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EXHIBIT 10
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STOCK PURCHASE AGREEMENT
by and among
MPW INDUSTRIAL SERVICES GROUP, INC.,
MPW MANAGEMENT SERVICES CORP.,
CLARCOR FILTRATION PRODUCTS, INC.,
AND
CLARCOR INC.
Dated: May 10, 2001
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TABLE OF CONTENTS
PAGE
1. DEFINITIONS.............................................................................................1
2. SALE AND TRANSFER OF SHARES; CLOSING...................................................................10
2.1 SHARES........................................................................................10
2.2 PURCHASE PRICE................................................................................10
2.3 CLOSING.......................................................................................10
2.4 CLOSING OBLIGATIONS...........................................................................10
2.5 ADJUSTMENT TO PURCHASE PRICE..................................................................11
3. REPRESENTATIONS AND WARRANTIES OF SELLERS..............................................................13
3.1 ORGANIZATION AND GOOD STANDING................................................................13
3.2 AUTHORITY; NO CONFLICT........................................................................14
3.3 CAPITALIZATION................................................................................14
3.4 FINANCIAL STATEMENTS..........................................................................15
3.5 NO UNDISCLOSED LIABILITIES....................................................................15
3.6 AVAILABILITY OF ASSETS........................................................................16
3.7 LEASED PROPERTY...............................................................................16
3.8 REAL PROPERTY.................................................................................16
3.9 TENANCIES.....................................................................................16
3.10 TITLE TO PROPERTIES; ENCUMBRANCES.............................................................16
3.11 ACCOUNTS RECEIVABLE...........................................................................17
3.12 INVENTORY.....................................................................................17
3.13 TAXES.........................................................................................18
3.14 NO MATERIAL ADVERSE CHANGE....................................................................19
3.15 EMPLOYEE BENEFITS.............................................................................19
3.16 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS...............................22
3.17 LEGAL PROCEEDINGS; ORDERS.....................................................................23
3.18 ABSENCE OF CERTAIN CHANGES AND EVENTS.........................................................24
3.19 CONTRACTS.....................................................................................26
3.20 INSURANCE.....................................................................................27
3.21 ENVIRONMENTAL MATTERS.........................................................................28
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TABLE OF CONTENTS
(continued)
PAGE
3.22 LABOR RELATIONS...............................................................................30
3.23 INTELLECTUAL PROPERTY.........................................................................30
3.24 CERTAIN PAYMENTS..............................................................................32
3.25 RELATIONSHIPS WITH RELATED PERSONS............................................................32
3.26 ABSENCE OF FUNDED DEBT........................................................................32
3.27 CUSTOMERS & SUPPLIERS.........................................................................33
3.28 BANK ACCOUNTS.................................................................................33
3.29 BROKERS OR FINDERS............................................................................33
3.30 ACCURACY OF DOCUMENTS AND INFORMATION FURNISHED...............................................33
4. REPRESENTATIONS AND WARRANTIES OF BUYER................................................................33
4.1 ORGANIZATION AND GOOD STANDING................................................................34
4.2 AUTHORITY; NO CONFLICT........................................................................34
4.3 INVESTMENT INTENT.............................................................................34
4.4 CERTAIN PROCEEDINGS...........................................................................34
4.5 BROKERS OR FINDERS............................................................................34
4.6 FUNDS FOR THE PURCHASE........................................................................35
5. COVENANTS OF SELLERS PRIOR TO CLOSING DATE.............................................................35
5.1 ACCESS AND INVESTIGATION......................................................................35
5.2 OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES.........................................35
5.3 NEGATIVE COVENANT.............................................................................36
5.4 REQUIRED APPROVALS............................................................................36
5.5 NOTIFICATION..................................................................................36
5.6 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS....................................................36
5.7 NO NEGOTIATION................................................................................36
5.8 ACCOUNTS RECEIVABLE...........................................................................37
5.9 REAL ESTATE MATTERS...........................................................................37
5.10 BEST EFFORTS..................................................................................37
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE...............................................................37
6.1 REQUIRED APPROVALS............................................................................37
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TABLE OF CONTENTS
(continued)
PAGE
6.2 BEST EFFORTS..................................................................................37
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE....................................................38
7.1 ACCURACY OF REPRESENTATIONS...................................................................38
7.2 SELLERS' PERFORMANCE..........................................................................38
7.3 CONSENTS......................................................................................38
7.4 NO INJUNCTION.................................................................................38
7.5 OTHER CONDITIONS..............................................................................38
8. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE...................................................39
8.1 ACCURACY OF REPRESENTATIONS...................................................................39
8.2 BUYER'S PERFORMANCE...........................................................................39
8.3 CONSENTS......................................................................................39
8.4 NO INJUNCTION.................................................................................39
9. TERMINATION............................................................................................39
9.1 TERMINATION EVENTS............................................................................39
9.2 EFFECT OF TERMINATION.........................................................................40
10. INDEMNIFICATION; REMEDIES..............................................................................40
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES....................................................40
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS.............................................40
10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER...............................................41
10.4 TIME LIMITATIONS..............................................................................41
10.5 LIMITATIONS ON AMOUNT--SELLERS................................................................42
10.6 ENVIRONMENTAL INDEMNIFICATION.................................................................42
10.7 INDEMNIFICATION - SPECIAL MATTERS.............................................................43
10.8 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.............................................43
10.9 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS...................................................44
10.10 CERTAIN LIMITATIONS ON REPRESENTATIONS, WARRANTIES AND THE RIGHTS OF THE PARTIES..............45
11. ADDITIONAL AGREEMENTS..................................................................................46
11.1 TAX MATTERS...................................................................................46
11.2 NON-COMPETITION BY SELLERS....................................................................50
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TABLE OF CONTENTS
(continued)
PAGE
11.3 NON-COMPETITION BY BUYER......................................................................51
11.4 AUTOMATIC MODIFICATION........................................................................51
11.5 ASSUMPTION OF VEHICLE LEASES..................................................................52
11.6 LICENSE.......................................................................................52
11.7 CONTINUING RELATIONSHIP.......................................................................52
11.8 FILTRATION PRODUCTS...........................................................................53
11.9 EMPLOYEE BENEFITS.............................................................................53
12. GENERAL PROVISIONS.....................................................................................54
12.1 EXPENSES......................................................................................54
12.2 PUBLIC ANNOUNCEMENTS..........................................................................54
12.3 CONFIDENTIALITY...............................................................................54
12.4 NOTICES.......................................................................................54
12.5 JURISDICTION; SERVICE OF PROCESS..............................................................55
12.6 FURTHER ASSURANCES............................................................................55
12.7 WAIVER........................................................................................55
12.8 ENTIRE AGREEMENT AND MODIFICATION.............................................................56
12.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS............................................56
12.10 SEVERABILITY..................................................................................56
12.11 SECTION HEADINGS, CONSTRUCTION................................................................56
12.12 TIME OF ESSENCE...............................................................................57
12.13 GOVERNING LAW.................................................................................57
12.14 COUNTERPARTS..................................................................................57
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TABLE OF SCHEDULES
Schedule 2.5(a)(i) GAAP Exceptions
Schedule 2.5(a)(ii) Target Net Worth
Schedule 3.1(a) Acquired Companies
Schedule 3.2(b) Conflicts and Violations Created by Stock Purchase
Agreement
Schedule 3.2(c) Notices and Consents Required by Acquired Companies
Schedule 3.3(b) Stockholder, Voting Trust and Similar Agreements
Schedule 3.5 Undisclosed Liabilities
Schedule 3.6 Asset Exceptions/Sellers' Services
Schedule 3.7(a) Real Property Leases
Schedule 3.7(b) Personal Property Leases
Schedule 3.8 Owned Real Property
Schedule 3.9 Continuing Real Property Leases
Schedule 3.10(a) Capitalized Leases
Schedule 3.10(b) Permitted Encumbrances
Schedule 3.13 Taxes
Schedule 3.15(a) Employee Pension Benefit Plans
Schedule 3.15(b) Non-ERISA Commitments
Schedule 3.15(c) Payments Under Multiemployer Plans
Schedule 3.15(e) Administration of ERISA Benefit Plans and Multiemployer
Plans
Schedule 3.15(f) Withdrawal Liabilities Under Multiemployer Plans
Schedule 3.16(a) Compliance with Law
Schedule 3.16(b) Governmental Authorizations
Schedule 3.16(c) Compliance with Governmental Authorizations
Schedule 3.17(a) Legal Proceedings
Schedule 3.17(b) Orders
Schedule 3.17(c) Compliance with Orders
Schedule 3.18 Certain Changes and Events Since the Date of the Balance
Sheet
Schedule 3.19(b) Contracts
Schedule 3.19(d) Contract Exceptions
Schedule 3.20(b) Insurance
Schedule 3.20(c) Insurance Claims
Schedule 3.21 Environmental Matters
Schedule 3.23(d) Claims of Infringement
Schedule 3.23(e) Software
Schedule 3.24 Certain Payments
Schedule 3.27 Customers and Suppliers
Schedule 3.28 Bank Accounts
Schedule 4.2(b) Buyer's Conflicts and Violations Created by Stock
Purchase Agreement
Schedule 4.2(c) Buyer's Notices and Consents
Schedule 11.5 Vehicle Leases
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TABLE OF EXHIBITS
Exhibit A Nashville Lease
Exhibit B Rochester Hills License
Exhibit C Form of Seller's Legal Opinion
Exhibit D Form of Estoppel Xxxxxxxxxxx
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XXXXX XXXXXXXX AGREEMENT
This Stock Purchase Agreement ("AGREEMENT") is made as of May 10, 2001,
by and among CLARCOR Filtration Products Inc., a Delaware corporation ("BUYER
SUB"); CLARCOR Inc., a Delaware corporation and the ultimate corporate parent of
Buyer Sub ("PARENT", and together with Buyer Sub, "BUYER"); MPW Industrial
Services Group, Inc., an Ohio corporation ("GROUP"); and MPW Management Services
Corp., an Ohio corporation and an indirect, wholly-owned subsidiary of Group
("MPW MANAGEMENT SERVICES," and together with Group, "SELLERS").
RECITALS
A. MPW Management Services owns all of the issued and outstanding
shares (the "SHARES") of capital stock of MPW Filtration Management Services
Corp., an Ohio corporation (the "COMPANY").
B. MPW Management Services desire to sell, and Buyer Sub desires to
purchase, all of the Shares for the consideration and on the terms set forth in
this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"ACCOUNTS RECEIVABLE" --as defined in Section 3.11.
"ACQUIRED COMPANIES"--the Company and its Subsidiaries, collectively.
"ACTUAL CLOSING DATE NET WORTH"--as defined in Section 2.5(c).
"ADJUSTMENT STATEMENT"--as defined in Section 2.5(a).
"AFFILIATE"--means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with the first Person, and any
successors or assigns of such Person; and as used in this definition, the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person whether through
ownership of voting securities, by contract or otherwise; provided, that the
officers, directors, trustees and individuals in similar capacities with respect
to any Person shall not be deemed "Affiliates" of that Person.
"APPLICABLE CONTRACT"--any Contract (a) under which any Acquired
Company has or may acquire any rights, (b) under which any Acquired Company has
or may become subject to any
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obligation or liability, or (c) by which any Acquired Company or any of the
assets owned or used by it is or may become bound.
"AUDITOR"--as defined in Section 2.5(b).
"BALANCE SHEET"--as defined in Section 3.4.
"BEST EFFORTS"--the efforts that a prudent Person desirous of achieving
a result would use in similar circumstances to ensure that such result is
achieved as expeditiously as possible; provided, however, that an obligation to
use Best Efforts under this Agreement does not require the Person subject to
that obligation to take actions that would result in a materially adverse change
in the Contemplated Transactions.
"BREACH"--a "Breach" of a representation, warranty, covenant,
obligation or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation or other provision, in
each case in a material respect, or (b) any claim (by any Person) or other
occurrence or circumstance that is or was inconsistent with such representation,
warranty, covenant, obligation or other provision, in each case in a material
respect, and the term "Breach" means any such inaccuracy, breach, failure,
claim, occurrence or circumstance.
"BUSINESS" --the business, as the case may be, of providing General
Industrial Cleaning Services or Filtration Products/Filtration Services.
"BUYER"--as defined in the first paragraph of this Agreement.
"BUYER GROUP"--collectively, Parent, Buyer Sub and their respective
Affiliates.
"BUYER GROUP MEMBERS"--as defined in Section 11.1(a)(i).
"BUYER'S ADVISORS" --as defined in Section 5.1.
"CERCLA" --means the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Sections 9601 et seq., any amendments thereto, any
successor statutes, and any regulations promulgated thereunder.
"CHANGE-OUTS" --as defined in the definition of Filtration
Products/Filtration Services.
"CLOSING"--as defined in Section 2.3.
"CLOSING DATE"--the date and time when the Closing actually occurs.
"CLOSING DATE NET WORTH"--the consolidated net worth of the Acquired
Companies at the Closing Date.
"COMPANY"--as defined in the Recitals of this Agreement.
"COMPETING BUSINESS"--as defined in Section 3.25.
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"CONSENT"--any approval, consent, ratification, waiver or other
authorization (including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS"--all of the transactions contemplated by
this Agreement, including:
(a) the sale of the Shares by MPW Management Services to Buyer
Sub;
(b) the performance by Buyer and Sellers of their respective
covenants and obligations under this Agreement; and
(c) Buyer Sub's acquisition and ownership of the Shares and
exercise of control over the Acquired Companies.
"CONTRACT"--any agreement, contract, obligation, promise or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"DAMAGES"--as defined in Section 10.2.
"ENCUMBRANCE"--any charge, claim, equitable interest, lien, option,
pledge, security interest, right of first refusal or material restriction on
use, voting, transfer, receipt of income or exercise of any other attribute of
ownership.
"ENVIRONMENT"--soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins and
wetlands), groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life and any other environmental medium
or natural resource.
"ENVIRONMENTAL LIABILITIES"--any cost, damages, expense, liability,
obligation or other responsibility arising from or under Environmental Law and
consisting of or relating to:
(a) any environmental matters or conditions (including on-site
or off-site contamination, and regulation of chemical substances or
products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and
response, investigative, remedial or inspection costs and expenses
arising under Environmental Law;
(c) financial responsibility under Environmental Law for
cleanup costs or corrective action, including any investigation,
cleanup, removal, containment or other remediation or response actions
("CLEANUP") required by applicable Environmental Law or required by any
Governmental Body; or
(d) any other compliance, corrective, investigative or
remedial measures required under Environmental Law.
The terms "removal," "remedial" and "response action" mean the types of
activities covered by CERCLA.
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"ENVIRONMENTAL LAW"--any Legal Requirement that requires or relates to:
(a) advising appropriate authorities, employees and the public
of intended or actual releases of pollutants or hazardous substances or
materials, violations of discharge limits or other prohibitions and of
the commencements of activities, such as resource extraction or
construction, that could have significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release or
minimizing the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged
and used so that they do not present unreasonable risks to human health
or the Environment when used or disposed of;
(e) protecting resources, species or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil or other
potentially harmful substances;
(g) cleaning up pollutants that have been released, preventing
the threat of release or paying the costs of such clean up or
prevention; or
(h) making responsible parties pay private parties, or groups
of them, for damages done to their health or the Environment, or
permitting self-appointed representatives of the public interest to
recover for injuries done to public assets.
"ERISA"--the Employee Retirement Income Security Act of 1974, as
amended, or any successor law, and regulations and rules issued pursuant to that
Act or any successor law.
"ESTIMATED CLOSING DATE NET WORTH"--as defined in Section 2.5(a).
"ESTIMATED PURCHASE PRICE"--as defined in Section 2.5(a).
"EXCEPTED SERVICES"--(a) the removal of used filtration products and
equipment from customers' industrial facilities, (b) the cleaning of such
filtration products and equipment, and (c) the installation of new replacement
filtration products and equipment in such facilities.
"EXCLUDED TAXES"--as defined in Section 11.1(a)(i).
"FACILITIES"--any real property, leaseholds or other interests
currently or formerly owned or operated by any Acquired Company and any
buildings, plants, structures or equipment (including motor vehicles and rolling
stock) currently or formerly owned or operated by any Acquired Company.
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"FILTRATION PRODUCTS/FILTRATION SERVICES" --generally the businesses
conducted by the Acquired Companies on the date of this Agreement and shall
include, without limitation, (a) the manufacture or sale to customers of
filtration products and equipment, (b) the removal of used filtration products
and equipment from customers' industrial facilities, (c) the cleaning of such
filtration products and equipment, (d) the installation of new replacement
filtration products and equipment in such facilities ("CHANGE-OUTS") and (e)
providing and laundering wipes and robot covers and preparing and providing
maintenance kits.
"FUNDED DEBT"--debt for borrowed money, including, without limitation,
intercompany debt, intercompany balances and bank overdrafts.
"GAAP"--generally accepted United States accounting principles, applied
on a basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to in Section 3.4 were prepared.
"GENERAL INDUSTRIAL CLEANING SERVICES" --generally the industrial
cleaning services provided by the Sellers and their Affiliates on the date of
this Agreement and shall include, without limitation, the provision of labor and
materials for the periodic cleaning of customer paint systems, powertrain
systems and stamping systems.
"GOVERNMENTAL AUTHORIZATION"--any approval, consent, license, permit,
waiver or other authorization issued, granted, given or otherwise made available
by or under the authority of any Governmental Body or pursuant to any Legal
Requirement.
"GOVERNMENTAL BODY"--any:
(a) nation, state, county, city, town, village, district or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official or
entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory or
taxing authority or power of any nature.
"GROUP"--as defined in the first paragraph of this Agreement.
"HAZARDOUS ACTIVITY"--the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about or from the Facilities or any part thereof into the Environment, and any
other act, business, operation or thing that increases the danger, or risk of
danger, or poses an
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unreasonable risk of harm to persons or property on or off the Facilities, or
that may affect the value of the Facilities or the Acquired Companies.
"HAZARDOUS MATERIALS"--any waste or other substance that is listed,
defined, designated or classified as, or otherwise determined to be, hazardous,
radioactive or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"INDEMNIFIED PERSONS"--as defined in Section 10.2.
"INTELLECTUAL PROPERTY ASSETS"--as defined in Section 3.23.
"INTERIM BALANCE SHEET"--as defined in Section 3.4.
"IRC"--the Internal Revenue Code of 1986, as amended, or any successor
law, and regulations issued by the IRS pursuant to the Internal Revenue Code or
any successor law.
"IRS"--the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"KNOWLEDGE"--an individual will be deemed to have "Knowledge" of a
particular fact or other matter if such individual is actually aware of such
fact or other matter or, as a part of such individual's normal responsibilities,
should have been aware of such fact or other matter. A Person (other than an
individual) will be deemed to have "Knowledge" of a particular fact or other
matter if any individual who is serving as a director, executive officer,
partner, executor, or trustee of such Person (or in any similar capacity) has,
or at any time had, Knowledge (as defined above) of such fact or other matter.
"LEGAL REQUIREMENT"--any applicable statutes, laws, rules, regulations,
orders, ordinances, codes and decrees of any Governmental Body.
"LICENSE"--as defined in Section 11.6.
"LICENSE AGREEMENT"--collectively, (a) the License Agreement by and
between MPW Container Management Corp. of Michigan and ESI International, Inc.
and (b) the License Agreement by and between MPW Container Management Corp. of
Michigan and the Company.
"MPW MANAGEMENT SERVICES"--as defined in the first paragraph of this
Agreement.
"NASHVILLE LEASE"--that certain Lease Agreement, dated as of the
Closing Date, by and between MPW Industrial Services, Inc. and ESI
International, Inc. substantially in the form of EXHIBIT A attached hereto,
pursuant to which MPW Industrial Services, Inc. will lease from ESI
International, Inc. approximately 5,000 square feet of commercial space located
at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxxxx, XX 00000 for a term of three years,
rent-free for the first year of the term, and at a rental rate for the remainder
of the term to be negotiated by the parties in good faith and based upon
prevailing market rates.
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"OCCUPATIONAL SAFETY AND HEALTH LAW"--any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"ORDER"--any award, decision, injunction, judgment, order, ruling,
subpoena or verdict entered, issued, made or rendered by any court,
administrative agency or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS"--an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day
operations of such Person;
(b) such action is not required to be authorized by the board
of directors of such Person (or by any Person or group of Persons
exercising similar authority) and is not required to be specifically
authorized by the parent company (if any) of such Person; and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors
(or by any Person or group of Persons exercising similar authority), in
the ordinary course of the normal day-to-day operations of other
Persons that are in the same line of business as such Person.
"ORGANIZATIONAL DOCUMENTS"--(a) the articles or certificate of
incorporation and the bylaws or regulations of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) the articles or certificate of organization or
formation of a limited liability company; (e) any charter or similar document
adopted or filed in connection with the creation, formation, or organization of
a Person; and (f) any amendment to any of the foregoing.
"OWNED REAL PROPERTY" --as defined in Section 3.8.
"PERMITTED ENCUMBRANCES" --as defined in Section 3.10.
"PERSON"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or Governmental Body.
"PERSONAL PROPERTY LEASES" --as defined in Section 3.7(b).
"PREVIOUS ACQUISITION CONTRACTS"--(a) the Merger and Purchase
Agreement, dated as of October 1, 1997, among ESI International, Inc., ESI-North
Limited, certain individuals, and Sellers; (b) the Purchase Agreement, dated as
of August 18, 1998, by and between Xxx Xxxxxxxx and Group; and (c) the Asset
Purchase Agreement, dated as of April 23, 1996, among Weston
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Engineering, Easton Engineering, Inc., Engineering Interests, Inc., Xxxx X.
Xxxxxx and Xxxxxx Engineering, Inc.
"PROCEEDING"--any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, investigative or
informal) commenced, brought, conducted or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"PURCHASE PRICE"--as defined in Section 2.2.
"RCRA"--the Resource Conservation and Recovery Act, 42 U.S.
C. Sections 6901 et seq., and any successor statute, and any regulations
promulgated thereunder.
"REAL PROPERTY LEASES" --as defined in Section 3.7(a).
"RELATED PERSON"--with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material
Interest; and
(d) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director, officer,
partner, executor or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly
under common control with such specified Person;
(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer, partner,
executor or trustee of such specified Person (or in a similar
capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity);
and
(f) any Related Person of any individual described in clause
(b) or (c).
For purposes of this definition, (a) the "FAMILY" of an individual includes (i)
the individual, (ii) the individual's spouse and former spouses, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural
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person who resides with such individual, and (b) "MATERIAL INTEREST" means
direct or indirect beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of voting securities or other voting interests
representing at least 50% of the outstanding voting power of a Person or equity
securities or other equity interests representing at least 50% of the
outstanding equity securities or equity interests in a Person.
"RELEASE"--any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping or other releasing into the Environment, whether
intentional or unintentional.
"REPRESENTATIVE"--with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor or other representative of such
Person, including legal counsel, accountants and financial advisors.
"RETAINED EMPLOYEES"--as defined in Section 11.9.
"ROCHESTER HILLS LICENSE"--that certain License Agreement, dated as of
the Closing Date, by and between MPW Industrial Services, Inc. and the Company
substantially in the form of EXHIBIT B attached hereto, pursuant to which the
Company will license to MPW Industrial Services, Inc. the office currently
occupied by Xxxxxx Xxxxxxxxxx located at 0000 Xxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx,
XX for a period of three years, rent-free for the first year of the term, and at
a rental rate of $200 per month for the remainder of the term.
"SECURITIES ACT"--the Securities Act of 1933, as amended, or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"SELLERS"--as defined in the first paragraph of this Agreement.
"SELLERS' COMPUTATIONS"--as defined in Section 2.5(b).
"SHARES"--as defined in the Recitals of this Agreement.
"STRADDLE PERIOD"--as defined in Section 11.1(a)(i).
"SUBSIDIARY"--with respect to any Person (the "OWNER"), any corporation
or other Person of which securities or other interests having the power to elect
a majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by the Owner or one or more of its Subsidiaries; when
used without reference to a particular Person, "Subsidiary" means a Subsidiary
of the Company, including, without limitation, the subsidiaries set forth on
SCHEDULE 3.1(a) to this Agreement.
"TARGET NET WORTH"--as defined in Section 2.5(a).
"TAX" OR "TAXES"--all net income, gross income, gross receipts, sales,
use, ad valorem, transfer, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property or windfall
profits taxes, customs duties or other taxes, fees,
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assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any taxing
authority (domestic or foreign).
"TAX PACKAGE"--as defined in Section 11.1(b)(iii).
"TAX RETURN"--any necessary return, report or similar statement
required to be filed with respect to any Taxes (including any attached
schedule), including without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
"TAX SHARING AGREEMENT"--any written or unwritten agreement or
arrangement for the allocation or payment of Tax liabilities or payment of Tax
benefits with respect to a consolidated, combined or unitary Tax Return that
includes the Acquired Companies.
"THREAT OF RELEASE"--a substantial likelihood of a Release that may
require action in order to prevent or mitigate damage to the Environment that
may result from such Release.
"THREATENED"--a claim, Proceeding, dispute, action or other matter will
be deemed to have been "Threatened" if any demand or statement has been made,
orally or in writing, or any notice has been given that such a claim,
Proceeding, dispute, action or other matter is likely to be asserted, commenced,
taken or otherwise pursued in the future.
2. SALE AND TRANSFER OF SHARES; CLOSING
2.1 SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
MPW Management Services will sell and transfer the Shares to Buyer Sub, and
Buyer Sub will purchase the Shares from MPW Management Services.
2.2 PURCHASE PRICE
The purchase price (the "PURCHASE PRICE") for the Shares shall be equal
to $31,050,000, subject to adjustment in accordance with Section 2.5 of this
Agreement.
2.3 CLOSING
The purchase and sale (the "CLOSING") provided for in this Agreement
will take place at the offices of the Seller's counsel, Xxxxx, Day, Xxxxxx &
Xxxxx, in Columbus, Ohio, at 10:00 a.m. (local time) on June 4, 2001, or at such
other time and place as the parties may agree. Subject to the provisions of
Section 9, failure to consummate the purchase and sale provided for in this
Agreement on the date and time set forth in this Section 2.3 will not result in
the termination of this Agreement and will not relieve any party of any
obligation under this Agreement.
2.4 CLOSING OBLIGATIONS
At the Closing:
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(a) Sellers will deliver to Buyer:
(i) certificates representing the Shares, duly endorsed (or accompanied
by duly executed stock powers) MPW Management Services for transfer to Buyer
Sub;
(ii) a certificate executed by the Chief Executive or Chief Financial
Officer of each of Sellers to the effect that, except as otherwise stated in
such certificate, each of Sellers' representations and warranties in this
Agreement was accurate in all respects as of the date of this Agreement and is
accurate in all respects as of the Closing Date as if made on the Closing Date;
(iii) an opinion of Xxxxx, Day, Xxxxxx & Xxxxx, substantially in the
form of EXHIBIT C attached hereto;
(iv) an employment agreement between the Company and Xxxx Xxxxxx;
(v) fully executed counterparts to the Nashville Lease and, if the
required Consents have been obtained, the Rochester Hills License;
(vi) documentary evidence, in a form satisfactory to Buyer, that
Sellers have obtained all consents and waivers of third-parties listed on
SCHEDULES 3.2(c) to this Agreement; and
(vii) the resignation of each director of the Acquired Companies.
(b) Buyer will deliver to Sellers:
(i) the Estimated Purchase Price by wire transfer of immediately
available funds to an account or accounts specified by Group;
(ii) a certificate executed by the Chief Executive or Chief Financial
Officer of each of Parent and Buyer Sub to the effect that, except as otherwise
stated in such certificate, each of Parent's and Buyer Sub's respective
representations and warranties in this Agreement were accurate in all respects
as of the date of this Agreement and are accurate in all respects as of the
Closing Date as if made on the Closing Date;
(iii) documentary evidence, in a form satisfactory to Sellers, that
Buyer has obtained all consents and waivers of third-parties listed on SCHEDULE
4.2(c) to this Agreement; and
(iv) fully executed counterparts to the Nashville Lease and, if the
required Consents have been obtained, the Rochester Hills License.
2.5 ADJUSTMENT TO PURCHASE PRICE
(a) Not more than five business days, but in no event less than two
business days, before the Closing Date, Sellers shall in good faith prepare and
deliver to Buyer a statement (the "ADJUSTMENT STATEMENT"), prepared in
accordance with GAAP, except as set forth on SCHEDULE
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2.5(a)(i) to this Agreement, and consistent with the calculation of the Target
Net Worth (as defined below), setting forth an estimate of the Closing Date Net
Worth. Sellers will make available to Buyer all records and work papers used in
preparing Sellers' estimate of the Closing Date Net Worth. Buyer shall notify
Sellers of any good faith disagreement with such calculation. If Buyer and
Sellers cannot agree as to an estimate of the Closing Date Net Worth prior to
the Closing Date, the estimate of the Closing Date Net Worth will be deemed to
be equal to the average of Sellers' and Buyer's good faith determinations
thereof. The Closing Date Net Worth as finally estimated pursuant to this
Section 2.5(a) is referred to herein as the "ESTIMATED CLOSING DATE NET WORTH."
At the Closing, if the Estimated Closing Date Net Worth is less than $32,001,000
(the "TARGET NET WORTH," which is calculated as set forth on SCHEDULE 2.5(a)(ii)
to this Agreement), then the Purchase Price will be decreased on a dollar for
dollar basis by the amount of such deficiency, and if the Estimated Closing Date
Net Worth is greater than the Target Net Worth, then the Purchase Price will be
increased on a dollar for dollar basis by the amount of such excess. The
Purchase Price as adjusted pursuant to this Section 2.5(a) is referred to herein
as the "ESTIMATED PURCHASE PRICE."
(b) As promptly as practicable, but in no event later than 60 days
after the Closing Date, Sellers will conduct a review of the Acquired Companies
and in good faith prepare and deliver to Buyer a statement prepared in
accordance with GAAP, except as set forth on SCHEDULE 2.5(a)(i) to this
Agreement, and consistent with the calculation of the Target Net Worth, setting
forth Sellers' computation of the Closing Date Net Worth ("SELLERS'
COMPUTATIONS") and make available to Buyer and its auditors all records and work
papers used in preparing Sellers' Computations. Buyer and its auditor shall have
60 days after the delivery of Sellers' Computations to review and audit Sellers'
determination of the Closing Date Net Worth, as reflected in Sellers'
Computations. If Buyer, in good faith, disagrees with Sellers' determination of
the Closing Date Net Worth, as reflected in Sellers' Computations, Buyer shall
notify Sellers in writing of such disagreement (such notice setting forth the
basis for such disagreement in reasonable detail) within such 60-day period.
Sellers and Buyer thereafter shall negotiate in good faith to resolve any such
disagreements. If there is an amount as to which Sellers and Buyer are able to
agree, such amount shall be paid to the appropriate party pursuant to Section
2.5(d) below. If Sellers and Buyer are unable to resolve any disagreements about
remaining amounts within 30 days after Buyer's delivery of its notice of
disagreement to Sellers, Sellers and Buyer shall submit the dispute to Deloitte
& Touche LLP (or its successors) (the "AUDITOR") for resolution.
(c) Sellers and Buyer shall use their Best Efforts to cause the Auditor
to resolve all disagreements over the Closing Date Net Worth, as soon as
practicable, but in any event within 60 days after submission of the dispute to
the Auditor. The resolution of such disagreements and the determination of the
Closing Date Net Worth by the Auditor shall be final and binding on Sellers and
Buyer. Buyer, on the one hand, and Sellers on the other, will share equally the
fees, costs and expenses of the Auditor incurred in connection with Section
2.5(b) and this Section 2.5(c). The Closing Date Net Worth, as finally
determined pursuant to Section 2.5(b) and this Section 2.5(c) is referred to
herein as the "ACTUAL CLOSING DATE NET WORTH."
(d) Within five days after the Actual Closing Date Net Worth is finally
determined pursuant to Sections 2.5(b) and 2.5(c):
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(i) in the event that Estimated Closing Date Net Worth is
greater than Actual Closing Date Net Worth, Sellers shall pay to Buyer
an amount in cash equal to Estimated Closing Date Net Worth minus the
Actual Closing Date Net Worth; and
(ii) in the event that Actual Closing Date Net Worth is
greater than Estimated Closing Date Net Worth, Buyer shall pay to
Sellers an amount equal to the Actual Closing Date Net Worth minus the
Estimated Closing Date Net Worth.
Any amount payable pursuant to this Section 2.5(d) shall include simple interest
thereon at the prime rate published in the Wall Street Journal on the Closing
Date, calculated on the basis of a 365-day year, from the Closing Date through
the date of payment, and shall be payable by a cashier's or certified check, or
by wire transfer of immediately available funds to the accounts designated by
the payee.
(e) Buyer will, and will cause each Acquired Company and its
Representatives to, cooperate with, and assist Sellers in good faith in the
preparation of Sellers' Computations and the Closing Date Net Worth, including,
without limitation, making, or causing to be made, available to Sellers and
their respective Representatives the personnel, books, records, working papers
and other documents and data of each of the Acquired Companies and any and all
other information as may be reasonably requested from time to time by Sellers or
any of their Representatives.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, jointly and severally, represent and warrant to Buyer as
follows:
3.1 ORGANIZATION AND GOOD STANDING
(a) SCHEDULE 3.1(a) to this Agreement sets forth a complete and
accurate list for each Acquired Company of its name, its jurisdiction of
incorporation or organization, other jurisdictions in which it is authorized to
do business and its capitalization (including the identity of each stockholder
and the number of shares held by each). Each Acquired Company is duly
incorporated or organized, validly exists and, to the extent applicable, is in
good standing under the laws of its jurisdiction of incorporation or
organization, with full corporate or limited liability company power and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use, and to perform all its
obligations under Applicable Contracts. Each Acquired Company is duly qualified
to do business as a foreign entity and is in good standing under the laws of
each state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by it,
requires such qualification except to the extent that any failure to be so
qualified or in good standing does not have a material adverse effect upon the
Acquired Companies taken as a whole.
(b) Sellers have delivered or made available to Buyer copies of the
Organizational Documents of each Acquired Company, as currently in effect.
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3.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid and binding obligation
of Sellers, enforceable against each of the Sellers in accordance with its
terms. Sellers have the absolute and unrestricted right, power, authority and
capacity to execute and deliver this Agreement and to perform their respective
obligations under this Agreement.
(b) Except as set forth on SCHEDULE 3.2(b) to this Agreement, neither
the execution and delivery of this Agreement nor the consummation or performance
of any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time):
(i) contravene, conflict with or result in a violation of any
provision of the Organizational Documents of Sellers or the Acquired
Companies;
(ii) contravene, conflict with or result in a violation of, or
give any Governmental Body or other Person the right to challenge any
of the Contemplated Transactions or to exercise any remedy or obtain
any relief under, any Legal Requirement or any Order to which any
Acquired Company or either Seller, or any of the assets owned or used
by any Acquired Company or either Seller, may be subject;
(iii) contravene, conflict with or result in a violation of
any of the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate or modify, any
Governmental Authorization that is held by any Acquired Company or
either Seller or that otherwise relates to the business of, or any of
the assets owned or used by, any Acquired Company or either Seller;
(iv) contravene, conflict with or result in a violation or
breach of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate or modify, any Applicable
Contract (in each case, a "CONFLICT") except to the extent that any
such Conflict would not have a material adverse effect on the Acquired
Companies taken as a whole; or
(v) result in the imposition or creation of any Encumbrance
(other than Permitted Encumbrances) upon or with respect to any of the
assets owned or used by any Acquired Company.
(c) Except as set forth on SCHEDULE 3.2(c) to this Agreement, no Seller
or Acquired Company is or will be required to give any notice to or obtain any
Consent from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions, except to the extent the failure to obtain any such Consent would
not have a material adverse effect on the Acquired Companies taken as a whole.
3.3 CAPITALIZATION
(a) The authorized equity securities of the Company consist of 750
shares of common stock, without par value (the "COMMON STOCK"), of which 100
shares are issued and outstanding,
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all of which issued and outstanding shares of Common Stock collectively
constitute the Shares. MPW Management Services is and will be on the Closing
Date the record and direct beneficial owner and holder of all of the issued and
outstanding Shares, and, at the Closing, the Shares will be free and clear of
all Encumbrances. With the exception of the Shares (which are owned by MPW
Management Services), all of the outstanding equity securities and other
securities of each Acquired Company will be on the Closing Date owned of record
and beneficially by one or more of the Acquired Companies, and, at the Closing,
such equity securities will be free and clear of all Encumbrances.
(b) Except as provided in this Agreement, there are no agreements,
arrangements, options, warrants, calls, rights or commitments of any character
relating to the issuance, sale, purchase or redemption of any shares of capital
stock or other equity interest of the Acquired Companies, whether on conversion
of other securities or otherwise. None of the issued and outstanding shares or
equity interests of the Acquired Companies has been issued in violation of or is
subject to any preemptive or subscription rights. Except as set forth in this
Agreement and on SCHEDULE 3.3(b) to this Agreement, neither Sellers nor any
Acquired Company is a party to any stockholder agreement, voting trust agreement
or any other similar contract, agreement, arrangement, commitment, plan or
understanding restricting or otherwise relating to the voting, dividend,
ownership or transfer rights of any shares of capital stock or equity interest
of any Acquired Company. All of the outstanding shares of capital stock or other
equity interest of the Acquired Companies are validly issued, fully paid and
nonassessable.
3.4 FINANCIAL STATEMENTS
Sellers have delivered to Buyer: (a) the unaudited consolidated balance
sheet of the Acquired Companies as of June 30, 2000 (collectively, the "BALANCE
SHEET") and the related unaudited consolidated statement of income for the
fiscal year then ended, and (b) the unaudited consolidated balance sheet of the
Acquired Companies as of January 31, 2001 (the "INTERIM BALANCE SHEET") and the
unaudited consolidated statement of income of the Acquired Companies for the
seven months ended January 31, 2001. Such financial statements fairly present
the financial condition and the results of operations of the Acquired Companies
at the respective dates of, and for the periods referred to in, such financial
statements, all in accordance with GAAP, except for footnote disclosure and as
set forth on SCHEDULE 2.5(a)(i) to this Agreement, subject, in the case of
interim financial statements, to normal recurring year-end adjustments; the
financial statements referred to in this Section 3.4 reflect the consistent
application of such accounting principles throughout the periods involved,
except as disclosed on SCHEDULE 3.18 to this Agreement.
3.5 NO UNDISCLOSED LIABILITIES
Except as set forth on SCHEDULE 3.5 to this Agreement, the Acquired
Companies are not subject to any liability (including, without limitation,
unasserted claims, whether known or unknown), whether absolute, contingent,
accrued or otherwise, which is required by GAAP to be disclosed on the Balance
Sheet and which is not shown thereon, other than (a) the Real Property Leases
and Personal Property Leases described in Section 3.7 of this Agreement, and (b)
liabilities of the same nature as those set forth in the Balance Sheet and
reasonably incurred in the Ordinary Course of Business of the Acquired Companies
after the date of the Balance Sheet.
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3.6 AVAILABILITY OF ASSETS
Except as set forth on SCHEDULE 3.6 to this Agreement, the assets owned
or leased by each Acquired Company constitute all of the assets used in its
business (including, without limitation, all books, records, computers and
computer programs and data processing systems) and are in good and serviceable
condition (subject to normal wear and tear and immaterial impairments of value
and damage) and are generally suitable for the uses for which intended. SCHEDULE
3.6 to this Agreement also sets forth, to the Knowledge of Sellers, a
description of all material services provided by each of the Sellers or any of
their respective Affiliates to the Acquired Companies utilizing either (a)
assets not owned by the Acquired Companies as of the Closing Date or (b)
employees not directly employed by the Acquired Companies on the Closing Date,
and the manner in which the costs of providing such services have been charged
to the Acquired Companies.
3.7 LEASED PROPERTY
(a) SCHEDULE 3.7(a) to this Agreement is a list, true and correct, of
all real property leases and subleases (collectively, the "REAL PROPERTY
LEASES") with respect to real property leased or subleased by any Acquired
Company as lessee. Sellers have delivered to Buyer true and correct copies of
each of the Real Property Leases.
(b) SCHEDULE 3.7(b) to this Agreement is a list, true and correct, of
all leases and subleases (collectively, the "PERSONAL PROPERTY LEASES") with
respect to all property, other than real property, leased by any Acquired
Company as lessee with a monthly payment in excess of $1,000. Sellers have
delivered to Buyer true and correct copies of each of the Personal Property
Leases.
3.8 REAL PROPERTY
SCHEDULE 3.8 to this Agreement is a list, true and correct, of the real
property owned by any of the Acquired Companies (collectively, the "OWNED REAL
PROPERTY"), all of which is, except as set forth on SCHEDULE 3.8 to this
Agreement, owned free and clear of all leasehold interests, options to purchase
or other Encumbrances (other than Permitted Encumbrances).
3.9 TENANCIES
Except for the Real Property Leases, the Nashville Lease and the
Rochester Hills License, and as set forth on SCHEDULE 3.9 to this Agreement,
there are no leases or tenancies for any part of the Owned Real Property that
shall remain in effect after the Closing Date, nor shall any third party have
any rights to the purchase, use or possession of all or any part of the Owned
Real Property at or after the Closing Date.
3.10 TITLE TO PROPERTIES; ENCUMBRANCES
(a) The Acquired Companies own (with good and marketable title in the case of
Owned Real Property, subject only to the matters permitted by Section 3.10(b))
all the properties and assets (whether real, personal, or mixed and whether
tangible or intangible) reflected in the Balance Sheet and the Interim Balance
Sheet (except for assets held under capitalized leases and
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disclosed on SCHEDULE 3.10(a) to this Agreement, and personal property sold
since the date of the Balance Sheet and the Interim Balance Sheet, as the case
may be, in the Ordinary Course of Business), and all of the properties and
assets purchased or otherwise acquired by the Acquired Companies since the date
of the Balance Sheet (except for personal property acquired and sold since the
date of the Balance Sheet in the Ordinary Course of Business).
(b) All material properties and assets reflected in the Balance Sheet
and Interim Balance Sheet will be free and clear of all Encumbrances at the
Closing and are not, in the case of Owned Real Property, subject to any rights
of way, building use restrictions, exceptions, variances, reservations, or
limitations of any nature except, with respect to all such properties and
assets, (i) Encumbrances shown on SCHEDULE 3.10(b) to this Agreement, (ii)
mortgages or security interests shown on the Balance Sheet or the Interim
Balance Sheet as securing specified liabilities or obligations, (iii) mortgages
or security interests incurred in connection with the purchase of property or
assets after the date of the Interim Balance Sheet (such mortgages and security
interests being limited to the property or assets so acquired), (iv)
Encumbrances for current Taxes that are not yet delinquent or are being
contested in good faith by appropriate proceedings, (v) landlord's liens or
similar Encumbrances incurred in the Ordinary Course of Business, and (vi) with
respect to real property, (A) minor imperfections of title or other Encumbrances
of any kind or character, if any, none of which materially detracts from the
value or impairs the use of the property subject thereto, or impairs the
operations of any Acquired Company, and (B) zoning laws and other land use
restrictions that do not impair the present or anticipated use of the property
subject thereto (the Encumbrances described in clauses (i), (ii), (iii), (iv),
(v) and (vi) above are collectively referred to herein as "PERMITTED
ENCUMBRANCES").
(c) All the real property interests and improvements, furniture,
fixtures and equipment relating thereto, and the operation of the businesses by
the Acquired Companies thereon, conform to any and all applicable health, fire,
safety, zoning and building laws, ordinances and regulations, except for any
non-conformance that would not have a material adverse effect upon the Acquired
Companies taken as a whole.
3.11 ACCOUNTS RECEIVABLE
All accounts receivable of the Acquired Companies that are reflected in
the Balance Sheet of the Interim Balance Sheet or on the accounting records of
the Acquired Companies as of the Closing Date (collectively, the "ACCOUNTS
RECEIVABLE") represent or will represent valid obligations arising from sales
actually made or services actually performed in the Ordinary Course of Business.
3.12 INVENTORY
The inventories of the Acquired Companies (including raw materials,
supplies, work-in-progress, finished goods and other materials) are (a) subject
to the reserves for obsolescence, reflected in the Balance Sheet and the Interim
Balance Sheet and will be reflected in the Closing Date Balance Sheet at the
lower of cost or market in accordance with GAAP, and (b) subject to the reserves
for obsolescence, in the case of finished goods, of a quality and quantity
saleable in the Ordinary Course of Business and, in the case of all other
inventories are of a quality and quantity useable in the Ordinary Course of
Business. The inventory obsolescence policies of the
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Acquired Companies are appropriate for the nature of the products sold and the
reserve for inventory obsolescence contained in the Balance Sheet and the
Interim Balance Sheet fairly reflects the amount of obsolete inventory as of the
respective dates thereof, and the reserve for inventory obsolescence to be
contained in the Closing Date Balance Sheet will fairly reflect the amount of
obsolete inventory as of the date thereof.
3.13 TAXES
(a) Except as set forth on SCHEDULE 3.13 to this Agreement, (i) each of
the Acquired Companies has properly filed on or before the date hereof (or will
timely file) all material Tax Returns required to be filed on or before the date
hereof (or the Closing Date); (ii) all such Tax Returns are (or will be)
complete and accurate in all material respects and disclose all Taxes required
to be paid by the Acquired Companies for the periods covered thereby and all
Taxes shown to be due on such Tax Returns have been (or will be) timely paid;
(iii) all Taxes (whether or not shown on any Tax Return) owed by the Acquired
Companies and required to be paid on or before the Closing Date have been (or
will be) timely paid (unless any such Taxes are being (or will be) contested by
any Acquired Company in good faith); (iv) no Acquired Company has waived or been
requested to waive any statute of limitations in respect of Taxes; (v) the Tax
Returns referred to in clause (i) have been examined by the IRS or the
appropriate state, local or foreign taxing authority or the period for
assessment of the Taxes in respect of which such Tax Returns were required to be
filed has expired; (vi) there is no action, suit, investigation, audit, claim or
assessment pending or, to the Knowledge of Sellers, Threatened, with respect to
Taxes of the Acquired Companies and no basis exists therefor; (vii) all
deficiencies asserted or assessments made as a result of any examination of the
Tax Returns referred to in clause (i) have been paid in full; (viii) all Tax
Sharing Arrangements and Tax indemnity arrangements will terminate prior to the
Closing Date and none of the Acquired Companies will have any liability
thereunder on or after the Closing Date; (ix) there are no liens for Taxes upon
the assets of any of the Acquired Company except liens relating to current Taxes
not yet due or Taxes that are being (or will be) contested by any Acquired
Company in good faith; (x) all Taxes that any Acquired Company is required by
law to withhold or to collect for payment have been duly withheld and collected,
and have been paid or accrued, reserved against and entered on the books of such
Acquired Company; (xi) there are no Tax rulings, requests for rulings, or
closing agreements relating to any Acquired Company that could affect such
Acquired Company's liability for Taxes for any period after the Closing Date;
(xii) as a result of any "closing agreement" (as described in Section 7121 of
the IRC or any corresponding provision of state or local Tax law), no Acquired
Company will be required to include any item of income in, or exclude any item
of deduction from, any taxable period beginning on or after the Closing Date;
(xiii) no written claim has been made, since June 30, 1998, by a Taxing
authority in a jurisdiction where any Acquired Company has never paid Taxes or
filed Tax Returns asserting that such Acquired Company is or may be subject to
Taxes assessed by such jurisdiction; and (xiv) since June 30, 1998, none of
Sellers or the Acquired Companies has taken any action not in accordance with
past practice that would have the effect of deferring any Tax liability for any
Acquired Company from any taxable period ending on or before the Closing Date to
any taxable period ending after the Closing Date.
(b) Except as set forth on SCHEDULE 3.13 to this Agreement, the
Contemplated Transactions are not subject to withholding under Section 1445 of
the IRC and no stock transfer
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Taxes, sales Taxes, use Taxes, real estate transfer Taxes or similar Taxes will
be imposed on the Contemplated Transactions.
(c) Except as set forth on SCHEDULE 3.13 to this Agreement, as a result
of the Contemplated Transactions, neither Sellers, any Acquired Company nor, to
the Knowledge of Sellers, Buyer will be obligated to make a payment to an
individual that would be a "parachute payment" to a "qualified individual" as
those terms are defined in Section 280G of the IRC, without regard to whether
such payment is reasonable compensation for personal services performed or to be
performed in the future.
3.14 NO MATERIAL ADVERSE CHANGE
Since the date of the Balance Sheet, there has not been any material
adverse change in the business, operations, properties, assets, results of
operations or financial condition of the Acquired Companies, taken as a whole,
and to the Knowledge of Sellers and the Acquired Companies, no event has
occurred or circumstance exists or is Threatened that may result in such a
material adverse change.
3.15 EMPLOYEE BENEFITS
(a) Set forth on SCHEDULE 3.15(a) to this Agreement is a true and
complete list of each "employee pension benefit plan" (as such term is defined
in Section 3(2) of ERISA) maintained by any of the Acquired Companies or an
ERISA Affiliate (as defined below), or with respect to which any of the Acquired
Companies or an ERISA Affiliate is or will be required to make any payment, or
which provides or will provide benefits to present or prior employees of any of
the Acquired Companies or an ERISA Affiliate due to such employment
(collectively, the "PENSION PLANS"). Set forth on SCHEDULE 3.15(a) to this
Agreement is a true and complete list of each "employee welfare benefit plan"
(as such term is defined in Section 3(l) of ERISA) maintained by any of the
Acquired Companies, or with respect to which any of the Acquired Companies is or
will be required to make any payment, or which provides or will provide benefits
to present or prior employees of any of the Acquired Companies due to such
employment (collectively, the "WELFARE PLANS") (together, the Pension Plans and
Welfare Plans are referred to herein as the "ERISA BENEFIT PLANS"). In addition,
set forth on SCHEDULE 3.15(a) to this Agreement is a true and complete list of
each other "employee pension benefit plan" (as such term is defined in Section
3(2) of ERISA) ever subject to Section 302 of ERISA and (i) maintained by any of
the Acquired Companies or an ERISA Affiliate at any time during the six-year
period prior to the Closing Date, or (ii) with respect to which any of the
Acquired Companies or an ERISA Affiliate was required to make any payment at any
time during such period (collectively, the "PRIOR PENSION PLANS"). For purposes
of this Agreement, "ERISA AFFILIATE" means (i) any corporation which at any time
on or before the Closing Date is or was a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the IRC) as any of the
Acquired Companies; (ii) any partnership, trade or business (whether or not
incorporated) which at any time on or before the Closing Date is or was under
common control (within meaning of section 414(c) of the IRC) with any of the
Acquired Companies and (iii) any entity which at any time an or before the
Closing Date is or was a member of the same affiliated service group (within the
meaning of Section 414(m) of the IRC) as either the Acquired Companies, any
corporation
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described in clause (i) or any partnership, trade or business described in
clause (ii) of this Section 3.15(a).
(b) Other than those listed on SCHEDULE 3.15(a) to this Agreement, set
forth on SCHEDULE 3.15(b) to this Agreement is a true and complete list of each
of the following to which any of the Acquired Companies is a party or with
respect to which it is or will be required to make any payment (the "NON-ERISA
COMMITMENTS"):
(i) each retirement, savings, profit sharing, deferred
compensation, severance, stock ownership, stock purchase, stock option,
performance, bonus, incentive, vacation or holiday pay, hospitalization
or other medical, disability, life or other insurance, or other
welfare, benefit or fringe benefit plan, policy, trust, understanding
or arrangement of any kind, whether written or oral; and
(ii) each employee collective bargaining agreement and each
agreement, understanding or arrangement of any kind, whether written or
oral, with or for the benefit of any present or prior officer,
director, employee, agent or consultant (including, without limitation,
each employment, compensation, deferred compensation, severance or
consulting agreement or arrangement, confidentiality agreement,
covenant not to compete, and any agreement or arrangement associated
with a change in ownership or control of the Acquired Companies, but
excluding employment agreements terminable by the Acquired Companies
without premium or penalty or notice of 30 days or less under which the
only monetary obligation of the Acquired Companies is to make current
wage or salary payments and provide current fringe benefits).
Sellers have delivered to Buyer correct and complete copies of (i) all written
Non-ERISA Commitments and (ii) all insurance and annuity policies and contracts
and other documents relevant to any Non-ERISA Commitment. SCHEDULE 3.15(b) to
this Agreement includes a complete and accurate description of all oral
Non-ERISA Commitments. Except as disclosed on SCHEDULE 3.15(a) or SCHEDULE
3.15(b) to this Agreement, none of the ERISA Benefit Plans or the Non-ERISA
Commitments is subject to the law of any jurisdiction outside of the United
States of America.
(c) Sellers have delivered to Buyer with respect to each ERISA Benefit
Plan and with respect to each Prior Pension Plan, other than any ERISA Benefit
Plan or Prior Pension Plan which is a "multiemployer plan" (as such term is
defined in Section 3(37) of ERISA, a "MULTIEMPLOYER PLAN"), correct and complete
copies, where applicable, of (i) all plan documents and amendments thereto,
trust agreements and amendments thereto and insurance and annuity contracts and
policies, (ii) the current summary plan description, (iii) the Annual Reports
(Form 5500 series) and accompanying schedules, as filed, for the most recently
completed three plan years for which such reports have been filed, (iv) the
financial statements for the most recently completed three plan years for which
such statements have been prepared, (v) the actuarial reports for the most
recently begun three plan years for which such reports exist, (vi) the most
recent determination letter issued by the IRS and the application submitted with
respect to such letter, (vii) PBGC Form 1 for the most recently, begun plan year
and (viii) all correspondence with the IRS, Department of Labor and Pension
Benefit Guaranty Corporation concerning any controversy. Each report described
in clause (v) of the preceding sentence accurately describes
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the funded status of the plan to which it relates and subsequent to the date of
such report there has been no adverse change in the funding status or financial
condition of such plan. With respect to each Pension Plan that is a
Multiemployer Plan, (A) Sellers have delivered to Buyer correct and complete
copies of all plan documents and amendments thereto and trust agreements and
amendments thereto, the items described in clauses (ii), (iii) and (v) of the
second preceding sentence but with respect to the reports described in such
clauses (iii) and (v) only such reports for the most recent year, and all
correspondence and other information in the possession of Sellers, the Acquired
Companies or any ERISA Affiliate relating to any anticipated increases in
contribution rates with respect to such plan, and (B) set forth on SCHEDULE
3.15(c) to this Agreement is a true and complete list of the amounts which each
of the Company and each ERISA Affiliate paid to such plan with respect to each
of the calendar years 1998 through 2000. Sellers have delivered to Buyer with
respect to each Multiemployer Plan and each Prior Pension Plan which is a
Multiemployer Plan (collectively, the "PRIOR MULTIEMPLOYER PLANS") correct and
complete copies of all correspondence and other information in Sellers', the
Acquired Companies' or any ERISA Affiliate's possession relating to the amount
for which the Acquired Companies or any ERISA Affiliate is or could be liable
under Title IV of ERISA for a total or partial withdrawal as of any date or for
any other reason.
(d) With respect to each Pension Plan subject to Section 302 of ERISA
other than any Multiemployer Plan, (i) no Proceeding has been initiated to
terminate such plan, (ii) there has been no "reportable event" (as such term is
defined in Section 4043(b) of ERISA), (iii) no "accumulated funding deficiency"
(within the meaning of Section 412 of the IRC), whether or not waived, has
occurred, (iv) no person has failed to make a required installment or any other
payment required under Section 412 of the IRC before the applicable due date,
(v) neither the Acquired Companies nor any ERISA Affiliate has provided or is
required to provide security to such plan under Section 401(a)(29) of the IRC
due to a plan amendment that results in an increase in current liability, and
(vi) without any additional contributions being made to such plan, the assets of
such plan are sufficient to satisfy all obligations of the plan if the plan were
to terminate (regardless of whether the plan can legally terminate). Each
Pension Plan which is intended to qualify under Section 401(a) of the IRC has
been determined to be so qualified by the IRS, and no circumstance has occurred
or exists which might cause such plan to cease being so qualified.
(e) There is no pending or, to the Knowledge of Sellers or the Acquired
Companies, Threatened claim in respect of any of the ERISA Benefit Plans other
than claims for benefits in the Ordinary Course of Business. Except as set forth
on SCHEDULE 3.15(e) to this Agreement, each of the ERISA Benefit Plans other
than any Multiemployer Plans (i) has been administered in accordance with its
material terms and (ii) complies in form, and has been administered in
accordance, with the requirements of ERISA and, where applicable, the IRC. The
Acquired Companies and each ERISA Affiliate have complied, in all material
respects, with the health care continuation requirements of Part 6 of Title I of
ERISA. No Acquired Company has any obligation under any ERISA Benefit Plans or
otherwise to provide health or other welfare benefits to any prior employees or
any other Person, except as required by Part 6 of Title I of ERISA. Except as
set forth on SCHEDULE 3.15(e) to this Agreement, the consummation of the
transactions contemplated by this Agreement will not result in an increase in
the amount of compensation or
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benefits or accelerate the vesting or timing of payment of any compensation or
benefits payable to or in respect of any participant of any ERISA Benefit Plan
or Non-ERISA Commitment.
(f) To the Knowledge of Sellers and the Acquired Companies, no
Proceeding has been initiated to terminate any Multiemployer Plan, and there has
been no "reportable event" (as such term is defined in Section 4043(b) of ERISA)
with respect to any such plan. No Multiemployer Plan is in reorganization as
described in Section 4241 of ERISA or insolvent as described in Section 4245 of
ERISA. Assuming the Acquired Companies and each ERISA Affiliate incurred a
complete withdrawal under Section 4203 of ERISA from each Multiemployer Plan,
the withdrawal liability arising under Section 4201 of ERISA with respect to
each such plan as a result thereof would not exceed the amount set forth on
SCHEDULE 3.15(f) to this Agreement. Except as described on SCHEDULE 3.15(f) to
this Agreement, neither the Acquired Companies nor any ERISA Affiliate has
failed to make a required or disputed contribution to any Multiemployer Plan or
any Prior Multiemployer Plan. Except as described on SCHEDULE 3.15(f) to this
Agreement, (i) neither the Acquired Companies nor any ERISA Affiliate has
incurred any liability on account of a "partial withdrawal" or a "complete
withdrawal" (within the meaning of Sections 4205 and 4203, respectively, of
ERISA) from any multiemployer plan (as such term is defined in Section 3(37) of
ERISA), no such liability has been asserted, there are no events or
circumstances which could result in any such partial or complete withdrawal, and
neither the Acquired Companies nor any ERISA Affiliate is bound by a contract or
agreement or has any obligation or liability described in Section 4204 of ERISA.
Each Multiemployer Plan (i) complies in form, and has been administered in
accordance, with the requirements of ERISA and, where applicable, the IRC, and
(ii) is qualified under Section 401(a) of the IRC as amended to the date hereof.
(g) Except as to Multiemployer Plans (as to which this representation
and warranty is made only to the Knowledge of Seller and the Acquired
Companies), neither the Acquired Companies nor, to the Knowledge of Seller and
the Acquired Companies, any other "disqualified person" (within the meaning of
Section 4975 of the Code) or "party in interest" (within the meaning of Section
3(14) of ERISA) has taken any action with respect to any ERISA Benefit Plan
which could subject any such plan (or its related trust) or the Acquired
Companies or any officer, director or employee of any of the foregoing to the
penalty or tax under Section 502(i) or Section 502(1) of ERISA or Section 4975
of the IRC.
(h) The Acquired Companies have no potential liability, whether direct
or indirect, under Section 4063, 4064, 4069, 4204 or 4212(c) of ERISA.
3.16 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS
(a) Except as set forth on SCHEDULE 3.16(a) to this Agreement:
(i) each Acquired Company is in substantial compliance with
each Legal Requirement that is applicable to it or to the conduct or
operation of its business or the ownership or use of any of its assets
except to the extent that any non-compliance would not have a material
adverse effect on the Acquired Companies taken as a whole; and
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(ii) no Acquired Company has received, at any time since June
30, 1998, any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding (A) any
actual, alleged, possible, or potential violation of, or failure to
comply with, any Legal Requirement, or (B) any actual, alleged,
possible, or potential obligation on the part of any Acquired Company
to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature that in any such case would have a
material adverse effect upon the Acquired Companies taken as a whole.
(b) SCHEDULE 3.16(b) to this Agreement sets forth a complete and
accurate list of each Governmental Authorization that is held by any Acquired
Company and that is material to the operation of the business of, or to the
ownership or use of any of the assets owned or used by, any Acquired Company.
Each Governmental Authorization listed on SCHEDULE 3.16(b) to this Agreement is
valid and in full force and effect.
(c) Except as set forth on SCHEDULE 3.16(c) to this Agreement, (i) each
of the Acquired Companies has fulfilled and performed, in all material respects,
its obligations under each of the Governmental Authorizations, and to the
Knowledge of Sellers and the Acquired Companies, no event has occurred or
condition or state of facts exists that constitutes or, after notice or lapse of
time or both, would constitute a breach or default under any such Governmental
Authorization or that permits or, after notice or lapse of time or both, would
permit revocation or termination of any such Governmental Authorization; (ii) no
notice of cancellation, of default or of any material dispute concerning any
Governmental Authorization, or of any event, condition or state of facts
described in the preceding clause, has been received by, or is Known to, Sellers
or the Acquired Companies since June 30, 1998; and (iii) as of the date of this
Agreement, each of the Governmental Authorizations is valid, subsisting and in
full force and effect, and the consummation of the Contemplated Transactions
will not cause the occurrence of any breach, default or forfeiture of rights
thereunder or require the consent, approval or act of, or the making of any
filing with, any Governmental Body.
3.17 LEGAL PROCEEDINGS; ORDERS
(a) Except as set forth on SCHEDULE 3.17(a) to this Agreement, there is
no pending Proceeding:
(i) that has been commenced by or against any Acquired Company
or any Seller or that otherwise relates to, affects or may affect the
business of, or any of the assets owned or used by, any Acquired
Company, or the financial condition, liabilities, shareholders' equity,
sales, net income or operations of any Acquired Company, which
Proceeding, in each case, could reasonably be expected to have a
material adverse effect upon the Acquired Companies, taken as a whole;
or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with, any
of the Contemplated Transactions.
To the Knowledge of Sellers and the Acquired Companies, (1) no such Proceeding
has been Threatened, and (2) no event has occurred or circumstance exists that
may give rise to or serve as a basis for the commencement of any such
Proceeding.
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(b) Except as set forth on SCHEDULE 3.17(b) to this Agreement:
(i) there is no Order to which any of the Acquired Companies,
or any of the assets owned or used by any Acquired Company, is subject;
(ii) neither Seller is subject to any Order that relates to
the business of, or any of the assets owned or used by, any Acquired
Company; and
(iii) to the Knowledge of Sellers and the Acquired Companies,
no officer, director, agent or employee of any Acquired Company is
subject to any Order that prohibits such officer, director, agent, or
employee from engaging in or continuing any conduct, activity, or
practice relating to the business of any Acquired Company.
(c) Except as set forth on SCHEDULE 3.17(c) to this Agreement:
(i) each Acquired Company is in full compliance with all of
the terms and requirements of each Order to which it, or any of the
assets owned or used by it, is or has been subject;
(ii) no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of time) a
violation of or failure to comply with any term or requirement of any
Order to which any Acquired Company, or any of the assets owned or used
by any Acquired Company, is subject; and
(iii) no Acquired Company has received any notice or other
communication (whether oral or written) from any Governmental Body or
any other Person regarding any actual, alleged, possible or potential
violation of, or failure to comply with, any term or requirement of any
Order to which any Acquired Company, or any of the assets owned or used
by any Acquired Company, is or has been subject.
3.18 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth on SCHEDULE 3.18 to this Agreement, since the date
of the Balance Sheet, the Acquired Companies have conducted their businesses
only in the Ordinary Course of Business and there has not been any:
(a) change in any Acquired Company's authorized or issued capital
stock; grant of any stock option or right to purchase shares of capital stock of
any Acquired Company; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption, retirement or
other acquisition by any Acquired Company of any shares of any such capital
stock; or declaration or payment of any dividend or other distribution or
payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of any Acquired Company;
(c) payment or increase by any Acquired Company of any bonuses,
salaries or other compensation to any stockholder, director, officer or
employee, except in the Ordinary Course of
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Business, or entry into any employment, severance, or similar Contract with any
director, officer or employee, except in the Ordinary Course of Business;
(d) adoption of, or increase in the payments or benefits under, any
profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement or other employee benefit plan for or with any employees of any
Acquired Company;
(e) damage to or destruction or loss of any asset or property of any
Acquired Company, whether or not covered by insurance, materially and adversely
affecting the properties, assets, business or financial condition of the
Acquired Companies, taken as a whole;
(f) sale (other than sales of inventory in the Ordinary Course of
Business), lease or other disposition of any asset or property of any Acquired
Company or mortgage, pledge or imposition of any lien or other Encumbrance
(other than Permitted Encumbrances) on any material asset or property of any
Acquired Company, including the sale, lease or other disposition of any of the
Intellectual Property Assets except as reflected by the Interim Balance Sheet;
(g) material change in the accounting methods used by any Acquired
Company;
(h) issuance, delivery or agreement (conditionally or unconditionally)
to issue or deliver any bonds, notes or other debt securities, or to borrow or
agree not to borrow any funds, other than in the Ordinary Course of Business
consistent with past practice, by any Acquired Company;
(i) payment of any obligation or liability (absolute or contingent)
other than liabilities reflected on the Balance Sheet and liabilities incurred
since the date of the Balance Sheet in the Ordinary Course of Business
consistent with past practice;
(j) except in the Ordinary Course of Business consistent with past
practice, any material amendment or termination of any Applicable Contract;
(k) capital expenditures exceeding $25,000, for any single project or
related series of projects;
(l) charitable donations in excess of $5,000 in the aggregate;
(m) cancellation of any debts owed to or claims held by any Acquired
Company exceeding $25,000 in the aggregate (including the settlement of any
claims or litigation) other than in the Ordinary Course of Business;
(n) accelerated or delayed collection of notes or accounts receivable
exceeding $25,000 in the aggregate in advance of or beyond their regular due
dates or the dates when the same would have been collected in the Ordinary
Course of Business;
(o) accelerated or delayed payment of any account payable or other
liability exceeding $25,000 in the aggregate beyond or in advance of its due
date or the date when such liability would have been collected in the Ordinary
Course of Business; or
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(p) agreement, whether oral or written, by either the Sellers or any
Acquired Company to do any of the foregoing.
3.19 CONTRACTS
(a) Sellers have delivered or made available to Buyer true and complete
copies, of:
(i) each Applicable Contract that involves performance of
services or delivery of goods or materials by one or more Acquired
Companies of an amount or value in excess of $50,000;
(ii) each Applicable Contract that involves performance of
services or delivery of goods or materials to one or more Acquired
Companies of an amount or value in excess of $50,000;
(iii) each Applicable Contract that was not entered into in
the Ordinary Course of Business and that involves expenditures or
receipts of one or more Acquired Companies in excess of $10,000;
(iv) each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other Applicable
Contract affecting the ownership of, leasing of, title to, use of or
any leasehold or other interest in, any real property;
(v) each licensing agreement or other Applicable Contract with
respect to patents, trademarks, copyrights or other intellectual
property, including agreements with current or former employees,
consultants or contractors regarding the appropriation or the
non-disclosure of any of the Intellectual Property Assets;
(vi) each joint venture, partnership and other Applicable
Contract (however named) involving a sharing of profits, losses, costs,
or liabilities by any Acquired Company with any other Person and that
involves expenditures or receipts of one or more Acquired Companies in
excess of $10,000;
(vii) each Applicable Contract containing covenants that in
any way purport to restrict or limit the freedom of any Acquired
Company to engage in any line of business or to compete with any
Person;
(viii) each Applicable Contract for capital expenditures in
excess of $25,000;
(ix) each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance involving
obligations in excess of $10,000 extended by any Acquired Company other
than in the Ordinary Course of Business;
(x) each guaranty for price reductions with respect to
contractual performance extended by any Acquired Company to any
customer and involving obligations in excess of $10,000; and
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(xi) each amendment, supplement and modification (whether oral
or written) in respect of any of the foregoing.
(b) Except as set forth on SCHEDULE 3.19(b) to this Agreement:
(i) no Seller (and no Related Person of any Seller) has or may
acquire any rights under, and no Seller has or may become subject to
any obligation or liability under, any Contract that relates to the
business of, or any of the assets owned or used by, any Acquired
Company; and
(ii) to the Knowledge of Sellers and the Acquired Companies,
no officer, director, agent, employee, consultant or contractor of any
Acquired Company is bound by any Contract that purports to limit the
ability of such officer, director, agent, employee, consultant or
contractor to (A) engage in or continue any conduct, activity or
practice relating to the business of any Acquired Company, or (B)
assign to any Acquired Company or to any other Person any rights to any
invention, improvement or discovery.
(c) The Contracts relating to the sale, design, manufacture or
provision of products or services by the Acquired Companies have been entered
into in the Ordinary Course of Business and have been entered into without the
commission of any act alone or in concert with any other Person, or any
consideration having been paid or promised, that is or would be in violation of
any Legal Requirement.
(d) Except as set forth on SCHEDULE 3.19(d) to this Agreement or in any
other Schedule to this Agreement, (i) each of the Applicable Contracts described
in Section 3.19(a) constitutes a valid and binding obligation of, and is in full
force and effect with respect to, each Acquired Company that is a party thereto,
(ii) to the Knowledge of Sellers, each of the Applicable Contracts described in
Section 3.19(a) constitutes a valid and binding obligation of, and is in full
force and effect with respect to, each other party thereto, (iii) none of the
Contemplated Transactions will, with the passage of time or the giving of notice
or both, result in a breach of or default under any of the Applicable Contracts
described in Section 3.19(a), (iv) each of the Acquired Companies has fulfilled
and performed in all material respects its respective obligations under each
Applicable Contract described in Section 3.19(a) to which it is a party and no
Acquired Company is in, or to the Knowledge of Sellers, alleged to be in, breach
or default under, nor is there, or to the Knowledge of Sellers is there alleged
to be, any basis for termination of, any Applicable Contract described in
Section 3.19(a), (v) to the Knowledge of Sellers, no other party to any of the
Applicable Contracts described in Section 3.19(a) is in material breach of or
default under any such Applicable Contract, and no event has occurred and no
condition or state of facts exists that, with the passage of time or the giving
of notice or both, would constitute such a material breach or default by any
such other party, and (vi) no Acquired Company is currently paying liquidated
damages in lieu of performance under any Applicable Contract described in
Section 3.19(a).
3.20 INSURANCE
(a) Sellers have delivered or made available to Buyer summaries of all
policies of insurance to which any Acquired Company is a party or under which
any Acquired Company, or
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any director of any Acquired Company, is or has been covered at any time within
the two (2) years preceding the date of this Agreement.
(b) Except as set forth on SCHEDULE 3.20(b) to this Agreement:
(i) All policies to which any Acquired Company is a party or
that provide coverage to either Seller, any Acquired Company, or any
director or officer of an Acquired Company:
(A) are valid, outstanding and enforceable;
(B) are issued by an insurer that is financially
sound and reputable;
(C) taken together, provide adequate insurance
coverage for the assets and the operations of the Acquired
Companies for all risks to which the Acquired Companies are
normally exposed; and
(D) will provide coverage following the consummation
of the Contemplated Transactions for insured events that
occurred on or before the Closing Date.
(ii) No Seller or Acquired Company has received any notice of
cancellation or any other indication that any insurance policy is no
longer in full force or effect or will not be renewed or that the
issuer of any policy is not willing or able to perform its obligations
thereunder.
(iii) The Acquired Companies have paid all premiums due, and
have otherwise performed all of their respective material obligations,
under each policy to which any Acquired Company is a party or that
provides coverage to any Acquired Company or director thereof.
(c) SCHEDULE 3.20(c) to this Agreement includes information of every
claim filed by or against an Acquired Company in excess of $5,000 since June 30,
1998 under such policies of insurance and the disposition or status thereof.
3.21 ENVIRONMENTAL MATTERS
Except as set forth on SCHEDULE 3.21 to this Agreement:
(a) Each Acquired Company is, and at all times has been,in substantial
compliance with, and has not been and is not in violation of or liable under,
any Environmental Law except to the extent that any such non-compliance or
violation, in each case, would not have a material adverse effect upon the
Acquired Companies taken as a whole. No Seller or Acquired Company has received
any Order, written, or to the Knowledge of Sellers, oral, notice or other
written, or to the Knowledge of Sellers, oral, communication from any
Governmental Body of any actual or potential violation or failure to comply
with any Environmental Law, or of any actual or Threatened obligation to
undertake or bear the cost of any Environmental Liabilities with respect to any
of the Facilities or any other properties or assets (whether real, personal or
mixed) in
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which Sellers or any Acquired Company has had an interest, or with respect to
any property or Facility at or to which Hazardous Materials were generated,
manufactured, refined, transferred, imported, used or processed by Sellers or
any Acquired Company, or from which Hazardous Materials have been transported,
treated, stored, handled, transferred, disposed, recycled or received.
(b) No Seller or Acquired Company has Knowledge of nor has received any
citation, directive, inquiry, notice, Order, summons, warning or other written,
or to the Knowledge of Sellers, oral, communication from a Governmental Body
that relates to Hazardous Activity, Hazardous Materials or any alleged, actual
or potential violation or failure to comply with any Environmental Law, or of
any alleged, actual or potential obligation to undertake or bear the cost of any
Environmental Liabilities with respect to any of the Facilities or any other
properties or assets (whether real, personal or mixed) in which Sellers or any
Acquired Company had an interest, or with respect to any property or facility to
which Hazardous Materials generated, manufactured, refined, transferred,
imported, used or processed by Sellers or any Acquired Company have been
transported, treated, stored, handled, transferred, disposed, recycled or
received.
(c) There has been no Release of any Hazardous Materials at or from the
Facilities or at any other properties in which any Acquired Company has or had
an interest, or, to the Knowledge of Sellers and the Acquired Companies, any
geologically or hydrologically adjoining property, whether by Sellers, any
Acquired Company or any other Person, which, in each case, would have a material
adverse effect on the Acquired Companies taken as a whole.
(d) Each of the Acquired Companies has all material Environmental,
health and safety Governmental Authorizations necessary for the operation of its
business, and all such Governmental Authorizations are in good standing and the
Acquired Companies are in compliance in all material respects with all
applicable terms and conditions of such authorizations.
(e) None of the Acquired Companies have:
(i) reported a Release of a hazardous substance pursuant to
Section 103(a) of CERCLA, or any state equivalent;
(ii) filed a notice pursuant to Section 103(c) of CERCLA;
(iii) filed a notice pursuant to Section 3010 of RCRA
indicating the generation of any hazardous waste, as that term is
defined under 40 C.F.R. Part 261 or any state equivalent; or
(iv) filed any notice under any applicable Environmental Law
reporting a substantial violation of any applicable Environmental Law.
(f) There is not now, nor to the Knowledge of Sellers or the Acquired
Companies has there ever been, on or in any Facility, any treatment, recycling,
storage or disposal of any hazardous waste, as that term is defined under 40
C.F.R. Part 261 or any state equivalent that
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requires or required a Governmental Authorization pursuant to Section 3005 of
RCRA, which, in each case, would have a material adverse effect on the Acquired
Companies taken as a whole.
(g) No Facility has been listed or, to the Knowledge of Sellers or the
Acquired Companies, is proposed for listing, on the National Priorities List
pursuant to CERCLA, on the Comprehensive Environmental Response, Compensation
and Liability Information System List or any state list of sites requiring any
Cleanup.
(h) None of the Acquired Companies has sent or arranged for the
transport of any Hazardous Materials to any site listed on the National
Priorities List pursuant to CERCLA with respect to which any of the Acquired
Companies has been notified in writing by a Governmental Authority that it is or
may be liable as a potentially responsible party.
(i) Sellers have delivered or made available to Buyer true and complete
copies and results of any reports, studies, analyses, tests or monitoring
possessed or initiated by Sellers or any Acquired Company pertaining to
Hazardous Materials or Hazardous Activities in, on or under the Facilities, or
concerning compliance by Sellers or any Acquired Company with Environmental
Laws.
3.22 LABOR RELATIONS
None of the Acquired Companies is a party to any collective bargaining
or other labor Contract. There is not presently pending or existing, and to
Sellers' Knowledge there is not Threatened, (a) any strike, slowdown, picketing,
work stoppage or employee grievance process generally, (b) any Proceeding
against or affecting any Acquired Company relating to the alleged violation of
the National Labor Relations Act or (c) any application for certification of a
collective bargaining agent. There is no lockout of any employees by any
Acquired Company, and no such action is contemplated by any Acquired Company. To
the Knowledge of Sellers and the Acquired Companies, there has been no
organizing effort by any union or other group seeking to represent any employees
of any Acquired Company as its bargaining agent or representative at any time
within three (3) years prior to the date of this Agreement. To the Knowledge of
Sellers, (x) there have been no unfair labor practice charges filed with the
National Labor Relations Board against any Acquired Company or any direct
employee of the Acquired Companies, or complaints issued by the National Labor
Relations Board against any Acquired Company or any direct employee of the
Acquired Companies and (y) no written grievance or complaint has been filed or
instituted by any union or union employee of any customer of the Acquired
Companies, during the three-year period prior to the date of this Agreement with
respect to the utilization by an Acquired Company of non-union employees in the
facilities of its customers.
3.23 INTELLECTUAL PROPERTY
(a) The term "INTELLECTUAL PROPERTY ASSETS" includes:
(i) all patents, patent applications and inventions and
discoveries that may be patentable (collectively, "PATENTS");
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(ii) all copyrights in both published works and unpublished
works (collectively, "COPYRIGHTS"); and
(iii) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process
technology, plans, drawings and blue prints (collectively, "TRADE
Secrets") owned, used or licensed by any Acquired Company as licensee
or licensor.
The Intellectual Property Assets shall not include the name "MPW" or "MPW
Filtration Management Services Corp." or any fictional business names, trading
names, registered or unregistered trademarks, service marks or applications
therefor, that contain the name "MPW."
(b) SCHEDULE 3.19(b) to this Agreement sets forth a complete and
accurate list and summary description of all Contracts relating to the
Intellectual Property Assets to which any Acquired Company is a party or by
which any Acquired Company is bound, except for any license implied by the sale
of a product and perpetual, paid-up licenses for software programs with a value
of less than $100,000 under which an Acquired Company is the licensee. There are
no outstanding and, to Sellers' Knowledge, no Threatened disputes or
disagreements with respect to any such agreement.
(c) The Intellectual Property Assets are all those necessary for the
operation of the Acquired Companies' businesses as they are currently conducted.
One or more of the Acquired Companies is the owner of all right, title and
interest in and to each of the Intellectual Property Assets, and, at the
Closing, the Intellectual Property Assets will be free and clear of all liens,
security interests, charges, Encumbrances, equities and other adverse claims
(other than Permitted Encumbrances), and has the right to use without payment to
a third party all of the Intellectual Property Assets.
(d) Except as disclosed on SCHEDULE 3.23(d) to this Agreement, no
infringement of any copyright, trademark, service xxxx, trade name, patent,
patent right, trade secret or other property right of any other Person has
occurred or resulted in any way from the operations of the business of the
Acquired Companies prior to the date of this Agreement. No claim of any
infringement of any copyright, trademark, service xxxx, trade name, patent,
patent right, trade secret or other property right of any other Person has been
made or asserted in respect of such operations. Neither Sellers nor the Acquired
Companies have had notice of, or any Knowledge of any basis for, a claim against
the Acquired Companies that the operations, activities, products, software,
equipment, machinery or processes of the Acquired Companies' businesses infringe
any copyright, trademark, service xxxx, trade name, patent, patent right, trade
secret or other property right of any other Person.
(e) SCHEDULE 3.23(e) to this Agreement contains a list and description
(showing in each case any owner, licensor or licensee) of all computer software
programs and software systems owned by, licensed to, or used by any of the
Acquired Companies in the conduct of its business, including, without
limitation, all databases, compilations, tool sets, compilers, higher level or
proprietary languages, related documentation and materials, whether in source
code, object code or human readable form (collectively, "Software"); provided,
however, that SCHEDULE 3.23(e) to this Agreement may omit Software licensed to
licensee that is available in consumer
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retail stores and subject to license agreements that become effective when the
purchaser breaks the seal of the Software package. Except as disclosed on
SCHEDULE 3.23(e) to this Agreement (and subject to the exceptions stated
therein), each Acquired Company that uses any Software either: (i) owns the
entire right, title and interest in and to such Software, free and clear of any
Encumbrance (other than Permitted Encumbrances), or (ii) has the perpetual,
royalty free right to use such Software.
3.24 CERTAIN PAYMENTS
Except as disclosed on SCHEDULE 3.24 to this Agreement, to the
Knowledge of Sellers, no Acquired Company or director, officer, agent or
employee of any Acquired Company, or any other Person associated with or acting
for or on behalf of any Acquired Company, has, directly or indirectly (a) made,
in violation of any Legal Requirement, any contribution, gift, bribe, rebate,
payoff, influence payment, kickback or other payment to any Person, private or
public, regardless of form, whether in money, property or services (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, or (iii) to obtain special concessions or for special
concessions already obtained, for or in respect of any Acquired Company or any
Affiliate of an Acquired Company, or (b) established or maintained any fund or
asset that has not been recorded in the books and records of the Acquired
Companies.
3.25 RELATIONSHIPS WITH RELATED PERSONS
No Seller or any Related Person of Sellers or of any Acquired Company
has, or since June 30, 1998 has had, any interest in any property (whether real,
personal or mixed and whether tangible or intangible), used in or pertaining to
the Acquired Companies' businesses. No Seller or any Related Person of Sellers
or of any Acquired Company is, or since June 30, 1998 has owned (of record or as
a beneficial owner) an equity interest or any other financial or profit interest
in, a Person that has (i) had business dealings or a material financial interest
in any transaction with any Acquired Company other than business dealings or
transactions conducted in the Ordinary Course of Business with the Acquired
Companies at substantially prevailing market prices and on substantially
prevailing market terms, or (ii) engaged in competition with any Acquired
Company with respect to any line of the products or services of such Acquired
Company (a "COMPETING BUSINESS") in any market presently served by such Acquired
Company except for less than five percent of the outstanding capital stock of
any Competing Business that is publicly traded on any recognized exchange or in
the over-the-counter market.
3.26 ABSENCE OF FUNDED DEBT
Prior to the Closing Date, Sellers shall cause the Acquired Companies
to satisfy any and all of their payment obligations with respect to Funded Debt
and with respect to any other indebtedness, liability or obligation owed by the
Acquired Companies to Sellers or any of their respective Affiliates, such that,
at and as of the Closing Date, no Acquired Company shall have any payment
obligation with respect to Funded Debt or with respect to such indebtedness owed
to Sellers or their respective Affiliates. Sellers shall jointly and severally
indemnify and hold harmless the Acquired Companies and Buyer from and against
any payment or indemnification obligation of Sellers, the Acquired Companies or
their respective Affiliates under the Previous Acquisition Contracts. Sellers
shall use their commercially reasonable efforts to assign to the
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Acquired Companies, or otherwise provide to the Acquired Companies the benefits
of, the covenants made by the parties (other than Sellers and the Acquired
Companies) in or pursuant to the Previous Acquisition Contracts (other than the
Purchase Agreement, dated as of August 18, 1998, by and between Xxx Xxxxxxxx and
Group).
3.27 CUSTOMERS & SUPPLIERS
SCHEDULE 3.27 to this Agreement sets forth a list, true and complete,
of the 10 largest customers and suppliers of each of the Acquired Companies for
the current fiscal year and the most recently completed fiscal year. No customer
or supplier listed on SCHEDULE 3.27 to this Agreement has notified any of the
Acquired Companies in writing that such customer or supplier intends to
substantially decrease the amount of business it conducts with any of the
Acquired Companies. Except as otherwise set forth on SCHEDULE 3.27 to this
Agreement, since the date of the Balance Sheet, there has not been any material
dispute or controversy with any customer or supplier listed on SCHEDULE 3.27 to
this Agreement, nor, to the Knowledge of Sellers, is there any event or
circumstance that could form the basis for any such material dispute or
controversy.
3.28 BANK ACCOUNTS
SCHEDULE 3.28 to this Agreement sets forth a true, correct and complete
list of each bank, savings and loan, or other financial institution in which any
of the Acquired Companies has an account, including cash contribution accounts
and safe deposit boxes.
3.29 BROKERS OR FINDERS
Except for fees due to Xxxxxxx Xxxxx & Co. in connection with the sale
of Shares contemplated by this Agreement, Sellers and their agents have incurred
no obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement and will indemnify and hold Buyer harmless from any such payment
alleged to be due by or through Sellers as a result of the action of Sellers or
its officers or agents.
3.30 ACCURACY OF DOCUMENTS AND INFORMATION FURNISHED
No statement by any Seller or Acquired Company contained in this
Agreement, in any Schedule hereto, or any certificate or other instrument or
document furnished or to be furnished by Sellers to Buyer pursuant hereto,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state any material fact that is required to be stated herein or
therein or that is necessary to make the statements contained herein or therein
in light of the circumstances under which they are made, not misleading;
provided, however, that with respect to any projections or forecasts concerning
the business and future financial condition and results of operations of the
Acquired Companies furnished to Buyer, Sellers represent and warrant only that
such projections or forecasts were prepared in good faith and were based upon
assumptions that Sellers believe to be reasonable.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Parent and Buyer Sub, jointly and severally, represent and warrant to
Sellers as follows:
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4.1 ORGANIZATION AND GOOD STANDING
Parent and Buyer Sub are corporations duly organized, validly existing
and in good standing under the laws of the their respective jurisdictions of
incorporation.
4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid and binding obligation
of Parent and Buyer Sub, enforceable against Parent and Buyer Sub in accordance
with its terms. Parent and Buyer Sub have the absolute and unrestricted right,
power and authority to execute and deliver this Agreement and to perform their
obligations under this Agreement. This Agreement and the Contemplated
Transactions have been approved by Parent's and Buyer Sub's respective Boards of
Directors and, if required, their shareholders.
(b) Except as set forth on SCHEDULE 4.2(b) to this Agreement, neither
the execution and delivery of this Agreement by Parent and Buyer Sub nor the
consummation or performance of any of the Contemplated Transactions by Parent
and Buyer Sub will give any Person the right to prevent, delay or otherwise
interfere with any of the Contemplated Transactions.
(c) Except as set forth on SCHEDULE 4.2(c) to this Agreement, neither
Parent nor Buyer Sub is or will be required to obtain any Consent from any
Person in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions.
4.3 INVESTMENT INTENT
Buyer Sub is acquiring the Shares for its own account and not with a
view to their distribution within the meaning of Section 2(11) of the Securities
Act.
4.4 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced against Parent
or Buyer Sub and that challenges, or may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of the Contemplated
Transactions. To the Knowledge of Parent and Buyer Sub, no such Proceeding has
been Threatened.
4.5 BROKERS OR FINDERS
Parent, Buyer Sub and their respective officers and agents have
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement and will indemnify and hold Sellers harmless from any such
payment alleged to be due by or through Parent or Buyer Sub as a result of the
action of Parent, Buyer Sub or their respective officers or agents.
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4.6 FUNDS FOR THE PURCHASE
Parent and Buyer Sub have, and as of the Closing will have, sufficient
unencumbered funds to pay in cash the Purchase Price and all of their respective
fees and expenses relating to this Agreement and the Contemplated Transactions.
5. COVENANTS OF SELLERS PRIOR TO CLOSING DATE
5.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date, upon Buyer's
reasonable request made to Group, and at Buyer's sole expense, Group will, and
will cause each Acquired Company and their respective Representatives to, (a)
afford Buyer and its Representatives and prospective lenders and their
Representatives (collectively, "BUYER'S ADVISORS") full and free access to each
Acquired Company's personnel, properties, contracts, books and records and other
documents and data during normal business hours, (b) furnish Buyer and Buyer's
Advisors with, or make available to Buyer and Buyer's Advisors, copies of all
such contracts, books and records and other existing documents and data as Buyer
may reasonably request, and (c) furnish Buyer and Buyer's Advisors with, or make
available to Buyer and Buyer's Advisors, such additional financial, operating
and other data and information as Buyer may reasonably request; provided,
however, that in responding to any request from Buyer under this Section 5.1,
none of Sellers, the Acquired Companies or their respective Representatives
shall be obligated to disrupt or materially alter in any way any of their
respective daily operations, affairs or business activities.
5.2 OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES
(a) Between the date of this Agreement and the Closing Date, Sellers
will, and will cause each Acquired Company to:
(i) conduct the business of such Acquired Company only in the
Ordinary Course of Business;
(ii) use their Best Efforts to preserve intact the current
business organization of such Acquired Company, keep available the
services of the current officers, employees and agents of such Acquired
Company, and maintain the relations and good will with suppliers,
customers, landlords, creditors, employees, agents and others having
business relationships with such Acquired Company; and
(iii) provide monthly consolidated balance sheets, statements
of income and forecasts for the Acquired Companies as soon as
practicable when they become available, and, upon the reasonable
request of Buyer, periodically report to Buyer concerning the status of
the business, operations and finances of the Acquired Companies.
(b) For the period beginning on the Closing Date and ending on the 15th
day after the Closing Date, Sellers shall provide Buyer daily reports of cash
received by Sellers or any of their Affiliates, which was payable to the
Acquired Companies, and Sellers shall promptly transfer any amount so received
to the Acquired Companies.
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5.3 NEGATIVE COVENANT
Except as otherwise expressly permitted by this Agreement, between the
date of this Agreement and the Closing Date, Sellers will not, and will cause
each Acquired Company not to, without the prior consent of Buyer, take any
affirmative action, or fail to take any reasonable action within their or its
control, as a result of which any of the changes or events listed in Section
3.18 is likely to occur.
5.4 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement, Sellers
will, and will cause each Acquired Company to, make all filings required by
Legal Requirements to be made by them in order to consummate the Contemplated
Transactions. Between the date of this Agreement and the Closing Date, Sellers
will, and will cause each Acquired Company to, (a) cooperate with Buyer with
respect to all filings that Buyer elects to make or is required by Legal
Requirements to make in connection with the Contemplated Transactions and (b)
cooperate with Buyer in obtaining all Consents identified on SCHEDULE 4.2(c) to
this Agreement.
5.5 NOTIFICATION
Between the date of this Agreement and the Closing Date, each Seller
will promptly notify Buyer in writing if such Seller or any Acquired Company
becomes aware of any fact or condition that causes or constitutes a material
Breach of any of Sellers' representations and warranties as of the date of this
Agreement, or if such Seller or any Acquired Company becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
material Breach of any such representation or warranty had such representation
or warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in one or more
Schedules to this Agreement, Sellers will promptly deliver to Buyer a supplement
to the applicable Schedule or Schedules specifying such change. Such delivery
shall not affect any rights of termination Buyer may have under Section 9.1 of
this Agreement. During the same period, each Seller will promptly notify Buyer
of the occurrence of any Breach of any covenant of Sellers in this Section 5 or
of the occurrence of any event that may make the satisfaction of the conditions
in Section 7 impossible or unlikely.
5.6 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS
Except as expressly provided in this Agreement, Sellers will cause all
indebtedness owed to an Acquired Company by any Seller or any Related Person of
either Seller to be paid in full prior to or at Closing.
5.7 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Section 9, Sellers will not, and will cause each Acquired Company and each of
their Representatives not to, directly or indirectly solicit, initiate or
encourage any inquiries or proposals from, discuss or negotiate with, provide
any non-public information to, or consider the merits of any unsolicited
inquiries or proposals from, any Person (other than Buyer) relating to any
transaction involving the sale of
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the business or assets (other than in the Ordinary Course of Business) of any
Acquired Company, or any of the capital stock of any Acquired Company, or any
merger, consolidation, business combination or similar transaction involving any
Acquired Company.
5.8 ACCOUNTS RECEIVABLE
Between the date of this Agreement and the Closing Date, Sellers will,
and will cause the Acquired Companies to, continue to establish and maintain
reserves for Accounts Receivable of the Acquired Companies in accordance with
past practice and will continue to collect accounts receivable of the Acquired
Companies in the Ordinary Course of Business consistent with past practice;
provided, however, that by the Closing Date, Sellers will, or will cause the
Acquired Companies to, increase such reserves of the Acquired Companies by
$340,000.
5.9 REAL ESTATE MATTERS
Between the date of this Agreement and the Closing Date, Sellers shall:
(a) use their commercially reasonable efforts to obtain Estoppel Certificates
substantially in the form attached hereto as EXHIBIT D from each of the lessors
under the Real Property Leases, but obtaining any such Estoppel Certificates
shall not in any way be a condition to the Closing; (b) shall cooperate, and
cause the Acquired Companies to cooperate, with Buyer to obtain a new survey of
the Owned Real Property, a preliminary title report and title insurance policies
for such Owned Real Property; and (c) use commercially reasonable efforts to
assist, and cause the Acquired Companies to assist, Buyer in the removal from
such title report and title policies any title defect noted thereon that are not
acceptable to Buyer. All costs of the survey and title insurance referred to
above shall be borne solely by Buyer.
5.10 BEST EFFORTS
Between the date of this Agreement and the Closing Date, Sellers will
use their Best Efforts to cause the conditions in Sections 7 and 8 to be
satisfied.
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE
6.1 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement, Buyer
will, and will cause each of its Related Persons to, make all filings required
by Legal Requirements to be made by them to consummate the Contemplated
Transactions. Between the date of this Agreement and the Closing Date, Buyer
will, and will cause each Related Person to, (a) cooperate with Sellers with
respect to all filings that Sellers are required by Legal Requirements to make
in connection with the Contemplated Transactions, and (b) cooperate with Sellers
in obtaining all Consents identified on SCHEDULE 3.2(c) to this Agreement.
6.2 BEST EFFORTS
Between the date of this Agreement and the Closing Date, Buyer will use
its Best Efforts to cause the conditions in Sections 7 and 8 to be satisfied.
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7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer Sub's obligation to purchase the Shares and Buyer Sub's and Parent's
obligation to take the other actions required to be taken by them at the Closing
is subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Buyer, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
All of Sellers' representations and warranties in this Agreement must have
been accurate in all material respects as of the date of this Agreement, and
must be accurate in all material respects as of the Closing Date as if made on
the Closing Date.
7.2 SELLERS' PERFORMANCE
(a) All of the covenants and obligations that Sellers are required to
perform or to comply with pursuant to this Agreement at or prior to the Closing
must have been duly performed and complied with in all material respects.
(b) Each document required to be delivered pursuant to Section 2.4(a)
(other than the Rochester Hills License) must have been delivered.
7.3 CONSENTS
Each of the Consents identified on SCHEDULE 3.2(c) (excluding any Consent
required in connection with the Rochester Hills License) and SCHEDULE 4.2(c) of
this Agreement must have been obtained and must be in full force and effect.
7.4 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that prohibits the purchase of the Shares by Buyer Sub from MPW
Management Services.
7.5 OTHER CONDITIONS
(a) The letter agreement, dated as of November 22, 1999, by and between
Camfil, Inc. and the Company must be terminated and of no further force and
effect.
(b) The Deed of Trust by Energy Service, Inc., trustor, to Xxxxx X. Xxxxx,
trustee, for the benefit of First American National Bank, beneficiary (which
creates a mortgage and security interest in the Owned Real Property), shall have
been released in writing and terminated by the trustee and the beneficiary in a
form suitable for recording.
(c) Xxxxxxxxxxx Non Wovens/Viledon shall have agreed to appoint an
Affiliate of Parent (including the Acquired Companies) as a distributor of
Xxxxxxxxxxx air filtration products in North America on terms and conditions
reasonably satisfactory to Parent.
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(d) Bank One, NA (and the other banks party to the Credit Agreement, dated
as of October 20, 1999, as amended) shall have released in writing (by the
execution and delivery to the Acquired Companies of appropriate Uniform
Commercial Code termination statements) its security interests in the assets of
the Acquired Companies.
8. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
MPW Management Services' obligation to sell the Shares and Sellers'
obligation to take the other actions required to be taken by them at the Closing
is subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Sellers, in whole or in
part):
8.1 ACCURACY OF REPRESENTATIONS
All of Buyer's representations and warranties in this Agreement must have
been accurate in all material respects as of the date of this Agreement and must
be accurate in all material respects as of the Closing Date as if made on the
Closing Date.
8.2 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to perform
or to comply with pursuant to this Agreement at or prior to the Closing must
have been performed and complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 2.4(b) and must have made the cash
payments required to be made by Buyer pursuant to Section 2.4(b)(i).
8.3 CONSENTS
Each of the Consents identified on SCHEDULE 3.2(c) and SCHEDULE 4.2(c) to
this Agreement must have been obtained and must be in full force and effect.
8.4 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that prohibits the sale of the Shares by MPW Management Services to
Buyer Sub.
9. TERMINATION
9.1 TERMINATION EVENTS
This Agreement may, by written notice given prior to or at the Closing, be
terminated:
(a) by either Buyer or Sellers if a material Breach of any agreement,
representation or warranty contained in this Agreement has been committed by the
other party and such Breach has not been waived or cured after such other party
has received written notice of and reasonable opportunity to cure such breach,
provided that any Breach of a representation and warranty shall
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not be deemed to be cured for the purpose of this Section 9.1 by the delivery of
a revised Schedule disclosing the matter constituting such Breach;
(b) (i) by Buyer if any of the conditions in Section 7 have not been
reasonably satisfied as of the Closing Date or if satisfaction of any such
condition is or becomes impossible (other than through the failure of Buyer to
comply with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Sellers, if any of the
conditions in Section 8 have not been reasonably satisfied as of the Closing
Date or if satisfaction of any such condition is or becomes impossible (other
than through the failure of Sellers to comply with their obligations under this
Agreement) and Sellers have not waived such condition on or before the Closing
Date;
(c) by mutual consent of Buyer and Sellers; or
(d) by either Buyer or Sellers if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) on or before 180 days after the
Closing Date fixed in Section 2.3, or such later date as the parties may agree
upon.
9.2 EFFECT OF TERMINATION
Each party's right of termination under Section 9.1 is in addition to any
other rights it may have under this Agreement or otherwise, and the exercise of
a right of termination will not be an election of remedies. If this Agreement is
terminated pursuant to Section 9.1, all further obligations of the parties under
this Agreement will terminate, except that the obligations in Sections 12.1 and
12.3 will survive; provided, however, that if this Agreement is terminated by a
party because of the Breach of the Agreement by the other party or because one
or more of the conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's failure to comply
with its obligations under this Agreement, the terminating party's right to
pursue all legal remedies will survive such termination unimpaired.
10. INDEMNIFICATION; REMEDIES
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties made in this Agreement, the certificates
delivered pursuant to Section 2.4(a)(ii) and Section 2.4(b)(ii), and any other
certificate or document delivered pursuant to this Agreement will survive the
Closing for the respective periods set forth in Section 10.4. All covenants and
obligations set forth in this Agreement or any other certificate or document
delivered pursuant to this Agreement will survive the Closing and will expire
when fully performed and discharged; provided, however, that any covenant or
obligation that is required to be performed or satisfied on or before the
Closing Date will be completely waived, discharged or performed by the closing
of the Contemplated Transactions.
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS
Sellers jointly and severally will indemnify Buyer and the Acquired
Companies (collectively, the "INDEMNIFIED PERSONS") against, and will pay to the
Indemnified Persons the
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amount of, any loss, liability, claim, damage (not including incidental and
consequential damages, except in the case where Sellers fail to close the
Contemplated Transactions in breach of the terms and conditions of this
Agreement) or expense (including costs of defense and reasonable attorneys'
fees) (collectively, "DAMAGES"), arising, directly or indirectly, from or in
connection with:
(a) any Breach of any representation or warranty made by Sellers in this
Agreement as if such representation or warranty were made on and as of the
Closing Date; provided, however, that if the Closing occurs, Sellers will have
no obligation under this Section 10.2 with respect to any such Breach that is
disclosed in a supplement to a Schedule to this Agreement or is expressly
identified in the certificate delivered pursuant to Section 2.4(a)(ii);
(b) any Breach by any Seller of any covenant or obligation of such Seller
in this Agreement;
(c) any costs, expenses or liabilities (including Taxes) of Sellers or any
of their Affiliates (other than the Acquired Companies) arising out of or
relating to the General Industrial Cleaning Business; or
(d) any claim by any Person for brokerage or finder's fees or commissions
or similar payments based upon any agreement or understanding alleged to have
been made by any such Person with either Seller or any Acquired Company (or any
Person acting on their behalf) in connection with any of the Contemplated
Transactions.
The remedies provided in this Section 10.2 will be exclusive of and limit any
other remedies that may be available to Buyer or the other Indemnified Persons
other than as provided in Section 9.2 and for the remedy of specific
performance.
10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER
Buyer will indemnify and hold harmless Sellers, and will pay to Sellers the
amount of any loss, liability, claim, damage (not including incidental and
consequential damages, except in the case where Buyer fails to close the
Contemplated Transactions in breach of the terms and conditions of this
Agreement) or expense (including costs of defense and reasonable attorneys'
fees) arising, directly or indirectly, from or in connection with (a) any Breach
of any representation or warranty made by Buyer in this Agreement or in any
certificate delivered by Buyer pursuant to this Agreement, (b) any Breach by
Buyer of any covenant or obligation of Buyer in this Agreement, or (c) any claim
by any Person for brokerage or finder's fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by such
Person with Buyer (or any Person acting on its behalf) in connection with any of
the Contemplated Transactions.
10.4 TIME LIMITATIONS
If the Closing occurs, Sellers will have no liability (for indemnification
or otherwise) pursuant to Section 10.2 with respect to any representation or
warranty, or covenant or obligation to be performed and complied with on or
prior to the Closing Date, other than those in Sections 3.1, 3.3, 3.10, 3.13,
3.21, 3.26, 10.6 and 11.1, unless on or before the second anniversary of the
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Closing Date, Buyer notifies Sellers of a claim specifying the factual basis of
that claim in reasonable detail to the extent then known by Buyer; provided,
that a claim with respect to Sections 3.1, 3.3, 3.10 and 3.26 may be made at any
time; a claim with respect to Sections 3.21 or 10.6 may be made within the time
specified in Section 10.6; and a claim with respect to Sections 3.13 or 11.1 may
be made at any time before the expiration of the applicable statute of
limitations. If the Closing occurs, Buyer will have no liability (for
indemnification or otherwise) pursuant to Section 10.3 with respect to any
representation or warranty, or covenant or obligation to be performed and
complied with on or prior to the Closing Date, unless on or before the second
anniversary of the Closing Date, Sellers notify Buyer of a claim specifying the
factual basis of that claim in reasonable detail to the extent then known by
Sellers.
10.5 LIMITATIONS ON AMOUNT--SELLERS
Sellers will have no liability (for indemnification or otherwise) with
respect to the matters described in clause (a) of Section 10.2 (other than
Sections 3.1, 3.3, 3.10, 3.13 and 3.26 as to which this Section 10.5 shall not
apply), the matters described in Section 10.6, or, to the extent relating to any
failure to perform or comply prior to the Closing Date, clause (b) of Section
10.2 until the total of all Damages with respect to such matters exceeds
$375,000, and then only for the amount by which such Damages exceed $375,000,
but in no event will such liability exceed 50% of the Purchase Price.
10.6 ENVIRONMENTAL INDEMNIFICATION
(a) Notwithstanding any other provision of this Agreement to the contrary,
Sellers jointly and severally agree to retain responsibility for, defend and
satisfy, and to indemnify and hold harmless the Indemnified Persons against any
Damages arising out of, related to, or in connection with any of the following:
(i) any violation or alleged violation of any Environmental Law
regarding any Facility or any past or present operations of the Acquired
Companies or their respective predecessors in interest at or prior to the
Closing Date;
(ii) any transport, treatment, recycling, storage, disposal or
arrangement therefor of any Hazardous Materials generated by the Acquired
Companies or their respective predecessors in interest at or prior to the
Closing Date at, to or from any facility owned or operated by another
Person, including but not limited to the Release or threatened Release of
any Hazardous Material from such facility;
(iii) any Release or threatened Release of any Hazardous Material at,
to or from any Facility or its predecessors in interest at or prior to the
Closing Date;
(iv) any Cleanup or corrective action (as the latter term is used in
Sections 3004(u) and 3004(v) of RCRA) arising out of, related to, or in
connection with any Facility or any past or present operations of the
Acquired Companies or their respective predecessors in interest and
resulting from any act or event occurring at or prior to the Closing Date;
and
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(v) any exposure, at or prior to the Closing Date, to any products,
raw materials or Hazardous Materials manufactured, generated, handled,
processed, stored or used at any Facility or as part of, or resulting from,
any past or present operations of any Acquired Company that cause or
contributed to any disease, injury or illness to any Person, regardless of
the time between exposure and the manifestation of such disease, injury or
illness or whether the operations of the Acquired Companies were in
compliance with Environmental Laws at the time of such exposure; provided,
however, that if any such claim is made by any present or former employee,
the Indemnified Persons hereby agree to timely assert any defense or
limitation to any such claim under applicable workers' compensation
statutes, laws, rules or regulations.
(b) Without limiting the generality of the foregoing and subject to the
limitations in Section 10.5, the indemnification provided for in this Section
10.6 shall terminate five years after the Closing Date (and no claims shall be
made by Buyer under this Section 10.6 thereafter).
(c) Buyer's receipt of any information, including, without limitation, any
disclosure made on SCHEDULE 3.21 to this Agreement, shall not relieve Sellers of
the obligations under this Section 10.6. To the extent not inconsistent with
terms of this Section 10.6, Sellers reserve any rights or causes of action that
they may have at law or in equity with respect to matters covered by this
Section 10.6.
10.7 INDEMNIFICATION - SPECIAL MATTERS
Notwithstanding any other provision of this Agreement to the contrary,
Sellers shall jointly and severally indemnify and hold harmless the Indemnified
Persons against any Damages incurred by the Acquired Companies (a) in order to
obtain all necessary licenses to use Software now used by any of the Acquired
Companies; (b) as a result of the failure by such Acquired Companies to have
such Software licenses on the date of this Agreement; (c) pursuant to the
memorandum dated October 18, 2000 from Xxx Xxxx to Xxxx Xxxxxx pertaining to
certain payments to Xx. Xxxxxx upon the consummation of a sale of the Acquired
Companies; (d) related to the matters disclosed on SCHEDULE 3.16(a), SCHEDULE
3.17(a) and SCHEDULE 3.24 to this Agreement; and (e) related to the failure, or
alleged failure, of the Acquired Companies to make any commission or bonus
payments due, or alleged to be due, to any employee, distributor or agent of the
Acquired Companies in respect of sales or periods prior to the Closing Date.
10.8 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS
(a) Promptly after receipt by an indemnified party under Sections 10.2,
10.3, 10.6, 10.7 or 11.1 of notice of the commencement of any Proceeding against
it, such indemnified party will, if a claim is to be made against an
indemnifying party under such Section, give notice to the indemnifying party of
the commencement of such claim, but the failure to notify the indemnifying party
will not relieve the indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnifying party's
failure to give such notice.
(b) If any Proceeding referred to in Section 10.8(a) is brought against an
indemnified party and it gives notice to the indemnifying party of the
commencement of such Proceeding, the
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indemnifying party will, unless the claim involves Taxes, be entitled to
participate in such Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the indemnified party
determines in good faith that joint representation would be inappropriate, or
(ii) the indemnifying party fails to provide reasonable assurance to the
indemnified party of its financial capacity to defend such Proceeding and
provide indemnification with respect to such Proceeding), to assume the defense
of such Proceeding with counsel satisfactory to the indemnified party and, after
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such Proceeding, the indemnifying party will not, as long
as it diligently conducts such defense, be liable to the indemnified party under
this Section 10 for any fees of other counsel or any other expenses with respect
to the defense of such Proceeding, in each case subsequently incurred by the
indemnified party in connection with the defense of such Proceeding, other than
reasonable costs of investigation. If the indemnifying party assumes the defense
of a Proceeding, (i) it will be conclusively established for purposes of this
Agreement that the claims made in that Proceeding are within the scope of and
subject to indemnification; (ii) no compromise or settlement of such claims may
be effected by the indemnifying party without the indemnified party's consent
unless (A) there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person and no effect on any
other claims that may be made against the indemnified party, and (B) the sole
relief provided is monetary damages that are paid in full by the indemnifying
party; and (iii) the indemnified party will have no liability with respect to
any compromise or settlement of such claims effected without its consent. If
notice is given to an indemnifying party of the commencement of any Proceeding
and the indemnifying party does not, within thirty (30) days after the
indemnified party's notice is given, give notice to the indemnified party of its
election to assume the defense of such Proceeding, the indemnifying party will
be bound by any determination made in such Proceeding or any compromise or
settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party determines in
good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its Affiliates other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
indemnified party may, by written notice to the indemnifying party, assume the
exclusive right to defend, compromise or settle such Proceeding, but the
indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
10.9 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS
A claim for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom indemnification is sought
delivered in accordance with this Agreement and specifying the factual basis of
that claim in reasonable detail to the extent then known by such party.
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10.10 CERTAIN LIMITATIONS ON REPRESENTATIONS, WARRANTIES AND THE RIGHTS OF
THE PARTIES
(a) Each of the parties is sophisticated in business transactions and was
advised by experienced counsel and, to the extent it deemed necessary, other
advisors in connection with this Agreement, the events giving rise hereto and
the Contemplated Transactions (collectively, the "DEAL"). Accordingly, each of
the parties hereby acknowledges and agrees (on behalf of itself and its
Affiliates) that:
(i) No party has relied or will rely upon any written or oral
information previously furnished to or discovered by it or its
representatives (including without limitation any investment memorandum,
data room information or oral or written information previously furnished
by or on behalf of Sellers or any Acquired Company in connection with the
Deal, including, without limitation, information furnished by Sellers, the
Company, any Affiliate of any of the foregoing or any of their respective
Representatives), other than this Agreement (including the Schedules
hereto) and the closing documents executed and delivered by Sellers at the
Closing;
(ii) There are no representations or warranties by or on behalf of any
party hereto, Sellers, the Company, any of their respective Affiliates or
any Seller Representatives in respect of the Deal other than those
expressly set forth in this Agreement; and
(iii) Following the Closing, the parties' respective rights,
obligations and remedies with respect to the Deal will be solely as set
forth in this Section 10.
(b) The representations and warranties made in this Agreement by Sellers
will be deemed for all purposes to be qualified by the disclosures made in the
Schedules to this Agreement and any supplement thereto, regardless of whether in
the case of any particular representation or warranty such representation or
warranty refers to the specific Schedule in which the disclosure is made or to
any other Schedule hereof.
(c) As between any Seller and any of their Representatives, on the one
hand, and Buyer and any Affiliate thereof (collectively, the "BUYER COMPANIES"),
on the other hand, following the Closing, the rights and obligations set forth
in this Section 10 will be the sole and exclusive rights, obligations and
remedies with respect to the Deal. Without limiting the generality or effect of
the foregoing, as a material inducement to the other parties hereto entering
into this Agreement, and in light of, among other factors, the acknowledgments
contained in Sections 10.10(a) and 10.10(b) hereof, each of the parties to this
Agreement hereby (i) waives any claim or cause of action that it otherwise might
assert, including, without limitation, under the common law (including, without
limitation, common law fraud, constructive fraud, negligent representation and
similar theories) or federal or state securities (including, without limitation,
Rule 10b-5 under the Exchange Act), trade regulation, environmental or other
Laws, by reason of the Deal, except for claims or causes of action brought under
and subject to the terms, conditions and limitations of this Section 10 and (ii)
agrees that, regardless of the foregoing provisions, no party will have any
liability or obligation in respect of any claim or cause of
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action that is or may be brought in respect of the Deal except in respect of an
indemnifiable Damage, and then only to the extent expressly provided in this
Section 10.
(d) Without limiting the generality or effect of any other provision
hereof, Buyer hereby expressly acknowledges and agrees on behalf of each of the
Buyer Companies that, regardless of the facts and circumstances, (i) no
Representative of any Seller had, has or will have any duty to any Buyer Company
in connection with the Deal and (ii) no Buyer Company has any right to recovery
against any Representative of any Seller in respect of the Deal on any theory,
whether for alleged breach of contract, negligent misrepresentation, actual or
constructive fraud, federal or state securities or other laws or otherwise.
11. ADDITIONAL AGREEMENTS
11.1 TAX MATTERS
(a) LIABILITY FOR TAXES.
(i) Sellers shall be jointly and severally liable for and pay, and
pursuant to Section 11.1(b) agree to indemnify and hold harmless Buyer, the
Acquired Companies and their respective Affiliates (the "BUYER GROUP
MEMBERS") against any and all Taxes (A) imposed on any of the Acquired
Companies or Buyer pursuant to Treas. Reg. Section 1.1502-6 or similar
provision of state or local law, or (B) imposed on any of the Acquired
Companies, or for which any of them may otherwise be liable, for any
taxable year or period that ends on or before the Closing Date and, with
respect to any Straddle Period (as defined below), the portion of such
Straddle Period ending on and including the Closing Date; provided,
however, that Sellers shall not be liable for or pay, and do not agree to
indemnify and hold harmless each Buyer Group Member from and against, (X)
any Taxes that result from Buyer, any Affiliate of Buyer or any of the
Acquired Companies engaging in any activity or transaction that would cause
the transactions contemplated by this Agreement to be treated as a purchase
or sale of assets of the Acquired Companies for federal, state or local Tax
purposes, (Y) any Taxes imposed on any of the Acquired Companies, or for
which any of them may otherwise be liable, as a result of transactions
occurring on the Closing Date that are properly allocable (based on, among
other relevant factors, factors set forth in Treas. Reg. Section
1.1502-76(b)(1)(ii)(B)) to the portion of the Closing Date after the
Closing, and (Z) any Taxes required by law to have been withheld or
collected for payment on or prior to the Closing Date, are payable after
the Closing Date, have been duly withheld and collected, and which have
been accrued, reserved against or otherwise entered on the books and
records of any of the Acquired Companies as of the Closing Date (Taxes
described in this proviso, are hereinafter referred to as "EXCLUDED
TAXES"). Buyer and Sellers agree that, with respect to any transaction
described in clause (Y) of the preceding sentence, the Acquired Companies
and all persons related to any of the Acquired Companies under Section
267(b) of the IRC immediately after the Closing shall treat the transaction
for all federal income Tax purposes (in accordance with Treas. Reg. Section
1.1502-76(b)(1)(ii)(B)), and (to the extent permitted) for other income Tax
purposes, as occurring at the beginning of the day following the Closing
Date. Sellers shall be entitled to any refund of (or credit for) Taxes
allocable to any taxable year or period that ends on or before the Closing
Date and,
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with respect to any taxable period that begins prior to the Closing Date
and ends after the Closing Date (each such period, a "STRADDLE PERIOD"),
the portion of such Straddle Period ending on and including the Closing
Date.
(ii) Buyer shall be liable for and pay, and pursuant to Section 10.3
agrees to indemnify and hold harmless each Seller from and against, (A) any
and all Taxes imposed on any of the Acquired Companies, or for which any of
them may otherwise be liable, for any taxable year or period that begins
after the Closing Date and, with respect to any Straddle Period, the
portion of such Straddle Period beginning after the Closing Date and (B)
Excluded Taxes. Except as otherwise provided herein, Buyer shall be
entitled to any refund of (or credit for) Taxes allocable to any taxable
year or period that begins after the Closing Date and, with respect to any
Straddle Period, the portion of such Straddle Period beginning after the
Closing Date.
(iii) For purposes of Sections 11.1(a)(i) and 11.1(a)(ii), whenever it
is necessary to determine the liability for Taxes of any of the Acquired
Companies for a Straddle Period, the determination of the Taxes of such
Acquired Company for the portion of the Straddle Period ending on and
including, and the portion of the Straddle Period beginning after, the
Closing Date shall be determined by assuming that the Straddle Period
consisted of two taxable years or periods, one which ended at the close of
the Closing Date and the other which began at the beginning of the day
following the Closing Date, and items of income, gain, deduction, loss or
credit of such Acquired Company for the Straddle Period shall be allocated
between such two taxable years or periods on a "closing of the books basis"
by assuming that the books of such Acquired Company were closed at the
close of the Closing Date, provided, however, that (A) transactions
occurring on the Closing Date that are properly allocable (based on, among
other relevant factors, factors set forth in Treas. Reg. Section
1.1502-76(b)(1)(ii)(B)) to the portion of the Closing Date after the
Closing shall be allocated to the taxable year or period that is deemed to
begin at the beginning of the day following the Closing Date and (B)
exemptions, allowances or deductions that are calculated on an annual
basis, such as the deduction for depreciation, shall be apportioned between
such two taxable years or periods on a daily basis. Notwithstanding the
foregoing provisions of this Section 11.1(a)(iii), if the transactions
contemplated by this Agreement result in the reassessment of the value of
any property owned by an Acquired Company for property Tax purposes, or the
imposition of any property Taxes at a rate which is different than the rate
that would have been imposed if such transactions had not occurred, then
(Y) the portion of such property Taxes for the portion of the Straddle
Period ending on and including the Closing Date shall be determined on a
daily basis, using the assessed value and Tax rate that would have applied
had such transactions not occurred, and (Z) the portion of such property
Taxes for the portion of such Straddle Period beginning after the Closing
Date shall be the total property Taxes for the Straddle Period minus the
amount described in clause (Y) of this sentence.
(iv) If, as a result of any action, suit, investigation, audit, claim,
assessment or amended Tax Return, there is any change after the Closing
Date in an item of income, gain, loss, deduction, credit or amount of Tax
that results in an increase in a Tax liability for which Sellers would
otherwise be liable pursuant to Section 11.1(a)(i), and such
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change results in a decrease in the Tax liability of an Acquired Company,
Buyer or any Affiliate or successor of any thereof for any taxable year or
period beginning after the Closing Date or for the portion of any Straddle
Period beginning after the Closing Date, Sellers shall not be liable
pursuant to Section 11.1(a)(i) with respect to such increase to the extent
of such decrease (and, to the extent such increase in Tax liability is paid
to a taxing authority by Sellers or any Affiliate thereof, Buyer shall pay
Sellers an amount equal to such decrease).
(v) Notwithstanding anything herein to the contrary, Buyer shall pay,
and agree to indemnify and hold Sellers and the Acquired Companies harmless
from and against any and all real property transfer or gains Taxes, sales
Taxes, use Taxes, stamp Taxes, stock transfer Taxes, or other similar Taxes
imposed on the transactions contemplated by this Agreement.
(b) TAX RETURNS.
(i) Sellers shall timely file or cause to be timely filed when due
(taking into account all extensions property obtained) all Tax Returns that
are (A) required to be filed by or with respect to the Acquired Companies
for taxable years or periods ending on or before the Closing Date (in the
case of income, franchise and similar Tax Returns required to be filed by
or with respect to the Acquired Companies as well as Tax Returns required
to be filed by or with respect to the Acquired Companies on a combined,
consolidated or unitary basis with Sellers or any Affiliate thereof) or (B)
due on or before the Closing Date (with respect to other Tax Returns), and
in each case Sellers shall remit or cause to be remitted any Taxes due in
respect of such Tax Returns, and Buyer shall timely file or cause to be
timely filed when due (taking into account all extensions properly
obtained) all other Tax Returns that are required to be filed by or with
respect to the Acquired Companies and Buyer shall remit or cause to be
remitted any Taxes due in respect of such Tax Returns. With respect to Tax
Returns to be filed by Buyer pursuant to the preceding sentence that relate
to taxable years or periods ending on or before the Closing Date or that
relate to any Straddle Period (Y) such Tax Returns shall be filed in a
manner consistent with past practice and no position shall be taken,
election made or method adopted that is inconsistent with positions taken,
elections made or methods used in prior periods in filing such Tax Returns
(including, without limitation, any such position, election or method which
would have the effect of accelerating income to periods for which Sellers
are liable or deferring deductions to periods for which Buyer is liable)
and (Z) such Tax Returns shall be submitted to Sellers not later than 30
days prior to the due date for filing such Tax Returns (or, if such due
date is within 45 days following the Closing Date, as promptly as
practicable following the Closing Date) for review and approval by Sellers,
which approval may not be unreasonably withheld, but may in all cases be
withheld if such Tax Returns were not prepared in accordance with clause
(Y) of this sentence. Sellers or Buyer shall pay the other party for the
Taxes for which Sellers or Buyer, respectively, is liable pursuant to
Section 11.1(a) but which are payable with any Tax Return to be filed by
the other party pursuant to this Section 11.1(b) upon the written request
of the party entitled to payment, setting forth in detail the computation
of the amount owed by Sellers or Buyer, as the case may be, but in no event
earlier than 10 business days prior to the due date for paying such Taxes.
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(ii) None of Buyer or any Affiliate of Buyer shall, or shall cause or
permit any Acquired Company to, amend, refile or otherwise modify (or grant
an extension of any statute of limitation with respect to) any Tax Return
relating in whole or in part to any Acquired Company with respect to any
taxable year or period ending on or before the Closing Date (or with
respect to any Straddle Period) without the prior written consent of
Sellers, which consent may be withheld in the sole discretion of Sellers.
(iii) Buyer shall promptly cause the Acquired Companies to prepare and
provide to Sellers a package of Tax information materials, including,
without limitation, schedules and work papers (the "TAX PACKAGE") required
by Sellers to enable Sellers to prepare and file all Tax Returns required
to be prepared and filed by it pursuant to Section 11.1(b)(i). The Tax
Package shall be completed in accordance with past practice, including past
practice as to providing such information and as to the method of
computation of separate taxable income or other relevant measure of income
of the Acquired Companies. Buyer shall cause the Tax Package to be
delivered to Sellers within 45 days after the Closing Date.
(c) CONTEST PROVISIONS.
(i) Buyer shall promptly notify Sellers in writing upon receipt by
Buyer, any of its Affiliates, or the Acquired Companies of written notice
of any pending or threatened federal, state, local or foreign Tax audits,
examinations or assessments which might affect the Tax liabilities for
which Sellers may be liable pursuant to this Section 11.1.
(ii) Sellers shall have the sole right to represent the interests of
the Acquired Companies in any Tax audit or administrative or court
proceeding relating to taxable periods ending on or before the Closing Date
or otherwise relating to Taxes for which Sellers may be liable pursuant to
this Section 11.1, and to employ counsel of their choice at their expense.
In the case of a Straddle Period, Sellers shall be entitled to participate
at their expense in any Tax audit or administrative or court proceeding
relating (in whole or in part) to Taxes attributable to the portion of such
Straddle Period ending on and including the Closing Date and, with the
written consent of Buyer, and at Sellers' sole expense, may assume the
entire control of such audit or proceeding. None of Buyer, any of its
Affiliates or the Acquired Companies may settle any Tax claim for any Taxes
for which Sellers may be liable pursuant to Section 11.1(a), without the
prior written consent of Sellers, which consent may be withheld in the sole
discretion of Sellers.
(d) ASSISTANCE AND COOPERATION.
After the Closing Date, each of Sellers and Buyer shall (and shall cause
their respective Affiliates to):
(i) assist the other party in preparing any Tax Returns that such
other party is responsible for preparing and filing in accordance with
Section 11.1(b);
(ii) cooperate fully in preparing for any audits of, or disputes with
taxing authorities regarding, any Tax Returns of the Acquired Companies;
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(iii) make available to the other and to any taxing authority as
reasonably requested all information, records, and documents relating to
Taxes of the Acquired Companies;
(iv) provide timely notice to the other in writing of any pending or
Threatened Tax audits or assessments of the Acquired Companies for taxable
periods for which the other may have a liability under this Section 11.1;
(v) furnish the other with copies of all correspondence received from
any taxing authority in connection with any Tax audit or information
request with respect to any such taxable period;
(vi) timely sign and deliver such certificates or forms as may be
necessary or appropriate to establish an exemption from (or otherwise
reduce), or file Tax Returns or other reports with respect to, Taxes
described in Section 11.1(a)(v) (relating to sales, transfer and similar
Taxes); and
(vii) timely provide to the other powers of attorney or similar
authorizations necessary to carry out the purposes of this Section 11.1.
11.2 NON-COMPETITION BY SELLERS
In furtherance of the transactions contemplated by this Agreement and to
more effectively protect the value and good will of the Acquired Companies to be
acquired hereunder, Sellers, jointly and severally, covenant and agree that for
a period ending on the fourth anniversary of the Closing Date, neither Sellers
nor any of their respective Affiliates will, anywhere in North America or
Mexico,
(a) directly or indirectly (whether as principal, agent, dealer,
distributor, independent contractor, partner or otherwise) own, manage, operate,
control, participate in, or otherwise engage in the Filtration
Products/Filtration Services Business; provided, however, that the foregoing
shall not prohibit Sellers and their Affiliates from providing or otherwise
engaging in the Excepted Services under the following circumstances:
(i) Excepted Services shall be provided only to customers of the
General Industrial Cleaning Business and only for and to equipment of such
customers cleaned by Sellers or their Affiliates in the ordinary course of
such General Industrial Cleaning Business;
(ii) Sellers and their Affiliates shall not solicit opportunities to
provide Excepted Services and Excepted Services shall not be provided by
Sellers or their Affiliates except upon the request of a customer of the
General Industrial Cleaning Business; and
(iii) subject to the provisions of Section 11.8 hereof, any filtration
products or equipment utilized in the course of providing the Excepted
Services shall be acquired by Sellers or their Affiliates only from (A) the
customer to which such Excepted Services are provided or (B) the Acquired
Companies.
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(b) induce or attempt to persuade any employee, agent or customer of any of
the Acquired Companies to terminate such employment, agency or business
relationship in order to enter into any such relationship on behalf of any other
business organization in competition with any of the Acquired Companies.
Notwithstanding the foregoing, nothing set forth in this Section 11.2 shall
prohibit Sellers or their Affiliates from owning not in excess of 5% of the
aggregate of any class of capital stock of any corporation if such stock is
publicly traded and listed on any national or regional stock exchange or
reported on the National Association of Securities Dealers Automated Quotations
System. Without limiting the right of Buyer to pursue any and all legal and
equitable remedies available to it for violation of this Section 11.2 by Sellers
or any of their respective Affiliates, it is agreed that other remedies cannot
fully compensate Buyer for such a violation and that Buyer shall be entitled to
injunctive relief to prevent any violation or continuing violation hereof.
11.3 NON-COMPETITION BY BUYER
In furtherance of the transactions contemplated by this Agreement and as a
substantial inducement to Sellers to enter into this Agreement, Parent and Buyer
Sub, jointly and severally, covenant and agree that for a period ending on the
fourth anniversary of the Closing Date, the Buyer Group shall not, anywhere in
North America or Mexico,
(a) directly or indirectly (whether as principal, agent, dealer,
distributor, independent contractor, partner or otherwise) own, manage, operate,
control, participate in, or otherwise engage in the General Industrial Cleaning
Business; provided, however, that the foregoing shall not prohibit or restrict
the Buyer Group from cleaning customers' equipment for or to which any of them
provides filtration products or filtration Change-out services as part of or
incidental to their respective conduct of the Filtration Products/Filtration
Services; or
(b) induce or attempt to persuade any employee, agent or customer of
Sellers or any of their respective Affiliates to terminate such employment,
agency or business relationship in order to enter into any such relationship on
behalf of any other business organization in competition with any of Sellers or
their respective Affiliates.
Notwithstanding the foregoing, nothing set forth in this Section 11.3
shall prohibit Buyer or its Affiliates from owning not in excess of 5% of the
aggregate of any class of capital stock of any corporation if such stock is
publicly traded and listed on any national or regional stock exchange or
reported on the National Association of Securities Dealers Automated Quotations
System. Without limiting the right of Sellers to pursue any and all legal and
equitable remedies available to them for violation of this Section 11.3 by
Buyer or any of its respective Affiliates, it is agreed that other remedies
cannot fully compensate Sellers for such a violation and that Sellers shall be
entitled to injunctive relief to prevent any violation or continuing violation
hereof.
11.4 AUTOMATIC MODIFICATION
It is the intent and understanding of each party hereto that if, in any
action before any court or agency legally empowered to enforce Section 11.2 or
11.3, any term, restriction, covenant or promise in Section 11.2 or 11.3, is
found to be unreasonable and for that reasons
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unenforceable, then such term, restriction, covenant or promise shall be deemed
modified to the extent necessary to make it enforceable by such court or agency.
11.5 ASSUMPTION OF VEHICLE LEASES
To the extent that any of the vehicle leases listed on SCHEDULE 11.5 of
this Agreement have not been assigned to and assumed by an Acquired Company
prior to Closing, Buyer hereby covenants and agrees to assume any and all
obligations with respect to such vehicle leases as of the Closing Date and
agrees to indemnify and hold Sellers and their Affiliates harmless with respect
to such vehicle leases as of the Closing Date.
11.6 LICENSE
Notwithstanding anything to the contrary set forth in this Agreement,
Sellers hereby grant to Buyer, for the 30 days immediately following the Closing
Date, a non-exclusive license (the "LICENSE") to use the names "MPW" and "MPW
Filtration Management Services Corp." and all trademarks and service marks with
respect thereto, solely in connection with the operation of the business of the
Acquired Companies. In consideration of the License, Buyer shall (a) pay Sellers
a royalty pursuant to, and shall comply with, the terms and conditions of the
License Agreement; provided, however, that the royalty payable by the Acquired
Companies pursuant to the License Agreement for such 30-day period shall be
equal to $100,000, and (b) promptly after the Closing (but not later than 30
days after the Closing Date) change the registered name of each Acquired Company
in the jurisdiction of its incorporation or organization and each jurisdiction
in which it is qualified to do business to a name that does not include "MPW" or
any words or phrases that can be reasonably confused with "MPW". Sellers
covenant and agree that, for period beginning on the 30-day anniversary of the
Closing Date and ending on the six-month anniversary of the Closing Date,
Sellers will not institute any action against Buyer or the Acquired Companies
for any inadvertent or inconsequential use of the names "MPW" and "MPW
Filtration Management Services Corp." (or for any compensation therefore) and
all trademarks and service marks with respect thereto.
11.7 CONTINUING RELATIONSHIP
From the Closing Date until the five-year anniversary of the Closing Date,
in the event that any customer in North America or Mexico of the Buyer Group
shall request that any of them provide General Industrial Cleaning Services to
such customer, directly or indirectly, Buyer Group shall forward such request in
writing to Group prior to any notification by Buyer Group to any other supplier
of such services. In the event that Sellers or any of their respective
Affiliates have not entered into a contract with such customer or Buyer Group to
provide such services within 30 days of its receipt of such notice, Buyer Group
shall be entitled to offer or refer such business to any competitor of Sellers
and their Affiliates. Requests by a customer that Buyer Group clean such
customers' equipment for or to which any of them has provided filtration
products or filtration Change-out services as part of its Filtration
Products/Filtration Services shall not be subject to this Section 11.7.
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11.8 FILTRATION PRODUCTS
From and after the Closing Date until the four year anniversary of the
Closing Date, Buyer hereby covenants and agrees to cause the Acquired Companies
to acquire for and sell to Sellers and their Affiliates all filtration products
and equipment reasonably required by them in order to provide the Excepted
Services (whether or not Buyer or one of its Affiliates manufactures such
filtration products or equipment); provided, however, that such Excepted
Services have been provided in accordance with Section 11.2 hereof and the
prices charged to and paid by Sellers or their Affiliates for such filtration
products and equipment shall be equal to the distributor prices therefor less
any volume discount to which Sellers or their Affiliates may be entitled by
reason of the volume of their purchases.
11.9 EMPLOYEE BENEFITS
(a) Except as provided in the following sentence, Buyer shall take any
necessary action so that each person who is an employee of one of the Acquired
Companies on the Closing Date shall remain an employee of such Acquired Company
as of the Closing Date (a "RETAINED EMPLOYEE"). Nothing in this Agreement shall
create any obligation on the part of Buyer or the Acquired Companies to continue
the employment of any Retained Employee for any definite period following the
Closing Date.
(b) As of the Closing Date, all Retained Employees shall cease the active
participation in all ERISA Benefit Plans and Non-ERISA Commitments that are
maintained by either of the Sellers or their Affiliates for employees of the
Acquired Companies.
(c) Sellers shall be responsible for all liabilities and for payment of all
covered claims for benefits (including, but not limited to, medical, dental,
life insurance and disability), and related expenses, incurred prior to the
Closing Date by any employee of the Acquired Companies (including Retained
Employees) under the Non-ERISA Commitments or any other plans maintained by
Sellers, whether or not a claim for such benefits has been filed prior to the
Closing Date, and Buyer shall not assume nor shall the Acquired Companies be
responsible for any liability with respect to such claims or expenses. In
addition, Seller shall retain the obligation and liability for any workers'
compensation or similar workers' protection claims with respect to any employee
of the Acquired Companies (including Retained Employees), whether incurred prior
to, on or after the Closing Date that are the result of an injury or illness
originating prior to or on the Closing Date.
(d) Sellers shall be solely responsible for providing, in accordance with
applicable Legal Requirements, health care continuation coverage under COBRA and
comparable state law to employees of the Acquired Companies (and their covered
dependents) who terminated employment with the Acquired Companies prior to the
Closing Date and Buyer shall have no responsibility for providing such coverage.
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12. GENERAL PROVISIONS
12.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives,
counsel and accountants. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another party.
12.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this Agreement
or the Contemplated Transactions will be issued, if at all, at such time and in
such manner as Sellers and Buyer mutually agree. Unless consented to in writing
by Sellers and Buyer in advance or required by Legal Requirements, prior to the
Closing, the parties shall, and shall cause their respective Representatives to,
keep this Agreement strictly confidential and may not make any disclosure of
this Agreement to any Person. Sellers and Buyer will consult with each other
concerning the means by which the Acquired Companies' employees, customers and
suppliers and others having dealings with the Acquired Companies will be
informed of the Contemplated Transactions.
12.3 CONFIDENTIALITY
Between the date of this Agreement and the Closing Date, Buyer and Sellers
will maintain in confidence, and will cause the directors, officers, employees,
agents and advisors of Buyer and the Acquired Companies to maintain in
confidence, and not use to the detriment of another party or an Acquired Company
any written, oral or other information obtained in confidence from another party
or an Acquired Company in connection with this Agreement or the Contemplated
Transactions, unless (a) such information is already known to such party or to
others not bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the Contemplated
Transactions or (c) the furnishing or use of such information is required by
legal proceedings. If the Contemplated Transactions are not consummated, each
party will return or destroy all such written information.
12.4 NOTICES
All notices, consents, waivers and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested or (c) when received by the addressee,
if sent by a nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and facsimile numbers set
forth below (or to such other addresses and facsimile numbers as a party may
designate by notice to the other parties):
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Sellers: MPW Industrial Services Group, Inc.
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
with a copy to: Xxxxx, Day, Xxxxxx & Xxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Buyer: Clarcor Filtration Products, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Facsimile No.: 000-000-0000
12.5 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of Ohio, Licking County or, if it has or can
acquire jurisdiction, in the United States District Court for the Southern
District of Ohio, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
12.6 FURTHER ASSURANCES
From and after the Closing, the parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each other
such other documents and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement. During the two-year
period immediately after the Closing Date, Sellers shall, upon the reasonable
request of Buyer, provide Buyer and the Company with reasonable access to all
historical information of the Acquired Companies contained on the data bases
maintained by Sellers or their Affiliates on the date hereof. From and after the
Closing and upon Sellers' reasonable request, Buyer agrees to provide Sellers
and their Representatives access to such records and information of the Acquired
Companies as may be necessary in connection with any audit, litigation or other
investigation.
12.7 WAIVER
Unless otherwise provided in this Agreement, the rights and remedies of the
parties to this Agreement are cumulative and not alternative. Neither the
failure nor any delay by any party in exercising any right, power or privilege
under this Agreement or the documents referred to in this Agreement will operate
as a waiver of such right, power or privilege, and no single or
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partial exercise of any such right, power or privilege will preclude any other
or further exercise of such right, power or privilege or the exercise of any
other right, power or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party, (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
12.8 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties with
respect to its subject matter and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by all of the parties
hereto.
12.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this Agreement without the
prior consent of the other parties, which will not be unreasonably withheld,
except that Buyer may assign any of its rights (but not its obligations) under
this Agreement to any Subsidiary of Buyer. Subject to the preceding sentence,
this Agreement will apply to, be binding in all respects upon and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy or
claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.
12.10 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
12.11 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
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12.12 TIME OF ESSENCE
With regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
12.13 GOVERNING LAW
This Agreement will be governed by the laws of the State of Ohio without
regard to conflicts of laws principles.
12.14 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK -- SIGNATURE PAGE IMMEDIATELY FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
BUYER SUB: SELLERS:
CLARCOR FILTRATION PRODUCTS, INC. MPW INDUSTRIAL SERVICES GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxx X. Xxxx
------------------------------ -----------------------------
Title: Chairman, President & CEO Title: President and COO
----------------------------- -----------------------------
PARENT:
CLARCOR INC. MPW MANAGEMENT SERVICES CORP.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxx X. Xxxx
------------------------------- --------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxx X. Xxxx
------------------------------ ------------------------------
Title: Chairman, President & CEO Title: President and COO
----------------------------- -----------------------------
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