECTION 11. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.
Purchaser's obligation to purchase the Purchased Assets under this Agreement is
subject to the fulfillment, prior to or at the Closing Date, of each of the
following conditions:
(a) Representations True on the Closing Date. The representations
and warranties of Seller contained in this Agreement shall be true on the date
hereof, and at the time of the Closing Date as though made on the Closing Date.
(b) Performance. Seller shall have performed and complied with
all agreements and conditions required by this Agreement to be performed or
complied with by it prior to the Closing Date.
(c) Seller's Closing Certificate. Seller shall have delivered to
Purchaser a Closing Certificate of the president or a vice president of Seller
dated as of the Closing Date in the form attached hereto as Schedule 11(c).
(d) Schedules. Seller shall have updated the Schedules hereto in
accordance with Section 16(g) hereof. Purchaser shall have determined, in good
faith, that taking into account the changes to the information in the updated
Schedules, the transactions contemplated by this Agreement are as beneficial to
purchaser as prior to the updating of the Schedules.
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(e) Consents to Assignments. Seller shall have taken all action
necessary and appropriate, and obtained all necessary consents, waivers and
approvals required under any leases or other agreements to consummate the sale
of the Purchased Assets pursuant to this Agreement in writing on terms
reasonably acceptable to Purchaser, and Purchaser shall reasonably cooperate
with Seller in its efforts to obtain such consents, waivers and approvals.
(f) Litigation. No litigation or proceeding shall be pending or
threatened to restrain, set aside or invalidate the transactions contemplated
by this Agreement or any portion thereof, including without limitation any
claims by creditors of Seller against the Purchased Assets.
(g) Opinion of Seller's Council. Seller shall have delivered to
Purchaser an opinion of counsel for Seller, dated as of the Closing Date and in
a form satisfactory to Purchaser's counsel, to the effect that:
(i) Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas; the location and
character of the properties owned or leased and the business conducted by
Seller do not make qualification or licensing as a foreign corporation
necessary in any other state or jurisdiction; and Seller has the corporate
power and authority to own its properties and to carry on it business as now
being conducted;
(ii) This Agreement has been duly executed and delivered by
Seller and constitutes a legal and binding obligation of Seller, enforceable in
accordance with its terms except as enforcement of the same may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights and by general equity principles;
(iii) All instruments of transfer and other documents necessary
to effect the transfer to Purchaser o of the Purchased Assets have been duly
authorized, executed and delivered by Seller and are in proper form to transfer
to Purchaser all right, title and interest of Seller in and to the Purchased
Assets;
(iv) Such counsel does not know of any litigation, proceeding,
governmental investigation or claim pending or threatened against or relating
to the Business, the Purchased Assets or the transactions contemplated by this
Agreement, except for those matters disclosed on Schedule 10(g)(i); and
(v) The execution and delivery of this Agreement and the
consummation by Seller of the transactions contemplated hereby do not and will
not violate any provision of the Articles of Incorporation or bylaws of Seller
and, to the knowledge of such counsel, (i) do not and will not violate, or
result, with the giving of notice or the lapse of time or both, in a violation
of any provision of, or result in the acceleration of or entitle any party to
accelerate (whether after the giving of notice or lapse of time or both) any
obligation under, or result in the creation or imposition of, any lien, lease,
agreement, license, instrument, law, ordinance, regulation, order, arbitration,
award, judgment or decree known to such counsel to which Seller is a party or
by
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which it is bound, and (ii) do not and will not constitute an event permitting
termination of any lease, agreement, license or instrument known to such
counsel to which Seller is a party.
(vi) The Xxxx of Sale in the form of Schedule 11(j) is sufficient to
transfer all right, title and interest in the Purchased Assets from Seller to
Purchaser.
(h) Certified Resolutions. Seller shall have delivered to Purchaser
copies, certified by the secretary or an assistant secretary of Seller, of the
resolutions of Seller's board of directors and stockholders authorizing the
execution and delivery of this Agreement.
(i) Certificate of Good Standing. Seller shall have delivered to
Purchaser a certificate of good standing of Seller issued by the Secretary of
State of Texas dated as of a date within five (5) days prior to the Closing
Date.
(j) Instruments of Transfer. Seller shall have delivered to
Purchaser a Xxxx of Sale, Assignment and Assumption Agreement in the form
attached hereto as Schedule 11(j) and other good and sufficient instruments of
transfer and conveyance, as in the reasonable opinion of Purchaser's counsel,
shall be effective to vest in Purchaser good and marketable title to the
Purchased Assets.
(k) Non-Competition Agreements. Seller shall have delivered to
Purchaser Non-Competition Agreements in the form attached hereto as Schedule
11(k) executed by Xxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxx and Xxxxxx X. Xxxxxxx, in
their individual capacities, and by Seller.
(l) Escrow Agreement. Seller shall have executed and delivered to
Purchaser a counterpart of the Escrow Agreement attached hereto as Schedule
3(a).
(m) Monitoring Services Contract. Seller shall have delivered to
Purchaser a Monitoring Services Contract in the form attached hereto as
Schedule 7 executed by Alarm Processing Corporation.
(n) Notice to Subscribers. Seller shall have delivered with seven
(7) days after the Closing Date to each customer set forth on Schedule 1(a)
hereto a notice in the form attached hereto as Schedule 11(n). Purchaser and
Seller shall each be responsible for one-half (1/2) of the costs associated
with the creation and delivery of such notices.
(o) Payment of Accrued Vacation Pay, etc. Seller shall pay to
each of Seller's employees who render services to the Business that are to be
discharged on or after the Closing Date all accrued and unpaid vacation pay,
sick pay and all other accrued obligations to which such employees are entitled
as a result of the termination of their employment with Seller.
(p) Billing Conversion Notice. Contemporaneous with the execution of
this Agreement, Seller shall deliver written notice to ABM Data System, Inc. of
the proposed sale of the Purchased Assets from Seller to Purchaser described
herein, which notice shall be in the form attached hereto as Schedule 11(p) and
shall request assistance in the transfer of data concerning customer billing,
central station account management information and other pertinent information
related to the conversion of data concerning the Purchased Assets and the
billing for Contracts.
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Actual billing conversion shall not occur prior to the Closing Date, and the
costs of such conversion shall be borne solely by Purchaser. Seller will use
its best efforts, including but not limited to, the provision of information,
to facilitate such conversion.
(q) Evidence of Insurance. Seller shall have provided to Purchaser
evidence satisfactory to Purchaser that Seller has maintained an occurrence
basis policy of insurance covering the Purchased Assets which is acceptable to
Purchaser prior to and including the Closing Date and Seller's insurer shall
have provided to Purchaser a certificate dated the Closing Date stating that
such policy of insurance is in full force and effect as of the Closing Date and
that all premiums for the policy of insurance which shall be attached to such
certificate, shall have been paid in full as of the Closing Date.
SECTION 12. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER.
Seller's obligations to sell and transfer the Purchased Assets to purchaser
under this Agreement are subject to the fulfillment, prior to or on the Closing
Date, of each of the following conditions.
(a) Representations True on the Closing. Purchaser's
representations and warranties contained in this Agreement shall be true at the
date hereof, and at the Closing Date as though made on the Closing Date.
(b) Performance. Purchaser shall have performed and complied with
all agreements and conditions required by this Agreement to be performed or
complied with by it prior to or on the Closing Date.
(c) Escrow Agreement. Purchaser shall have executed and delivered
to Seller a counterpart of the Escrow Agreement attached hereto as Schedule
3(a).
(d) Monitoring Services Contract. Purchaser shall have executed
and delivered to Alarm Processing Corporation a Monitoring Services Contract in
the form attached hereto as Schedule 7.
(e) Assumption Agreement. Purchaser shall have executed and
delivered a Xxxx of Sale, Assignment and Assumption Agreement in the form
attached hereto as Schedule 11(j).
(f) Certified Resolutions. Purchaser shall have delivered to
Seller a copy, certified by the secretary or an assistant secretary of
Purchaser, of the resolutions of Purchaser's sole stockholder authorizing the
execution and delivery of this Agreement.
(g) Purchaser's Examination. Purchaser warrants and represents to
Seller that the Purchased Assets are being purchased by Purchaser based on (i)
Purchaser's inspection of the Purchased Assets and (ii) the representations and
warranties made by Seller in this Agreement. Seller makes no representation or
warranty as to the fair market value of the Purchased Assets, as of the Closing
Date or otherwise.
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SECTION 13. INDEMNIFICATION. Seller, on the one hand, and
Purchaser, on the other hand, shall indemnify and hold each other harmless from
and against any and all losses, liabilities, damages and expenses, including
reasonable attorneys' fees, that they may suffer or become liable for as a
result of or in connection with any breach of a misrepresentation, warranty,
covenant or agreement contained in this Agreement. The indemnification
obligations of Purchaser and Seller with respect to the representations,
warranties, covenants and agreements contained in this Agreement, shall, except
as provided otherwise in Section 16(c) and in the Non-Competition Agreements
referred to in Schedule 11(k), survive the closing of the transactions
contemplated herein and for a period of three (3) years subsequent to the
Closing Date. With respect to customer or other third party claims arising
under the Contracts only, except for losses, liabilities, damages and expenses
resulting form wantonness, fraud or other intentional misconduct, the
indemnification obligations of Seller contained in this Agreement shall be
limited to the policy limits of insurance maintained by Seller prior to and
including the Closing Date, which policy limits shall in no event be less than
Two Million Dollars ($2,000,000).
SECTION 14. BULK SALES LAW. Seller represents and warrants to
Purchaser that the transactions contemplated by this Agreement do not
constitute a "bulk transfer" of assets under the laws of the State of Texas.
SECTION 15. ASSIGNMENT. Purchaser may, without the consent of
Seller, assign its rights and delegate its obligations under this Agreement, to
any corporation, partnership, association or proprietorship who acquires all or
a substantial part of its business. Upon any such assignment Purchaser shall
be relieved and discharged from any further obligations under this Agreement.
Furthermore, Purchaser may, without the consent of Seller, collaterally assign
its rights under this Agreement to one or more banks, insurance companies or
other financial institution for purposes of financing. Except as provided
above, neither party may assign its rights or delegate its obligations under
this Agreement without the written consent of the other party.
SECTION 16. AGREEMENTS PRIOR TO CLOSING.
(a) Fulfillment of Conditions. Seller shall use its best efforts
to take or cause to be taken all action reasonably necessary or appropriate to
cause each of the conditions set forth in Section 11 to be fulfilled prior to
or on the Closing Date. Purchaser shall use its best efforts to take or cause
to be taken all action reasonably necessary or appropriate to cause each of the
conditions set forth in Section 12 to be fulfilled prior to or on the Closing
Date.
(b) Access to Information. Between the date of this Agreement and
the Closing, Seller shall allow the employees, representatives, attorneys and
accountants of Purchaser free access at
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all reasonable times to the records, files, correspondence, audits and
properties of Seller which pertain to the Business.
(c) Confidentiality. Purchaser agrees to hold all information it
obtains pursuant to its review of the records, files, correspondence, audits
and properties of Seller, and all information relating to the Purchase Price,
in confidence and not to disclose such information to any third party, except
for (i) information known by Purchaser and obtained from sources other than
Seller; (ii) disclosure that is authorized by Seller in writing; (iii)
disclosure to Purchaser's professional advisors and to persons who are expected
to be lenders to Purchaser; or (iv) disclosure of information where such
information is required to be filed with any governmental agency or required to
be produced before any court or tribunal or otherwise required by law to be
disclosed. In the event that the parties do not close on this Agreement, all
records, files, correspondence, employee lists, copies and other items
associated with this transaction will be returned to Seller without charge, and
no information obtained by the Purchaser, pursuant to the transaction
contemplated hereby, will be used to directly or indirectly, through any person
or entity, to solicit or provide security service to any of the customers of
Seller, or otherwise take any action which would adversely affect Seller's
interests in the Contracts or in the customers. Except in connection with
Seller's filing of tax returns and as otherwise required by law, Seller shall
not disseminate to any person other than officers, directors and
representatives of Seller any information relating to the Purchase Price or
other consideration contemplated to be paid under this Agreement. The
obligations and prohibitions contained in this subsection shall survive
execution of this Agreement.
(d) Conduct of Business. Between the date of this Agreement and the
Closing Date, Seller shall cause to Business to be conducted in the usual and
ordinary course.
(e) Preservation of Existing Relationships. Between the date of
this Agreement and the Closing Date, Seller shall use its best efforts to
continue existing relationships with customers, suppliers, employees and other
having business relations with respect to Seller.
(f) No Negotiations with Third Parties. So long as this Agreement
is in effect, Seller shall not enter into any negotiations, arrangements,
understandings, commitments, options or other agreements regarding the sale,
transfer or other disposition of any of the shares of stock of Seller or of all
or substantially all of the assets of Seller that relate in any way to the
Business, or regarding any merger or consolidation of Seller with or into any
corporation or business entity.
(g) Updated Schedules. Seller agrees to update the Schedules hereto
as of the Closing Date to reflect changes occurring after the date hereof;
provided, however, that if any of the Schedules attached hereto on the date
hereof are materially inaccurate or incorrect, Seller may correct such
Schedules only with Purchaser's written consent. Any updated Schedules shall
be attached to this Agreement and for all purposes be deemed to be a part of
this Agreement.
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SECTION 17. NO JOINT VENTURE. The relationship between the
parties hereto is that of purchaser/seller and does not constitute a partnership
or joint venture. Both parties agree not to make any representations or
statements to any other person which contradict the foregoing.
SECTION 18. SELLER'S EMPLOYEES. Purchaser shall be under no
obligation to employ after the Closing Date any of Seller's employees. Prior
to the Closing Date and upon providing notice to Seller, Purchaser may
interview any of Seller's employees regarding possible employment with
Purchaser as of the Closing Date, so long as Purchaser does not materially
interfere with the conduct of Seller's business. If Purchaser and any of
Seller's employees reach agreement as to terms of employment to commence on or
after the Closing Date, no inference shall be created that Purchaser has
assumed any of Seller's obligations to its employees. Seller shall furnish to
Purchaser on request a list of all employees of the Business, setting forth
their compensation, job description, hire date and a summary of all group
insurance benefits provided.
SECTION 19. POST-CLOSING COVENANTS.
(a) Conversion. Seller agrees to use its best efforts to
accommodate the conversion of the customer accounts relating to the contracts
(the "Alarm Accounts") to Purchaser's central station and billing system after
the APC Monitoring Period. Seller shall cooperate with Purchaser to cause an
expeditious conversion of the Alarm Accounts after the APC Monitoring Period.
Those Alarm Accounts that are listed in Schedule 1(a) beginning with account
numbers 31----, are Interactive Technology, Inc. type systems and Seller agrees
to assist Purchaser in the downloading and conversion of those accounts to
Purchaser's central station, upon request, after Closing.
(b) Seller's Access to Information. In the event that a claim shall
be asserted against Seller in a court of competent jurisdiction with regard to
a Contract purchased by Purchaser from Seller, Purchaser shall allow the
employees, representatives, attorneys and accountants of Seller access at
reasonable times to the Contract Information existing prior to the Closing Date
solely for the purpose of allowing Seller the opportunity to defend itself
against such claim.
(c) Change in Corporate Name. On or before the one hundred
eightieth (180th) day after the Closing Date, Seller shall change its corporate
name, by filing an amendment to its articles or charter of incorporation, to a
name that is not similar to "Kenmar Electronics, Inc." or "Houston Alarm," and
shall, beginning on the Closing Date and at all times thereafter, refrain from
using the names "Kenmar Electronics, Inc." or "Houston Alarm" or any name
similar thereto. Purchaser hereby grants to Seller a non-exclusive,
non-assignable license to utilize the name "Kenmar Electronics, Inc." for a
period of one hundred eighty (180) days subsequent to the Closing Date for the
limited purpose of terminating Seller's business in an orderly fashion and for
no other purpose.
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SECTION 20. RISK OF LOSS. The risk of any loss or damage to the
Purchased Assets resulting from fire, theft, explosion, earthquake, windstorm,
flood, accident, act of God, war, seizure, activities of the armed forces or
other casualty, reasonable wear and tear excepted, shall be borne by Seller at
all times prior to the Closing Date, and Seller shall be entitled to all
insurance proceeds resulting from such loss or damage.
SECTION 21. MISCELLANEOUS.
(a) Pronouns. Whenever used herein and unless otherwise indicated
by the context, the masculine pronoun shall include and also mean the feminine
and the neuter, and the singular shall include and also mean the plural.
(b) Expenses. Each party shall pay all expenses incurred by it in
connection with the preparation, execution and performance of this Agreement.
(c) Entire Agreement. This Agreement, together with the Schedules
hereto, sets forth the entire understanding of the parties, and supersedes all
prior agreements, arrangements and communications, whether oral or written,
with respect to the subject matter hereof. This Agreement shall not be
modified or amended except by written agreement of Purchaser and Seller.
Captions appearing in this Agreement are for convenience only and shall not be
deemed to explain, limit or amplify the provisions hereof. All Schedules to
this Agreement are incorporated into and made a part of this Agreement for all
purposes to the same extent as if fully set forth herein.
(d) Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if the invalid
or unenforceable provision was omitted.
(e) Binding Effect; Assignment. All the terms, provisions,
covenants and conditions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by and against the parties hereto and their
respective successors and assigns.
(f) Notices. Any notice required or permitted to be delivered
pursuant to the terms of this Agreement shall be considered to have been
sufficiently delivered within five (5) days after posting, if mailed by U.S.
Mail, certified or registered, return receipt requested, postage prepaid or,
upon receipt by overnight courier maintaining records of receipt by addressee
or if delivered by hand or telecopied with the original notice being mailed the
same day by one of the foregoing methods and addressed as follows:
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If to Purchaser at:
Masada Security, Inc.
000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
With copy to:
Xxxxxx, Xxxxxx, Xxxxxx & Xxxxx P.C.
000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
TELECOPY: (000) 000-0000
If to Seller at:
Kenmar Electronics, Inc.
0000 Xxxxxx Xxxxx, Xxx 00000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
With copy to:
Xxxxx X. Xxxxxx, Attorney at Law
0000X Xxxxx
Xxxxxxxx, Xxxxx 00000
TELECOPY: (000) 000-0000
or at such other address as the party may designate by 10 days advance written
notice to the other party. Notice shall be effective when delivered to a
responsible person at the address of the addressee.
(g) Further Assurances. Purchaser and Seller shall execute such other
instruments, documents and other papers and shall take such further actions as
may be reasonably required or desirable to carry out the provisions hereof and
to consummate the transactions contemplated hereby.
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(h) Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas. Any legal
proceeding initiated with regard to this Agreement shall be brought in the
District Court of Xxxxxx County, Texas or in the United States District Court
for the Southern District of Texas, Houston Division.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original.
(j) Survival. The representations, warranties, covenants and
agreements of the parties hereto shall survive the date of this Agreement.
(k) Drafting Presumption. Each of the parties hereto has participated
in the negotiation and drafting of this Agreement and agree that no one party
has prepared this document to the exclusion of the other party and that in
construing this Agreement there should be no presumption based upon which party
drafted this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
"Purchaser"
MASADA SECURITY, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Its: President
--------------------------------
"Seller"
KENMAR ELECTRONICS, INC.
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Xxxxxxx Xxxxxxx
Its: President
--------------------------------
Addendum A attached hereto constitutes a part of this Agreement as if fully set
forth herein.
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ADDENDUM "A"
This addendum constitutes a part of the Asset Purchase Agreement between Kenmar
Electronics, Inc. and Masada Security, Inc. dated October 27, 1994 that same as
if fully set forth herein.
SECTION 21 (I) INTENDED BENEFICIARY. Purchase and Seller hereby acknowledges
that the purchase price for the Purchased Assets will be funded from a loan
provided by State Street Bank and Trust Company to Purchaser; therefor,
Purchaser and Seller further acknowledge that State Street Bank and Trust
Company is an intended beneficiary of this Agreement and shall rely upon the
representations, warranties and agreements of Purchaser and Seller contained
herein.
"Purchaser"
MASADA SECURITY, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Its: Chief Financial Officer
---------------------------------
"Seller"
KENMAR ELECTRONICS, INC.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Its: President
---------------------------------
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LIST OF SCHEDULES
Schedule 1(a) - The Contracts
Schedule 1(b) - The Inventory
Schedule 1(c) - The Fixed Assets
Schedule 1(d) - The Equipment
Schedule 1(e) - The Vehicles
Schedule 1(f) - The Other Contracts
Schedule 1(g) - The Receivables
Schedule 1(h) - The Intangible Personal Property
Schedule 1(i) - The Telephone Lines and Numbers
Schedule 2(a) - Prepaid Revenue
Schedule 2(g) - Chip Change Locations
Schedule 2(i) - Certain Accounts Receivable
Schedule 2(j) - Allocation of Purchase Price
Schedule 3(a) - Escrow Agreement
Schedule 3(b) - Report
Schedule 6 - Assumed Liabilities
Schedule 7 - Monitoring Services Contract
Schedule 8(e) - Contract Forms
Schedule 9(d) - Brokerage Fee
Schedule 10(g)(i) - Actions, etc.
Schedule 11(c) - Closing Certificate
Schedule 11(j) - Xxxx of Sale, Assignment and Assumption Agreement
Schedule 11(k) - Non-Competition Agreement
Schedule 11(n) - Notice to Subscribers
Schedule 11(p) - Billing Conversion Notice
