STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into as
of November 14, 1997 by and among Xxxxxxx Xxxxx, an individual
("Stockholder"), Metran Boston, Inc., a Massachusetts corporation ("Metran
MA"), Metran Automatic Transmission Parts Corp., a New York corporation
("Metran NY"), Metran Parts of Pennsylvania, Inc., a Pennsylvania corporation
("Metran PA"), TM-AL Acquisition Corp., a Delaware corporation ("Buyer"), and
Aftermarket Technology Corp., a Delaware corporation ("ATC"). For purposes
of this Agreement, Metran MA, Metran NY and Metran PA are sometimes
individually or collectively referred to as the "Company."
R E C I T A L S
A. The Company is engaged in the sourcing, distribution and sale
of automotive and light truck component parts (the "Business"); and
B. Stockholder owns all of the issued and outstanding shares
(collectively the "Shares") of the capital stock of each of Metran MA, Metran
NY and Metran PA, and Buyer desires to purchase and Stockholder desire to
sell the Shares on the terms and conditions set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants and agreements hereinafter set forth,
the parties hereto agree as follows.
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. The following terms, as used herein, have the
following meanings:
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Act of 1934, as amended.
Without limiting the generality of the foregoing, after the Closing Date the
Affiliates of Buyer shall include the Company.
"APPLICABLE LAW" means, with respect to any Person, any domestic or
foreign, federal, state or local statute, law, ordinance, rule,
administrative interpretation, regulation, policy, guidance, order, writ,
injunction, directive, judgment, decree or other requirement of any
Governmental Authority (including any Environmental Law) applicable to such
Person or any of its Affiliates or Plan Affiliates or any of their respective
properties, assets, officers, directors, employees, consultants or agents (in
connection with such officer's, director's, employee's, consultant's or
agent's activities on behalf of such Person or any of its Affiliates or Plan
Affiliates).
"ASSOCIATE" or "ASSOCIATED WITH" means, when used to indicate a
relationship with any Person, (a) any other Person of which such Person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10%
or more of any class of equity securities issued by such other Person, (b)
any trust or other estate in which such Person has a beneficial interest of
more than 50% or as to which such Person serves as trustee or in a similar
fiduciary capacity, and (c) any parent, grandparent, aunt, uncle, sibling,
child or spouse of such Person, or any relative of such spouse who has the
same home as such Person or who is a director or officer of such Person or
any Affiliate thereof.
"BENEFIT ARRANGEMENT" means any material benefit arrangement, other
than an Employee Benefit Plan, maintained by the Company or any ERISA
Affiliate of the Company covering the employees, former employees, directors
and former directors of the Company and the beneficiaries of any of them,
including, without limitation, (i) each material employment or consulting
agreement, (ii) each arrangement providing for material insurance coverage
for employees or workers' compensation benefits, (iii) each material
incentive bonus or deferred bonus arrangement, (iv) each arrangement
providing material termination allowance, severance or similar benefits, (v)
each material equity compensation plan, (vi) each material deferred
compensation plan and (vii) each material compensation policy and practice.
"BENEFIT PLAN" means an Employee Benefit Plan or Benefit
Arrangement.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other
day on which commercial banks in Chicago, Illinois are authorized or required
by law to close.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTRACTS" means all contracts, agreements, options, leases,
licenses, sales and purchase order, commitments and other instruments of any
kind, whether written or oral, to which the Company is a party on the Closing
Date, including the Scheduled Contracts and the Subsequent Material Contracts.
"DAMAGES" means all demands, claims, actions or causes of action,
assessments, losses, damages, costs, expenses, liabilities, judgments,
awards, fines, sanctions, penalties, charges and amounts paid in settlement,
net of insurance proceeds actually received, including without limitation (i)
interest on cash disbursements in respect of any of the foregoing, at the
Prime Rate in effect from time to time, from the date each such cash
disbursement is made until the Person incurring the same shall have been
indemnified in respect thereof and (ii) reasonable costs, fees and expenses
of attorneys, accountants and other agents of such Person. In determining
Damages, tax effects shall be considered and appropriate adjustments made for
the tax consequences of such Damages.
"EMPLOYEE BENEFIT PLAN" means any employee benefit plan, as defined
in Section 3(3) of ERISA, that is sponsored or contributed to by the Company
or any ERISA Affiliate thereof covering employees or former employees of the
Company.
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"EMPLOYEE PENSION BENEFIT PLAN" means any employee pension benefit
plan, as defined in Section 3(2) of ERISA, that is subject to Title IV of
ERISA, including a Multiemployer Plan.
"ENVIRONMENTAL LAWS" means all Applicable Laws relating to
Hazardous Substances, occupational health and safety, or the environment
including, without limitation, (i) all Applicable Laws pertaining to
reporting, licensing, permitting, controlling, investigating or remediating
emissions, discharges, releases or threatened releases of Hazardous
Substances, chemical substances, pollutants, contaminants or toxic
substances, materials or wastes, whether solid, liquid or gaseous in nature,
into the air, surface water, groundwater or land, (ii) all Applicable Laws
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances, chemical
substances, pollutants, contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature; and (iii) the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), the Clean Air Act, the
Water Pollution Control Act, the Safe Drinking Water Act, the Toxic Substance
Control Act ("TSCA") and all requirements promulgated pursuant to any of
these or analogous state or local statutes.
"ENVIRONMENTAL LIABILITIES" means Liabilities of a Person that
arise under any Environmental Law.
"EQUIPMENT" means all machinery, equipment, furniture, office
equipment, communications equipment, vehicles, storage tanks, spare and
replacement parts and other tangible property (and interests in any of the
foregoing) of the Company.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA AFFILIATE" of any Person means any other Person that,
together with such Person as of the relevant measuring date under ERISA, was
or is required to be treated as a single employer under Section 414(b), (c),
(m) or (o) of the Code.
"EXCLUDED ENVIRONMENTAL LIABILITY" means Environmental Liabilities
arising as a result of the actions or inactions of Buyer, ATC or the Company
after the Closing Date.
"GAAP" means generally accepted accounting principles in the United
States as in effect at the time the relevant financial statement is prepared,
applied on a consistent basis.
"GOVERNMENTAL AUTHORITY" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory
organization, commission, tribunal or organization or any regulatory,
administrative or other agency, or any political or other subdivision,
department or branch of any of the foregoing.
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"GROUP HEALTH PLAN" means any group health plan, as defined in
Section 5000(b)(1) of the Code.
"HAZARDOUS SUBSTANCE" means any substance or material: (i) the
presence of which requires investigation or remediation under any Applicable
Law; or (ii) the generation, storage, treatment, transportation, disposal,
remediation, removal, handling or management of which is regulated by any
Environmental Law; or (iii) that is defined as a "hazardous waste" or
"hazardous substance" under any Applicable Law; or (iv) that is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic or
mutagenic or otherwise hazardous and is regulated by any Governmental
Authority having or asserting jurisdiction over the Business or the Company;
or (v) the presence of which constitutes a nuisance, trespass or other
tortious condition; or (vi) the presence of which on adjacent properties
constitutes a trespass by Seller; or (vii) without limitation, that contains
gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated
biphenols (PCBs) or asbestos.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"INDEBTEDNESS" means all liabilities and obligations, contingent or
otherwise, of the Company (i) in respect of borrowed money, (ii) evidenced by
bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or
services, other than those incurred in the ordinary course of its business
that constitute trade payables to trade creditors, (iv) evidenced by a
bankers' acceptance or similar instrument issued or accepted by banks, (v)
for the capitalized amount of a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP, (vi) evidenced by a
letter of credit or a reimbursement obligation of the Company with respect to
any letter of credit, and (vii) any of the foregoing of another Person as to
which the Company is a guarantor or otherwise liable (except endorsements of
customer checks in the ordinary course of business), but excluding the
portion of any of the foregoing that is due within 12 months of the date
hereof.
"INDEMNIFYING PARTY" means: (1) Stockholder when any Buyer
Indemnitee is asserting a claim under Sections 9.01(a) or (2) Buyer and ATC
when any Stockholder Indemnitee is asserting a claim under Sections 9.01(b).
"INDEMNITEE" means: (1) each of Buyer and its Affiliates
(including, without limitation, ATC and, after the Closing, the Company) with
respect to any claim for which Stockholder is an Indemnifying Party under
Sections 9.01(a); or (2) Stockholder and his Affiliates with respect to
claims for which Buyer and ATC are Indemnifying Parties under Sections
9.01(b).
"INVENTORY" means all items of inventory notwithstanding how
classified in the financial records of the Company, including all raw
materials, work-in-process, finished goods, supplies, spare parts, samples,
cores and stores of the Company.
"IRS" means the Internal Revenue Service.
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"KNOWLEDGE" means, with respect to the Company, all things actually
known by any of Xxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxx or Xxx
XxXxxxx and, with respect to any other corporation, all things actually known
to the executive officers of such corporation.
"LIABILITY" means, with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether
known or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, whether
or not the same is required to be accrued on the financial statements of such
Person and whether or not the same is disclosed on any schedule to this
Agreement.
"LIEN" means, with respect to any asset, any mortgage, title defect
or objection, lien, pledge, charge, security interest, hypothecation,
restriction, encumbrance or charge of any kind in respect of such asset.
"MATERIAL ADVERSE EFFECT" means a change in, or effect on, the
operations, affairs, prospects, financial condition, results of operations,
assets, Liabilities, reserves or any other aspect of the Company or the
Business that results in a material adverse effect on, or a material adverse
change in, the Company or the Business taken as a whole.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 3(37) and 4001(a)(3) of ERISA.
"OUTSIDE DATE" means December 31, 1997.
"PERMITTED LIENS" means (i) Liens for Taxes or governmental
assessments, charges or claims the payment of which is not yet due, or for
Taxes the validity of which are being contested in good faith by appropriate
proceedings; (ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Persons and other
Liens imposed by Applicable Law incurred in the ordinary course of business
for sums not yet delinquent or being contested in good faith; (iii) Liens
relating to deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security or to secure the performance of leases, trade contracts or other
similar agreements; (iv) Liens and Encumbrances specifically identified in
the 1997 Balance Sheet; and (v) Liens securing executory obligations under
any Lease that constitutes an "operating lease" under GAAP; PROVIDED,
HOWEVER, that to the extent that any such Encumbrance or Lien arose prior to
the date of the 1997 Balance Sheet and relates to, or secures the payment of,
a Liability that is required to be accrued under GAAP, such Encumbrance or
Lien shall not be a Permitted Lien unless adequate accrual for such Liability
has been established therefor on the 1997 Balance Sheet in conformity with
GAAP. Notwithstanding the foregoing, no Lien arising under the Code or ERISA
with respect to the operation, termination, restoration or funding of any
Benefit Plan sponsored by, maintained by or contributed to by the Company or
any of its ERISA Affiliates or arising in connection with any excise tax or
penalty tax with respect to such Benefit Plan shall be a Permitted Lien.
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"PERSON" means an individual, corporation, partnership,
association, trust, estate or other entity or organization, including a
Governmental Authority.
"PLAN AFFILIATE" means, with respect to any Person, any Benefit
Plan sponsored by, maintained by or contributed to by such Person, and with
respect to any Benefit Plan, any Person sponsoring, maintaining or
contributing to such Benefit Plan.
"PRIME RATE" means per annum rate of interest publicly announced
from time to time by The Chase Manhattan Bank as its prime rate (or reference
rate). Any change in the Prime Rate shall take effect at the opening of
business on the day specified in the public announcement of such change.
"PROHIBITED TRANSACTION" means a transaction that is prohibited
under Section 4975 of the Code or Section 406 of ERISA and not exempt under
Section 4975 of the Code or Section 408 of ERISA, respectively.
"TAX" means all taxes imposed of any nature including federal,
state, local or foreign net income tax, alternative or add-on minimum tax,
profits or excess profits tax, franchise tax, gross income, adjusted gross
income or gross receipts tax, employment related tax (including employee
withholding or employer payroll tax, FICA or FUTA), real or personal property
tax or ad valorem tax, sales or use tax, excise tax, stamp tax or duty, any
withholding or back up withholding tax, value added tax, severance tax,
prohibited transaction tax, premiums tax, occupation tax, together with any
interest or any penalty, addition to tax or additional amount imposed by any
governmental authority (domestic or foreign) responsible for the imposition
of any such tax.
"TAX RETURN" means all returns, reports, forms or other information
required to be filed with respect to any Tax.
1.02 ADDITIONAL DEFINED TERMS. The following terms are defined in
the Sections referred to below:
"1997 Balance Sheet" . . . . . . . . . . . . . . . . . . . . . . Section 3.08
"AAA Rules". . . . . . . . . . . . . . . . . . . . . . . . . Section 11.11(a)
"Agreement". . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Annual Statements". . . . . . . . . . . . . . . . . . . . . . . Section 3.09
"ATC". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Business" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recital A
"Buyer Indemnitees". . . . . . . . . . . . . . . . . . . . . .Section 9.01(a)
"Buyer". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . .Section 2.02(a)
"Closing". . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.02(a)
"Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Distributions". . . . . . . . . . . . . . . . . . . . . . . .Section 3.10(h)
"Encumbrances" . . . . . . . . . . . . . . . . . . . . . . . .Section 3.11(a)
"Financial Statements" . . . . . . . . . . . . . . . . . . . . . Section 3.09
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"Indebtedness Certificate" . . . . . . . . . . . . . . . . . .Section 2.03(a)
"Insurance Policies" . . . . . . . . . . . . . . . . . . . . . . Section 3.23
"Intellectual Property Rights" . . . . . . . . . . . . . . . .Section 3.20(a)
"Interim Statements" . . . . . . . . . . . . . . . . . . . . . . Section 3.09
"Leased Real Property" . . . . . . . . . . . . . . . . . . . .Section 3.11(a)
"Leases" . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 3.11(b)
"Metran MA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Metran NY". . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Metran PA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Owned Real Property". . . . . . . . . . . . . . . . . . . . .Section 3.11(a)
"Permits". . . . . . . . . . . . . . . . . . . . . . . . . . .Section 3.16(a)
"Personal Property Leases" . . . . . . . . . . . . . . . . . .Section 3.11(b)
"Proceedings". . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.14
"Real Property Leases" . . . . . . . . . . . . . . . . . . . .Section 3.11(b)
"Required Consents". . . . . . . . . . . . . . . . . . . . . .Section 3.16(b)
"Required Contractual Consent" . . . . . . . . . . . . . . . .Section 3.16(b)
"Required Governmental Approval" . . . . . . . . . . . . . . .Section 3.16(b)
"Scheduled Contracts". . . . . . . . . . . . . . . . . . . . .Section 3.15(a)
"Share Encumbrances" . . . . . . . . . . . . . . . . . . . . .Section 3.01(a)
"Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recital B
"Stockholder Indemnitees". . . . . . . . . . . . . . . . . . .Section 9.01(b)
"Stockholder". . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"Subsequent Material Contract" . . . . . . . . . . . . . .Section 5.01(b)(iv)
ARTICLE II
PURCHASE AND SALE
2.01 PURCHASE OF SHARES FROM STOCKHOLDER. On the terms and subject
to the conditions set forth herein, at the Closing Stockholder shall sell,
transfer, convey, assign and deliver to Buyer, free and clear of all Share
Encumbrances, and Buyer shall purchase, acquire and accept from Stockholder,
all the Shares. At the Closing, Stockholder shall deliver to Buyer
certificates evidencing the Shares duly endorsed for transfer and such other
instruments as may be reasonably requested by Buyer to transfer full legal
and beneficial ownership of the Shares to Buyer, free and clear of all Share
Encumbrances. Buyer shall pay the purchase price for the Shares in accordance
with the terms of Section 2.02(b). Such purchase price is allocated as
follows: Metran MA--1.5%, Metran NY--78.5% and Metran PA--20.0%.
2.02 CLOSING.
(a) The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place at the offices of Xxxxxxxxx,
Xxxxxxxx & Xxxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxx on the date on
which the last of the conditions to Closing set forth in Sections 8.01 and
8.02 have been satisfied or waived by the party or parties entitled to waive
the same or such other date as to which Buyer and Stockholder may agree (the
"Closing Date"); PROVIDED, HOWEVER, that, as provided in Section 10.01(d),
Stockholder or Buyer may terminate this Agreement if the Closing shall not
have been consummated by the Outside Date.
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(b) At the Closing Buyer shall pay to Stockholder, in cash by
wire transfer of immediately available funds to a bank account or bank
accounts designated in writing by Stockholder, an aggregate amount equal to
$7,172,545.82 minus the amount, if any, by which the Indebtedness as of the
Closing Date exceeds $440,000.
2.03 CALCULATION OF INDEBTEDNESS AND CLOSING BALANCE SHEET.
(a) For purposes of determining the purchase price to be paid
by Buyer pursuant to Section 2.02(b), the Company shall deliver at the
Closing a certificate, executed by an officer of the Company, setting forth
the Company's good faith estimate of the amount of Indebtedness as of the
Closing Date, broken down by type of Indebtedness (the "Indebtedness
Certificate"). As soon as practicable but in no event more than 45 days
after the Closing Date, Stockholder shall cause to be prepared and delivered
to Buyer a balance sheet of the Company as of the Closing Date, together with
all supporting documentation, prepared in accordance with GAAP except for
such adjustments as to which the parties agree. If Buyer disputes any aspect
of such balance sheet and the parties are unable to resolve such dispute
within 15 days of Buyer's notification to Stockholder of the nature of the
dispute, the dispute shall be referred for final and conclusive resolution to
Deloitte & Touch LLP or, if such firm is not available, such other
independent accounting firm of national reputation selected by the mutual
agreement of Stockholder and Buyer. The fees and expenses of the accounting
firm resolving the dispute shall be paid by Stockholder and/or Buyer as such
firm shall determine.
(b) If the amount of Indebtedness as of the Closing Date, as
shown on the closing balance sheet (as finally determined pursuant to Section
2.03(a)), is other than as set forth in the Indebtedness Certificate, then:
(i) Stockholder shall pay to Buyer cash in the amount,
if any, equal to the lesser of (A) the Indebtedness as of the Closing Date
minus the amount set forth in the Indebtedness Certificate and (B) the
Indebtedness as of the Closing Date minus $440,000; or
(ii) Buyer shall pay to Stockholder cash in the amount,
if any, equal to the lesser of (A) the amount set forth in the Indebtedness
Certificate minus the Indebtedness as of the Closing Date and (B) the amount
set forth in the Indebtedness Certificate minus $440,000.
The payment called for by this Section 2.03(b), together with interest from
the Closing Date to the date of payment at the Prime Rate, shall be made
within five Business Days after the ultimate determination of the amount of
Indebtedness as of the Closing Date and shall be in immediately available
funds by wire transfer to an account designated in writing by the recipient.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
STOCKHOLDER AND THE COMPANY
As an inducement to Buyer and ATC to enter into this Agreement and
to consummate the transactions contemplated herein, Stockholder and the
Company represent and warrant to Buyer and ATC as follows:
3.01 REPRESENTATIONS REGARDING THE SHARES.
(a) Stockholder has good and marketable title to the Shares
free and clear of any and all covenants, conditions, restrictions (other than
restrictions under federal or state securities laws), voting trust
arrangements, rights of first refusal, options, Liens and adverse claims or
rights whatsoever (collectively, "Share Encumbrances"), except as set forth
in SCHEDULE 3.01; and on the Closing Date, Stockholder will have, and will
deliver to Buyer, good and marketable title to the Shares free and clear of
any and all Share Encumbrances (including without limitation those set forth
in SCHEDULE 3.01).
(b) Stockholder has the full right, power and authority to
enter into this Agreement and to transfer, convey and sell to Buyer at the
Closing the Shares. Upon consummation of the purchase contemplated hereby,
Buyer will acquire from Stockholder good and marketable title to the Shares,
free and clear of all Share Encumbrances except those created or permitted by
Buyer.
3.02 EXISTENCE AND POWER. Metran MA is a corporation duly organized
and validly existing and in good standing under the laws of the State of
Massachusetts, Metran NY is a corporation duly organized and validly existing
and in good standing under the laws of the State of New York, and Metran PA
is a corporation duly organized and validly existing and in good standing
under the laws of the State of Pennsylvania. The Company has all corporate
power and all governmental licenses, authorizations, consents, approvals and
qualifications required to carry on the Business as now conducted and to own
and operate its assets as now owned and operated except where, in the
aggregate, the failure to have such licenses, authorizations, consents,
approvals and qualifications would not have a Material Adverse Effect. The
Company is duly qualified to do business as a foreign corporation in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary to carry on its
business as now conducted, except for those jurisdictions where the failure
to be so qualified has not been, and may not reasonably be expected to be,
material. SCHEDULE 3.02, sets forth those states in which the Company is
duly qualified to do business and in good standing.
3.03 AUTHORIZATION. The execution, delivery and performance by the
Company and Stockholder of this Agreement and the consummation thereby of the
transactions contemplated hereby are within each of the Company's and
Stockholder's powers and have been duly authorized by all necessary corporate
action on the part of the Company. This Agreement has been duly and validly
executed by the Company and Stockholder and constitutes the legal, valid and
binding agreement of the Company and Stockholder, enforceable against each of
them
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in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and subject to general principles of equity.
3.04 NON-CONTRAVENTION. The execution, delivery and performance by
the Company and Stockholder of this Agreement do not and will not (a)
contravene or conflict with the charter or bylaws of the Company, true and
correct copies of which have been delivered to Buyer, (b) assuming receipt of
the Required Consents, contravene or conflict with or constitute a violation
of any provision of any Applicable Law binding upon or applicable to the
Company, Stockholder, the Business or the Shares, (c) assuming receipt of the
Required Consents, constitute a default under or give rise to any right of
termination, cancellation or acceleration of, or to a loss of any benefit to
which the Company is entitled under, any material Contract or any Permit or
similar authorization relating to the Company, the Business or the Shares by
which the Company, the Business or the Shares may be bound, or (d) result in
the creation or imposition of any Lien on any assets of the Company(other
than Permitted Liens) or any Share Encumbrance.
3.05 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Company and Stockholder of this Agreement require no
action by, consent or approval of, or filing with, any Governmental Authority
other than any actions, consents, approvals or filings otherwise expressly
referred to in this Agreement or set forth on SCHEDULE 3.05 or SCHEDULE
3.16(b). To the Knowledge of the Company and Stockholder, there are no facts
relating to the identity or circumstances of the Company or Stockholder that
would prevent or materially delay obtaining any of the Required Consents.
3.06 SUBSIDIARIES. The Company does not have any subsidiaries.
3.07 SUFFICIENCY OF AND TITLE TO ASSETS. The Company has, and as
of the Closing Date will have, title to, or the right to use, all assets,
whether tangible or intangible, necessary to operate the Business as a going
concern.
3.08 CAPITAL STOCK. The authorized capital stock of Metran MA
consists solely of 15,000 shares of common stock, no par value, of which 100
shares are issued and outstanding on the date hereof; the authorized capital
stock of Metran NY consists solely of 200 shares of common stock, no par
value, of which 50 shares are issued and outstanding on the date hereof; and
the authorized capital stock of Metran PA consists solely of 1,000 shares of
common stock, no par value, of which 100 shares are issued and outstanding on
the date hereof. All such issued and outstanding shares of Common Stock have
been validly authorized and issued and are validly outstanding, fully paid
and nonassessable. The Shares represent all of the issued and outstanding
shares of the Company's capital stock and are owned beneficially and of
record by Stockholder. Except as set forth on SCHEDULE 3.08, there are not,
and on the Closing Date there will not be, outstanding (a) any options,
warrants or other rights to purchase from the Company or any Person any
capital stock of the Company, (b) any securities convertible into or
exchangeable for shares of such stock or (c) any other commitments of any
kind for the issuance of additional shares of capital stock or options,
warrants or other securities of the Company.
10
3.09 FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES. Attached
hereto as EXHIBIT A are true and complete copies of the consolidated balance
sheet and related consolidated statement of operations and retained earnings
for the Company as of and for the eight months ended August 31, 1997 (the
"Financial Statements"). The balance sheet is referred to herein as the
"1997 Balance Sheet." Each of the Financial Statements has been prepared
based on the books and records of the Company in accordance with GAAP (except
for the omission of footnote disclosure required by GAAP) and the Company's
normal accounting practices, consistent with past practice and with each
other, and present fairly the financial condition and results of operations
of the Company as of the date indicated or for the period indicated.
3.10 ABSENCE OF CERTAIN CHANGES. Except as set forth on SCHEDULE
3.10, since the date of the 1997 Balance Sheet, the Business has been
conducted in the ordinary course, and there has not been:
(a) any event, occurrence, development or state of
circumstances or facts or change in the Company or the Business (including
any damage, destruction or other casualty loss, but excluding any event,
occurrence, development or state of circumstances or facts or change
resulting from changes in general economic conditions) affecting the Company
or the Business that has had or that may be reasonably expected to have,
either alone or together with all such events, occurrences, developments,
states of circumstances or facts or changes, a Material Adverse Effect;
(b) (i) any incurrence, assumption or guarantee of any
Indebtedness for borrowed money by the Company, (ii) any incurrence of any
Liability relating to a documentary or standby letter of credit by the
Company, (iii) any change in any material Liability other than in the
ordinary course of business, or (iv) any incurrence of any other Liability by
the Company, other than in the ordinary course of business;
(c) any creation, assumption or sufferance of the existence
of any Lien on any of the Company's assets, other than Permitted Liens;
(d) any material transaction or commitment made, or any
material Contract entered into, by the Company, or any waiver, amendment,
termination or cancellation of any material Contract by the Company, or any
relinquishment of any rights thereunder by the Company, or of any other
material right or debt owed to the Company, other than in each such case
actions taken in the ordinary course of business consistent with past
practice;
(e) except for actions taken in the ordinary course of
business consistent with the past practice of the Company that are not, in
the aggregate, material, any (i) grant of any severance, continuation or
termination pay to any director, officer, stockholder or employee of the
Company or any Associate of any of the foregoing, (ii) entering into of any
employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer,
stockholder or employee of the Company or any Associate of any of the
foregoing, (iii) increase in benefits payable or potentially payable under
any severance, continuation or termination pay policies or employment
agreements with any director, officer, stockholder or employee of the Company
or any Associate of any of the
11
foregoing, (iv) except as required by Applicable Law, increase in
compensation, bonus or other benefits payable or potentially payable to
directors, officers, stockholders or employees of the Company or any
Associate of any of the foregoing, (v) except as required by Applicable Law,
change in the terms of any bonus, pension, insurance, health or other Benefit
Plan of the Company, or (vi) representation of the Company to any employee or
former employee of the Company that Buyer would assume, continue to maintain
or implement any Benefit Plan after the Closing Date;
(f) any loan to or guarantee or assumption of any loan or
obligation on behalf of any stockholder, director, officer or employee of the
Company or to any Associate of any of the foregoing, except travel advances
occurring in the ordinary course of business consistent with past practice;
(g) any material change by the Company in its accounting
principles, methods or practices or in the manner it keeps its books and
records or any material change by the Company of its current practices with
regard to sales, receivables, payables or accrued expenses that would affect
the timing of collection of receivables or the payment of payables;
(h) any distribution, dividend, bonus or other payment by the
Company to any officer, director, or Affiliate of the Company or any of their
respective Affiliates or Associates (collectively, "Distributions"), other
than Distributions to Stockholder;
(i) the entering into of any Contract or other arrangement
between the Company and any officer, director or stockholder of the Company
or any of their respective Affiliates or Associates; or
(j) any payment, discharge or satisfaction of any Liabilities
of the Company, other than payments, discharges or satisfactions in the
ordinary course of business.
3.11 PROPERTIES; LEASES; TANGIBLE ASSETS.
(a) The Company does not own any real property or have a
leasehold interest in any real property other than the real property
identified on SCHEDULE 3.11(a) (the "Owned Real Property" and the "Leased
Real Property," respectively), which constitutes all of the real property
used in the Business. The Company has a good and valid leasehold interest in
the Leased Real Property and the property subject to the Personal Property
Leases and has good and valid title to the Owned Real Property and its other
tangible assets. The Company holds title to each such property and asset
free and clear of all Liens, adverse claims, easements, rights of way,
servitudes, zoning or building restrictions, or any other rights of others or
other adverse interests of any kind, including chattel mortgages, conditional
sales contracts, collateral security arrangements and other title or interest
retention arrangements (collectively, "Encumbrances"), except the Leases and
Permitted Liens.
(b) SCHEDULE 3.11(b) sets forth a true and complete list of
(i) all personal property leases or licenses (A) to which the Company is a
party or by which the Company is bound and (B) that provide for annual
payments by the Company in excess of
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$10,000 that cannot be terminated without charge by the Company within 30
days (the "Personal Property Leases") and (ii) all leases or licenses of
Leased Real Property that provide for annual payments by the Company in
excess of $10,000 that cannot be terminated without charge by the Company
within 30 days (the "Real Property Leases" and collectively with the Personal
Property Leases, the "Leases"). With respect to the Leases, except as set
forth on SCHEDULE 3.11(b), there exist no defaults by the Company, or, to the
Knowledge of the Company, any default or threatened default by any lessor or
third party thereunder, that has materially affected or could reasonably be
expected to materially affect the rights and privileges thereunder of the
Company. Assuming the Required Consents are obtained, the consummation of
the transactions contemplated hereby will not result in a breach of, or give
any Person the right to terminate, any Lease to which the Company is a party
with non-Affiliates or by which it is bound.
(c) Except as disclosed in SCHEDULE 3.11(c) or SCHEDULE
3.22(c), the Company has not received notice of any pending zoning or other
land-use regulation proceedings or any proposed change in any Applicable Laws
that could reasonably be expected to detrimentally affect the use or
operation of any Leased Real Property, nor has the Company received notice of
any special assessment proceedings affecting the Leased Real Property, or
applied for any change to the zoning or land use status of the Leased Real
Property.
3.12 AFFILIATES.
(a) Except as set forth in SCHEDULE 3.12, neither the Company
nor Stockholder or any officers or directors of the Company (or any immediate
family member of any such officer or director) now has or at any time
subsequent to December 31, 1995, had, either directly or indirectly, an
equity or debt interest in any Person that furnishes or sells or during such
period furnished or sold services or products to the Company or purchases or
during such period purchased from the Company any goods or services, or
otherwise does or during such period did business with the Company of a
material nature or amount; PROVIDED, HOWEVER, that neither the Company, nor
Stockholder nor any of the Company's officers and directors or other
Affiliates shall be deemed to have such an interest solely by virtue of the
ownership of less than 5.0% of the outstanding voting stock or debt
securities of any publicly held company, the stock or debt securities of
which are traded on a national stock exchange or quoted on the National
Association of Securities Dealers Automated Quotation System.
(b) Except as set forth in SCHEDULE 3.12, neither the Company
nor Stockholder or any officers or directors of the Company (or any immediate
family member of any such officer or director) now is or at any time
subsequent to December 31, 1995, was, a party to any contract, commitment or
agreement to which the Company is or during such period was a party or under
which the Company is or was obligated or bound or to which any of their
respective properties may be or may have been subject, other than through the
Company.
3.13 INVENTORIES. Subject to any reserve therefor that is included
in the 1997 Balance Sheet and except as disclosed in SCHEDULE 3.13, all
Inventories of the Company (a) have been acquired or manufactured in the
ordinary course of business, in accordance with the Company's normal
inventory practices; (b) are of a quality usable (including processing into
13
merchantable finished inventories for sale in the ordinary course of
business), free of any material defect or deficiency; and (c) are in
merchantable and undamaged condition and meet customer specifications.
3.14 LITIGATION. Except as disclosed on SCHEDULE 3.14, (i) there
are no actions, suits, hearings, arbitrations, proceedings (public or
private) or governmental investigations that have been brought by or against
any Governmental Authority or any other Person (collectively, "Proceedings")
pending or, to the Knowledge of the Company or Stockholder, threatened,
against or affecting the Company, the Business, Stockholder or the Shares or
which seek to enjoin or rescind the transactions contemplated by this
Agreement or otherwise prevent the Company or Stockholder from complying with
the terms and provisions of this Agreement; and (ii) there are no existing
orders, judgments or decrees of any Governmental Authority affecting any of
the Company, the Business, Stockholder or the Shares.
3.15 CONTRACTS.
(a) SCHEDULE 3.15(a) sets forth a complete list of the
following contracts, commitments and obligations (whether written or oral) of
the Company (collectively with the Leases and the Employment Agreements, the
"Scheduled Contracts"):
(i) each Contract between the Company and (A) each
present or former director, officer or other member of management or other
personnel of the Company, (B) any supplier of services or products to the
Company whose dollar volume of sales to the Company exceeded $10,000 in 1996
or is expected to exceed $10,000 in 1997, and (C) any Person in which the
aggregate payments made to the Company under such Contract exceeded $10,000
in 1996 or is expected to exceed $10,000 in 1997;
(ii) each other agreement or arrangement of the Company
that (A) requires the payment or incurrence of Liabilities or the rendering
of services by the Company, subsequent to the date of this Agreement, of more
than $10,000 and (B) cannot be terminated without charge by the Company
within 30 days;
(iii) all Contracts relating to, and evidences of or
guarantees of, or providing security for, indebtedness for borrowed money or
the deferred purchase price of property (whether incurred, assumed,
guaranteed or secured by any asset);
(iv) all partnership, joint venture or other similar
Contracts, arrangements or agreements;
(v) to the extent that any of the following provide for
annual payments by the Company in excess of $10,000 and cannot be terminated
without charge by the Company within 30 days, all license, distribution,
commission, marketing, agent, franchise, technical assistance or similar
agreements relating to or providing for the marketing and/or sale of the
products or services to which the Company is a party or by which the Company
is otherwise bound; and
14
(vi) all other material contracts, commitments and
obligations that are not in the ordinary course of the Business.
(b) Except as disclosed in SCHEDULE 3.15(b), each Scheduled
Contract and Subsequent Material Contract is a legal, valid and binding
obligation of the Company and, to the Knowledge of the Company and
Stockholder, each other party thereto, enforceable (except to the extent such
enforceability may be limited by bankruptcy, equity and creditors' rights
generally) against the Company and, to the Knowledge of the Company and
Stockholder, each such other party in accordance with its terms, and neither
the Company nor, to the Knowledge of the Company and Stockholder, any other
party thereto is in material default or has failed to perform any material
obligation thereunder. Complete and correct copies of each written Scheduled
Contract have been delivered to Buyer.
(c) SCHEDULE 3.15(c) sets forth a list (by name and address) of
the 10 largest customers of and the 10 primary vendors providing services to the
Company from January 1, 1997 to November 12, 1997 together with the approximate
dollar amount of sales by or services provided to the Company during said
period.
3.16 PERMITS; REQUIRED CONSENTS.
(a) SCHEDULE 3.16(a) sets forth all material approvals,
authorizations, certificates, consents, licenses, orders, permits,
qualifications or other similar authorizations of all Governmental
Authorities (and all other Persons) necessary for the operation of the
Business or the Company's assets in substantially the same manner as
currently operated or affecting or relating in any way to the Business or
such assets (the "Permits").
(b) SCHEDULE 3.16(b) lists (i) each governmental or other
registration, filing, application, notice, transfer, consent, approval,
order, qualification and waiver (each, a "Required Governmental Approval")
required under Applicable Law to be obtained by the Company or Stockholder by
virtue of the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby to avoid the loss of any material Permit
or otherwise, and (ii) each Scheduled Contract with respect to which the
consent of the other party or parties thereto must be obtained by the Company
or Stockholder by virtue of the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby to avoid the
invalidity of such Contract, the termination thereof, a breach or default
thereunder or any other change or modification to the terms thereof (each, a
"Required Contractual Consent" and collectively with the Required
Governmental Approvals, the "Required Consents"). Except as set forth in
SCHEDULE 3.16(a) OR (b) each Permit is valid and in full force and effect in
all material respects and, assuming the related Required Consents have been
obtained prior to the Closing Date, none of the Permits will be terminated or
become terminable or impaired in any material respect as a result of the
transactions contemplated hereby.
15
3.17 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth in
SCHEDULE 3.17, the operation of the Business has not violated or infringed,
and does not violate or infringe, any material Applicable Law, or any order,
writ, injunction or decree of any Governmental Authority.
3.18 EMPLOYMENT AGREEMENTS; CHANGE IN CONTROL; AND EMPLOYEE
BENEFITS.
(a) SCHEDULE 3.18 sets forth all Benefit Plans. The Company
has made true and correct copies of all governing instruments and related
agreements pertaining to such Benefit Plans available to Buyer. The Company
has made available to Buyer a copy of the three (3) most recently filed
Federal Form 5500 series and accountant's opinion, if applicable, for each
Employee Benefit Plan.
(b) Except as set forth on SCHEDULE 3.18, neither the Company
nor any ERISA Affiliates of the Company sponsors or has within the last five
years sponsored, maintained, contributed to, or incurred an obligation to
contribute to, any Employee Pension Benefit Plan.
(c) Except as set forth in SCHEDULE 3.18, no individual shall
accrue or receive additional benefits, service or accelerated rights to
payments of benefits under any Benefit Plan, including the right to receive
any parachute payment, as defined in Section 280G of the Code, or become
entitled to severance, termination allowance or similar payments as a direct
result of the transactions contemplated by this Agreement.
(d) No Employee Benefit Plan has participated in, engaged in
or been a party to any non-exempt Prohibited Transaction, and neither the
Company nor any ERISA Affiliates of the Company has had asserted against it
any claim for taxes under Chapter 43 of Subtitle D of the Code and Sections
5000 of the Code, or for penalties under ERISA Section 502(c), (i) or (l),
with respect to any Employee Benefit Plan nor, to the Knowledge of the
Company or Stockholder, is there a basis for any such claim. No officer,
director or employee of the Company has committed a material breach of any
responsibility or obligation imposed upon fiduciaries by Title I of ERISA
with respect to any Employee Benefit Plan.
(e) Other than routine claims for benefits, there is no claim
pending or to the Knowledge of the Company threatened, involving any Benefit
Plan by any Person against such plan or the Company or any ERISA Affiliate.
There is no pending or, to the Knowledge of the Company or Stockholder,
threatened proceeding involving any Employee Benefit Plan before the IRS, the
United States Department of Labor or any other Governmental Authority.
(f) Except as set forth on SCHEDULE 3.18, each Benefit Plan
has at all times prior hereto been maintained in all material respects, by
its terms and in operation, in accordance with ERISA and the Code, including,
but not limited to, all applicable reporting and disclosure requirements.
The Company and each ERISA Affiliate have made full and timely payment of all
amounts required to be contributed under the terms of each Benefit Plan and
Applicable Law or required to be paid as expenses under such Benefit Plan,
and the Company and each ERISA Affiliate shall continue to do so through the
Closing.
16
(g) With respect to any Group Health Plans maintained by the
Company or its ERISA Affiliate, whether or not for the benefit of the Company
and its ERISA Affiliate, the Company and its ERISA Affiliates have complied
in all material respects with the provisions of Part 6 of Title I of ERISA
and Section 4980B of the Code. The Company is not obligated to provide
health care benefits of any kind to its retired employees pursuant to any
Employee Benefit Plan, including, without limitation, any Group Health Plan,
or pursuant to any agreement or understanding.
3.19 LABOR AND EMPLOYMENT MATTERS.
(a) Except as set forth on SCHEDULE 3.19, no collective
bargaining agreement exists that is binding on the Company and, except as
described on SCHEDULE 3.19, no petition has been filed or proceedings
instituted by an employee or group of employees with any labor relations
board seeking recognition of a bargaining representative. SCHEDULE 3.19
describes any organizational effort currently being made or, to the Knowledge
of the Company or Stockholder, threatened by or on behalf of any labor union
to organize any employees of the Company.
(b) Except as set forth on SCHEDULE 3.19, (i) there is no
labor strike, dispute, slow down or stoppage pending or, to the Knowledge of
the Company or Stockholder, threatened against or directly affecting the
Business, (ii) no grievance or arbitration proceeding arising out of or under
any collective bargaining agreement is pending, and no claims therefor exist;
and (iii) neither the Company nor Stockholder nor any of their Affiliates has
received any notice or has any Knowledge of any threatened labor or civil
rights dispute, controversy or grievance or any other unfair labor practice
proceeding or breach of contract claim or action with respect to claims of,
or obligations to, any employee or group of employees of the Company.
(c) The Company has complied and is currently complying, in
all material respects, in respect of all employees of the Company, with all
Applicable Laws respecting employment and employment practices and the
protection of the health and safety of employees, from whatever source such
law may be derived, including, without limitation, statutes, ordinances,
laws, rules, regulations, policies, standards, judicial or administrative
precedents, judgments, orders, decrees, awards, citations, licenses, official
interpretations and guidelines. Except as set forth on SCHEDULE 3.19, since
January 1, 1994 the Company has not received any citation or other
notification for the violation of occupational and health safety laws or
regulations.
(d) All individuals who are performing or have performed
services for the Company and are or were classified by the Company as
"independent contractors" qualify for such classification under Section 530
of the Revenue Act of 1978 or Section 1706 of the Tax Reform Act of 1986, as
applicable, except for such instances which are not, in the aggregate,
material.
17
3.20 INTELLECTUAL PROPERTY.
(a) SCHEDULE 3.20 sets forth a complete and correct list of
each patent, patent application and docketed invention, trademark, trade
name, trademark or tradename registration or application, copyright or
copyright registration or application for copyright registration, and each
license or licensing agreement for any of the foregoing relating to the
Business or held by the Company (the "Intellectual Property Rights").
(b) Except as disclosed in SCHEDULE 3.20, the Company has not
during the three years preceding the date of this Agreement been a party to
any Proceeding nor, to the Knowledge of the Company or Stockholder, is any
Proceeding threatened as to which there is a reasonable possibility of a
determination adverse to the Company that involved or may involve a claim of
infringement by any Person (including any Governmental Authority) of any
Intellectual Property Right. Except as disclosed in SCHEDULE 3.20, no
Intellectual Property Right is subject to any outstanding order, judgment,
decree, stipulation or agreement restricting the use thereof by the Company,
or restricting the licensing thereof by the Company to any Person. The use
of the Intellectual Property Rights does not conflict with, infringe upon or
violate any patent, patent license, patent application, trademark, tradename,
trademark or tradename registration, copyright, copyright registration,
service xxxx, brand xxxx or brand name or any pending application relating
thereto, or any trade secret, know-how, programs or processes, or any similar
rights, of any Person.
(c) Except as set forth in SCHEDULE 3.20, the Company either
owns the entire right, title and interest in, to and under, or has acquired
in connection with the acquisition of Equipment or Inventory an implied
license to use, any and all inventions, processes, computer programs,
know-how, formulae, trade secrets, patents, chip designs, mask works,
trademarks, tradenames, brand names and copyrights that are necessary for the
conduct of the Business in the manner that the Business has heretofore been
conducted. No other inventions, processes, computer programs, know-how,
formulae, trade secrets, patents, chip designs, mask works, trademarks,
tradenames, brand names, copyrights, licenses or applications for any of the
foregoing are necessary for the unimpaired continued operation of the
Business in the manner that the Business has heretofore been conducted.
3.21 ADVISORY FEES. Except for Buckingham (whose fees and expenses
will be paid by Stockholder), there is no investment banker, broker, finder
or other intermediary or advisor that has been retained by or is authorized
to act on behalf of the Company, Stockholder or their Affiliates who might be
entitled to any fee, commission or reimbursement of expenses from Buyer or
any of its Affiliates or any of their respective Associates upon consummation
of the transactions contemplated by this Agreement.
3.22 ENVIRONMENTAL COMPLIANCE.
(a) Except as disclosed in SCHEDULE 3.22, the Company has
obtained all material approvals, authorizations, certificates, consents,
licenses, orders and permits or other similar authorizations of all Governmental
Authorities, or from any other Person, that are
18
required under any Environmental Law. SCHEDULE 3.22 sets forth all material
permits, licenses and other authorizations issued under any Environmental Law
to the Company.
(b) Except as disclosed in SCHEDULE 3.22, the Company is in
compliance in all material respects with all terms and conditions of all
approvals, authorizations, certificates, consents, licenses, orders and
permits or other similar authorizations of all Governmental Authorities (and
all other Persons) required under all Environmental Laws and is also in
compliance in all respects with all other material limitations, restrictions,
conditions, standards, requirements, schedules and timetables required or
imposed under all Environmental Laws.
(c) Except as disclosed in SCHEDULE 3.22, there are no past
or present events, conditions, circumstances, activities, practices,
incidents, actions, omissions or plans relating to or in any way affecting
the Company or the Business that could reasonably be expected to prevent, or
make more expensive, continued compliance with any Environmental Law by Buyer
or the Company after the Closing, or that may give rise to any Environmental
Liability, or otherwise form the basis of any claim, action, demand, suit,
Proceeding, hearing, study or investigation (i) under any Environmental Law,
(ii) based on or related to the manufacture, processing, distribution, use,
treatment, storage (including without limitation underground storage tanks),
disposal, transport or handling, or the emission, discharge, release or
threatened release of any Hazardous Substance, or (iii) resulting from
exposure to workplace hazards.
3.23 INSURANCE.
(a) SCHEDULE 3.23 sets forth a complete and correct list of
all material insurance policies of any kind currently in force with respect
to the Company (the "Insurance Policies"), including all "occurrence based"
liability policies regardless of the periods to which they relate. SCHEDULE
3.23 sets forth for each Insurance Policy the type of coverage, the name of
the insureds, the insurer, the premium, the expiration date, the period to
which it relates, the deductibles and loss retention amounts and the amounts
of coverage. No cancellation or material amendment or increase of premiums
is pending or, to the Knowledge of the Company or Stockholder, threatened
with respect to any of the Insurance Policies.
(b) No insurance company that issued any Insurance Policy,
Board of Fire Underwriters or similar body, or Governmental Authority has
issued a recommendation or requirement for any changes in the conduct of the
Business or any repairs or other work to be done on or with respect to any
assets of the Company.
3.24 TAX MATTERS. Except as set forth on SCHEDULE 3.24:
(a) The Company has timely filed all Tax Returns required to
have been filed by it, and has paid or accrued all Taxes due to any taxing
authority (whether or not shown on any Tax Return) with respect to all
taxable periods ending on or prior to the Closing Date, or otherwise
attributable to all periods prior to the Closing Date; and all such Tax
Returns
19
are true, correct and complete in all material respects. The Company
is not currently the beneficiary of any extension of time within which to
file any Tax Return.
(b) The Company has not received notice that the IRS or any
other taxing authority has asserted against the Company any deficiency in
Taxes or claim for additional Taxes in connection with any tax period.
Except for liens arising from Taxes which are due but not yet payable, there
are no liens for Taxes on any of the Company's assets.
(c) The Company is not a party to an agreement extending the
time within which to file any Tax Return or extending the statute of
limitations for any period with respect to any Tax to which the Company may
be subject. No claim has ever been made by any Taxing Authority in a
jurisdiction in which the Company does not file Tax Returns that it is or may
be subject to taxation by that jurisdiction.
(d) The Company has withheld or collected and paid over all
Taxes required to have been withheld or collected and paid over in connection
with amounts or paid or owing to, or received from, any employee, independent
contractor, creditor, stockholder, or other Person;
(e) The Company has not been included in any consolidated,
combined or unitary Tax Return provided for under the laws of the United
States, any state or locality with respect to Taxes for any taxable period
for which the statute of limitations has not expired.
(f) The Company has not made any payments, is not obligated
to make any payments, and is not a party to any agreement that under certain
circumstances could require it to make any payments, that are not deductible
under Section 280G of the Code.
(g) None of the assets of the Company constitutes tax-exempt
bond financed property or tax-exempt use property, with the meaning of
Section 168 of the Code. The Company is not a party to any "safe harbor
lease" that is subject to the provisions of Section 168(f)(8) of the Internal
Revenue Code as in effect prior to the Tax Reform Act of 1986.
(h) The Company is not a party to any joint venture,
partnership or other arrangement that is treated as a partnership for federal
income Tax purposes.
(i) The Company does not have any liability for Taxes of any
person (1) under Section 1.1502-6 of the Treasury Regulations (or any similar
provision of state, local or foreign law), (2) as a transferee or successor,
(3) by contract or (4) otherwise.
(j) The Company is not a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during any
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(k) The Company does not have any unpaid liability for Taxes
under Sections 1363(d), 1374, or 1375 of the Code (or any successor or
predecessor provision) or any
20
similar provision of state or local law for any period on or prior to or
including the Closing Date, except for any such liability as may arise as
a result of the consummation of the transactions contemplated by this
Agreement.
(l) Each of Metran MA, Metran NY and Metran PA has made and
continues to have in effect a valid and timely election to be treated as
an "S corporation" under Section 1361 ET. SEQ. of the Code (and any
corresponding provisions of all applicable state and local income tax laws)
for all taxable years beginning on and after August 30, 1996, January 1, 1987
and April 24, 1990, respectively (which are the dates each elected to be
treated as an S corporation), and each of Metran MA, Metran NY and Metran PA
will be treated as an S corporation under the Code and all such state and local
tax laws for all taxable years or portions thereof ending on or prior to the
Closing Date.
3.25 DISTRIBUTIONS TO STOCKHOLDER. Except as set forth on
SCHEDULE 3.25, the Company has not made any Distributions to
Stockholder since December 31, 1996.
3.26 MATERIAL DISCLOSURES. No statement, representation or warranty
made by the Company or Stockholder in this Agreement or in any certificate,
statement, list, schedule or other document furnished or to be furnished to
Buyer hereunder contains, or when so furnished will contain, any untrue
statement of a material fact, or fails to state, or when so furnished will
fail to state, a material fact necessary to make the statements contained
herein or therein, in light of the circumstances in which they are made, not
misleading. Matters disclosed on one or more schedules attached hereto and
made a part hereof shall be deemed to have been disclosed on each and every
relevant schedule to the extent necessary to make any other statement,
representation or warranty contained herein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND ATC
As an inducement to Stockholder and the Company to enter into this
Agreement and to consummate the transactions contemplated herein, Buyer
and ATC hereby represent and warrant to Stockholder and the Company that:
4.01 ORGANIZATION AND EXISTENCE. Each of Buyer and ATC is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has all corporate power and authority to enter into this
Agreement and consummate the transactions contemplated hereby. Each of Buyer
and ATC is duly qualified to do business as a foreign corporation in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary to carry on its
business as now conducted, except for those jurisdictions where the failure
to be so qualified has not been, and may not reasonably be expected to be,
material.
4.02 CORPORATE AUTHORIZATION. The execution, delivery and performance by
Buyer and ATC of this Agreement and the consummation by Buyer and ATC of the
transactions contemplated hereby are within the corporate powers of Buyer and
ATC and have been duly authorized by all necessary corporate action. This
Agreement constitutes a legal, valid and
21
binding agreement of each of Buyer and ATC, enforceable against each of them
in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and subject to general principles of equity.
4.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and performance
by Buyer and ATC of this Agreement require no action by, consent or approval
of, or filing with, any Governmental Authority other than as set forth in
this Agreement.
4.04 NON-CONTRAVENTION. The execution, delivery and performance by
Buyer and ATC of this Agreement does not (a) contravene or conflict with the
Certificate of Incorporation or Bylaws of Buyer or ATC, or (b) assuming
compliance with the matters referred to in Section 4.03, contravene or
conflict with or constitute a violation of any provision of any Applicable
Law binding upon or applicable to Buyer or ATC.
4.05 ADVISORY FEES. There is no investment banker, broker, finder or
other intermediary or advisor that has been retained by or is authorized
to act on behalf of Buyer who might be entitled to any fee, commission or
reimbursement of expenses from the Company or Stockholder any of his
Affiliates upon consummation of the transactions contemplated by this
Agreement.
4.06 LITIGATION. There is no Proceeding pending against, or to the
Knowledge of Buyer or ATC, threatened against or affecting, Buyer or ATC
before any court or arbitrators or any governmental body, agency or official
that in any matter challenges or seeks to prevent, enjoin, alter or materially
delay the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF STOCKHOLDERS AND METRAN
5.01 CONDUCT OF THE BUSINESS; DISTRIBUTIONS. From the date hereof
until the Closing Date, the Company shall, and Stockholder shall cause the
Company to, conduct the Business in the ordinary course and in substantially
in the same manner as it has prior to the date of this Agreement and agrees,
other than in the ordinary course of business, not to enter into any material
agreements or take any other significant actions without the prior written
consent of Buyer, which shall not be unreasonably withheld. The Company
shall use its reasonable efforts to preserve intact the Business and the
business organizations and relationships and goodwill of the Company with
third parties and keep available the services of the present officers,
employees, agents and other personnel of the Company. Without limiting
the generality of the foregoing and except as otherwise expressly provided
in this Agreement, from the date hereof until the Closing Date:
(a) The Company will, and Stockholder will cause the Company to:
(i) (A) maintain the assets of the Company in the ordinary
course of business consistent with past practice in operating order and
condition, reasonable wear and tear excepted, (B) promptly repair, restore or
replace any assets of the Company in the
22
ordinary course of business consistent with past practice, (C) upon any
damage, destruction or loss to any of the assets of the Company, apply any
and all insurance proceeds received with respect thereto to the prompt
repair, replacement and restoration thereof to the condition of the assets of
the Company before such event or set such proceeds aside for application by
the Company after the Closing, (D) use its best efforts to obtain, prior to
the Closing Date, all Required Consents, and (E) take all actions necessary
to be in compliance with, and to maintain the effectiveness of, all material
Permits;
(ii) comply with all material Applicable Laws;
(iii) promptly notify Buyer in writing of (A) any action, event,
condition or circumstance, or group of actions, events, conditions or
circumstances, that results in, or could reasonably be expected to result in,
a Material Adverse Effect, other than changes in general economic conditions,
(B) the commencement of any Proceeding by or against the Company or
Stockholder, or the Company or Stockholder becoming aware of any threat,
claim, action, suit, inquiry, proceeding, notice of violation, demand letter,
subpoena, government audit or disallowance that could reasonably be expected
to result in a Proceeding, and (C) the occurrence of any breach by the
Company or Stockholder of any representation or warranty, or any covenant or
agreement, contained in this Agreement.
(b) without Buyer's prior consent, the Company will not, and
Stockholder shall not permit the Company to, do any of the following and will
not agree to:
(i) purchase or otherwise acquire assets from any other Person
other than in the ordinary course of business;
(ii) sell, assign, lease, license, transfer or otherwise
dispose of, or mortgage, pledge or encumber (other than with Permitted
Liens), any of the assets of the Company, including Leased Real Property,
except in the ordinary course of business;
(iii) enter any agreement or arrangement that requires or allows
payment, acceleration of payment or incurrence of Liabilities, or the
rendering of services by the Company outside the ordinary course of business;
(iv) amend or modify in any material respect or terminate any
Scheduled Contract or any other Contract entered into by the Company after
the date hereof which, if in existence on the date hereof, would be required
to be set forth in the SCHEDULE 3.15(a) as a Scheduled Contract (each, a
"Subsequent Material Contract");
(v) make or commit to make any capital expenditure, or group
of related capital expenditures, in excess of $10,000, other than capital
expenditures expressly required under any Scheduled Contract;
(vi) enter into or commit or propose to enter into any
Subsequent Material Contract;
23
(vii) make any distribution, dividend, bonus or other payment to
any officer, director, stockholder or Affiliate of the Company or any of
their respective Affiliates or Associates, except (A) as otherwise required
by this Agreement or (B) as set forth on SCHEDULE 5.01;
(viii) (A) create, incur, assume, or guarantee any indebtedness
for borrowed money or (B) incur any Liability relating to a documentary or
standby letter of credit, other than in the ordinary course of business where
the aggregate dollar amount of all of the foregoing does not exceed $10,000;
(ix) except as set forth on SCHEDULE 5.01, (A) increase the
rate or terms of compensation payable or to become payable to its employees
except in the ordinary course of business, (B) pay or agree to pay any
pension, retirement allowance or other employee benefit not provided for by
any Employee Plan, Benefit Arrangement or Employment Agreement set forth in
the Schedules hereto, (C) commit itself to any additional pension, profit
sharing, bonus, incentive, deferred compensation, stock purchase, stock
option, stock appreciation right, group insurance, severance pay,
continuation pay, termination pay, retirement or other employee benefit plan,
agreement or arrangement, or increase the rate or terms of any Employee Plan
or Benefit Arrangement, (D) enter into any employment agreement with or for
the benefit of any Person, or (E) increase the rate of compensation under or
otherwise change the terms of any Employment Agreement set forth in SCHEDULE
3.15(a);
(x) repay any Long-Term Debt other than scheduled payments
that are required to be made during such period so as not to be in default
with respect to such Long-Term Debt; and
(xi) issue or sell any (A) shares of capital stock of the
Company, (B) options, warrants or other rights to purchase from the Company
shares of its capital stock, (C) securities convertible into or exchangeable
for shares of its capital stock or (D) any other commitments of any kind for
the issuance or sale of additional shares of capital stock or options,
warrants or other securities of the Company.
5.02 ACCESS TO INFORMATION. Subject to compliance with Applicable Laws,
from the date hereof until the Closing Date, the Company will, and Stockholder
will cause the Company to, and Stockholder will, promptly: (a) give Buyer and
its counsel, financial advisors, auditors and other authorized representatives
reasonable access to the offices, properties, books and records relating to the
Company or the Business upon reasonable prior notice, (b) furnish to Buyer and
its counsel, financial advisors, auditors and other authorized representatives
such information relating to the Company or the Business as Buyer may
reasonably request and (c) instruct the directors, officers, employees,
counsel, auditors and financial advisors of the Company and Stockholder
to cooperate with Buyer and its counsel, financial advisors, auditors and
other authorized representatives in their investigation of the Company and
the Business. Such investigation shall include, but shall not be limited to:
(i) A business and financial performance review of the Business;
24
(ii) A review of the financial statements and tax returns of
the Company;
(iii) An environmental review as to the presence and nature of
any Hazardous Substance in or on any real property owned or leased by the
Company; and
(iv) A standard legal due diligence examination relating to the
Company and the Business.
5.03 COMPLIANCE WITH TERMS OF REQUIRED GOVERNMENTAL APPROVALS AND
REQUIRED CONTRACTUAL CONSENTS. On and after the Closing Date, Stockholder
shall comply at his own expense with all conditions and requirements
affecting the Company set forth in (a) all Required Governmental Approvals as
necessary to keep the same in full force and effect assuming continued
compliance with the terms thereof by Buyer and the Company and (b) all
Required Contractual Consents as necessary to keep the same effective and
enforceable against the Persons giving such Required Contractual Consents
assuming continued compliance with the terms thereof by Buyer and the Company.
5.04 MAINTENANCE OF INSURANCE POLICIES. Between the date hereof and the
Closing Date, the Company shall not, and Stockholder shall cause the Company
to not, take or fail to take any action if such action or inaction, as the case
may be, would adversely affect the applicability of any insurance in effect on
the date hereof that covers all or any part of the assets of the Company or the
Business with respect to the period of time ending on the Closing Date.
5.05 CONFIDENTIALITY.
(a) The Company and Stockholder will, and will cause their
representatives to, treat any data and information obtained with respect to
Buyer or any of its Affiliates from any representative, officer, director, or
employee of Buyer, or from any books or records of Buyer in connection with this
Agreement, confidentially and with commercially reasonable care and discretion,
and will not disclose any such information to third parties; PROVIDED, HOWEVER,
that the foregoing shall not apply to (i) information in the public domain or
that becomes public through disclosure by any party other than the Company,
Stockholder or their Affiliates or representatives, so long as such other party
is not in breach of a confidentiality obligation, (ii) information available to
the Company or Stockholder on a non-confidential basis prior to its disclosure
pursuant to this Agreement, (iii) information that is required to be disclosed
by Applicable Law, (iv) information required to be disclosed to obtain any
Required Consents, or (v) any disclosure of such information in litigation
between the parties hereto in the course of such litigation.
(b) In the event that the Closing fails to take place and this
Agreement is terminated, the Company and Stockholder, upon the written
request of Buyer, will, and will cause their representatives to, promptly
deliver to Buyer any and all documents or other materials furnished by Buyer
or any of its Affiliates to the Company or Stockholder in connection with
this Agreement without retaining any copy thereof. In the event of such
request, all other documents, whether analyses, compilations or studies, that
contain or otherwise reflect the information
25
furnished by Buyer to the Company or Stockholder shall be destroyed by the
Company and Stockholder or shall be turned over to Buyer, and the Company and
Stockholder shall confirm to Buyer in writing that all such materials have
been turned over or destroyed. No failure or delay by Buyer in exercising
any right, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
(c) The parties hereto recognize and agree that in the event of
a breach of this Section 5.05, money damages would not be an adequate remedy to
Buyer or its Affiliates for such breach and, even if money damages were
adequate, it would be impossible to ascertain or measure with any degree of
accuracy the damages sustained therefrom. Accordingly, if there should be a
breach or threatened breach of this Section 5.05, Buyer and its Affiliates shall
be entitled to an injunction restraining the Company and Stockholder from any
breach without showing or proving actual damage sustained by Buyer or its
Affiliates, as the case may be. Nothing in the preceding sentence shall limit
or otherwise affect any remedies that Buyer and its Affiliates may otherwise
have under Applicable Law.
5.07 CAPITAL CONTRIBUTION OF CERTAIN DEBT. Prior to the Closing Date,
Stockholder shall contribute to the Company all Indebtedness then owed by the
Company to Stockholder, other than accrued payroll, and such Indebtedness will
ceased to be outstanding.
5.08 Pennsylvania FACILITY. Prior to the Closing Date, Metran PA shall
distribute to Stockholder all of Metran PA's right, title and interest in
and to its facility located at 000 Xxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx (the
"Pennsylvania Facility") and Stockholder will assume the outstanding balance
of the mortgage relating to the Pennsylvania Facility and all property taxes
and assessments relating thereto. Stockholder shall obtain from the mortgage
holder a complete release of Metran PA under such mortgage.
ARTICLE VI
COVENANTS OF BUYER AND ATC
6.01 CONFIDENTIALITY.
(a) Buyer and ATC will, and will cause their representatives to,
treat any data and information obtained with respect to the Company or
Stockholder from any representative, officer, director or employee of the
Company or Stockholder, or from any books or records of the Company or
Stockholder in connection with this Agreement, confidentially and with
commercially reasonable care and discretion, and will not disclose any such
information to third parties; PROVIDED, HOWEVER, that the foregoing shall not
apply to (i) information in the public domain or that becomes public through
disclosure by any party other than Buyer or its Affiliates or representatives,
so long as such other party is not in breach of a confidentiality obligation,
(ii) information available to Buyer, its Affiliates or representatives on a
non-confidential basis prior to its disclosure pursuant to this Agreement,
(iii) information that is required to be disclosed by Applicable Law,
(iv) information required to be disclosed to obtain any Required Consents;
(v) any information that is disclosed by Buyer or its Affiliates to any
of their actual or prospective lenders in connection with financing
the transactions contemplated by this
26
Agreement; or (vi) any information that is disclosed by Buyer after the
Closing shall have occurred; PROVIDED, HOWEVER, that in the event the Closing
has occurred, this Section 6.01(a) shall cease to be effective with respect
to any data and information obtained with respect to the Company.
(b) In the event that the Closing fails to take place and this
Agreement is terminated, Buyer, upon the written request of the Company, will,
and will cause their representatives to, promptly deliver to the Company any and
all documents or other materials furnished by the Company or Stockholder to
Buyer in connection with this Agreement without retaining any copy thereof. In
event of such request, all other documents, whether analyses, compilations or
studies, that contain or otherwise reflect the information furnished by the
Company or Stockholder to Buyer shall be destroyed by Buyer or shall be turned
over to the Company, and Buyer shall confirm to the Company and Stockholder in
writing that all such materials have been turned over or destroyed. No failure
or delay by the Company and Stockholder in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any right, power or privilege hereunder.
(c) The parties hereto recognize and agree that in the event of
a breach of this Section 6.01, money damages would not be an adequate remedy to
the Company and Stockholder for such breach and, even if money damages were
adequate, it would be impossible to ascertain or measure with any degree of
accuracy the damages sustained by the Company and Stockholder therefrom.
Accordingly, if there should be a breach or threatened breach of this
Section 6.01, the Company and Stockholder shall be entitled to an injunction
restraining Buyer from any breach without showing or proving actual damage
sustained by the Company and Stockholder. Nothing in the preceding sentence
shall limit or otherwise affect any remedies that the Company and Stockholder
may otherwise have under Applicable Law.
6.02 ACCESS TO INFORMATION. Subject to compliance with Applicable Laws,
from the Closing Date until December 31, 2002, the Company will, and Buyer
will cause the Company to, and Buyer will, promptly: (a) furnish to
Stockholder and his counsel, financial advisors, auditors and other authorized
representatives such information relating to the Company or the Business as
Stockholder may reasonably request in connection with the preparation of Tax
Returns and (b) instruct the directors, officers, employees, counsel, auditors
and financial advisors of the Company and Buyer to cooperate in all reasonable
respects with Stockholder and his counsel, financial advisors, auditors and
other authorized representatives in connection with the preparation of Tax
Returns. After the Closing Date, in the event that the Company intends to
destroy any documents that contain or otherwise reflect information in
connection with the Business for any period prior to the Closing Date, the
Company will provide written notice to Stockholder of its intention to destroy
such documents and provide Stockholder with the opportunity to request that such
documents instead be delivered to Stockholder. Any information or documents
provided to Stockholder pursuant to this Section 6.02 shall be held by
Stockholder pursuant to Section 5.05.
27
ARTICLE VII
COVENANTS OF ALL PARTIES
7.01 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each party will use all reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary or
desirable under Applicable Law to consummate the transactions contemplated by
this Agreement. Buyer, ATC, the Company and Stockholder agree to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be reasonably necessary or desirable in order to
consummate or implement expeditiously the transactions contemplated by this
Agreement.
7.02 CERTAIN FILINGS. The parties hereto shall cooperate with one
another in determining whether any action by or in respect of, or filing with,
any Governmental Authority is required or reasonably appropriate, or any action,
consent, approval or waiver from any party to any Contract is required or
reasonably appropriate, in connection with the consummation of the transactions
contemplated by this Agreement. Subject to the terms and conditions of this
Agreement, in taking such actions or making any such filings, the parties hereto
shall furnish information required in connection therewith and seek timely to
obtain any such actions, consents, approvals or waivers. Without limiting the
foregoing, the parties hereto shall each promptly complete and file all reports
and forms, and respond to all requests or further requests for additional
information, if any, as may be required or authorized under the HSR Act.
7.03 PUBLIC ANNOUNCEMENTS. Up to (and including) the Closing Date, the
parties agree that they will not make any disclosure with respect to this
Agreement or the transactions contemplated hereby or cause to be publicized in
any manner whatsoever by way of interviews, responses to questions or inquiries,
press releases or otherwise any aspect of this Agreement or the transactions
contemplated hereby without prior written notice to and approval of the other
parties hereto, unless such party reasonably concludes that such release of
information is required by Applicable Law or Nasdaq regulations, and the parties
hereto cannot reach agreement upon a mutually acceptable form of release.
Notwithstanding the foregoing, the parties hereto may, on a confidential basis,
advise their respective agents, accountants, attorneys and financing sources
with respect to the contents of this Agreement and the transactions contemplated
hereby.
7.04 ADMINISTRATION OF ACCOUNTS. All payments and reimbursements
received by Stockholder after the Closing Date from any third party in the name
of or to the Company shall be held by Stockholder in trust for the benefit of
the Company and, immediately upon receipt by Stockholder of any such payment or
reimbursement, Stockholder shall pay, or cause to be paid, over to the Company
the amount of such payment or reimbursement without right of set off.
7.05 TAXES.
(a) All sales, value added, use, registration, stamp and similar
Taxes imposed in connection with the sale of the Shares shall be borne by Buyer
and all transfer and similar Taxes imposed in connection with the sale of the
Shares shall be borne by Stockholder.
28
Except as provided in the preceding sentence and Section 7.05(e)(iii), all
other Taxes relating to the sale of the Shares shall be borne by Stockholder.
(b) (i) Stockholder shall have the exclusive authority and
obligation and shall be responsible for the correct and timely filing of all
Tax Returns of the Company with respect to income taxes imposed by the
Federal government or any state or political subdivision thereof for all
periods ending on or prior to the Closing Date, and, after the Closing Date,
the Company shall, and Buyer shall cause the Company to, provide reasonable
access to such books and records of the Company as necessary to prepare such
Tax Returns which may be reviewed and copied at Stockholder' sole expense.
Such authority shall include, but not be limited to, the determination of the
manner in which any items of income, gain, deduction, loss or credit arising
out of the income, properties and operations of the Company shall be reported
or disclosed on such Tax Returns; PROVIDED, HOWEVER, that Stockholder shall
provide Buyer with draft Tax Returns of the Company with respect to income
taxes imposed by the Federal government or any state or any political
subdivision thereof for the short taxable year ending on the Closing Date at
least 20 days prior to the due date for filing such Tax Returns. In the
event Buyer has any objection to any items set forth on such draft Tax
Returns, Buyer and Stockholder agree to consult and resolve in good faith any
such objections, it being understood and agreed that in the absence of any
such resolution, any and all such objections shall be resolved in a manner
substantially consistent with the past practices with respect to such items.
(ii) Buyer shall have the exclusive authority and obligation
and shall be responsible for the correct and timely filing of all Tax Returns
of the Company for any taxable period beginning after the Closing Date. Such
authority shall include, but not be limited to, the determination of the
manner in which any items of income, gain, deduction, loss or credit arising
out of the income, properties and operations of the Company shall be reported
or disclosed on such Tax Returns.
(c) (i) After giving effect to all payments in respect thereof
which have been made or accrued (to the extent that such accrued Taxes arise
in the ordinary course of business and are not income Taxes) prior to the
Closing Date, Stockholder shall be responsible and liable for the timely
payment of any unpaid Taxes imposed on or with respect to the properties,
income and operations of the Company for all periods ending on or prior to
the Closing Date.
(ii) Buyer shall be responsible and liable for the timely
payment of all Taxes imposed on or with respect to the properties, income and
operations of the Company for all periods beginning after the Closing Date.
(d) (i) Stockholder, at his sole expense, shall have the
exclusive authority to represent the Company before any taxing authority or
any court regarding the Tax consequences of the operations of the Company for
all periods ending on or prior to the Closing Date; PROVIDED, HOWEVER, that
Stockholder shall not enter into any settlement of any contest or otherwise
compromise any issue that affects or may affect the Tax Liability of the
Company for any period beginning after the Closing Date without the prior
written consent of Buyer, which
29
shall not be unreasonably withheld. Stockholder shall keep Buyer fully and
timely informed with respect to the commencement, status and nature of any
administrative or judicial proceedings involving any Tax Liability of the
Company for all taxable periods.
(ii) Except as provided in Section 7.05(d)(i), Buyer shall
have the sole right to control any audit or examination by any taxing authority,
initiate any claim for refund or amend any Tax Return, and contest, resolve and
defend against any assessment for additional Taxes, notice of Tax deficiency or
other adjustment of Taxes of, or relating to, the Company; PROVIDED, HOWEVER,
that with respect to any audit or examination by any taxing authority regarding
the Tax consequences of the operations of the Company for all periods ending on
or prior to the Closing Date, the Company shall, and Buyer shall cause the
Company to, notify Stockholder thereof and keep them reasonably informed, and
PROVIDED FURTHER, that Buyer shall not enter into any settlement of any contest
or otherwise compromise any issue that affects or may affect the Tax Liability
of the Company or Stockholder for any period ending prior to the Closing Date
without the prior written consent of Stockholder, which shall not be
unreasonably withheld.
(e) (i) If Buyer, in Buyer's sole discretion, shall request,
Stockholder shall (A) join Buyer in making the election permitted to be made
under Section 338(h)(10) of the Code and any corresponding or similar
provisions of state or local law (the "Section 338(h)(10) Elections"), (B)
cooperate with Buyer to take all actions necessary to effect and preserve
timely such Section 338(h)(10) Elections in accordance with Treasury
Regulation Section 1.338(h)(10) (and any comparable provisions of state and
local law and any successor provisions thereto) and (C) take no position
inconsistent with treating the purchase of the capital stock of the Company
as a Section 338(h)(10) Election. Stockholder shall assist Buyer in the
preparation of Form 8023-A and any accompanying schedules required under
Section 338(h)(10) of the Code and any corresponding or similar provisions of
state or local law and Stockholder agrees that Buyer may make any
determination or election required or permitted to be made in connection with
the Section 338(h)(10) Elections. Stockholder shall execute Form 8023-A and
any accompanying schedules and such other documents or forms at the Closing
or at such other time as Buyer may request or as required by the Code in
order to effectuate the Section 338(h)(10) Elections. Buyer and Stockholder
shall file all Tax Returns in a manner consistent with the Section 338(h)(10)
Elections, Form 8023-A and any accompanying schedules and such other
documents and forms as are requested by Buyer to effectuate the Section
338(h)(10) Elections.
(ii) Stockholder shall indemnify and hold harmless Buyer
and its Affiliates in respect of Damages resulting from the Section
338(h)(10) Election being invalid or unavailable due to any of Metran MA,
Metran NY and/or Metran PA not being treated as an "S corporation" under the
Code.
(iii) Buyer agrees that if the Section 338(h)(10)
Elections are made, Buyer will pay Stockholder an amount equal to the excess
of (A) all federal and state income taxes payable solely as a result of the
transactions contemplated by this Agreement including the making of the
Section 338(h)(10) Elections and an additional amount necessary to
30
make Stockholder whole as a result of the taxes created by this Section
7.05(e)(iii) over (B) the federal and state income taxes that would be
payable by Stockholder solely as a result of the transactions contemplated by
this Agreement, assuming no Section 338(h)(10) Elections are made, determined
in a manner consistent with the Company's prior tax accounting practice.
7.06 LEASE. At the Closing, Stockholder, as lessor, will enter into
a lease in the form of EXHIBIT B hereto with Metran PA, as lessee, for the
Pennsylvania Facility. The monthly rental rate for such lease shall be equal
to the "market rate" as established by a MAI appraiser selected by the mutual
agreement of Stockholder and Buyer and having experience in appraising
properties in the Philadelphia area. The appraiser may not be Associated
With the Company, Stockholder, Buyer or ATC. The fee of the appraiser shall
be shared equally by Buyer on the one hand and Stockholder on the other.
ARTICLE VIII
CONDITIONS TO CLOSING
8.01 CONDITIONS TO OBLIGATION OF BUYER AND ATC. The obligation of
Buyer and ATC to consummate the transactions contemplated hereby is subject
to the satisfaction of each of the following conditions:
(a) (i) the Company and Stockholder shall each have performed
and satisfied in all material respects each of their material obligations
hereunder required to be performed and satisfied by any of them on or prior
to the Closing Date, (ii) each of the representations and warranties of the
Company and Stockholder contained in this Agreement shall have been true and
correct in all material respects when made and shall contain no misstatement
or omission that would make any such representation or warranty materially
misleading when made and shall be true and correct in all material respects,
and shall not contain any misstatement or omission that would make any such
representation or warranty materially misleading, at and as of the Closing
Date with the same force and effect as if made as of the Closing Date and
(iii) Buyer shall have received certificates signed by Stockholder and a duly
authorized executive officer of the Company to the foregoing effect and to
the effect that the conditions specified within this Section 8.01 have been
satisfied.
(b) All Required Consents (including such consents as are
required under Subsequent Material Contracts) shall have been obtained
without the imposition of any conditions that are or would become applicable
to the Company, the Business, the Shares, Buyer or any of its Affiliates
after the Closing that Buyer in good faith reasonably determines would be
materially burdensome upon the Company, the Business, the Shares, Buyer or
any of its Affiliates or their respective businesses substantially as such
businesses have been conducted prior to the Closing Date. All such Required
Consents shall be in effect, and no Proceedings shall have been instituted or
threatened by any Governmental Authority with respect thereto as to which, in
Buyer's good faith opinion, there is a material risk of a determination that
would terminate the effectiveness of, or otherwise materially and adversely
modify the terms of, any such Required Consent; all applicable waiting
periods with respect to such Required Consents shall have expired; and all
conditions and requirements prescribed by Applicable Law or by such Required
Consents to be satisfied on or prior to the Closing Date shall have been
satisfied to the
31
extent necessary such that all such Required Consents are, and will remain,
in full force and effect assuming continued compliance with the terms thereof
after the Closing.
(c) The transactions contemplated by this Agreement and the
consummation of the Closing shall not violate any Applicable Law. No
temporary restraining order, preliminary or permanent injunction, cease and
desist order or other order issued by any court of competent jurisdiction or
any competent Governmental Authority or any other legal restraint or
prohibition preventing the transfer and exchange contemplated hereby or the
consummation of the Closing, or imposing Damages in respect thereto, shall be
in effect, and there shall be no pending or threatened actions or proceedings
by any Governmental Authority (or determinations by any Governmental
Authority) or by any other Person (i) challenging or in any manner seeking to
restrict or prohibit the transfer and exchange contemplated hereby or the
consummation of the Closing, or to impose conditions that Buyer in good faith
determines would be materially burdensome upon the Company, the Business, the
Shares, Buyer or any of its Affiliates or their respective businesses
substantially as such businesses have been conducted prior to the Closing
Date or as such businesses, as of the date hereof, would be reasonably
expected to be conducted after the Closing Date.
(d) Since the date hereof, there shall not have been any
event, occurrence, development or state of circumstances or facts or change
in the Company or the Business (including any damage, destruction or other
casualty loss, but excluding any event, occurrence, development or state of
circumstances or facts or change resulting from changes in general economic
conditions) affecting the Company or the Business that has had or that may be
reasonably expected to have, either alone or together with all such events,
occurrences, developments, states of circumstances or facts or changes, a
Material Adverse Effect.
(e) Stockholder shall have executed and delivered to Buyer a
Noncompetition Agreement in the form of EXHIBIT C hereto.
(f) Stockholder shall have executed and delivered to Buyer an
Employment Agreement in the form of EXHIBIT D hereto.
(g) Stockholder, as lessor, shall have executed and delivered
to Metran PA the lease agreement called for by Section 7.06.
(h) Buyer shall have received an opinion of Xxxxxxxxx,
Xxxxxxxx & Xxxxxx in a form reasonably acceptable to Buyer.
(i) As of the Closing Date, there shall exist no Liens on any
assets of the Company, other than Permitted Liens, nor any Share Encumbrances.
8.02 CONDITIONS TO OBLIGATION OF STOCKHOLDER. The obligation of
Stockholder to consummate the transactions contemplated hereby is subject to
the satisfaction of each of the following conditions:
32
(a) (i) Buyer shall have performed and satisfied in all
material respects each of its material obligations hereunder required to be
performed and satisfied by it on or prior to the Closing Date, and the
aggregate effect of all failures to perform or satisfy all obligations of
Buyer on or prior to the Closing Date shall not be materially adverse to
Stockholder; (ii) the representations and warranties of Buyer contained in
this Agreement shall be true, complete and accurate in all material respects
at and as of the Closing Date, as if made at and as of such date and (iii)
Stockholder shall have received a certificate signed by a duly authorized
executive officer of Buyer to the foregoing effect and to the effect that to
such officer's Knowledge the conditions specified within this Section 8.02
have been satisfied.
(b) All material Required Consents (including such consents
as are required under Subsequent Material Contracts) for the transactions
contemplated by this Agreement shall have been obtained without the
imposition of any conditions that are or would become applicable to
Stockholder or any of their respective Affiliates after the Closing that
Stockholder in good faith reasonably determine would be materially burdensome
upon such Person. All such Required Consents that relate to Stockholder'
sale of the Shares shall be in effect, and no Proceedings shall have been
instituted or threatened by any Governmental Authority with respect thereto
as to which, in Stockholder' good faith opinion, there is a material risk of
a determination that would terminate the effectiveness of, or otherwise
materially and adversely modify the terms of, any such Required Consent. All
applicable waiting periods with respect to such Required Consents shall have
expired, and all conditions and requirements prescribed by Applicable Law or
by such Required Consents to be satisfied on or prior to the Closing Date
shall have been satisfied to the extent necessary such that all such Required
Consents are, and will remain, in full force and effect assuming continued
compliance with the terms thereof after the Closing.
(c) The sale and transfer contemplated by this Agreement and
the consummation of the Closing shall not violate any Applicable Law. No
temporary restraining order, preliminary or permanent injunction, cease and
desist order or other order issued by any court of competent jurisdiction or
any competent Governmental Authority or any other legal restraint or
prohibition preventing the transfer and exchange contemplated hereby or the
consummation of the Closing, or imposing Damages in respect thereto, shall be
in effect, and there shall be no pending or threatened actions or proceedings
by any Governmental Authority (or determinations by any Governmental
Authority) or by any other Person challenging or in any manner seeking to
restrict or prohibit the transfer and exchange contemplated hereby or the
consummation of the Closing.
(d) Buyer shall have executed and delivered to Stockholder an
Employment Agreement in the form of EXHIBIT D hereto.
(e) the Company, as lessee, shall have executed and delivered
to Stockholder the lease agreements called for by Section 7.06.
(f) Stockholder shall have received an opinion of Xxxxxx
Xxxxxxxxxxxx, Esq. in a form reasonably acceptable to Stockholder.
33
ARTICLE IX
INDEMNIFICATION
9.01 AGREEMENT TO INDEMNIFY.
(a) Subject to the limitations provided herein, ATC and the
direct and indirect subsidiaries of ATC (including Buyer and, after the
Closing has occurred, the Company) (collectively, the "Buyer Indemnitees")
shall each be indemnified and held harmless to the extent set forth in this
Article IX by Stockholder in respect of any Damages reasonably and
proximately incurred by any Buyer Indemnitee (i) as a result of any
inaccuracy or misrepresentation in or breach of or failure to perform any
representation, warranty, covenant, agreement or obligation of the Company or
Stockholder in this Agreement or (ii) in connection with any Environmental
Liability other than Excluded Environmental Liabilities. The aggregate
liability of Stockholder under this Section 9.01(a) shall not exceed the
purchase price paid for the Shares pursuant to Section 2.02(b), except in the
case of Damages due to Stockholder's fraud or willful misconduct.
(b) Stockholder and his Affiliates (collectively the
"Stockholder Indemnitees") shall each be indemnified and held harmless to the
extent set forth in this Article IX on a joint and several basis by Buyer and
ATC in respect of any and all Damages reasonably and proximately incurred by
any Stockholder Indemnitee as a result of (i) any inaccuracy or
misrepresentation in or breach of or failure to perform any representation,
warranty, covenant, agreement or obligation of Buyer or ATC in this Agreement
or (ii) the Company's conduct of the Business after the Closing.
(c) Notwithstanding the foregoing, Buyer Indemnitees may not
seek indemnification hereunder from Stockholder unless and until the claims
in the aggregate exceed $20,000, provided that if such threshold is exceeded,
Buyer Indemnitees may seek indemnification hereunder for any and all claims.
(d) From and after the Closing Date, the Company shall have
no liability to Stockholder for contribution or reimbursement due to, or
other Damages arising out of, liability incurred by Stockholder pursuant to
Section 9.01(a) notwithstanding that such liability may have arisen out of a
misrepresentation or breach by the Company.
9.02 SURVIVAL OF REPRESENTATION, WARRANTIES AND COVENANTS.
(a) Except as hereinafter provided in this Section 9.02, all
representations, warranties, covenants, agreements and obligations of each
Indemnifying Party contained herein and all claims of any Indemnitee in
respect of any breach of any representation, warranty, covenant, agreement or
obligation of any Indemnifying Party contained in this Agreement, shall
survive the Closing and shall expire on the second (2nd) anniversary of the
Closing Date.
(b) Notwithstanding Section 9.02(a), the representations,
warranties, covenants, agreements and obligations of Stockholder as an
Indemnifying Party shall survive the Closing Date until the expiration of 60
days following any applicable statute of limitations,
34
including extensions thereof with respect to: (i) the inaccuracy or
misrepresentation in or breach of any representation, warranty, covenant or
agreement made by Stockholder in this Agreement arising out of fraud or
willful misconduct; (ii) any inaccuracy or misrepresentation in or breach of
any representation or warranty made in Sections 3.17 and 3.24 regardless of
whether such inaccuracy or misrepresentation or breach arises out of fraud or
willful misconduct; and (iii) the breach or failure to perform by Stockholder
after the Closing Date of any of the covenants, agreements or obligations of
such Person contained in this Agreement or in the Exhibits attached hereto.
(c) Notwithstanding Section 9.02(a), the representations and
warranties of Stockholder contained in Section 3.22 (except for any
inaccuracy or misrepresentation arising out of fraud or willful misconduct)
and Stockholder's obligation to indemnify the Buyer Indemnitees against
Environmental Liabilities shall survive the Closing Date until the expiration
of the fifth (5th) anniversary of the Closing Date.
(d) Notwithstanding Section 9.02(a), each of the following
representations, warranties, covenants, agreements and obligations of Buyer
and ATC as Indemnifying Parties shall survive the Closing Date until the
expiration of 60 days following the applicable statute of limitations,
including extensions thereof: (i) any inaccuracy or misrepresentation in or
breach of any representation, warranty, covenant or agreement made by Buyer
or ATC in this Agreement arising out of fraud or willful misconduct; and (ii)
the breach or failure to perform by Buyer or ATC after the Closing Date of
any of the covenants, agreements or obligations of such Person contained in
this Agreement or in the Exhibits attached hereto.
(e) The expiration of any representation, warranty, covenant,
agreement or obligation pursuant to this Section 9.02 shall not relieve an
Indemnifying Party of his or its obligation with respect to any claim of
breach of such representation, warranty, covenant, agreement or obligation
asserted prior to such expiration.
9.03 CLAIMS FOR INDEMNIFICATION. If any Indemnitee shall believe
that such Indemnitee is entitled to indemnification pursuant to this Article
IX in respect of any Damages, such Indemnitee shall give the appropriate
Indemnifying Party prompt written notice thereof. Any such notice shall set
forth in reasonable detail and to the extent then known the basis for such
claim for indemnification. The failure of such Indemnitee to give notice of
any claim for indemnification promptly shall not adversely affect such
Indemnitee's right to indemnity hereunder except to the extent that such
failure materially adversely affects the right of the Indemnifying Party to
assert any reasonable defense to such claim. The Indemnifying Party shall
have 30 days following its receipt of such notice either (a) to acquiesce in
such claim by giving such Indemnitee written notice of such acquiescence or
(b) to object to the claim by giving such Indemnitee written notice of the
objection. If the Indemnifying Party does not object thereto within such
30-day period, such Indemnitee shall be entitled to be indemnified for all
Damages reasonably and proximately incurred by such Indemnitee in respect of
such claim. If the Indemnifying Party objects to such claim in a timely
manner, and such Indemnitee and the Indemnifying Party are unable to resolve
their dispute within 30 days following such objection
35
(or such additional period of time as may be mutually agreed to by such
Persons), the claim shall be submitted immediately to arbitration pursuant to
Section 11.11.
9.04 DEFENSE OF CLAIMS.
(a) In connection with any claim that may give rise to
indemnity under this Article IX resulting from or arising out of any claim or
Proceeding against an Indemnitee by a Person that is not a party hereto, the
Indemnifying Party may, subject to Section 9.04(b), assume the defense of any
such claim or Proceeding (unless such Indemnitee elects not to seek indemnity
hereunder for such claim), upon written notice to the relevant Indemnitee, if
all Indemnifying Parties with respect to such claim or Proceeding jointly
acknowledge to the Indemnitee its right to indemnity pursuant hereto in
respect of the entirety of such claim (as such claim may have been modified
through written agreement of the parties or arbitration hereunder) and
provides assurances, reasonably satisfactory to such Indemnitee, that the
Indemnifying Parties will be financially able to satisfy such claim in full
if such claim or Proceeding is decided adversely. Prior to the assumption by
an Indemnifying Party of the defense of any claim or Proceeding, the
Indemnitee may make such appearances and filings with respect thereto as the
Indemnitee reasonably determines to be necessary or appropriate. If the
Indemnifying Parties assume the defense of any such claim or Proceeding, the
Indemnifying Parties shall select counsel reasonably acceptable to such
Indemnitee to conduct the defense of such claim or Proceeding, shall take all
steps necessary in the defense or settlement thereof and shall at all times
diligently and promptly pursue the resolution thereof. If the Indemnifying
Parties shall have assumed the defense of any claim or Proceeding in
accordance with this Section 9.04, the Indemnifying Parties shall be
authorized to consent to a settlement of, or the entry of any judgment
arising from, any such claim or Proceeding, without the prior written consent
of such Indemnitee, PROVIDED that (i) the Indemnifying Parties shall pay or
cause to be paid all amounts arising out of such settlement or judgment
concurrently with the effectiveness thereof, (ii) the Indemnifying Parties
shall not be authorized to encumber any of the assets of any Indemnitee or to
agree to any restriction that would apply to any Indemnitee or to its conduct
of business, and (iii) a condition to any such settlement shall be a complete
release of such Indemnitee and its Affiliates, officers, employees,
consultants and agents with respect to such claim. Subject to Section
9.04(b), such Indemnitee shall be entitled to participate in (but not
control) the defense of any such action, with its own counsel and at its own
expense. Each Indemnitee shall, and shall cause each of its Affiliates,
officers, employees, consultants and agents to, cooperate fully with the
Indemnifying Parties in the defense of any claim or Proceeding being defended
by the Indemnifying Parties pursuant to this Section 9.04. If the
Indemnifying Parties do not assume the defense of any claim or Proceeding
resulting therefrom in accordance with the terms of this Section 9.04(a),
such Indemnitee may defend against such claim or Proceeding.
(b) Notwithstanding Section 9.04(a), the Indemnifying Parties
may not assume the defense of any claim or Proceeding and the Indemnitee may
assume such defense if, in the reasonable opinion of the Indemnitee, (i) such
claim or Proceeding involves an issue or matter that, if determined adversely
to the Indemnitee, is likely to have a material adverse effect on the
business, operations, assets, properties or prospects of the Indemnitee, or
(ii) there is one or more legal defenses available to the Indemnitee that
conflict with those available to an
36
Indemnifying Party. If the Indemnitee assumes defense of any such claim or
Proceeding, (A) the Indemnifying Parties may participate in, but not control,
the defense of such claim or Proceeding, and (B) if the Indemnitee receives a
settlement proposal from the Person asserting such claim or instituting such
Proceeding and is notified by an Indemnifying Party that such Indemnifying
Party wants to accept such settlement proposal, the liability of the
Indemnifying Parties with respect to such claim or Proceeding shall equal the
lesser of (x) the amount offered in such settlement proposal, (y) the amount
of actual Damages of the Indemnitee with respect to such claim or Proceeding
or (z) the maximum liability of the Indemnifying Parties pursuant to Section
9.01(a) and any such settlement shall expressly release the Indemnifying
Parties from any further liability with respect to the claim.
(c) If the Indemnitee elects to defend any claim or
Proceeding pursuant to the last sentence of Section 9.04(a) or pursuant to
Section 9.04(b), the Indemnitee shall conduct such defense in such manner as
it shall deem appropriate, including settling such claim or Proceeding after
giving notice of the same to the Indemnifying Parties, on such terms as such
Indemnitee shall deem appropriate, PROVIDED that such settlement expressly
releases the Indemnifying Parties from any further liability with respect to
the claim. If the Indemnifying Parties seek to question the manner in which
such Indemnitee defended such claim or Proceeding or the amount of or nature
of any such settlement, the Indemnifying Parties shall have the burden to
prove by a preponderance of the evidence that such Indemnitee did not defend
such claim or Proceeding in a reasonably prudent manner.
ARTICLE X
TERMINATION
10.01 GROUNDS FOR TERMINATION. This Agreement may be terminated at
any time prior to the Closing:
(a) by mutual written agreement of all of the parties hereto;
(b) by a party at any time following the expiration of 15
days from the date that such party has given notice to another party of any
one or more inaccuracies or misrepresentations in or breaches of the
representations or warranties made by the recipient of such notice contained
in this Agreement that, if not cured prior to the Closing Date, would give
the notifying party grounds not to close under Section 8.01 when taken into
account with all other uncured inaccuracies or misrepresentations in or
breaches of such representations or warranties as to which the notifying
party shall have given notice to previously pursuant to this clause (b);
PROVIDED, HOWEVER, that no termination under this clause (b) shall take
effect if such inaccuracies, misrepresentations or breaches shall have been
cured in all material respects within such 15-day period;
(c) by a party at any time following the expiration of 15
days from the date that such party has given written notice to another party
of the failure by recipient of such notice to perform and satisfy in any
material respect any of his or its material obligations under this Agreement
required to be performed and satisfied by him or it on or prior to the
Closing Date, or the failure to perform and satisfy any other obligations of
the recipient of such notice
37
under this Agreement if the aggregate of all such other failures shall be
material; PROVIDED, HOWEVER, that no termination under this clause (c) shall
take effect if such breaches or failures shall have been cured in all
material respects within such 15-day period;
(d) by any party hereto, if the Closing shall not have been
consummated by the Outside Date; PROVIDED, HOWEVER, that a party may not
terminate this Agreement pursuant to this clause (d) if the Closing shall not
have been consummated within such time period by reason of the failure of
such party or any of its Affiliates to perform in all material respects any
of its or their respective covenants or agreements contained in this
Agreement; or
(e) by any party hereto if any Federal, state or foreign law
or regulation thereunder shall hereafter be enacted or become applicable that
makes the transactions contemplated hereby or the consummation of the Closing
illegal or otherwise prohibited, or if any judgment, injunction, order or
decree enjoining either party hereto from consummating the transactions
contemplated hereby is entered, and such judgment, injunction, order or
decree shall become final and nonappealable.
10.02 EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 10.01, such termination shall be without liability of
any party to any other party to this Agreement; PROVIDED, HOWEVER, that if
such termination shall result from the breach by any party of its
representations, warranties or covenants contained in this Agreement, such
party shall be fully liable for any and all Damages incurred or suffered by
the other parties as a result of such failure or breach notwithstanding such
termination, except that if Stockholder terminate this Agreement pursuant to
Section 10.01(g), they will not be liable for Damages relating to the
breaches giving rise to their right of termination. The provisions of
Sections 5.05, 6.01, 10.02, 11.01, 11.03, 11.05 11.07, 11.08, 11.10, 11.11
and 11.12 shall survive any termination of this Agreement pursuant to Article
X.
ARTICLE XI
MISCELLANEOUS
11.01 NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be deemed duly given
(i) when delivered by personal delivery, (ii) two Business Days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth below, (iii) the
day following being sent through an overnight delivery service in
circumstances in which such service guarantees next day delivery, or (iv)
once such notice or other communication is transmitted to the telecopier
number specified below and the appropriate answer back or telephonic
confirmation is received, PROVIDED that such notice or other communication is
promptly thereafter mailed in accordance with the provisions of clause (ii)
above:
38
If to the Company or Stockholder:
Xxxxxxx Xxxxx
0 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
with a copy to:
Xxxxxxxxx, Xxxxxxxx & Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
If to Buyer or ATC:
Aftermarket Technology Corp.
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Telecopier No: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx and Xxxxxx Xxxxxxxxxxxx
Any party may give any notice, request, demand, claim or other communication
hereunder using any other means (including ordinary mail or electronic mail),
but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the
individual for whom it is intended. Any party may change the address to which
notices, requests, demands, claims and other communications hereunder are to be
delivered by giving the other parties notice in the manner herein set forth.
11.02 AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the
case of an amendment, by all parties hereto, or in the case of a waiver, by
the party against whom the waiver is to be effective.
(b) No waiver by a party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent occurrence. No failure or delay
by a party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
39
11.03 EXPENSES. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense. Without limiting the generality of the
foregoing, Stockholder shall pay (i) the fees and expenses of Buckingham. and
(ii) all legal, accounting and other fees and expenses incurred by
Stockholder and/or the Company prior to the Closing Date in connection with
the negotiation, execution, delivery and performance of this Agreement.
11.04 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No party hereto may assign either this
Agreement or any of its rights, interests or obligations hereunder without
the prior written approval of each other party, which approval shall not be
unreasonably withheld.
11.05 GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the internal laws (without reference to choice or
conflict of laws) of the State of New York.
11.06 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by the other parties hereto.
11.07 ENTIRE AGREEMENT. This Agreement (including the Schedules and
Exhibits referred to herein which are hereby incorporated by reference)
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior oral and written and all
contemporaneous oral agreements, understandings and negotiations between the
parties with respect to the subject matter of this Agreement. Neither this
Agreement nor any provision hereof is intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.
11.08 CONSTRUCTION. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof. All references to an Article or Section include all subparts
thereof. Neither party hereto, nor its respective counsel, shall be deemed
the drafter of this Agreement, and all provisions of this Agreement shall be
construed in accordance with their fair meaning, and not strictly for or
against either party hereto.
11.09 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the
date this Agreement was executed or last amended.
40
11.10 THIRD PARTY BENEFICIARIES. No provision of this Agreement
shall create any third party beneficiary rights in any Person, including any
employee of Buyer or employee or former employee of the Company or any Affiliate
thereof (including any beneficiary or dependent thereof).
11.11 ARBITRATION OF CLAIMS.
(a) Except as otherwise specifically provided elsewhere in
this Agreement, any dispute or difference between or among the parties
arising out of this Agreement or the transactions contemplated hereby,
including, without limitation, any dispute between any Indemnitee and any
Indemnifying Party under Article IX which the parties are unable to resolve
themselves, shall be submitted to and resolved by arbitration pursuant to and
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association in effect on the date of the initial request that
gave rise to the dispute to be arbitrated (the "AAA Rules").
(b) Such arbitration shall be conducted by a panel of three
arbitrators, which shall be selected from a list of arbitrators pursuant to
and in accordance with the AAA Rules. Such arbitration proceeding shall be
conducted in New York, New York. The arbitrators shall not have the
authority to modify any term or provision of this Agreement. The arbitration
proceeding shall include an opportunity for the parties to conduct discovery
in advance of the proceeding, which discovery may be limited by rules
established by the arbitrators. Notwithstanding the foregoing, the parties
agree that they will attempt, and they intend that they and the arbitrators
should use their best efforts in that attempt, to conclude such arbitration
proceeding and have a final decision from the arbitrators within 90 days from
the date of selection of the arbitrators; provided, however, that the
arbitrators shall be entitled to extend such 90-day period one or more times
to the extent necessary for such arbitrators to place a dollar value on any
claim that may be unliquidated. The arbitrators shall promptly deliver a
written decision with respect to the dispute to each of the parties, which
shall promptly act in accordance therewith. Each party agrees that any
decision of the arbitrators shall be final, conclusive and binding, absent
fraud or manifest error, and that they will not contest any action by any
other party hereto in accordance with a decision of the arbitrators, except
on a basis of fraud or manifest error. It is specifically understood and
agreed that any party may enforce any award rendered pursuant to the
arbitration provisions of this Section 11.11 by bringing suit in any court of
competent jurisdiction.
(c) All fees, costs and expenses (including attorneys' fees
and expenses) incurred by the party that prevails in any such arbitration
commenced pursuant to this Section 11.11 or any judicial action or proceeding
seeking to enforce the agreement to arbitrate disputes as set forth in this
Section 11.11 or seeking to enforce any order or award of any arbitration
commenced pursuant to this Section 11.11 may be assessed against the party or
parties that do not prevail in such arbitration in such manner as the
arbitrators or the court in such judicial action, as the case may be, may
determine to be appropriate under the circumstances. All costs and expenses
attributable to the arbitrators shall be allocated among the parties to the
arbitration in such manner as the arbitrators shall determine to be
appropriate under the circumstances.
41
11.12 CUMULATIVE REMEDIES. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
STOCKHOLDER:
/s/ Xxxxxxx Xxxxx
--------------------------------------
Xxxxxxx Xxxxx
METRAN BOSTON, INC.
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Xxxxxxx Xxxxx
President
METRAN AUTOMATIC TRANSMISSION
PARTS CORP.
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Xxxxxxx Xxxxx
President
METRAN PARTS OF PENNSYLVANIA, INC.
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Xxxxxxx Xxxxx
President
43
TM-AL ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
President and
Chief Executive Officer
AFTERMARKET TECHNOLOGY CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
President and
Chief Executive Officer
44
EXHIBITS
Exhibit A. . . . . . . . . . . . . . . . Financial Statements
Exhibit B. . . . . . . . . . . . . . . . Form of Lease
Exhibit C. . . . . . . . . . . . . . . . Form of Noncompetion Agreement
Exhibit D. . . . . . . . . . . . . . . . Form of Employment Agreement
SCHEDULES
Schedule 3.01. . . . . . . . . . . . . . Share Encumbrances
Schedule 3.02. . . . . . . . . . . . . . Company Qualifications to do Business
Schedule 3.05. . . . . . . . . . . . . . Governmental Authorizations
Schedule 3.08. . . . . . . . . . . . . . Capital Stock Matters
Schedule 3.10. . . . . . . . . . . . . . Absence of Certain Changes
Schedule 3.11(a) . . . . . . . . . . . . Leased Real Property
Schedule 3.11(b) . . . . . . . . . . . . Personal Property Leases
Schedule 3.11(c) . . . . . . . . . . . . Land-Use Regulation
Schedule 3.12. . . . . . . . . . . . . . Affiliate Transactions
Schedule 3.13. . . . . . . . . . . . . . Inventories
Schedule 3.14. . . . . . . . . . . . . . Litigation
Schedule 3.15(a) . . . . . . . . . . . . Scheduled Contracts
Schedule 3.15(b) . . . . . . . . . . . . Non-Binding Scheduled Contracts
Schedule 3.15(c) . . . . . . . . . . . . Primary Customers and Suppliers
Schedule 3.16(a) . . . . . . . . . . . . Permits
Schedule 3.16(b) . . . . . . . . . . . . Required Consents
Schedule 3.17. . . . . . . . . . . . . . Compliance with Applicable Laws
Schedule 3.18. . . . . . . . . . . . . . Benefit Plans
Schedule 3.19. . . . . . . . . . . . . . Labor and Employment Matters
Schedule 3.20. . . . . . . . . . . . . . Intellectual Property
Schedule 3.22. . . . . . . . . . . . . . Environmental Matters
Schedule 3.23. . . . . . . . . . . . . . Insurance Policies
Schedule 3.24. . . . . . . . . . . . . . Tax Matters
Schedule 3.25. . . . . . . . . . . . . . Distributions to Stockholder
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