Exhibit 10.15
ASSET PURCHASE AGREEMENT
BY AND AMONG
NES ACQUISITION CORP.
(THE "PURCHASER"),
INDUSTRIAL CRANE MAINTENANCE SYSTEMS, INC.,
BRAZOS RENTAL & TOOL, INC.
AND
SAFE WORK LOAD PRODUCTS, INC.
(THE "SELLERS")
AND
THE STOCKHOLDERS OF THE SELLERS
(THE "STOCKHOLDERS")
Dated as of January 6, 1997
1
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS...................................................................................... 1
1.1 Definitions............................................................................... 1
1.2 Other Definitional Provisions............................................................. 5
1.3 Cross Reference of Other Definitions...................................................... 5
ARTICLE 2
PURCHASE AND SALE; ASSUMPTION OF CERTAIN LIABILITIES; CLOSING.................................... 7
2.1 Purchase and Sale of ICMS Assets........................................................... 7
2.2 Purchase and Sale of BRTI Assets........................................................... 10
2.3 Purchase and Sale of SWLP Assets........................................................... 11
2.4 The Closing................................................................................ 14
2.5 Post Closing Purchase Price Adjustment..................................................... 15
2.6 Distribution of Holdback................................................................... 16
ARTICLE 3
TRANSITIONAL ARRANGEMENTS........................................................................ 17
3.1 Sellers' Name Change....................................................................... 17
ARTICLE 4
CONFIDENTIALITY.................................................................................. 17
4.1 Confidential Treatment..................................................................... 17
4.2 Forced Disclosure.......................................................................... 17
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.................................................. 18
5.1 Organization of the Purchaser.............................................................. 18
5.2 Authorization; Binding Effect; No Breach................................................... 18
5.3 Brokerage.................................................................................. 18
5.4 Disclosure................................................................................. 18
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND STOCKHOLDERS.................................... 18
6.1 Organization and Corporate Power............................................................ 19
6.2 Capital Stock and Related Matters........................................................... 19
6.3 Authorization; Binding Effect; No Breach.................................................... 19
6.4 Subsidiaries; Investments................................................................... 20
6.5 Financial Statements and Related Matters.................................................... 20
6.6 Absence of Undisclosed Liabilities.......................................................... 21
6.7 Acquired Assets............................................................................. 21
6.8 Absence of Certain Developments............................................................. 21
6.9 Tax Matters................................................................................. 23
6.10 Contracts and Commitments................................................................... 24
6.11 Proprietary Rights.......................................................................... 26
6.12 Certain Litigation.......................................................................... 27
6.13 Brokerage................................................................................... 27
6.14 Insurance................................................................................... 27
6.15 Employees................................................................................... 27
6.16 ERISA....................................................................................... 28
6.17 Real Estate................................................................................. 29
6.18 Compliance with Laws........................................................................ 30
6.19 Product Warranty............................................................................ 31
6.20 Disclosure.................................................................................. 31
ARTICLE 7
ACCESS TO RECORDS................................................................................. 32
7.1 Access to Records........................................................................... 32
2
ARTICLE 8
SURVIVAL AND INDEMNIFICATION 32
8.1 Survival........................................................................................................ 32
8.2 Indemnification Obligations of the Sellers and the Stockholders................................................. 33
8.3 Indemnification Obligations of the Purchaser.................................................................... 34
8.4 Indemnification Procedures...................................................................................... 34
8.5 Limitation...................................................................................................... 35
8.6 Treatment of Indemnification Payments........................................................................... 35
8.7 Payment......................................................................................................... 35
ARTICLE 9
OTHER COVENANTS....................................................................................................... 36
9.1 Transaction Expenses............................................................................................ 36
9.2 Special Leasing Arrangement..................................................................................... 36
9.3 Employment Agreement............................................................................................ 36
9.4 Prepayment of Certain Indebtedness.............................................................................. 36
9.5 Noncompetition and Nonsolicitation.............................................................................. 36
9.6 Further Assurances.............................................................................................. 37
9.7 Announcements................................................................................................... 37
9.8 Employees....................................................................................................... 37
9.9 Employee Benefit Plans.......................................................................................... 38
9.10 Necessary Third Party Consents.................................................................................. 38
ARTICLE 10
OTHER AGREEMENTS...................................................................................................... 39
10.1 Remedies........................................................................................................ 39
10.2 Consent to Amendments........................................................................................... 39
10.3 Successors and Assigns.......................................................................................... 39
10.4 Governing Law................................................................................................... 39
10.5 Notices......................................................................................................... 39
10.6 Severability of Provisions...................................................................................... 40
10.7 Schedules and Exhibits.......................................................................................... 41
10.8 Counterparts.................................................................................................... 41
10.9 No Third-Party Beneficiaries.................................................................................... 41
10.10 Headings........................................................................................................ 41
10.11 Merger and Integration.......................................................................................... 41
10.12 Allocation of Purchase Price.................................................................................... 41
10.13 Bulk Sales Law.................................................................................................. 41
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EXHIBITS
Exhibit A - Form of Opinion of Seller's Counsel
Exhibit B - Form of Real Estate Lease
Exhibit C - Form of Employment Agreement
DISCLOSURE SCHEDULES
Affiliated Transactions Schedule
Assets Schedule
BRTI Acquired Assets Schedule
BRTI Contracts Schedule
Brokerage Schedule
Capitalization Schedule
Compliance Schedule
Consents Schedule
Developments Schedule
Employee Benefits Schedule
Environmental Matters Schedule
ICMS Contracts Schedule
Insurance Schedule
Liabilities Schedule
Litigation Schedule
Noncompete Allocation Schedule
Organization Schedule
Permits Schedule
Proprietary Rights Schedule
Real Estate Schedule
SWLP Contracts Schedule
Taxes Schedule
Transaction Expenses Schedule
Warranties Schedule
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of January 6, 1997, by and among NES
ACQUISITION CORP., a Delaware corporation (the "Purchaser"), INDUSTRIAL CRANE
MAINTENANCE SYSTEMS, INC., a Texas corporation ("ICMS"), BRAZOS RENTAL & TOOL,
INC., a Texas corporation ("BRTI"), SAFE WORK LOAD PRODUCTS, INC., a Texas
corporation ("SWLP," and together with ICMS and BRTI, the "Sellers"), and Xxxxx
X. Xxxxxxx and Xxxxx X. Xxxxxxxxx, the sole stockholders of the Sellers (the
"Stockholders"). The Purchaser, the Sellers and the Stockholders are
collectively referred to herein as the "Parties."
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, (i) the Purchaser desires to acquire from ICMS, and ICMS desires to
sell to the Purchaser, substantially all of ICMS's assets, (ii) the Purchaser
desires to acquire from BRTI, and BRTI desires to sell to the Purchaser,
substantially all of BRTI's assets which relate to BRTI's hoist rental business
(subject to certain of BRTI's liabilities as specifically provided herein) and
(iii) the Purchaser desires to acquire from SWLP, and SWLP desires to sell to
the Purchaser, substantially all of SWLP's assets.
NOW, THEREFORE, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. For purposes hereof, the following terms, when used herein
with initial capital letters, shall have the respective meanings set forth
herein:
"Affiliate" of any Person means any other Person controlling, controlled by or
under common control with such first Person.
"Agreement" means this Asset Purchase Agreement, including all Exhibits and
Schedules hereto, as it may be amended from time to time in accordance with its
terms.
"Books and Records" means all lists, records and other information pertaining
to accounts, personnel and referral sources of any of the Sellers, all lists and
records pertaining to suppliers and customers of any of the Sellers, and all
other books, ledgers, files and business records of every kind relating or
pertaining to the ICMS Business, the BRTI Business or the SWLP Business, in each
case whether evidenced in writing, electronically (including by computer) or
otherwise.
"BRTI Business" means the hoist rental business of BRTI as now conducted.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Environmental Affiliates" of any Person means, with respect to any particular
matter, all other Persons whose liabilities or obligations with respect to that
particular matter have been assumed by, or are otherwise deemed by law to be
those of, such first Person.
"Environmental and Safety Requirements" means all federal, state, local and
foreign statutes, regulations, ordinances and similar provisions having the
force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning public
health and safety, worker health and safety and pollution or protection of the
environment, including all such standards of conduct and bases of obligations
relating to the presence, use, production, generation, handling, transport,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or by-products,
asbestos, polychlorinated biphenyls (or PCBs), noise or radiation.
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"Environmental Lien" means any Lien, whether recorded or unrecorded, in favor
of any Government Entity relating to any liability of any Seller or any
Environmental Affiliate of any Seller arising under any Environmental and Safety
Requirement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Estimated Recently Acquired Assets Amount" means $80,202.00.
"GAAP" means, at a given time, United States generally accepted accounting
principles, consistently applied.
"Government Entity" means the United States of America or any other nation,
any state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government.
"ICMS Business" means the business of ICMS as now conducted.
"Indebtedness" of any Person means, without duplication: (a) indebtedness for
borrowed money or for the deferred purchase price of property or services in
respect of which such Person is liable, contingently or otherwise, as obligor or
otherwise (other than trade payables and other current liabilities incurred in
the ordinary course of business) and any commitment by which such Person assures
a creditor against loss, including contingent reimbursement obligations with
respect to letters of credit; (b) indebtedness guaranteed in any manner by such
Person, including a guarantee in the form of an agreement to repurchase or
reimburse; (c) obligations under capitalized leases in respect of which such
Person is liable, contingently or otherwise, as obligor, guarantor or otherwise,
or in respect of which obligations such Person assures a creditor against loss;
and (d) any unsatisfied obligation of such Person for "withdrawal liability" to
a "multiemployer plan," as such terms are defined under ERISA.
"Investment" means, with respect to any Person, any direct or indirect
purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or other ownership or beneficial interest
(including partnership interests and joint venture interests) of any other
Person, and any capital contribution by such Person to any other Person.
"Knowledge" means, with respect to a Person, (a) the actual knowledge of such
Person (which includes the actual knowledge of all officers, directors and
executive employees of such Person) and (b) the knowledge which a prudent
business person would have obtained in the conduct of his or her business after
making reasonable inquiry and exercising reasonable diligence with respect to
the particular matter in question.
"Legal Requirement" means any requirement arising under any action, law,
treaty, rule or regulation, determination or direction of an arbitrator or
Government Entity, including any Environmental and Safety Requirement.
"Lien" means any mortgage, pledge, security interest, encumbrance, easement,
restriction, charge, or other lien.
"Loss" means, with respect to any Person, any diminution in value,
consequential or other damage, liability, demand, claim, action, cause of
action, cost, damage, deficiency, Tax, penalty, fine or other loss or expense,
whether or not arising out of a third party claim, including all interest,
penalties, reasonable attorneys' fees and expenses and all amounts paid or
incurred in connection with any action, demand, proceeding, investigation or
claim by any third party (including any Government Entity) against or affecting
such Person or which, if determined adversely to such Person, would give rise
to, evidence the existence of, or relate to, any other Loss and the
investigation, defense or settlement of any of the foregoing, together with
interest thereon from the date on which such Person provides the written notice
of the related claim as described in Section 8.4 through and including the date
on which the total amount of the claim, including such interest, is recovered or
recouped pursuant to Article 8.
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"Person" means an individual, a partnership, a corporation, an association, a
limited liability company, a joint stock company, a trust, a joint venture, an
unincorporated organization, a governmental entity or any department, agency or
political subdivision thereof and any other entity.
"Proprietary Rights" means (i) with respect to BRTI, all of the following
owned by, issued to or licensed to BRTI and which relate to the BRTI Business,
(ii) with respect to ICMS, all of the following owned by, issued to or licensed
to ICMS, and (iii) with respect to SWLP, all of the following owned by, issued
to or licensed to SWLP and which relate to the SWLP Business: (a) all inventions
(whether patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations, continuations-in-
part, revisions, extensions, and reexaminations thereof; (b) all trademarks,
service marks, trade dress, logos, trade names, and corporate names, together
with all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith; (c) all copyrightable works
(including, without limitation, all software developed by the Seller for use in
the Business), all copyrights, and all applications, registrations, and renewals
in connection therewith; (d) all mask works and all applications, registrations,
and renewals in connection therewith; (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals);
(f) all computer software (including data and related documentation); (g) all
other proprietary rights; and (h) all copies and tangible embodiments thereof
(in whatever form or medium).
"Recently Acquired Assets Amount" means (i) the amounts actually paid by ICMS
or BRTI for any assets purchased by ICMS or BRTI in connection with the ICMS
Business or BRTI Business after September 30, 1996 and prior to the Closing Date
in the ordinary course of business, minus (ii) the amounts actually received by
ICMS or BRTI for any assets sold by ICMS or BRTI in connection with the ICMS
Business or BRTI Business after September 30, 1996 and prior to the Closing
Date.
"Subsidiary" means, with respect to any Person, any corporation a majority of
the total voting power of shares of stock of which is entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or any partnership, association or other
business entity a majority of the partnership or other similar ownership
interest of which is at the time owned or controlled, directly or indirectly, by
that Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes of this definition, a Person is deemed to have a majority ownership
interest in a partnership, association or other business entity if such Person
is allocated a majority of the gains or losses of such partnership, association
or other business entity or is or controls the managing director or general
partner of such partnership, association or other business entity.
"SWLP Business" means the business of SWLP as now conducted.
"Taxes" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes imposed pursuant to Section 59A
of the Code), customs duties, capital stock, franchise, profits, withholding,
social security, unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on minimum,
or other tax, fee, assessment or charge of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
"Transaction Documents" means this Agreement, and all other agreements,
instruments, certificates and other documents to be entered into or delivered by
any Party in connection with the transactions contemplated to be consummated
pursuant to any of the foregoing.
"Treasury Regulations" means the United States Treasury Regulations
promulgated pursuant to the Code.
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1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Accounting Terms. Accounting terms which are not otherwise defined in
this Agreement have the meanings given to them under GAAP. To the extent that
the definition of accounting term that is defined in this Agreement is
inconsistent with the meaning of such term under GAAP, the definition set forth
in this Agreement will control.
(b) "Hereof," etc. The terms "hereof," "herein" and "hereunder" and terms of
similar import are references to this Agreement as a whole and not to any
particular provision of this Agreement. Section, clause, Schedule and Exhibit
references contained in this Agreement are references to Sections, clauses,
Schedules and Exhibits in or to this Agreement, unless otherwise specified.
(c) Successor Laws. Any reference to any particular Code section or any other
law or regulation will be interpreted to include any revision of or successor to
that section regardless of how it is numbered or classified.
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1.3 CROSS REFERENCE OF OTHER DEFINITIONS. Each capitalized term listed below
is defined in the corresponding Section of this Agreement:
Term Section
Actual Recently Acquired Assets Amount....................................................................... 2.5(a)
Actual Specified Current Liabilities......................................................................... 2.5(a)
Assumption................................................................................................... 2.4(a)
BRTI......................................................................................................... Preface
BRTI Acquired Assets......................................................................................... 2.2(a)
BRTI Assumed Liabilities..................................................................................... 2.2(c)
BRTI Cash Purchase Price..................................................................................... 2.2(e)(i)(A)
BRTI Excluded Assets......................................................................................... 2.2(b)
BRTI Excluded Liabilities.................................................................................... 2.2(d)
BRTI Purchase Price.......................................................................................... 2.2(e)(i)
Closing...................................................................................................... 2.4
Closing Date................................................................................................. 2.4
Closing Date Adjustment...................................................................................... 2.4(a)
Closing Review............................................................................................... 2.5(a)
Confidential Information..................................................................................... 4.1
Continuing Employees......................................................................................... 9.8(b)
Contracts.................................................................................................... 6.10(b)
Controlled Group............................................................................................. 6.16(h)
Draft Computation............................................................................................ 2.5(a)
Employee Pension Plans....................................................................................... 6.16(b)
Employee Welfare Plans....................................................................................... 6.16(a)
Financial Statements......................................................................................... 6.5(a)
Firm......................................................................................................... 2.5(a)
Holdback..................................................................................................... 2.2(e)(i)(B)
ICMS......................................................................................................... Preface
ICMS Acquired Assets......................................................................................... 2.1(a)
ICMS Assumed Liabilities..................................................................................... 2.1(c)
ICMS Cash Purchase Price..................................................................................... 2.1(e)
ICMS Excluded Assets......................................................................................... 2.1(b)
ICMS Excluded Liabilities.................................................................................... 2.1(d)
ICMS Purchase Price.......................................................................................... 2.1(e)
ICMS Real Estate............................................................................................. 2.1(a)(vi)
Indemnification Claim Notice................................................................................. 8.4(a)
Indemnified Party............................................................................................ 8.4(a)
Indemnifying Party........................................................................................... 8.4(a)
Latest Balance Sheet......................................................................................... 6.5(a)
Leased Real Property......................................................................................... 6.17(b)
Leases....................................................................................................... 6.17(b)
Multiemployer Plan........................................................................................... 6.16(c)
Noncompetition Period........................................................................................ 9.5(a)
Objection Notice............................................................................................. 2.5(a)
Other Plans.................................................................................................. 6.16(a)
Parties...................................................................................................... Preface
PBGC......................................................................................................... 6.16(h)
Pending Claim................................................................................................ 2.6
Plans........................................................................................................ 6.16
Prime Rate................................................................................................... 2.2(e)(i)
Proceeding................................................................................................... 8.4(a)
Purchaser.................................................................................................... Preface
Purchaser Indemnitees........................................................................................ 8.2
Remaining Holdback........................................................................................... 2.6
Sale......................................................................................................... 2.4(d)
Sellers...................................................................................................... Preface
Seller Employees............................................................................................. 6.16(a)
Seller Indemnitees........................................................................................... 8.3
Specified Current Liabilities................................................................................ 2.2(c)(i)
Specified Current Liabilities Excess......................................................................... 2.5(b)(i)
Stockholders................................................................................................. Preface
SWLP......................................................................................................... Preface
SWLP Acquired Assets......................................................................................... 2.3(a)
SWLP Assumed Liabilities..................................................................................... 2.3(c)
SWLP Cash Purchase Price..................................................................................... 2.3(e)
SWLP Excluded Assets......................................................................................... 2.3(b)
SWLP Excluded Liabilities.................................................................................... 2.3(d)
SWLP Purchase Price.......................................................................................... 2.3(e)
SWLP Real Estate............................................................................................. 2.3(a)(vi)
Unassignable Contracts....................................................................................... 9.10
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ARTICLE 2
PURCHASE AND SALE; ASSUMPTION OF CERTAIN LIABILITIES; CLOSING
2.1 PURCHASE AND SALE OF ICMS ASSETS.
(a) ICMS Acquired Assets. Upon the terms and subject to the conditions set
forth in this Agreement, ICMS hereby sells, assigns, transfers and delivers to
the Purchaser, and the Purchaser hereby purchases, all properties, assets,
rights and interests of every kind and nature, whether tangible or intangible,
and wherever located and by whomever possessed, owned by ICMS as of the date
hereof, except as set forth in Section 2.1(b) below (collectively, the "ICMS
Acquired Assets"), including, without limitation:
(i) all cash and cash equivalents (including, without limitation, all money
market accounts, mutual fund accounts and repurchase agreements);
(ii) all accounts and notes receivables (whether current or noncurrent);
(iii) all securities and other Investments;
(iv) all of ICMS's Proprietary Rights, along with all income, royalties,
damages and payments due or payable as of the date hereof or hereafter,
including, without limitation, damages and payments for past, present or
future infringements or misappropriations thereof, the right to xxx and
recover for past infringements or misappropriations thereof and any and all
corresponding rights that, now or hereafter, may be secured throughout the
world;
(v) all of ICMS's rights existing under leases, contracts, licenses,
permits, distribution arrangements, sales and purchase agreements, accounts
receivable, other agreements and business arrangements, including, without
limitation, all contracts and agreements described on the ICMS Contracts
Schedule attached hereto;
(vi) all real property leased by ICMS, and all plants, buildings and other
improvements located on such leased property, and all easements, licenses,
rights of way, permits and all appurtenances to such leased property,
including, without limitation, all appurtenant rights in and to public
streets, whether or not vacated (collectively, the "ICMS Real Estate");
(vii) all leasehold improvements and all machinery, equipment (including all
transportation and office equipment), fixtures, trade fixtures, tools, dyes
and furniture owned by ICMS wherever located, including, without limitation,
all such items which are located in any building, warehouse, office or other
space leased or occupied by ICMS or used in connection with the ICMS Real
Estate;
(viii) all rental equipment of any kind, wherever located, rented by ICMS to
any Person;
(ix) all inventories of work in process, semi-finished and finished goods,
stores, replacement and spare parts, packaging materials, operating supplies,
and fuels, owned by ICMS wherever located;
(x) all office supplies, production supplies, spare parts, other
miscellaneous supplies, and other tangible property of any kind wherever
located, including, without limitation, all property of any kind located in
any building, office or other space leased, owned or occupied by ICMS or in
any warehouse where any of ICMS's properties and assets may be situated;
(xi) all prepayments and prepaid expenses (except for the refund of the
workmen's compensation insurance deposit);
10
(xii) all of ICMS's claims, causes of action, choses in action, rights of
recovery and rights of set-off of any kind;
(xiii) the right to receive and retain mail, accounts receivable payments
and other communications relating to ICMS;
(xiv) the right to xxxx and receive payment for products shipped or
delivered and services performed but unbilled or unpaid as of the date hereof;
(xv) all lists, records and other information pertaining to accounts,
personnel and referral sources, all lists and records pertaining to suppliers
and customers, and all books, ledgers, files and business records of every
kind, whether evidenced in writing, electronically (including, without
limitation, by computer) or otherwise;
(xvi) all advertising, marketing and promotional materials and all other
printed or written materials;
(xvii) all permits, licenses, certifications and approvals from all
permitting, licensing, accrediting and certifying agencies, and the rights to
all data and records held by such permitting, licensing and certifying
agencies;
(xviii) all goodwill as a going concern and all other intangible properties;
(xix) all telephone numbers (e.g. "800" numbers) used by ICMS;
(xx) the legal names "Industrial Crane Maintenance Systems, Inc." and
"Industrial Crane Rentals & Maintenance"; and
(xxi) except as specified in Section 2.1(b) below, all other property owned
by ICMS, or in which it has an interest on the date hereof, including, without
limitation, all fixed assets relating to ICMS included on the Latest Balance
Sheet and any and all subsequent improvements or additions thereon through the
date hereof.
(b) ICMS Excluded Assets. Notwithstanding Section 2.1(a) above, the following
assets are expressly excluded from the purchase and sale contemplated hereby
and, as such, are not ICMS Acquired Assets (collectively, the "ICMS Excluded
Assets"):
(i) all monies to be received by ICMS from the Purchaser;
(ii) all rights of ICMS under this Agreement;
(iii) all deferred compensation agreements, insurance policies which provide
health, disability, life, accidental death and dismemberment or dental
insurance coverage and all Plans, including, but not limited to, the
Industrial Crane Maintenance Systems, Inc. 401(k) Plan;
(iv) all qualifications to do business as a foreign corporation;
(v) all arrangements with registered agents relating to foreign
qualifications;
(vi) all taxpayer and other identification numbers; and
(vii) all seals, minute books, stock transfer books, blank stock
certificates, and other documents relating to the organization, maintenance,
and existence of ICMS as a corporation.
(c) ICMS Assumed Liabilities. Subject to Section 2.1(d) below, as additional
consideration for the ICMS Acquired Assets, the Purchaser hereby assumes the
following liabilities and obligations of ICMS (the "ICMS Assumed Liabilities"):
11
(i) all liabilities and obligations of ICMS pursuant to executory contracts,
orders and commitments covering the purchase of inventory and/or supplies or
the sale of merchandise or services which are described on the attached ICMS
Contracts Schedule.
(d) ICMS Excluded Liabilities. Except as set forth in Section 2.1(c) above,
the Purchaser shall not assume or become liable for, and shall not be deemed to
have assumed or have become liable for, any of ICMS's liabilities and
obligations not expressly assumed by the Purchaser pursuant to Section 2.1(c)
above, whether accrued, absolute or contingent, whether known or unknown,
whether disclosed or undisclosed, whether due or to become due and whether
related to the ICMS Acquired Assets or otherwise, and regardless of when
asserted (the "ICMS Excluded Liabilities"). ICMS hereby acknowledges that it is
retaining the ICMS Excluded Liabilities and ICMS and the Stockholders jointly
and severally agree to promptly pay and discharge all such liabilities and
obligations when due.
(e) Purchase Price for ICMS Acquired Assets. The purchase price for the ICMS
Acquired Assets (the "ICMS Purchase Price") consists of the assumption by the
Purchaser of the ICMS Assumed Liabilities and the payment of an aggregate of
$460,000, which shall be paid in cash (the "ICMS Cash Purchase Price").
2.2 PURCHASE AND SALE OF BRTI ASSETS.
(a) BRTI Acquired Assets. Upon the terms and subject to the conditions set
forth in this Agreement, BRTI hereby sells, assigns, transfers and delivers to
the Purchaser, and the Purchaser hereby purchases, all of the assets set forth
on the attached BRTI Acquired Assets Schedule (collectively, the "BRTI Acquired
Assets").
(b) BRTI Excluded Assets. Except for the BRTI Acquired Assets, all of the
other assets relating to the BRTI Business are expressly excluded from the
purchase and sale contemplated hereby and, as such, are not BRTI Acquired Assets
(collectively, the "BRTI Excluded Assets").
(c) BRTI Assumed Liabilities. Subject to Section 2.2(d) below, as additional
consideration for the BRTI Acquired Assets, the Purchaser hereby assumes the
following liabilities and obligations of BRTI (the "BRTI Assumed Liabilities"):
(i) liabilities of BRTI for accrued expenses and non-interest bearing
accounts payable relating to the ongoing operation of BRTI which are set forth
on the face of the Latest Balance Sheet or which have been incurred by BRTI in
the ordinary course of business since the date of the Latest Balance Sheet
(the "Specified Current Liabilities"); and
(ii) all liabilities and obligations of BRTI pursuant to executory
contracts, orders and commitments covering the purchase of inventory and/or
supplies or the sale of merchandise or services which are described on the
attached BRTI Contracts Schedule.
(d) BRTI Excluded Liabilities. Except as set forth in Section 2.2(c) above,
the Purchaser shall not assume or become liable for, and shall not be deemed to
have assumed or have become liable for, any of BRTI's liabilities and
obligations not expressly assumed by the Purchaser pursuant to Section 2.2(c)
above, whether accrued, absolute or contingent, whether known or unknown,
whether disclosed or undisclosed, whether due or to become due and whether
related to the BRTI Acquired Assets or otherwise, and regardless of when
asserted (the "BRTI Excluded Liabilities"). BRTI hereby acknowledges that it is
retaining the BRTI Excluded Liabilities and BRTI and the Stockholders jointly
and severally agree to promptly pay and discharge all such liabilities and
obligations when due.
(e) Purchase Price for BRTI Acquired Assets.
(i) The purchase price for the BRTI Acquired Assets (the "BRTI Purchase
Price") consists of the assumption by the Purchaser of the BRTI Assumed
Liabilities and the payment of an aggregate of $4,490,000 (as adjusted
pursuant to Section 2.2(e)(ii) below), which shall be paid as follows: (A) the
Purchaser shall deliver $3,990,000 (as adjusted pursuant to Section 2.2(e)(ii)
below) in cash (the "BRTI Cash Purchase Price"); and (B) the
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Purchaser shall maintain $500,000 in a book entry account of the Purchaser
(the "Holdback"). The Holdback shall be available to satisfy any amounts owing
to the Purchaser pursuant to Section 2.5 (Post Closing Purchase Price
Adjustment) and/or Section 8.2 (Indemnification). Interest shall accrue at the
Prime Rate (as defined below) on the undistributed portion of the Holdback.
The interest on the Holdback shall also be available to satisfy any amounts
owing to the Purchaser pursuant to Section 2.5 (Post Closing Purchase Price
Adjustment) and/or Section 8.2 (Indemnification). For the purposes hereof, the
"Prime Rate" shall mean the rate of interest published as the "prime rate" in
the Wall Street Journal, Midwest Edition, on the Closing Date.
(ii) At the Closing, the BRTI Purchase Price and the BRTI Cash Purchase
Price will be (A) increased dollar-for-dollar by an amount equal to the
Estimated Recently Acquired Assets Amount, and (B) reduced dollar-for-dollar
by an amount equal to the sum of the amounts required to be set forth on the
Transaction Expense Schedule pursuant to Section 9.1 hereto which have been
paid between June 30, 1996 and the Closing.
2.3 PURCHASE AND SALE OF SWLP ASSETS.
(a) SWLP Acquired Assets. Upon the terms and subject to the conditions set
forth in this Agreement, SWLP hereby sells, assigns, transfers and delivers to
the Purchaser, and the Purchaser hereby purchases, all properties, assets,
rights and interests of every kind and nature, whether tangible or intangible,
and wherever located and by whomever possessed, owned by SWLP as of the date
hereof, except as set forth in Section 2.3(b) below (collectively, the "SWLP
Acquired Assets"), including, without limitation:
(i) All Cash And Cash Equivalents (Including, Without Limitation, All Money
Market Accounts, Mutual Fund Accounts And Repurchase Agreements);
(ii) all accounts and notes receivables (whether current or noncurrent);
(iii) all securities and other Investments;
(iv) all of SWLP's Proprietary Rights, along with all income, royalties,
damages and payments due or payable as of the date hereof or hereafter,
including, without limitation, damages and payments for past, present or
future infringements or misappropriations thereof, the right to xxx and
recover for past infringements or misappropriations thereof and any and all
corresponding rights that, now or hereafter, may be secured throughout the
world;
(v) all of SWLP's rights existing under leases, contracts, licenses,
permits, distribution arrangements, sales and purchase agreements, accounts
receivable, other agreements and business arrangements, including, without
limitation, all contracts and agreements described on the SWLP Contracts
Schedule attached hereto;
(vi) all real property leased by SWLP, and all plants, buildings and other
improvements located on such leased property, and all easements, licenses,
rights of way, permits and all appurtenances to such leased property,
including, without limitation, all appurtenant rights in and to public
streets, whether or not vacated (collectively, the "SWLP Real Estate");
(vii) all leasehold improvements and all machinery, equipment (including all
transportation and office equipment), fixtures, trade fixtures, tools, dyes
and furniture owned by SWLP wherever located, including, without limitation,
all such items which are located in any building, warehouse, office or other
space leased or occupied by SWLP or used in connection with the SWLP Real
Estate;
(viii) all rental equipment of any kind, wherever located, rented by SWLP to
any Person;
(ix) all inventories of work in process, semi-finished and finished goods,
stores, replacement and spare parts, packaging materials, operating supplies,
and fuels, owned by SWLP wherever located;
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(x) all office supplies, production supplies, spare parts, other
miscellaneous supplies, and other tangible property of any kind wherever
located, including, without limitation, all property of any kind located in
any building, office or other space leased, owned or occupied by SWLP or in
any warehouse where any of SWLP's properties and assets may be situated;
(xi) all prepayments and prepaid expenses;
(xii) all of SWLP's claims, causes of action, choses in action, rights of
recovery and rights of set-off of any kind;
(xiii) the right to receive and retain mail, accounts receivable payments
and other communications relating to SWLP;
(xiv) the right to xxxx and receive payment for products shipped or
delivered and services performed but unbilled or unpaid as of the date hereof;
(xv) all lists, records and other information pertaining to accounts,
personnel and referral sources, all lists and records pertaining to suppliers
and customers, and all books, ledgers, files and business records of every
kind, whether evidenced in writing, electronically (including, without
limitation, by computer) or otherwise;
(xvi) all advertising, marketing and promotional materials and all other
printed or written materials;
(xvii) all permits, licenses, certifications and approvals from all
permitting, licensing, accrediting and certifying agencies, and the rights to
all data and records held by such permitting, licensing and certifying
agencies;
(xviii) all goodwill as a going concern and all other intangible properties;
(xix) all telephone numbers (e.g. "800" numbers) used by SWLP;
(xx) the legal names "Safe Work Load Products, Inc."; and
(xxi) except as specified in Section 2.3(b) below, all other property owned
by SWLP, or in which it has an interest on the date hereof.
(b) SWLP Excluded Assets. Notwithstanding Section 2.3(a) above, the following
assets are expressly excluded from the purchase and sale contemplated hereby
and, as such, are not SWLP Acquired Assets (collectively, the "SWLP Excluded
Assets"):
(i) all monies to be received by SWLP from the Purchaser;
(ii) all rights of SWLP under this Agreement;
(iii) all deferred compensation agreements, insurance policies which provide
health, disability, life, accidental death and dismemberment or dental
insurance coverage and all Plans;
(iv) all qualifications to do business as a foreign corporation;
(v) all arrangements with registered agents relating to foreign
qualifications;
(vi) all taxpayer and other identification numbers; and
(vii) all seals, minute books, stock transfer books, blank stock
certificates, and other documents relating to the organization, maintenance,
and existence of SWLP as a corporation.
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(c) SWLP Assumed Liabilities. Subject to Section 2.3(d) below, as additional
consideration for the SWLP Acquired Assets, the Purchaser hereby assumes the
following liabilities and obligations of SWLP (the "SWLP Assumed Liabilities"):
(i) all liabilities and obligations of SWLP pursuant to executory contracts,
orders and commitments covering the purchase of inventory and/or supplies or
the sale of merchandise or services which are described on the attached SWLP
Contracts Schedule.
(d) SWLP Excluded Liabilities. Except as set forth in Section 2.3(c) above,
the Purchaser shall not assume or become liable for, and shall not be deemed to
have assumed or have become liable for, any of SWLP's liabilities and
obligations not expressly assumed by the Purchaser pursuant to Section 2.3(c)
above, whether accrued, absolute or contingent, whether known or unknown,
whether disclosed or undisclosed, whether due or to become due and whether
related to the SWLP Acquired Assets or otherwise, and regardless of when
asserted (the "SWLP Excluded Liabilities"). SWLP hereby acknowledges that it is
retaining the SWLP Excluded Liabilities and SWLP and the Stockholders jointly
and severally agree to promptly pay and discharge all such liabilities and
obligations when due.
(e) Purchase Price for SWLP Acquired Assets. The purchase price for the SWLP
Acquired Assets (the "SWLP Purchase Price") consists of the assumption by the
Purchaser of the SWLP Assumed Liabilities and the payment of an aggregate of
$75,000, which shall be paid in cash (the "SWLP Cash Purchase Price").
2.4 THE CLOSING. The closing of the purchase and sale of the ICMS Acquired
Asset, the assumption of the ICMS Assumed Liabilities, the purchase and sale of
the BRTI Acquired Assets, the assumption of the BRTI Assumed Liabilities, the
purchase and sale of the SWLP Acquired Assets, the assumption of the SWLP
Assumed Liabilities and the transactions relating thereto are herein referred to
as the "Closing." The date and time of the Closing (the "Closing Date") shall be
10:00 a.m. on the date hereof. At the Closing the following deliveries shall be
made:
(a) the Purchaser will deliver to the Sellers such instruments of assumption
as are required in order for the Purchaser to assume the ICMS Assumed
Liabilities, the BRTI Assumed Liabilities and the SWLP Assumed Liabilities (the
"Assumption");
(b) the Purchaser will deliver to the Sellers (or, at the Sellers' direction,
to lenders or other third parties) the ICMS Cash Purchase Price, the BRTI Cash
Purchase Price and the SWLP Cash Purchase Price by wire transfer of immediately
available funds;
(c) the Purchaser will deliver to the Sellers the cash payment described in
Section 9.5 below;
(d) the Sellers will convey to the Purchaser good title to all of the ICMS
Acquired Assets and the BRTI Acquired Assets, free and clear of all Liens, and
deliver to the Purchaser warranty deeds, bills of sale, assignments of leases
and contracts and all other instruments of conveyance and consents which are
necessary or desirable to effect transfer of the ICMS Acquired Assets and the
BRTI Acquired Assets (the "Sale"), including documents acceptable for
recordation in the United States Patent and Trademark Office, the United States
Copyright Office and any other similar Government Entity;
(e) the Sellers will deliver to the Purchaser an opinion from Xxxxxx & Xxxx,
legal counsel for the Sellers, with respect to the matters set forth in Exhibit
A attached hereto addressed to the Purchaser. Such opinion will be dated the
Closing Date and will be in form satisfactory to the Purchaser's special legal
counsel;
(f) the Sellers will deliver to the Purchaser evidence satisfactory to the
Purchaser that the Stockholders have prepaid all third party indebtedness for
borrowed money secured by any of the ICMS Acquired Assets, BRTI Acquired Assets
or SWLP Acquired Assets pursuant to Section 9.4 below, and the Sellers will
deliver to the Purchaser evidence satisfactory to the Purchaser of the release
of all security interest securing such indebtedness;
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(g) the Sellers will deliver to the Purchaser the following documents:
(i) a copy of the resolutions duly adopted by each Seller's board of
directors and stockholders authorizing such Seller's execution, delivery and
performance of the Transaction Documents to which such Seller is a party and
the consummation of the Sale and all other transactions contemplated by the
Transaction Documents, as in effect as of the Closing, certified by an officer
of such Seller;
(ii) a certificate (dated not earlier than five business days prior to the
Closing) of the Secretary of State of the state of incorporation of each
Seller as to the good standing of such Seller in such state;
(iii) a certificate (dated not earlier than five business days prior to the
Closing) of the Secretary of State of each state wherein each Seller has
qualified to do business as a foreign corporation as to the good standing of
such Seller in such state; and
(iv) the Books and Records of each Seller.
2.5 POST CLOSING PURCHASE PRICE ADJUSTMENT.
(a) Post-Closing Determination. Within 90 days after the Closing Date, the
Purchaser and its auditors will conduct a review (the "Closing Review") of the
Specified Current Liabilities and the Recently Acquired Assets Amount as of the
close of business on the day before the Closing Date and will prepare and
deliver to BRTI a computation of the amount of the Specified Current Liabilities
and the Recently Acquired Assets Amount as of the close of business on the day
before the Closing Date (the "Draft Computation"). The Purchaser and its
auditors will give BRTI and its auditors an opportunity to observe the Closing
Review and will make available to such Persons all records and work papers used
in preparing the Draft Computation. If BRTI disagrees with the computation of
the Specified Current Liabilities or the Recently Acquired Assets Amount
reflected on the Draft Computation, BRTI may, within thirty (30) days after
receipt of the Draft Computation, deliver a notice (an "Objection Notice") to
the Purchaser setting forth BRTI's calculation of the amount of the Specified
Current Liabilities and/or the Recently Acquired Assets Amount as of the close
of business on the day before the Closing Date. The Purchaser and BRTI will use
reasonable efforts to resolve any disagreements as to the computation of the
Specified Current Liabilities and/or the Recently Acquired Assets Amount, but if
they do not obtain a final resolution within 30 days after the Purchaser has
received the Objection Notice, the Purchaser and BRTI will jointly retain an
independent accounting firm of recognized national or regional standing (the
"Firm") to resolve any remaining disagreements. If the Purchaser and BRTI are
unable to agree on the choice of the Firm, the Firm will be a "big-six"
accounting firm selected by lot (after excluding one firm designated by each of
the Purchaser, on the one hand, and BRTI, on the other hand). The Purchaser and
BRTI will direct the Firm to render a determination within fifteen (15) days of
its retention and the Purchaser, BRTI and their respective employees will
cooperate with the Firm during its engagement. The Firm will consider only
those items and amounts in the Draft Computation set forth in the Objection
Notice which the Purchaser and BRTI are unable to resolve. The Firm's
determination will be based on the definition of the Specified Current
Liabilities and the Recently Acquired Assets Amount included herein. The
determination of the Firm will be conclusive and binding upon the Purchaser and
BRTI. The parties shall bear the costs and expenses of the Firm based on the
percentage which the portion of the contested amount not awarded to each party
bears to the amount actually contested by such party. The amount of the
Specified Current Liabilities, as finally determined pursuant to this Section
2.5(a), is referred to herein as the "Actual Specified Current Liabilities."
The amount of the Recently Acquired Assets Amount, as finally determined
pursuant to this Section 2.5(a), is referred to herein as the "Actual Recently
Acquired Assets Amount."
(b) Post-Closing Adjustment.
(i) If the Actual Specified Current Liabilities are greater than $500,000,
the Purchaser shall be entitled to receive from the Holdback, within two (2)
Business Days after the determination thereof, the amount of such excess (the
"Specified Current Liabilities Excess"); provided, however, that if the
Holdback is less than the amount of the Specified Current Liabilities Excess,
BRTI shall pay to the Purchaser, within two (2) Business Days after the
determination of the Actual Specified Current Liabilities, the amount by which
the Holdback is
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less than the Specified Current Liabilities Excess by wire transfer or
delivery of other immediately available funds.
(ii) If the Actual Recently Acquired Assets Amount is greater than the
Estimated Recently Acquired Assets Amount, the Purchaser shall pay to BRTI,
within two (2) Business Days after the determination of the Actual Recently
Acquired Assets Amount, an amount equal to such excess by wire transfer or
delivery of other immediately available funds. If the Actual Recently
Acquired Assets Amount is less than the Estimated Recently Acquired Assets
Amount, BRTI shall pay to the Purchaser, within two (2) Business Days after
the determination of the Actual Recently Acquired Assets Amount, the amount by
which the Actual Recently Acquired Assets Amount is less than the Estimated
Recently Acquired Assets Amount by wire transfer or delivery of other
immediately available funds.
2.6 DISTRIBUTION OF HOLDBACK. On the 90th day after the Closing Date, the
Purchaser shall pay to BRTI an amount equal to the amount of the Holdback
(together with all accrued but undistributed interest thereon), if any,
remaining after (i) all amounts owing to the Purchaser pursuant to Section 2.5
have been satisfied and (ii) all claims of the Purchaser under Section 8.2 which
have theretofore been finally resolved have been satisfied (the "Remaining
Holdback") less any amount for which the Purchaser claims, prior to such 90th
day, that it is entitled to receive indemnification pursuant to Section 8.2
(each, a "Pending Claim"). As soon as practicable following final resolution of
all Pending Claims, the Purchaser shall pay to BRTI an aggregate amount equal to
the portion, if any, of the Holdback (together with all accrued but
undistributed interest thereon) which remains after payment of the Remaining
Holdback and final resolution of all Pending Claims.
ARTICLE 3
TRANSITIONAL ARRANGEMENTS
3.1 SELLERS' NAME CHANGE. Within five days after the Closing, ICMS will
change its corporate name to a name which is not (and which is not confusingly
similar to) "Industrial Crane Maintenance Systems," BRTI will change its
corporate name to a name which is not (and which is not confusingly similar to)
"Brazos Rental & Tool, Inc.," and SWLP will change its corporate name to a name
which is not (and which is not confusingly similar to) "Safe Work Load Products,
Inc.,"it being the intent of the Parties that from and after the Closing the
Purchaser will have the sole right as against the Sellers and all other Persons
to conduct business under such names and that the Purchaser will commence doing
so at the time of the Closing.
ARTICLE 4
CONFIDENTIALITY
4.1 CONFIDENTIAL TREATMENT. The Sellers and the Stockholders will (and will
cause each of their Affiliates to) treat and hold as confidential all
information concerning the conduct or affairs of the ICMS Business, the BRTI
Business or the SWLP Business (the "Confidential Information"), refrain from
using any Confidential Information, and, at the Purchaser's request, deliver to
the Purchaser or destroy all tangible embodiments (and all copies) of any
Confidential Information which are in the Sellers', Stockholders' or any such
Affiliate's possession. This Section 4.1(a) will not apply to any Confidential
Information which is generally available to the public (other than by reason of
any disclosure by any Seller, Stockholder or Affiliate thereof which constitutes
or is the result of breach of this Section 4.1 or any disclosure by any such
Affiliate which would constitute a breach of this Section 4.1 if such Affiliate
were a Seller) immediately prior to the time of disclosure.
4.2 FORCED DISCLOSURE. If any Seller, Stockholder or any Affiliate thereof is
requested or required (by oral question or request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar process) to disclose any Confidential Information, such Person will
notify the Purchaser promptly of such request or requirement so that the
Purchaser may seek an appropriate protective order or waive compliance with the
provisions of this Article 4. If, in the absence of such a protective order or
waiver, such Seller, Stockholder or Affiliate thereof, on the advice of counsel,
is compelled to disclose any Confidential
17
Information to any Government Entity, such Person will use his or its best
efforts to ensure that such disclosure is limited to Confidential Information
which is so required to be disclosed and obtain an order or other assurance that
confidential treatment will be accorded to any Confidential Information
disclosed.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As a material inducement to the Sellers to enter into this Agreement, the
Purchaser hereby represents and warrants that:
5.1 ORGANIZATION OF THE PURCHASER. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Purchaser has the requisite corporate power and authority and all
licenses, permits and authorizations necessary to enter into, deliver and carry
out its obligations pursuant to the Transaction Documents to which it is a
party.
5.2 AUTHORIZATION; BINDING EFFECT; NO BREACH. The Purchaser's execution,
delivery and performance of each Transaction Document to which the Purchaser is
a party has been duly authorized by the Purchaser. Each Transaction Document to
which the Purchaser is a party constitutes a valid and binding obligation of the
Purchaser which is enforceable in accordance with its terms. The execution,
delivery and performance by the Purchaser of the Transaction Documents to which
the Purchaser is a party do not and will not (i) conflict with or result in a
breach of the terms, conditions or provisions of, (ii) constitute a default
under, (iii) result in a violation of, or (iv) require any authorization,
consent, approval, exemption or other action by or declaration or notice to any
Governmental Entity pursuant to, the charter or bylaws of the Purchaser or any
agreement, instrument, or other document, or any Legal Requirement, to which the
Purchaser or any of its assets is subject.
5.3 BROKERAGE. There is no claim for brokerage commissions, finders' fees or
similar compensation in connection with the transactions contemplated by the
Transaction Documents based on any arrangement or agreement which is binding
upon the Purchaser.
5.4 DISCLOSURE. Neither this Article 5 nor any certificate or other item
delivered to the Sellers by or on behalf of the Purchaser with respect to the
transactions contemplated by the Transaction Documents contains any untrue
statement of a material fact or omits a material fact which is necessary to make
any statement contained herein or therein not misleading.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND STOCKHOLDERS
As a material inducement to the Purchaser to enter into this Agreement, purchase
the ICMS Acquired Assets, the BRTI Acquired Assets and the SWLP Acquired Assets
and assume the ICMS Assumed Liabilities, the BRTI Assumed Liabilities and the
SWLP Assumed Liabilities, the Sellers and the Stockholders hereby jointly and
severally represent and warrant that:
6.1 ORGANIZATION AND CORPORATE POWER. Each of the Sellers is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and is duly qualified to do business in each jurisdiction
in which its ownership of property or conduct of business requires it to so
qualify. The Organization Schedule attached hereto lists every jurisdiction
where such Seller is duly qualified to do business and its jurisdiction of
incorporation. Such Seller has the requisite corporate power necessary to own
and operate its properties, carry on the ICMS Business, BRTI Business or SWLP
Business, as applicable, and enter into, deliver and carry out the transactions
contemplated by the Transaction Documents. Each Stockholder has the requisite
capacity necessary to enter into, deliver and carry out its obligations pursuant
to the Transaction Documents to which it is a party.
18
6.2 CAPITAL STOCK AND RELATED MATTERS. The authorized capital stock of ICMS
consists of 100 shares of Common Stock, no par value, of which 10 shares are
issued and outstanding. All of the issued and outstanding shares of ICMS have
been duly authorized, are validly issued, fully paid, and nonassessable, and are
held of record and beneficially by the Stockholders, free and clear of any Lien,
option or other right of any nature. No class of capital stock of ICMS is
entitled to contractual or other preemptive rights. The authorized capital
stock of BRTI consists of 100 shares of Common Stock, no par value, of which 10
shares are issued and outstanding. All of the issued and outstanding shares of
BRTI have been duly authorized, are validly issued, fully paid, and
nonassessable, and are held of record and beneficially by the Stockholders, free
and clear of any Lien, option or other right of any nature. No class of capital
stock of BRTI is entitled to contractual or other preemptive rights. The
authorized capital stock of SWLP consists of 1,000 shares of Common Stock, no
par value, of which 1,000 shares are issued and outstanding. All of the issued
and outstanding shares of SWLP have been duly authorized, are validly issued,
fully paid, and nonassessable, and are held of record and beneficially by the
Stockholders, free and clear of any Lien, option or other right of any nature.
No class of capital stock of SWLP is entitled to contractual or other preemptive
rights. Except as set forth on the attached Capitalization Schedule:
(a) there are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require any of the Sellers to issue, sell, or otherwise
cause to become outstanding any of their capital stock;
(b) there are no outstanding or authorized stock appreciation, phantom stock,
profit participation, or similar rights with respect to any of the Sellers; and
(c) there are no voting trusts, proxies, or other agreements or understandings
with respect to the voting of the capital stock of any of the Sellers.
To the extent any of the rights described in clauses (a) and (b) above are in
existence, the Capitalization Schedule sets forth a description of the nature of
such rights and the names of the Persons holding such rights and the amounts
thereof.
6.3 AUTHORIZATION; BINDING EFFECT; NO BREACH Each Seller's execution, delivery
and performance of each Transaction Document to which such Seller is a party
have been duly authorized by such Seller. Each Transaction Document to which
such Seller or any of the Stockholders is a party constitutes a valid and
binding obligation of such Person which is enforceable in accordance with its
terms. Except as set forth on the attached Consents Schedule, the execution,
delivery and performance of the Transaction Documents to which such Seller or
Stockholder is a party do not and will not (i) conflict with or result in a
breach of the terms, conditions or provisions of, (ii) constitute a default
under, (iii) result in the creation of any Lien upon any of the ICMS Acquired
Assets, BRTI Acquired Assets or SWLP Acquired Assets under, (iv) give any third
party the right to modify, terminate or accelerate any ICMS Assumed Liability,
BRTI Assumed Liability, SWLP Assumed Liability or other liability or obligation
of such Seller or Stockholder under, (v) result in a violation of, or (vi)
require any authorization, consent, approval, exemption or other action by or
declaration or notice to any Governmental Entity pursuant to, the charter or
bylaws of such Seller or any agreement, instrument or other document, or any
Legal Requirement, to which such Seller, Stockholder or any of such Seller's
assets is subject. Without limiting the generality of the foregoing, except as
set forth on the attached Consents Schedule, neither such Seller, Stockholder
nor any Affiliate of any of them has entered into any agreement, or is bound by
any obligation of any kind whatsoever, directly or indirectly to transfer or
dispose of (whether by sale of stock or assets, assignment, merger,
consolidation or otherwise) the ICMS Business, the BRTI Business, the SWLP
Business, the ICMS Acquired Assets, the BRTI Acquired Assets or the SWLP
Acquired Assets (or any substantial portion thereof) to any Person other than
the Purchaser, and neither such Seller nor Stockholder has entered into any
agreement, nor is it bound by any obligation of any kind whatsoever, to issue
any capital stock of the Sellers to any Person.
6.4 SUBSIDIARIES; INVESTMENTS. Each Seller does not own or hold any rights to
acquire any capital stock or any other security, interest or Investment in any
other Person other than investments which constitute cash or cash equivalents.
Each Seller does not have, and has never had, a Subsidiary.
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6.5 FINANCIAL STATEMENTS AND RELATED MATTERS.
(a) Financial Statements. Each of (i) the unaudited combined and combining
balance sheets of ICMS and BRTI as of June 30, 1993, June 30, 1994 and June 30,
1995 and the unaudited related combined and combining statements of income for
the respective 12-month periods then ended, and (ii) the unaudited combined and
combining balance sheet of ICMS and BRTI as of June 30, 1996 (the "Latest
Balance Sheet") and the related unaudited combined and combining statements of
income and cash flows for the 12-month period then ended (collectively, the
"Financial Statements") (including in all cases the notes thereto, if any) is
accurate and complete in all material respects, is consistent with the books and
records of ICMS and BRTI (which, in turn, are accurate and complete in all
material respects) and fairly and accurately present the financial condition of
ICMS and BRTI.
(b) Receivables. The notes and accounts receivable which are part of the ICMS
Acquired Assets, the BRTI Acquired Assets and the SWLP Acquired Assets are valid
receivables, current, and are subject to no valid counterclaims or setoffs, at
the aggregate amount recorded on the Sellers' books and records as of the
Closing, net of an amount of allowances for doubtful accounts which relate to
those receivables computed in a manner consistent with GAAP and the accounting
practices used in the preparation of the Latest Balance Sheet.
(c) Inventory. The inventory which is part of the ICMS Acquired Assets, the
BRTI Acquired Assets and the SWLP Acquired Assets, net of the reserves
applicable to such inventory, consists of a quantity and quality which, except
as reflected in such reserve, is usable and saleable in the ordinary course of
the ICMS Business, the BRTI Business or the SWLP Business, as applicable, and
the items of such inventory are not defective, slow-moving, obsolete or damaged
and are merchantable and fit for their particular use.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth on the attached
Liabilities Schedule, each of the Sellers does not have any liability (whether
accrued, absolute, contingent, unliquidated or otherwise, whether or not known
to the Sellers or the Stockholders, whether due or to become due, and regardless
of when asserted) other than: (a) the liabilities set forth on the face of the
Latest Balance Sheet, (b) current liabilities which have arisen after the date
of the Latest Balance Sheet in the ordinary course of the ICMS Business, the
BRTI Business or the SWLP Business, as applicable, and consistent with such
Seller's past practice (none of which is a liability resulting from breach of
contract, breach of warranty, tort, infringement, claim or lawsuit) and (c)
other liabilities and obligations expressly disclosed and quantified in the
other Schedules to this Agreement.
6.7 ACQUIRED ASSETS. Except as set forth on the attached Assets Schedule:
(a) the ICMS Acquired Assets constitute all of the assets and rights (other
than the ICMS Excluded Assets) which are necessary for the conduct of the ICMS
Business as currently conducted and presently proposed to be conducted, the BRTI
Acquired Assets constitute all of the assets and rights which are necessary for
the conduct of the BRTI Business as currently conducted and presently proposed
to be conducted and the SWLP Acquired Assets constitute all of the assets and
rights (other than the SWLP Excluded Assets) which are necessary for the conduct
of the SWLP Business as currently conducted and presently proposed to be
conducted;
(b) each Seller has good and marketable title to, or a valid leasehold
interest in, all properties and assets used by it, located on its premises,
shown on the Latest Balance Sheet, or acquired by it since the date of the
Latest Balance Sheet, in each case free and clear of all Liens, other than Liens
disclosed on the Latest Balance Sheet (including any notes thereto); and
(c) each Seller's equipment and other tangible assets are in good operating
condition and fit for use in the ordinary course of such Seller's business and
consistent with its past practice.
6.8 ABSENCE OF CERTAIN DEVELOPMENTS. Except as set forth on the attached
Developments Schedule, since June 30, 1996, there has been no adverse change in
the ICMS Acquired Assets, the ICMS Assumed Liabilities, the BRTI Acquired
Assets, the BRTI Assumed Liabilities, the SWLP Acquired Assets, the SWLP Assumed
Liabilities or the financial condition, operating results, assets, customer or
supplier relations, employee relations or business prospects of the ICMS
Business, the BRTI Business or the SWLP Business. Without limiting the
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generality of the preceding sentence, except as expressly contemplated by this
Agreement or as set forth on the attached Developments Schedule, since June 30,
1996, each Seller has not:
(a) engaged in any activity which has resulted in the acceleration or delay
of the collection of its accounts or notes receivable or any delay in the
payment in its accounts payable, in each case as compared with its custom and
practice in the conduct of the ICMS Business, the BRTI Business or the SWLP
Business, as applicable, immediately prior to June 30, 1996;
(b) discharged or satisfied any Lien or paid any obligation or liability
which would not constitute an ICMS Assumed Liability, BRTI Assumed Liability or
SWLP Assumed Liability, as applicable, if it were unpaid on the Closing Date,
other than current liabilities paid in the ordinary course of the ICMS Business,
the BRTI Business or the SWLP business, as applicable, and consistent with such
Seller's past practice;
(c) mortgaged or pledged any ICMS Acquired Asset, BRTI Acquired Asset or
SWLP Acquired Asset, as applicable, or subjected any ICMS Acquired Asset, BRTI
Acquired Asset or SWLP Acquired Asset, as applicable, to any Lien;
(d) declared, set aside, or paid any dividend or made any distribution with
respect to its capital stock (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its capital stock;
(e) sold, assigned, conveyed, transferred, canceled or waived any property,
tangible asset, Proprietary Right of such Seller or other intangible asset or
right which, if it were held by such Seller on the Closing Date, would
constitute an ICMS Acquired Asset, BRTI Acquired Asset or SWLP Acquired Asset,
as applicable, other than in the ordinary course of the ICMS Business, the BRTI
Business or the SWLP Business, as applicable, and consistent with such Seller's
past practice;
(f) disclosed any Confidential Information to any Person other than the
Purchaser and the Purchaser's representatives, agents, attorneys, accountants
and present and proposed financing sources;
(g) waived any right other than in the ordinary course of the ICMS Business,
the BRTI Business or the SWLP Business, as applicable, or consistent with such
Seller's past practice;
(h) made commitments for capital expenditures which, in the aggregate, would
exceed $25,000 other than in the ordinary course of the ICMS Business, the BRTI
Business or the SWLP Business, as applicable, and consistent with such Seller's
past practice;
(i) made any loan or advance to, or guarantee for the benefit of, or any
Investment (other than Investments which constitute ICMS Excluded Assets, BRTI
Excluded Assets or SWLP Excluded Assets, as applicable) in, any other Person;
(j) granted any bonus or any increase in wages, salary or other compensation
to any employee (other than any increase in wages or salaries granted in the
ordinary course of the ICMS Business, the BRTI Business or the SWLP Business, as
applicable, and consistent with such Seller's past practice granted to any
employee who is not affiliated with such Seller other than by reason of such
Person's employment by such Seller);
(k) made any charitable contributions;
(l) suffered damages, destruction or casualty losses which, in the
aggregate, exceed $10,000 (whether or not covered by insurance) to any ICMS
Acquired Asset, BRTI Acquired Asset or SWLP Acquired Asset, as applicable, or
any other property or asset which, if it existed and was held by such Seller on
the Closing Date, would constitute an ICMS Acquired Asset, BRTI Acquired Asset
or SWLP Acquired Asset, as applicable;
(m) received any indication from any material supplier of such Seller to the
effect that such supplier will stop, or materially decrease the rate of,
supplying materials, products or ervices to such Seller (or to the Purchaser, if
the
21
Sale is consummated), or received any indication from any material customer of
such Seller to the effect that such customer will stop, or materially decrease
the rate of, buying materials, products or services from such Seller (or from
the Purchaser, if the Sale is consummated);
(n) entered into any transaction other than in the ordinary course of the
ICMS Business, the BRTI Business or the SWLP Business, as applicable, and
consistent with such Seller's past practice, or entered into any other material
transaction, whether or not in the ordinary course of the ICMS Business, the
BRTI Business or the SWLP Business, as applicable, which may adversely affect
the ICMS Business, the BRTI Business or the SWLP Business, as applicable, the
ICMS Acquired Assets, the BRTI Acquired Assets or the SWLP Acquired Assets, as
applicable, or the ICMS Assumed Liabilities, BRTI Assumed Liabilities or SWLP
Assumed Liabilities, as applicable; or
(o) agreed to do any act described in any of clauses 6.8(a) through (n)
above.
6.9 TAX MATTERS. Except as set forth in the attached Taxes Schedule:
(a) each Seller has filed all Tax returns and other reports which it was
required to file and each such return or other report was correct and complete
in all respects, and such Seller has paid all Taxes due and owing by it (whether
or not shown on any Tax return or other report) and has withheld and paid over
all Taxes which it is obligated to withhold from amounts paid or owing to any
employee, independent contractor, stockholder, creditor or other third party;
(b) no Tax audits are pending or being conducted with respect to any Seller;
(c) there are no Liens on any of the assets of any Seller that arose in
connection with any failure (or alleged failure) to pay any Tax;
(d) no information related to Tax matters has been requested by any Taxing
authority and no Seller has received notice indicating an intent to open an
audit or other review from any Taxing authority;
(e) there are no unresolved disputes or claims concerning any Seller's Tax
liability;
(f) no claim has ever been made by any jurisdiction in which any Seller does
not file Tax returns to the effect that such Seller is or may be subject to any
Tax imposed by that jurisdiction;
(g) a valid election to be an S Corporation (as defined in Section 1361(d)
of the Code and any corresponding provision of state, local or foreign law) has
been in effect with respect to BRTI at all times since April 20, 1990;
(h) a valid election to be an S Corporation (as defined in Section 1361(d)
of the Code and any corresponding provision of state, local or foreign law) has
been in effect with respect to SWLP at all times since July 2, 1996;
(i) no Seller has waived any statute of limitations in respect of Taxes or
agreed to an extension of time with respect to any Tax assessment or deficiency;
and
(j) no Seller is a party to any Tax sharing or allocation agreement, and no
Seller has any liability for the Taxes of any person under Section 1.1502-6 of
the Treasury Regulations (or any similar provision of state, local or foreign
law), as a transferee or successor, by contract, or otherwise.
6.10 CONTRACTS AND COMMITMENTS.
(a) Contracts Schedule. Other than this Agreement or as described on the
attached ICMS Contracts Schedule, on the attached BRTI Contracts Schedule or on
the attached SWLP Contracts Schedule, as applicable, each Seller is not a party
to any written or oral:
22
(i) pension, profit sharing, stock option, employee stock purchase or other
plan or arrangement providing for deferred or other compensation to employees
or any other employee benefit, welfare or stock plan or arrangement which is
not described on the attached Employee Benefits Schedule, or any contract with
any labor union, or any severance agreement;
(ii) contract for the employment or engagement as an independent contractor
of any Person on a full-time, part-time, consulting or other basis;
(iii) contract pursuant to which such Seller has advanced or loaned funds,
or agreed to advance or loan funds, to any other Person;
(iv) contract or indenture relating to any Indebtedness or the mortgaging,
pledging or otherwise placing a Lien on any of the ICMS Acquired Assets, BRTI
Acquired Assets or SWLP Acquired Assets, as applicable;
(v) contract pursuant to which such Seller is the lessee of, or holds or
operates, any real or personal property owned by any other Person;
(vi) contract pursuant to which such Seller is the lessor of, or permits any
third party to hold or operate, any real or personal property owned by such
Seller or of which such Seller is a lessee;
(vii) assignment, license, indemnification or other contract with respect to
any intangible property (including any Proprietary Right of such Seller) which
is not described on the attached Proprietary Rights Schedule;
(viii) contract or agreement with respect to services rendered or goods sold
or leased to or from others, other than any customer purchase order accepted
in the ordinary course of business and in accordance with such Seller's past
practice which both (1) does not require delivery after the date which is six
months after to Closing Date and (2) does not involve a sale price by more
than $25,000;
(ix) contract prohibiting it from freely engaging in any business anywhere
in the world;
(x) independent sales representative or distributorship agreement with
respect to the ICMS Business, the BRTI Business or the SWLP Business, as
applicable; or
(xi) any other contract which is material to the ICMS Business, the BRTI
Business or the SWLP Business, as applicable, or involves a consideration in
excess of $25,000.
(b) Enforceability. Each item described on the attached ICMS Contracts
Schedule, the attached BRTI Contracts Schedule or the attached SWLP Contracts
Schedule (the "Contracts") is valid, binding and enforceable in accordance with
its terms, except as such enforceability may be limited by (a) applicable
insolvency, bankruptcy, reorganization, moratorium or other similar laws
affecting creditors' rights generally and (b) applicable equitable principles
(whether considered in a proceeding at law or in equity).
(c) Compliance. Each Seller has performed all obligations required to be
performed by it under each Contract to which it is a party, and, to the best of
such Seller's Knowledge, such Seller is not in default under or in breach in any
material respect of (nor is it in receipt of any claim of default or breach
under) any such obligation. No event has occurred which with the passage of
time or the giving of notice (or both) would result in a default, breach or
event of noncompliance in any material respect under any obligation of such
Seller pursuant to any Contract to which it is a party. Such Seller has no
present expectation or intention of not fully performing any obligation of such
Seller pursuant to any Contract to which it is a party, and such Seller has no
Knowledge of any breach or anticipated breach by any other party to any
Contract.
(d) Leases. With respect to each Contract which is a lease of personal
property, each Seller which is a party to such Contract holds a valid and
existing leasehold interest under such lease for the term set forth with respect
to
23
such lease on the attached ICMS Contracts Schedule, the attached BRTI
Contracts Schedule or the attached SWLP Contracts Schedule, as applicable.
(e) Affiliated Transactions. Except as set forth on the attached Affiliated
Transactions Schedule, no officer, director, stockholder or Affiliate of any
Seller (and no individual related by blood or marriage to any such Person, and
no entity in which any such Person or individual owns any beneficial interest)
is a party to any agreement, contract, commitment or transaction with any Seller
(other than this Agreement) or has any material interest in any material
property used by any Seller.
(f) Copies. The Purchaser's special legal counsel has been supplied with a
true and correct copy of each written Contract, each as currently in effect.
6.11 PROPRIETARY RIGHTS.
(a) Schedule. The attached Proprietary Rights Schedule contains a complete
and accurate list of (a) all patented or registered Proprietary Rights owned by
each Seller or used in connection with the ICMS Business, the BRTI Business or
the SWLP Business, (b) all pending patent applications and applications for
registrations of other Proprietary Rights of each Seller filed by or on behalf
of such Seller, (c) all trade names, corporate names and unregistered trade
names and service marks owned by each Seller or used in connection with the ICMS
Business, the BRTI Business or the SWLP Business and (d) all unregistered
copyrights and computer software which are material to the ICMS Acquired Assets,
the BRTI Acquired Assets, the SWLP Acquired Assets, the ICMS Assumed
Liabilities, the BRTI Assumed Liabilities or the SWLP Assumed Liabilities, or
the financial condition, operating results, assets, customer or supplier
relations, employee relations or business prospects of the ICMS Business, the
BRTI Business or the SWLP Business. The attached Proprietary Rights Schedule
also contains a complete and accurate list of all licenses and other rights
granted by each Seller to any third party, and all licenses and other rights
granted by any third party to each Seller, with respect to any Proprietary
Rights. The Proprietary Rights comprise all intellectual property rights which
are necessary for the operation of the ICMS Business, the BRTI Business and the
SWLP Business.
(b) Ownership; Claims. Except as set forth on the attached Proprietary Rights
Schedule, each Seller owns and possesses all right, title and interest in and to
(or has the right to use pursuant to a valid and enforceable license) all
Proprietary Rights necessary for the operation of such Seller's business as
presently conducted and as presently proposed to be conducted, and such Seller
has taken all necessary actions to maintain and protect the Proprietary Rights
which it owns and uses. To the best of each Seller's Knowledge, the owners of
the Proprietary Rights licensed to such Seller have taken all necessary actions
to maintain and protect the Proprietary Rights which are subject to such
licenses. Except as indicated on the attached Proprietary Rights Schedule:
(i) each Seller owns all right, title, and interest in and to all of the
Proprietary Rights described on such Schedule and each other Proprietary Right
which is material to the conduct of the ICMS Business, the BRTI Business or
the SWLP Business, as applicable (in each case free and clear of all Liens),
(ii) there have been no claims made against any Seller asserting the
invalidity, misuse or unenforceability of any of such Proprietary Rights, and
there are no grounds for any such claim,
(iii) no Seller has received any notice of (nor is it aware of any facts
which indicate a likelihood of) any infringement or misappropriation by, or
conflict with, any Person with respect to the Proprietary Rights (including
any demand or request that such Seller license rights from any Person),
(iv) the conduct of the ICMS Business, the BRTI Business and the SWLP
Business has not infringed or misappropriated, and does not infringe or
misappropriate, any proprietary right of any other Person, nor would the
Purchaser's conduct of the ICMS Business, the BRTI Business or the SWLP
Business as presently conducted infringe or misappropriate any proprietary
right of any other Person,
24
(v) to the best of the Sellers' Knowledge, the Proprietary Rights used in
connection with the ICMS Business, the BRTI Business and the SWLP Business, as
applicable, have not been infringed or misappropriated by any other Person,
and
(vi) the consummation of the transactions contemplated by this Agreement
will have no adverse effect on any Proprietary Right of any of the Sellers.
6.12 CERTAIN LITIGATION. Except as set forth on the attached Litigation
Schedule, there is no action, suit, proceeding, order, investigation or claim
pending (or, to the best of the Sellers' Knowledge, threatened) against or
affecting any of the Sellers, the ICMS Business, the BRTI Business or the SWLP
Business (or to the best of the Sellers' Knowledge, pending or threatened
against or affecting any officer, director or employee of any of the Sellers
with respect to the ICMS Business, the BRTI Business or the SWLP Business, as
applicable), at law or in equity, or before or by any Government Entity (a) with
respect to the transactions contemplated by the Transaction Documents, or (b)
concerning the design, manufacture, rendering or sale by any of the Sellers of
product or service in the course of the ICMS Business, the BRTI Business or the
SWLP Business or otherwise concerning the conduct of the ICMS Business, the BRTI
Business or the SWLP Business, and, to the best of the Sellers' Knowledge, there
is no basis for any of the foregoing.
6.13 BROKERAGE. Except as set forth on the attached Brokerage Schedule, there
is no claim for brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by the Transaction Documents based
on any arrangement or agreement which may be binding upon any of the Sellers or
to which any of the Sellers or any of the ICMS Acquired Assets, BRTI Acquired
Assets or SWLP Acquired Assets may be subject.
6.14 INSURANCE. The attached Insurance Schedule contains a description of
each insurance policy maintained by each Seller with respect to its properties,
assets or business, and each such policy is in full force and effect. No Seller
is in default on any obligation pursuant to any insurance policy maintained by
it.
6.15 EMPLOYEES.
(a) Continued Employment. To the best of the Sellers' Knowledge, no executive
or key employee of any of the Sellers or any group of employees of any of the
Sellers has any plans to terminate employment with any of the Sellers.
(b) Compliance and Restrictions. Each Seller has complied with all laws
relating to the employment of labor in connection with the ICMS Business, the
BRTI Business or the SWLP Business, as applicable, including provisions of such
laws relating to wages, hours, equal opportunity, collective bargaining and the
payment of social security and other taxes, and such Seller has no material
labor relations problem (including any union organization activities, threatened
or actual strikes or work stoppages or material grievances). Neither such Seller
nor any of its employees is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement relating to,
affecting, or in conflict with, the ICMS Business, the BRTI Business or the SWLP
Business activities.
6.16 ERISA. Except as set forth on the attached Employee Benefits Schedule:
(a) with respect to all current employees (including those on lay-off,
disability or leave of absence), former employees, and retired employees of each
Seller (the "Seller Employees"), such Seller does not maintain or contribute to
any (a) employee welfare benefit plans (as defined in Section 3(1) of ERISA)
("Employee Welfare Plans"), or (b) any plan, policy or arrangement which
provides nonqualified deferred compensation, bonus or retirement benefits,
severance or "change of control" (as set forth in Code Section 280G) benefits,
or life, disability accident, vacation, tuition reimbursement or other material
fringe benefits ("Other Plans");
(b) each of the Sellers does not, and has not during the past six (6) years,
maintained, contributed to, or participated in any defined benefit plan or
defined contribution plan which are employee pension benefit plans (as defined
in Section 3(2) of ERISA) ("Employee Pension Plans");
25
(c) each of the Sellers does not, and never has, contributed to or
participated in any multiemployer plan (as defined in Section 3(37) of ERISA) (a
"Multiemployer Plan");
(d) each of the Sellers does not maintain or have any obligation to contribute
to or provide any post-retirement health, accident or life insurance benefits to
any Seller Employee, other than limited medical benefits required to be provided
under Code Section 4980B;
(e) all Plans (and all related trusts and insurance contracts) comply in form
and in operation in all respects with the applicable requirements of ERISA and
the Code;
(f) all required reports and descriptions (including all Form 5500 Annual
Reports, Summary Annual Reports and Summary Plan Descriptions) with respect to
all Plans have been properly filed with the appropriate government agency or
distributed to participants, and each Seller has complied with the requirements
of Code Section 4980B;
(g) with respect to each Plan, all contributions, premiums or payments which
are due on or before the Closing Date have been paid to such Plan; and
(h) each of the Sellers has not incurred, and has no reason to believe that it
will incur, any liability to the Pension Benefit Guaranty Corporation (the
"PBGC"), the United States Internal Revenue Service, any multiemployer plan or
otherwise with respect to any employee pension benefit plan or with respect to
any employee pension benefit plan currently or previously maintained by members
of the controlled group of companies (as defined in Sections 414(b) and (c) of
the Code) that includes such Seller (the "Controlled Group") that has not been
satisfied in full, and no condition exists that presents a material risk to such
Seller or any member of the Controlled Group of incurring such a liability
(other than liability for premiums due the PBGC) which could reasonably be
expected to have any adverse effect on the Purchaser or any of the ICMS Acquired
Assets, BRTI Acquired Assets or SWLP Acquired Assets after the Closing.
The "Plans" means all Employee Pension Plans, Employee Welfare Plans, Other
Plans and Multiemployer Plans to which any of the Sellers contributes or is a
party.
6.17 REAL ESTATE.
(a) Owned Properties. Except as set forth on the attached Real Estate
Schedule, each Seller does not own, and has not owned in the past, any real
property.
(b) Leased Property. The attached Real Estate Schedule lists and describes
briefly all real property leased or subleased to each Seller and all other real
property which is used in the ICMS Business, the BRTI Business or the SWLP
Business (the "Leased Real Property"). Each Seller has delivered to the
Purchaser's special legal counsel correct and complete copies of the leases and
subleases listed on the Real Estate Schedule (collectively, the "Leases"). With
respect to the Leased Real Property and each of the Leases:
(i) such Lease is legal, valid, binding, enforceable, and in full force and
effect;
(ii) such Lease is fully assignable to the Purchaser and will continue to
be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the Sale and the Assumption and
the commencement of the operation of the ICMS Business, the BRTI Business and
the SWLP Business by the Purchaser;
(iii) no party to such Lease is in breach or default, and no event has
occurred which, with notice or lapse of time, would constitute a breach or
default or permit termination, modification, or acceleration of such lease or
sublease;
(iv) no party to such Lease has repudiated any provision thereof;
26
(v) there are no disputes, oral agreements, or forbearance programs in
effect as to such Lease;
(vi) in the case of each Lease which is a sublease, the representations and
warranties set forth in clauses 6.17(b)(i) through (v) are true and correct
with respect to the underlying lease;
(vii) no Seller has assigned, transferred, conveyed, mortgaged, deeded in
trust, or encumbered any interest in the leasehold or subleasehold created
pursuant to such Lease;
(viii) none of the Leases has been modified in any respect, except to the
extent that such modifications are in writing and have been delivered or made
available to the Purchaser;
(ix) all buildings, improvements and other structures located upon the
Leased Real Property have received all approvals or governmental authorities,
including licenses and permits, required in connection with the operation of
the ICMS Business, the BRTI Business or the SWLP Business, as applicable,
thereon and have been operated and maintained in accordance with all
applicable Legal Requirements and the terms and conditions of the Leases; and
(x) all buildings, structures and other improvements located upon the
Leased Real Property, including, without limitation, all components thereof,
are in good operating condition subject to the provision of usual and
customary maintenance in the ordinary course of business with respect to
buildings, structures and improvements of like age and construction and all
water, gas, electrical, steam, compressed air, telecommunication, sanitary and
storm sewage and other utility lines and systems serving the Leased Real
Property are sufficient to enable the continued operation of the Leased Real
Property in the manner currently being used in connection with the operation
of the ICMS Business, the BRTI Business or the SWLP Business, as applicable.
6.18 COMPLIANCE WITH LAWS.
(a) Generally. Except as set forth on the attached Compliance Schedule, no
Seller has violated any Legal Requirement the violation of which could have an
adverse effect on the ICMS Acquired Assets, the BRTI Acquired Assets, the SWLP
Acquired Assets, the ICMS Assumed Liabilities, the BRTI Assumed Liabilities, the
SWLP Assumed Liabilities or the financial condition, operating results, assets,
customer or supplier relations, employee relations or business prospects of the
ICMS Business, the BRTI Business or the SWLP Business, and no Seller has
received notice alleging any such violation.
(b) Required Permits. Each Seller has complied with (and is in compliance
with) all permits, licenses and other authorizations required for the occupation
of such Seller's facilities and the operation of the ICMS Business, the BRTI
Business or the SWLP Business, as applicable. The items described on the
attached Permits Schedule constitute all of the permits, filings, notices,
licenses, consents, authorizations, accreditation, waivers, approvals and the
like of, to or with any Government Entity which are required for the
consummation of the Sale, the Assumption or any other transaction contemplated
by the Transaction Documents or the ownership of the ICMS Acquired Assets, the
BRTI Acquired Assets or the SWLP Acquired Assets or the Purchaser's conduct of
the ICMS Business, the BRTI Business or the SWLP Business (as such is presently
conducted by the Sellers) thereafter.
(c) Environmental and Safety Matters. Without limiting the generality of
Section 6.18(a) and (b) above, except as set forth on the attached Environmental
Matters Schedule, each Seller and all of such Seller's Environmental Affiliates
have complied (and are in compliance, in all respects) with all applicable
Environmental and Safety Requirements, and neither such Seller nor any of such
Seller's Environmental Affiliates has received any notice, report or information
regarding any liabilities (whether accrued, absolute, contingent, unliquidated
or otherwise), or any corrective, investigatory or remedial obligations, arising
under any Environmental and Safety Requirement. Without limiting the generality
of the preceding sentence, except as set forth on the attached Environmental
Matters Schedule:
27
(i) no underground storage tank, asbestos-containing material in any
form or condition, or PCB-containing materials or equipment, exists at any
property owned or occupied by any of the Sellers or any of their
Environmental Affiliates;
(ii) the transactions contemplated to be consummated pursuant to the
Transaction Documents will not result in the imposition of any obligations
under Environmental and Safety Requirements for site investigation, cleanup
or notification to or consent of any government agency or third party;
(iii) no equipment, facts, events, conditions, conduct or methods
relating to the past or present facilities, properties or operations of any
of the Sellers or any of their Environmental Affiliates will prevent,
hinder or limit continued compliance with any Environmental and Safety
Requirement, give rise to or result in any corrective, investigatory or
remedial obligation pursuant to Environmental and Safety Requirements, or
give rise to or result in any other liability (including any liability
relating to onsite or offsite hazardous or non-hazardous substance
releases, personal injury, cleanup, remediation, property damage or natural
resources damage) pursuant to any Environmental and Safety Requirement; and
(iv) no Environmental Lien has attached to any property of any of the
Sellers or any of their Environmental Affiliates.
6.19 PRODUCT WARRANTY. Except as set forth on the attached Warranties
Schedule, all products leased, manufactured, serviced, distributed, sold or
delivered by each Seller in connection with the ICMS Business, the BRTI Business
or the SWLP Business, as applicable, have been manufactured, serviced,
distributed, sold and/or delivered in conformity with all applicable contractual
commitments and all express and implied warranties. No material liability of any
of the Sellers exists for replacement or other damages in connection with any
such product.
6.20 DISCLOSURE. Neither this Article 6 nor any schedule, attachment,
written statement, document, certificate or other item supplied to the Purchaser
by or on behalf of the Sellers with respect to the transactions contemplated by
the Transaction Documents contains any untrue statement of a material fact or
omits a material fact necessary to make each statement contained herein or
therein not misleading. There is no fact which the Sellers have not disclosed to
the Purchaser in writing and of which any officer, director or executive
employee of any of the Sellers is aware (other than matters of a general
economic nature) and which has had or could reasonably be expected to have a
material adverse effect upon the ICMS Acquired Assets, the BRTI Acquired Assets,
the SWLP Acquired Assets, the ICMS Assumed Liabilities, the BRTI Assumed
Liabilities, the SWLP Assumed Liabilities or the financial condition, operating
results, assets, customer or supplier relations, employee relations or business
prospects of the ICMS Business, the BRTI Business or the SWLP Business.
ARTICLE 7
ACCESS TO RECORDS
7.1 ACCESS TO RECORDS. To the extent reasonably required for any bona fide
business purpose, each Party will allow, and will use its best efforts to cause
its Affiliates to allow, the other Parties (and the other Parties' agents,
representatives and Affiliates) access to all business records and files
concerning the ICMS Business, the BRTI Business, the SWLP Business, the ICMS
Acquired Assets, the BRTI Acquired Assets, the SWLP Acquired Assets, the ICMS
Assumed Liabilities, the BRTI Assumed Liabilities or the SWLP Assumed
Liabilities which relate to the period prior to the Closing Date and will permit
such Persons to make copies of the same. Such access will be granted upon
reasonable advance notice, during normal business hours, and in such a manner so
as not to interfere unreasonably with the operations of the Person affording
such access. Without limiting the generality of the foregoing, if any Party or
any of its Affiliates actively is contesting or defending against any charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand in
connection with (a) any transaction contemplated by the Transaction Documents,
or (b) any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act, or transaction on or
prior to the Closing relating to the ICMS Business, the BRTI Business or the
SWLP Business, then the other Parties will cooperate, and use their best efforts
to cause their Affiliates to cooperate, with the contesting or defending Person
and its counsel in such
28
contest or defense, make available such other Parties' and their Affiliates'
personnel and provide such testimony and access to books and records as are
reasonably requested in connection with such contest or defense, all at the
contesting or defending Person's expense (unless the contesting or defending
Person is entitled to indemnification therefor pursuant to Section 8.2 or 8.3).
No provision of this Article 7 will be construed so as to limit the Sellers'
obligation to transfer to the Purchaser all Books and Records which are part of
the ICMS Acquired Assets, the BRTI Acquired Assets or the SWLP Acquired Assets.
ARTICLE 8
SURVIVAL AND INDEMNIFICATION
8.1 SURVIVAL. All representations, warranties, covenants and agreements of
the Parties contained herein or made in writing by any Party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby as follows (regardless of
any investigation made by any Party or on its behalf):
(a) the representations and warranties contained in Section 6.4 through 6.6,
6.8, 6.10 through 6.17 and 6.19 through 6.20 of this Agreement shall terminate
on the second anniversary of the Closing Date;
(b) the representations and warranties contained in Sections 6.9 and 6.18 of
this Agreement shall terminate when the applicable statutes of limitations with
respect to the liabilities in question expire (giving effect to any extensions
or waivers thereof), plus 60 days; and
(c) the representations and warranties contained in Sections 6.1 through 6.3
and 6.7 of this Agreement, the covenants and agreements contained in this
Agreement, and all other representations, warranties, covenants and agreements
contained herein or made in writing by any Party in connection herewith and not
specifically mentioned in clauses (a) or (b) above shall survive indefinitely,
unless earlier terminated by their terms; provided that, in each case, any
representation or warranty in respect of which indemnification may be sought
under Section 8.2 or 8.3, and the indemnity with respect thereto, shall survive
the time at which it would otherwise terminate pursuant to this Section 8.1 if
notice of the inaccuracy or breach thereof giving rise to such right of
indemnity shall have been given to the party against whom such indemnity may be
sought prior to such time; provided further that neither a Party's participation
in the consummation of any transaction pursuant to any Transaction Document nor
any waiver of any condition to such participation will constitute a waiver by
such participating Party of any representation, warranty, covenant or agreement
of any Party or otherwise affect the survival of any such representation,
warranty, covenant or agreement.
8.2 INDEMNIFICATION OBLIGATIONS OF THE SELLERS AND THE STOCKHOLDERS. In
addition to any other right or remedy available to the Purchaser at law or in
equity, the Sellers and the Stockholders will jointly and severally indemnify
the Purchaser and its Affiliates, stockholders, officers, directors, employees,
agents, representatives and permitted successors and assigns (collectively, the
"Purchaser Indemnitees") in respect of, and save and hold each Purchaser
Indemnitee harmless against and pay on behalf of or reimburse each Purchaser
Indemnitee as and when incurred, any Loss which any Purchaser Indemnitee
suffers, sustains or becomes subject to as a result of, in connection with,
relating or incidental to or by virtue of, without duplication:
(a) any misrepresentation or breach of any representation or warranty by any
of the Sellers or the Stockholders set forth in this Agreement or any Schedule,
Exhibit, certificate or other instrument or document furnished to the Purchaser
by any of the Sellers or the Stockholders pursuant to any Transaction Document;
(b) any nonfulfillment or breach of any covenant or agreement of any of the
Sellers or the Stockholders set forth in any Transaction Document; or
29
(c) any ICMS Excluded Liability, BRTI Excluded Liability or SWLP Excluded
Liability.
The Purchaser Indemnitees may proceed against any or all of the Sellers and/or
any or all of the Stockholders, at the Purchaser Indemnitees' option.
8.3 INDEMNIFICATION OBLIGATIONS OF THE PURCHASER. The Purchaser will
indemnify the Sellers and their Affiliates, stockholders, officers, directors,
employees, agents, representatives and permitted successors and assigns
(collectively, the "Seller Indemnitees") and hold each of them harmless against
any Loss which such Seller Indemnitee suffers, sustains or becomes subject to as
a result of, in connection with, relating to or by virtue of, without
duplication:
(a) any misrepresentation or breach of any representation or warranty by the
Purchaser set forth in this Agreement or any certificate delivered by the
Purchaser to the Sellers pursuant to any Transaction Document;
(b) any nonfulfillment or breach of any covenant or agreement of the Purchaser
set forth in any Transaction Document; or
(c) any ICMS Assumed Liability, BRTI Assumed Liability or SWLP Assumed
Liability.
8.4 INDEMNIFICATION PROCEDURES.
(a) Notice of Claim. Any Person making a claim for indemnification pursuant
to Section 8.2 or 8.3 above (an "Indemnified Party") must give the Party from
whom indemnification is sought (an "Indemnifying Party") written notice of such
claim (an "Indemnification Claim Notice") promptly after the Indemnified Party
receives any written notice of any action, lawsuit, proceeding, investigation or
other claim (a "Proceeding") against or involving the Indemnified Party by a
Government Entity or other third party or otherwise discovers the liability,
obligation or facts giving rise to such claim for indemnification; provided that
the failure to notify or delay in notifying an Indemnifying Party will not
relieve the Indemnifying Party of its obligations pursuant to Section 8.2 or
8.3, as applicable, except to the extent that such failure actually xxxxx the
Indemnifying Party. Such notice must contain a description of the claim and the
nature and amount of such Loss (to the extent that the nature and amount of such
Loss is known at such time).
(b) Control of Defense: Conditions. With respect to the defense of any
Proceeding against or involving an Indemnified Party in which the Government
Entity or other third party in question seeks only the recovery of a sum of
money for which indemnification is provided in Section 8.2 or 8.3, at its option
an Indemnifying Party may appoint as lead counsel of such defense any legal
counsel selected by the Indemnified Party; provided that before the Indemnifying
Party assumes control of such defense it must first
(i) enter into an agreement with the Indemnified Party (in form and
substance satisfactory to the Indemnified Party) pursuant to which the
Indemnifying Party agrees to be fully responsible (with no reservation of any
rights other than the right to be subrogated to the rights of the Indemnified
Party) for all Losses relating to such Proceeding and unconditionally
guarantees the payment and performance of any liability or obligation which
may arise with respect to such Proceeding or the facts giving rise to such
claim for indemnification, and
(ii) furnish the Indemnified Party with evidence that the Indemnifying
Party, in the Indemnified Party's sole judgment, is and will be able to
satisfy any such liability.
(c) Control of Defense: Exceptions, etc. Notwithstanding Section 8.4(b), the
Indemnified Party will be entitled to participate in the defense of such claim
and to employ counsel of its choice for such purpose at its own expense;
provided that the Indemnifying Party will bear the reasonable fees and expenses
of such separate counsel incurred prior to the date upon which the Indemnifying
Party effectively assumes control of such defense. The Indemnifying Party will
not be entitled to assume control of the defense of such claim, and will pay the
reasonable fees and expenses of legal counsel retained by the Indemnified Party,
if
30
(i) the Indemnified Party reasonably believes that an adverse
determination of such Proceeding could be detrimental to or injure the
Indemnified Party's reputation or future business prospects,
(ii) the Indemnified Party reasonably believes that there exists or could
arise a conflict of interest which, under applicable principles of legal
ethics, could prohibit a single legal counsel from representing both the
Indemnified Party and the Indemnifying Party in such Proceeding, or
(iii) a court of competent jurisdiction rules that the Indemnifying Party
has failed or is failing to prosecute or defend vigorously such claim; and
The Indemnifying Party must obtain the prior written consent of the Indemnified
Party (which the Indemnified Party will not unreasonably withhold) prior to
entering into any settlement of such claim or Proceeding or ceasing to defend
such claim or Proceeding.
8.5 LIMITATION. Notwithstanding anything to the contrary contained in this
Agreement, the aggregate amount of all payments made by the Sellers and the
Stockholders in satisfaction of claims for indemnification pursuant to Section
8.2(a) shall in no event exceed $2,600,000.
8.6 TREATMENT OF INDEMNIFICATION PAYMENTS. Amounts paid to or on behalf of
the Purchaser or any of the Sellers as indemnification hereunder shall be
treated as adjustments to the Purchase Price. If any Tax authority asserts that
an indemnification payment is not an adjustment to the Purchase Price, the
Indemnifying Party will indemnify the Indemnified Party against any Tax imposed
on the receipt of such indemnification payment pursuant to Section 8.2 or 8.3,
including any Tax imposed on any payment pursuant to this Section 8.6.
8.7 PAYMENT. Subject to Sections 2.6, the Indemnifying Party shall pay the
Indemnified Party to the extent the Indemnified Party is entitled to payment
hereunder in immediately available funds promptly after the Indemnified Party
provides the Indemnifying Party with notice of a claim hereunder and the parties
reasonably agree that there is a reasonable basis for such claim, or a final
result, determination, finding, judgment and/or award is made with respect to
such claim by any court of competent jurisdiction.
ARTICLE 9
OTHER COVENANTS
9.1 TRANSACTION EXPENSES. The Purchaser will bear its own costs and expenses
(including, without limitation, all Taxes and all legal, accounting, consulting
and other fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby. Each Seller agrees that, except as set forth
on the attached Transaction Expenses Schedule, it has not paid any amount to any
third party, and will not pay any amount to any third party until after the
Closing, with respect to any of the costs and expenses of such Seller or any
Stockholder (including, without limitation, all Taxes and all legal, accounting,
brokerage, advisory, consulting and other fees and expenses) in connection with
this Agreement or any of the transactions contemplated hereby. In addition,
the Stockholders will pay (i) all transfer, sales, use and similar Taxes imposed
by reason of the transactions contemplated by this Agreement, (ii) all stamp and
recording taxes, fees and expenses, settlement fees, escrow fees and other
miscellaneous closing fees or costs associated therewith, and (iii) all costs
and expenses incurred by the Sellers or the Stockholders in connection with the
negotiation, preparation and entry into the Transaction Documents and the
consummation of the transactions to be consummated pursuant to the Transaction
Documents.
9.2 SPECIAL LEASING ARRANGEMENT. At the Closing, the Stockholders and the
Purchaser shall enter into a real estate lease substantially in the form of
Exhibit B attached hereto.
9.3 EMPLOYMENT AGREEMENT. At the Closing, the Purchaser and Xxxxx X. Xxxxxxx
shall enter into an employment agreement substantially in the form of Exhibit C
attached hereto.
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9.4 PREPAYMENT OF CERTAIN INDEBTEDNESS. At the Closing, the Stockholders will
prepay all third party indebtedness for borrowed money secured by any of the
ICMS Acquired Assets, BRTI Acquired Assets or SWLP Acquired Assets, and shall
secure complete releases of any security interest such third parties may have in
any of such ICMS Acquired Assets, BRTI Acquired Assets or SWLP Acquired Assets.
9.5 NONCOMPETITION AND NONSOLICITATION.
(a) Noncompetition. Each Stockholder acknowledges that in the course of his
affiliation with ICMS, BRTI and SWLP he has become familiar with ICMS's, BRTI's
and SWLP's trade secrets and with other Confidential Information. Therefore,
each Stockholder agrees that for the period commencing on the Closing Date and
ending on the third anniversary of the Closing Date (the "Noncompetition
Period"), such Stockholder shall not directly or indirectly own, manage,
control, participate in, consult with, render services for, or in any manner
engage in any business competing with the businesses of the Purchaser or its
Affiliates as such businesses exist or are in process or are contemplated on the
Closing Date, within the geographical area in which the Purchaser or any of its
Affiliates engages or plans to engage in such businesses. The Stockholders
agree that the provisions of this Section 9.5(a) are reasonable with respect to
their duration, geographical area and scope. As further consideration for the
obligations of the Stockholders pursuant to this Section 9.5, the Purchaser
shall pay to the Stockholders $250,000 on the Closing Date, allocated among the
Stockholders in accordance with Noncompete Allocation Schedule attached hereto.
(b) Nonsolicitation. During the Noncompetition Period, each Stockholder shall
not directly or indirectly through another entity (i) induce or attempt to
induce any employee of ICMS, BRTI, SWLP, the Purchaser or any of their
respective Affiliates to leave the employ of ICMS, BRTI, SWLP, the Purchaser or
such Affiliate, or in any way interfere with the relationship between ICMS,
BRTI, SWLP, the Purchaser or any such Affiliate and any employee thereof, (ii)
hire any person who was an employee of ICMS, BRTI, SWLP, the Purchaser or any of
their respective Affiliates at any time after the date which is one year prior
to the Closing Date, or (iii) induce or attempt to induce any customer,
supplier, licensee or other business relation of ICMS, BRTI, SWLP, the Purchaser
or any of their respective Affiliates to cease doing business with ICMS, BRTI,
SWLP, the Purchaser or such Affiliate, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and ICMS, BRTI, SWLP, the Purchaser or any of their respective Affiliates.
(c) Enforcement. If, at the time of enforcement of Section 9.5, a court holds
that the restrictions stated herein are unreasonable under circumstances then
existing, the Parties agree that the maximum duration, scope or geographical
area reasonable under such circumstances shall be substituted for the stated
period, scope or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum duration, scope and area
permitted by law. Because the Stockholders have had access to Confidential
Information, the Parties agree that money damages would be an inadequate remedy
for any breach of this Section 9.5. Therefore, in the event of a breach or
threatened breach of this Section 9.5, the Purchaser or its respective
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any violations of, the provisions of this Section 9.5 (without posting a bond or
other security).
9.6 FURTHER ASSURANCES. From and after the Closing, the Sellers will execute
all documents and take any other action which they are reasonably requested to
execute or take to further effectuate the transactions contemplated by the
Transaction Documents.
9.7 ANNOUNCEMENTS. Neither the Sellers nor the Stockholders will make any
public announcement of or regarding the transactions contemplated by this
Agreement without the prior approval of the Purchaser as to the timing and
content of such announcement (which approval the Purchaser may not unreasonably
withhold or delay).
9.8 EMPLOYEES.
(a) Each Seller has provided the Purchaser with a true, correct and complete
list of all of such Seller's employees indicating the rate of pay of each such
employee during the twelve months preceding the date hereof and the
32
location of such employee. Each Seller shall pay all amounts of wages, bonuses
and other remuneration (including, without limitation, discretionary benefits
and bonuses) payable to such employees with respect to the period ending on the
day prior to the Closing Date, together with any worker's compensation claims or
amounts payable on an ongoing basis to such employees in connection with events
occurring prior to the Closing Date.
(b) The Purchaser will offer employment to all Persons employed as of the
Closing Date (the "Continuing Employees") on terms and conditions which are in
the aggregate substantially equivalent to those applicable to such Persons'
employment with the Sellers as of the Closing Date. Nothing in this Section 9.8
shall obligate the Purchaser to continue to employ any Continuing Employee for
any period of time.
(c) The Sellers will be responsible for and shall pay (i) to the Purchaser at
Closing an amount equal to all vacation pay, sick leave pay and floating holiday
pay earned or accrued by the Continuing Employees as of the close of business on
the Closing Date, including any related payroll burden (FICA and other
employment taxes) with respect thereto, whether or not such pay is vested or has
been accrued on the books of the Sellers at such close of business, based upon
the remuneration of such Continuing Employees, normally used in computing such
vacation pay, sick leave pay and floating holiday pay and (ii) to the
appropriate Continuing Employee, all severance payments (if any) due to
Continuing Employees as a result of the termination of their employment with the
Seller.
(d) Each Seller has provided the Purchaser with a true, correct and complete
list of all Continuing Employees employed by such Seller indicating the amount
of each such Continuing Employee's severance payments (if any) and earned or
accrued vacation pay, sick leave pay and floating holiday pay.
9.9 EMPLOYEE BENEFIT PLANS. The Sellers shall be responsible for and shall
pay, all obligations to employees as they come due under any and all Plans or
any fringe benefit arrangements at any time maintained by the Sellers.
9.10 NECESSARY THIRD PARTY CONSENTS. Anything contained in this Agreement to
the contrary notwithstanding, this Agreement shall not constitute an agreement
to transfer or assign any right, title or interest in, to or under any contract,
license, lease, commitment, sales order, purchase order or other agreement, nor
any claim or right or any benefit arising thereunder or resulting therefrom, if
(i) an attempted transfer or assignment thereof, without the consent of a third
party thereto, would constitute a breach thereof or in any way adversely affect
the rights of the Purchaser or the Sellers or any of their respective Affiliates
thereunder and (ii) such consent is not obtained (the "Unassignable Contracts").
Each of the Sellers shall use all reasonable efforts to obtain the consent of
all necessary third parties to the transfer or assignment to the Purchaser
pursuant to this Agreement of all Unassignable Contracts. With respect to each
Unassignable Contract, until consent to assign such contract is obtained, or in
the event such consent is never obtained, each of the Sellers and the Purchaser
shall cooperate in any reasonable arrangements designed to provide for the
Purchaser, to the maximum extent possible, the benefits thereunder, including,
without limitation, enforcement for the benefit of the Purchaser of any and all
rights of any of the Sellers against such third party arising out of
cancellation by such third party or otherwise.
ARTICLE 10
OTHER AGREEMENTS
10.1 REMEDIES. No failure to exercise, and no delay in exercising, any right,
remedy, power or privilege under this Agreement by any Party will operate as a
waiver of such right, remedy, power or privilege, nor will any single or partial
exercise of any right, remedy, power or privilege under this Agreement preclude
any other or further exercise of such right, remedy, power or privilege or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges provided pursuant to this Agreement are cumulative and not
exhaustive of any other rights, remedies, powers and privileges which may be
provided by law.
10.2 CONSENT TO AMENDMENTS. No waiver, amendment, modification or supplement
of this Agreement will be binding upon any Party unless such waiver, amendment,
modification or supplement is set forth in writing
33
and is executed by such Party. No other course of dealing between or among any
of the Parties or any delay in exercising any rights pursuant to this Agreement
will operate as a waiver of any rights of any Party.
10.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided in this
Agreement, all covenants and agreements set forth in this Agreement by or on
behalf of the Parties will bind and inure to the benefit of the respective
successors and assigns of the Parties, whether so expressed or not, except that
neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by the Sellers without the Purchaser's prior written consent.
The Purchaser may (at any time prior to the Closing) at its sole discretion, in
whole or in part assign its rights and delegate its obligations pursuant to this
Agreement, including the right to purchase the ICMS Acquired Assets, the BRTI
Acquired Assets and the SWLP Acquired Assets and the obligation to assume the
ICMS Assumed Liabilities, the BRTI Assumed Liabilities and the SWLP Assumed
Liabilities to one or more of its Affiliates, and the Purchaser may, at its sole
discretion, direct the Sellers to convey the ICMS Acquired Assets, the BRTI
Acquired Assets or the SWLP Acquired Assets, in whole or in part, to one or more
of the Purchaser's Affiliates. Furthermore, the Purchaser may assign its rights
under this Agreement for collateral security purposes to any lenders providing
financing to the Purchaser or any of its Affiliates.
10.4 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the domestic laws of the State of Illinois, without giving
effect to any choice of law or conflict provision or rule (whether of the State
of Illinois or any other jurisdiction) that would cause the laws of any
jurisdiction other than the State of Illinois to be applied. In furtherance of
the foregoing, the internal law of the State of Illinois will control the
interpretation and construction of this Agreement, even if under such
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.
10.5 NOTICES. All demands, notices, communications and reports provided for
in this Agreement will be in writing and will be either personally delivered,
mailed by first class mail (postage prepaid) or sent by reputable overnight
courier service (delivery charges prepaid) to any Party at the address specified
below, or at such address, to the attention of such other Person, and with such
other copy, as the recipient party has specified by prior written notice to the
sending Party pursuant to the provisions of this Section 10.5:
If to the Sellers or the Stockholders:
c/o Xxxxx X. Xxxxxxx
00 Xxxxxx Xxx
Xxxx Xxxxxxx, XX 00000
with a copy, which will not constitute notice to the Sellers or
the Stockholders, to:
Xxxxxx & Lang
00 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
If to the Purchaser:
NES Acquisition Corp.
c/o National Equipment Services, Inc.
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
34
with a copy, which will not constitute notice to the Purchaser, to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Perl
Any such demand, notice, communication or report will be deemed to have been
given pursuant to this Agreement when delivered personally, on the third
business day after deposit in the U.S. mail or on the business day after deposit
with a reputable overnight courier service, as the case may be.
10.6 SEVERABILITY OF PROVISIONS. If any covenant, agreement, provision or
term of this Agreement is held to be invalid for any reason whatsoever, then
such covenant, agreement, provision or term will be deemed severable from the
remaining covenants, agreements, provisions and terms of this Agreement and will
in no way affect the validity or enforceability of any other provision of this
Agreement.
10.7 SCHEDULES AND EXHIBITS. The Schedules and Exhibits constitute a part of
this Agreement and are incorporated into this Agreement for all purposes.
10.8 COUNTERPARTS. The Parties may execute this Agreement in two or more
counterparts (no one of which need contain the signatures of all Parties), each
of which will be an original and all of which together will constitute one and
the same instrument.
10.9 NO THIRD-PARTY BENEFICIARIES. Except as otherwise expressly provided in
this Agreement, no Person which is not a Party will have any right or obligation
pursuant to this Agreement.
10.10 HEADINGS. The headings used in this Agreement are for the purpose of
reference only and will not affect the meaning or interpretation of any
provision of this Agreement.
10.11 MERGER AND INTEGRATION. Except as otherwise provided in this Agreement,
this Agreement sets forth the entire understanding of the Parties relating to
the subject matter hereof, and all prior understandings, whether written or oral
are superseded by this Agreement.
10.12 ALLOCATION OF PURCHASE PRICE. The allocation of the Purchase Price
among the acquired assets shall be made in accordance with Section 1060 of the
Code and applicable Treasury Regulations thereunder. The fair market value of
the acquired assets shall be determined jointly by the Purchaser and the Seller
reasonably and in good faith, and such determination shall be used by the
parties in allocating the Purchase Price and in preparing (a) Form 8594, Asset
Acquisition Statement, for each of the Purchaser and the Sellers, and (b) all
Tax Returns. Each of the Purchaser and the Sellers shall file Form 8594,
prepared in accordance with this Section, with its federal income Tax Return for
its Tax period including the Closing Date.
10.13 BULK SALES LAW. The Sellers will bear any loss, liability, obligation
or cost suffered by any of the Sellers or the Purchaser as a result of the
Sellers' noncompliance with any provision of any bulk sales law which is
applicable to the transfer of the ICMS Acquired Assets, the BRTI Acquired Assets
or the SWLP Acquired Assets pursuant to this Agreement.
35
IN WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement as
of the date first written above.
PURCHASER:
NES ACQUISITION CORP.
By: /s/ Xxxxx Xxxxxxx
-------------------------
Its: President
------------------------
SELLERS:
INDUSTRIAL CRANE MAINTENANCE SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------
Its: President
------------------------
BRAZOS RENTAL & TOOL, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------
Its: President
------------------------
SAFE WORK LOAD PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Its: President
------------------------
STOCKHOLDERS:
/s/ Xxxxx X. Xxxxxxx
-----------------------------
XXXXX X. XXXXXXX
/s/ Xxxxx X. Xxxxxxxxx
-----------------------------
XXXXX X. XXXXXXXXX
36
