Exhibit 10.5
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
AGREEMENT AND PLAN MERGER AND REORGANIZATION (the "Agreement") dated as of
October 9, 2001 by and among (1) TRC Companies, Inc., a Delaware corporation
(the "Parent"), party of the first part; (2) TRC Infrastructure, Inc., a New
York corporation; TRC Infrastructure, Inc., a New Jersey corporation; and TRC
Infrastructure, Inc., a Virginia corporation (all collectively the "Merger
Sub"), parties of the second part; (3) SITE-Xxxxxxxx Engineers, Inc., a New York
corporation; Site Construction Services, Inc., a New Jersey corporation; and
SITE-Xxxxxxxx Engineers, Inc., a Virginia corporation (all collectively the
"Company" or "Surviving Corporation"), parties of the third part; and (4) Xxxxxx
X. Xxxxxx, F. Xxxxxx Xxxxxxxxx, Xxxx X. Xxxxxxxxx and Xxxx X. Xxxxxx, (all
collectively the "Shareholders"), parties of the fourth part.
R E C I T A L S
WHEREAS, the boards of directors of Parent, Merger Sub and the Company have each
determined that it is in furtherance of and consistent with their respective
long-term business strategies and is advisable and in the best interests of
their respective companies and shareholders for Merger Sub to merge with and
into the Company upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such combination, the boards of directors of Parent,
Merger Sub and the Company have each approved the Merger (the "Merger") of
Merger Sub with and into the Company in accordance with the applicable
provisions of applicable states business law and upon the terms and subject to
the conditions set forth herein;
WHEREAS, it is intended that, for United States federal income tax purposes, the
Merger shall qualify as a reorganization under the provisions of Section 368(a)
of the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "Code") and that this Agreement be, and hereby is,
adopted as a plan of reorganization for purposes of Section 368 of the Code;
WHEREAS, as an inducement to the willingness of Parent and Merger Sub to enter
into this Agreement, Company will enter into employment agreements, each dated
as of the date hereof and to become effective as of the Effective Time, with
Xxxxxx X. Xxxxxx, Xxxx X. Xxxxxxxxx, and F. Xxxxxx Xxxxxxxxx; and
WHEREAS, the Company, Parent, Merger Sub and Shareholders desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and the other transactions contemplated hereby;
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NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties and covenants
herein contained, the Parties agree as follows:
1. THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions of this
Agreement and in accordance with the New York Business Corporation Law, the New
Jersey Business Corporation Law and the Virginia Stock Corporation Act
(collectively, the "BCLs"), at the Effective Time (as defined herein), the
Merger Sub shall be merged with and into Company, and Company shall (i) be the
surviving corporation in the Merger, (ii) succeed to and assume all the rights
and obligations of Merger Sub in accordance with the BCLs, and (iii) continue
its corporate existence under the laws of the States of New Jersey, New York and
Virginia as applicable; all in accordance with and pursuant to the three (3)
respective Articles of Merger ("Articles of Merger") attached hereto as
EXHIBIT 1.1-"A", EXHIBIT 1.1-"B" and EXHIBIT 1.1-"C". At the Effective Time, the
separate existence of Merger Sub shall cease. In accordance with the BCLs, all
of the rights, privileges, powers and franchises of the Merger Sub shall vest in
the Surviving Corporation, and all of the debts, liabilities and duties of the
Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
1.2 EFFECTIVE TIME; FILING OF AGREEMENT OF MERGER. The Merger shall become
effective at the later date or time of (a) such filing of the Agreements of
Merger with the States of New Jersey, New York, and Virginia; (b) after the
close of business (no later than 11:59 P.M.) October 15, 2001 or (c) at such
later date or time as Company and Merger Sub shall agree and as specified in the
Articles of Merger (the "Effective Time"). Following execution of this
Agreement. Parent and the Company shall take any and all other reasonable and
lawful actions and do any and all lawful things to cause the Merger to become
effective.
1.3 ARTICLES OF INCORPORATION. At the Effective Time, the Articles of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the Articles of Incorporation of the Surviving Corporation until
thereafter amended in accordance with their terms and the BCLs.
1.4 BYLAWS. The Bylaws of Company, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended in accordance with their terms and the BCLs.
1.5 DIRECTORS AND OFFICERS. The directors and the officers of the Company
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Corporation.
1.6 ADDITIONAL ACTIONS. If at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that consistent with the
terms of this Agreement any further assignments or assurances in law or any
other acts are necessary or desirable (i) to vest, perfect or confirm, of record
or otherwise, in the Surviving Corporation, title to and possession of any
property or right acquired or to be acquired by reason of, or as a result of,
the Merger, or (ii) otherwise to carry out the purposes of this Agreement, then,
subject to the terms and conditions of this Agreement, each party and its
officers and directors shall be deemed to have granted to the Surviving
Corporation an irrevocable power of attorney to execute and deliver all such
deeds, assignments and assurances in law and to do all acts necessary or proper
to vest,
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perfect or confirm title to and possession of such property or rights
in the Surviving Corporation and otherwise carry out the purposes of this
Agreement; and the officers and directors of the Surviving Corporation are fully
authorized in the name of each party to take any and all such action.
1.7 COMPANY SHARES. Each of the shares of the Company common stock held by
the Shareholders ("Company Shares") issued and outstanding immediately prior to
the Effective Time, shall, by virtue of the Merger and without any action on the
part of the Company, the Parent or the Shareholders, be converted into the right
to receive the consideration as provided under Section 2.2 below, after the
surrender of the certificate(s) representing such Company Shares as provided in
Section 2.2; and the Shareholders shall have no further rights related to such
shares other than the right to Merger Consideration as provided under Section
2.2 below.
2. THE CLOSING; MERGER CONSIDERATION
2.1 THE CLOSING. Subject to the terms and conditions of this Agreement, the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place at the offices of Parent in Windsor, Connecticut commencing at 5:00
P.M. local time on October 9, 2001 or at such other time and date mutually
agreed upon by all Parties hereto (the "Closing Date").
2.2 CONVERSION OF COMPANY SHARES; MERGER CONSIDERATION AND EXCHANGE. Each
Company share issued and outstanding immediately prior to the Effective Time
shall be converted into the right to receive the consideration for the Merger
set forth in this Section 2.2 ("Merger Consideration"); and in exchange for the
Company Shares, Parent shall deliver to Shareholders on the basis of their
respective Shareholder Interests as set forth on SCHEDULE 2.2 the following: (i)
the Initial Exchange [as set forth in subsection 2.2(a)], and (ii) the Earnout
Exchange [as set forth in subsection 2.2(c)].
(a) INITIAL EXCHANGE. At the Effective Time, Parent shall deliver:
(i) to the Shareholders certificates for 557,802 shares of
Parent's $.10 par value, common stock (the "TRC Shares") worth $21.52
million ($21,520,000.00) calculated as set forth in Section 2 (a)
(iii) below.
(ii) to the Escrow Agent certificates for 90,720 TRC shares
("Escrow Shares") worth $3.5 million ($3,500,000.00), calculated as
set forth in Section 2 (a) (iii) below, which Escrow Shares shall be
released and delivered to the Shareholders pursuant to the Escrow
Agreement attached hereto as Exhibit 2.2 (a) (ii) as follows:
(A) If Company's earnings before interest and taxes ("EBIT")
calculated as set forth herein plus Transaction, Extraordinary
and Non-Recurring Expenses (the "Transaction, Extraordinary and
Non-Recurring Expenses") as hereinafter defined for the annual
period ending on June 30, 2002 ("FY02") is equal to or greater
than $6.49 million ($6,490,000.00), all of the Escrow Shares will
be released and delivered to the Shareholders as soon as the
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financial results for FY02 are determined to be final. The term
"Transaction, Extraordinary, and Non-Recurring Expense means (i)
all transaction related expenses for legal, tax, accounting,
travel and other related expense items expensed by Company during
July, August and September, 2001 prior to Closing subject to the
agreement by Parent; (ii) all transaction related expenses for
legal, tax, accounting, travel and other related expense items
expensed by the Company after September 30, 2001 subject to the
agreement by Parent; (iii) amounts distributed by Company to
Shareholders necessary to cover their income tax liability as
Shareholders of the Company for the period from January 1, 2001
until the effective date and (iv) such other expenses set forth
on SCHEDULE 2.2 (a) (ii) (A) SUBJECT TO THE AGREEMENT OF PARENT.
(B) If Company's EBIT plus Transaction, Extraordinary and
Non-Recurring Expenses is less than $6.49 million ($6,490,000.00)
for FY02, the number of Escrow Shares to be released and
delivered to the Shareholders will be calculated as follows:
I. $3.66 million ($3,660,000.00), will be subtracted
from the actual amount of the Company's EBIT plus
Transaction , Extraordinary and Non-Recurring Expenses for
FY02.
II. The result of subparagraph (B) I. above will be
divided by the result of $2.83 million ($2,830,000.00) minus
Transaction, Extraordinary and Non-Recurring Expenses.
III. The number of Escrow Shares will be multiplied by
the percentage derived from subparagraph (B) II. above. The
resulting number of shares (not to exceed the total number
of Escrow Shares) will be released and delivered to the
Shareholders; provided that no Escrow Shares will be
released and delivered to the Shareholders if the result of
the calculation in subparagraph I is zero or less.
IV. The remaining Escrow Shares will be released and
delivered to the Shareholders according to subsection (C)
next below.
(C) Escrow Shares remaining (if any) after the end of Fiscal
Year 02 shall be released and delivered as follows:
I. $3.66 million ($3,660,000.00) will be subtracted
from the actual amount of Company's EBIT for the annual
period ending June 30, 2003 (FY03").
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II. The result of subparagraph (C) I. above will be
divided by $5.29 million ($5,290,000.00).
III. The remaining number of Escrow Shares will be
multiplied by the percentage derived from subparagraph (C)
II. above. The resulting number of shares (not to exceed the
total number of remaining Escrow Shares) will be released
and delivered to the Shareholders as soon as the financial
results for FY03 are determined to be final; provided that
no Escrow Shares will be released and delivered to the
Shareholders if the result of the calculation in
subparagraph I is zero or less.
IV. The remaining Escrow Shares (if any) will be
released and delivered to the Shareholders according to
subsection (D) next below.
(D) Escrow Shares remaining (if any) after the end of FY03
shall be delivered as follows:
I. $3.66 million ($3,660,000.00) will be subtracted
from the actual amount of Company's EBIT for the annual
period ending June 30, 2004 ("FY04").
II. The result of subparagraph (D) I. above will be
divided by $6.24 million ($6,240,000.00).
III. The remaining number of Escrow Shares will be
multiplied by the percentage derived from subparagraph (D)
II. above. The resulting number of shares (not to exceed the
total number of remaining Escrow Shares) will be released
and delivered to the Shareholders as soon as the financial
results for FY04 are determined to be final; provided that
no Escrow Shares will be payable if the results of the
calculation in subparagraph I is zero or less.
IV. Any Escrow Shares remaining unreleased and not
delivered to the Shareholders after the end of FY04 pursuant
to this Section 2.2 (a) (ii) will be forfeited and
retransferred by Shareholders to Parent, and the Merger
Consideration will be reduced by the value of the TRC Shares
so forfeited and retransferred.
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(iii) The number of TRC Shares to be delivered pursuant to this
Section 2.2 (a) (rounded to the nearest whole share) shall be
calculated using a per share value equal to Thirty-eight Dollars and
fifty-eight cents ($38.58).
(iv) EBIT for the Company will be determined in the same manner
as for past Company financial statements in accordance with generally
accepted accounting principles consistently applied and will include
the Earnings Before Interest and Taxes of SITE-Xxxxxxxx Engineers,
Inc., a New York corporation and its wholly-owned subsidiary of
SITE-Xxxxxxxx Engineers, Inc., a New Jersey corporation; Site
Construction Services, Inc., a New Jersey corporation; SITE-Xxxxxxxx
Engineers, Inc., a Virginia corporation and from any source and any
operation under the direction and control of the Company and will be
computed without allocation of corporate overhead by Parent or its
affiliates except to the extent it replaces a historical operating
cost of Company.
(v) The Escrow Shares delivered to the Escrow Agent shall at all
times be issued, outstanding and registered upon Parent's stock
records in the name of Shareholders in accordance with their
respective Shareholder Interests as set forth on SCHEDULE 2.2, and
owned by Shareholder subject only to divestiture as provided in
Section 2.2 (a) (ii) (D) IV.; and except for restriction upon
possession, sale and transfer of the Escrow Shares as well as possible
forfeiture and retransfer of TRC Shares pursuant to Section 2.2 (a)
(ii) (D) IV., Shareholders have full right and privilege of ownership
with respect to the Escrow Shares including but not limited to the
right to vote such shares as well as the right to receive any and all
dividends declared and paid with respect to such shares.
(b) MERGER CONSIDERATION ADJUSTMENT. The Initial Exchange shall be
adjusted upwards or downwards by a number of TRC Shares equal in value
(calculated as aforesaid under Section 2.2 (a) (iii) hereof) to the dollar
amount by which the Net Worth of the Company as set forth on the Company's
balance sheet as of September 30, 2001 as adjusted hereunder is more than
or less than $9.6 million ($9,600,000.00), respectively. Parent and
Shareholders agree to cause Company to prepare financial statements for
Company as of September 30, 2001 within sixty (60) days of the Closing
Date. Said financial statements will be prepared in the same manner as past
Company financial statements in accordance with generally accepted
accounting principles consistently applied and will include SITE-Xxxxxxxx
Engineers, Inc., a New York corporation and its wholly-owned subsidiary of
SITE-Xxxxxxxx Engineers, Inc., a New Jersey corporation; Site Construction
Services, Inc., a New Jersey corporation; SITE-Xxxxxxxx Engineers, Inc., a
Virginia corporation and any source and any operation under the direction
and control of the Company. The Net Worth appearing on the Company's
balance sheet shall be increased by the Transaction, Extraordinary and
Non-Recurring Expenses and shall be the Adjusted Net Worth for purposes
hereof.
If the Adjusted Net Worth of the Company as September 30, 2001 exceeds $9.6
million ($9,600,000.00), Parent will transfer and deliver TRC Shares valued as
aforesaid under Section 2.2 (a) (iii) to the Shareholders in an amount equal in
value to the excess amount. If the Adjusted Net Worth of the Company as of
September 30, 2001 is less than $9.6 million ($9,600,000.00), Shareholders will
transfer and deliver TRC Shares valued as aforesaid under
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Section 2.2 (a) (iii) to Parent in an amount equal in value to the deficiency.
All such transfers and deliveries either by Parent or Shareholder shall be made
no later than ten (10) days after final determination of such Adjusted Net
Worth. The costs of preparation of said financial statements shall be paid by
the Company.
If the Parent and Shareholders shall not be able to agree with such
calculation of the Company's Net Worth as of September 30, 2001 following a good
faith attempt to reach such agreement within ten days, then any such disputed
matter shall be submitted to and determined by an independent accounting firm
acceptable to Parent and Shareholders, which determination shall be final and
binding, absent manifest error. The fees and expenses of any such accounting
firm incurred in resolving the disputed matter shall be equitably apportioned by
such accounting firm based upon the extent to which Parent or Shareholders is
determined by such accounting firm to be the prevailing party.
(c) EARNOUT EXCHANGE. (i) Within sixty (60) days following each of the
four (4) Earnout Periods set forth below ("Earnout Periods"), Parent shall
deliver to Shareholders on the basis of their respective Shareholder
Interests (as set forth on SCHEDULE 2.2) $1.03 worth of registered TRC
Shares (rounded to the nearest whole share and valued as provided in
subparagraph (iii) of this subsection herein below) for each $1.00 of EBIT
of the Company above the following four (4) targets ("Targets") for the
indicated Earnout Periods:
Earnout Period Target
A. October 1, 2001- June 30, 2002 $3.6 million ($3,600,000.00)
B. July 1, 2002 - June 30, 2003 $4.8 million ($4,800,000.00)
C. July 1, 2003 - June 30, 2004 $4.8 million ($4,800,000.00)
D. July 1, 2004 - September 30, 2004 $1.2 million ($1,200,000.00)
(ii) EBIT for the Company will be determined in the same manner
as for past Company financial statements in accordance with generally
accepted accounting principles consistently applied and will include
the Earnings Before Interest and Taxes of SITE-Xxxxxxxx Engineers,
Inc., a New York corporation and its wholly-owned subsidiary of
SITE-Xxxxxxxx Engineers, Inc., a New Jersey corporation; Site
construction Services, Inc., a New Jersey corporation; SITE-Xxxxxxxx
Engineers, Inc., a Virginia corporation and from any source and any
operation under the direction and control of the Company and will be
computed without allocation of corporate overhead by Parent or its
affiliates except to the extent it replaces a historical operating
cost of Company. Transaction, Extraordinary and Non-Recurring Expense
will be excluded from the calculation of EBIT to the extent incurred
during the Earnout Period.
(iii) The number of registered TRC Shares to be delivered
pursuant to this Section 2.2 (c) shall be calculated using a per share
value equal to the daily average closing
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price of the TRC Shares on the New York Stock Exchange for the 50
trading-day period ending on the fifth trading day prior to their
delivery.
(iv) In the event federal income tax is determined to be due for
imputed interest on the TRC Shares to be issued under this Section 2.2
(c), additional registered TRC Shares shall be issued to Shareholders
concurrently with a value (determined as aforesaid) equal to the
"gross up" required to compensate the Shareholders for the value of
the federal income tax liability with respect to the imputed interest
using the formula:
"gross up" = (40% X IMPUTED INTEREST)
----------------------------
60%
(v) The Earnout Exchange shall be determined on the basis of the
Company as constituted as of Closing, without the effect of
acquisitions by Company post-Closing.
(vi) Following each of the Earnout Periods, Parent and
Shareholders shall prepare an annual computation of the Merger
Consideration under this Section 2.2 (c) for the Earnout Exchange
under this Section 2.2 (c) due to Shareholders. Said computation shall
be completed no later than sixty (60) days after the end of each
Earnout Period. If Parent and Shareholders shall not be able to agree
with such calculation following a good faith attempt to reach such
agreement within ten days, then any such disputed matter shall be
submitted to and determined by an independent accounting firm
acceptable to Parent and Shareholders, which determination shall be
final and binding, absent manifest error. The fees and expenses of any
such accounting firm incurred in resolving the disputed matter shall
be equitably apportioned by such accounting firm based upon the extent
to which Parent or Shareholders is determined by such accounting firm
to be the prevailing party. Delivery of the TRC Shares due
Shareholders for the Earnout Exchange under this Section 2.2 (c) shall
be made within 15 days of the final determination by the independent
accounting firm.
(d) REGISTRATION.
(i) The TRC Shares deliverable hereunder will not be initially
registered, and will bear a restrictive legend in substantially the
following form:
"The Stock represented by this Certificate has not been
registered under the Federal Securities Act of 1933, as
amended, and may not be assigned, transferred or otherwise
disposed of without an opinion of counsel satisfactory to
the Company that an exemption from registration under such
Act is available therefor or that an applicable registration
statement under such Act is effective with respect thereto.
In addition, the stock represented by this Certificate has
not been registered or qualified in accordance with the
securities laws of any state and transfer may be made only
in compliance with such laws."
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(ii) The TRC Shares to be delivered under Section 2.2 as well as
under the Employment Agreements shall enjoy registration rights as set
forth in the Registration Rights Agreement attached hereto as EXHIBIT
2. 2 (d)(ii)"A". Parent will use its reasonable best efforts to have a
registration statement for the resale of the TRC Shares by the
Shareholders filed with the United States Securities and Exchange
Commission pursuant to the terms of the Registration Rights Agreement
as close to the Closing Date as is reasonably practicable. If the TRC
Shares are not registered at the Effective Time and if the share price
of TRC Shares upon registration is less than the share price of the
unregistered TRC Shares delivered at Closing, the Parent shall issue
and deliver at the time of registration of the TRC Shares, an
additional number of registered TRC Shares (rounded for the nearest
whole share) calculated and determined as follows:
Additional TRC Shares = (0.3865) x (A) x (B-C) / (C)
WHERE:
A = The number of shares of TRC Shares issued and
delivered pursuant to Section 2.2 (a) (i) and Section
2.2 (a) (ii) hereof.
B = The per share value of TRC Shares determined pursuant to
Section 2.2 (a) (iii) hereof.
C = The closing price of a share of TRC Shares on the New
York Stock Exchange on the date of registration
hereunder.
(e) ACTIONS AT THE CLOSING. At the Closing, (i) the Shareholders will
deliver to the Parent the various certificates, instruments and documents
required hereunder, (ii) the Parent will deliver to the Shareholders the
various certificates, instruments and documents required hereunder, (iii)
the Shareholders will deliver to Parent certificates evidencing all of the
Company Shares owned by them, endorsed in blank or accompanied by duly
executed assignment documents, and (iv) the Parent will deliver to the
Shareholders the Merger Consideration for the Initial Exchange as set forth
in this Section 2.2 (a).
(f) MERGER SUB. At the Effective Time, each share of common stock of
Merger Sub issued and outstanding immediately prior to the Effective Time
shall constitute one validly issued, fully paid and nonassessable Company
Share. Following the Effective Time, each certificate evidencing ownership
of shares of Merger Sub common stock shall evidence ownership of such
Company Shares.
3. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Shareholders jointly and severally represent and warrant to Parent, as of
the date hereof and as of the Effective Time, each of the following matters:
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3.1 DUE AUTHORIZATION. The execution, delivery and performance by each
Shareholder of this Agreement and all of the other agreements, certificates and
documents delivered on or prior to the Closing Date in connection with the
transactions contemplated hereby ("Ancillary Documents") to which they are or
will be a party, and the consummation by them of the transactions contemplated
hereby and thereby are authorized. Shareholders are the beneficial and record
owners of all the Company Shares free and clear of all liens, claims,
encumbrances, taxes or restrictions on transfer or other rights, are adult
individuals and are competent to execute and deliver this Agreement and the
Ancillary Documents to which each of the Shareholders are or will be a party.
This Agreement and the Ancillary Documents to which each of the Shareholders are
or will be a party have been or will be duly and validly executed and delivered
by each of the Shareholders and constitute or will constitute valid and binding
obligations of each of the Shareholders, enforceable in accordance with their
respective terms.
3.2 CONSENTS, APPROVALS, ETC. No material consent, approval or
authorization of, or waiver or exemption by, or filing with, or permit from any
governmental, public or self-regulatory body or authority (collectively
"Governmental Approvals") is required in connection with the execution, delivery
or performance by Shareholders of this Agreement or any of the Ancillary
Documents to which Shareholders are or will be a party or the consummation by
Shareholders of the transactions contemplated hereby or thereby
3.3 NO VIOLATION. The execution, delivery and performance by Shareholders
of this Agreement and the Ancillary Documents to which Shareholders are or will
be a party and the consummation by Shareholders of the transactions contemplated
hereby and thereby will not, with or without the giving of notice or the lapse
of time, or both, (a) violate any law, statute, regulation, rule, judgment,
order, writ or decree of any court applicable to Shareholders or to Shareholders
knowledge the Company, or (b) result in the breach of or conflict with any term,
covenant, condition or provision of, result in the modification or termination
of, constitute a default under the (i) the Articles of Incorporation or By-laws
of Company or (ii) except as set forth on SCHEDULE 3.3 any material contract,
agreement, note, mortgage, indenture or other instrument to which either
Shareholders or to Shareholders knowledge the Company is a party.
3.4 ACCURACY OF INFORMATION. To the extent of the warranties and
representations made herein, none of the representations and warranties of
Shareholders contained herein contains any material misstatement of fact, or
omits any material fact required to be stated herein or necessary to make the
statements herein not misleading.
3.5 INVESTMENT. Each Shareholder (a) understands that as of the Effective
Time the TRC Shares to be issued and delivered in connection with this
transaction will not have been, registered under the Securities Act of 1933 or
under any state securities laws and are being offered and sold in reliance upon
federal and state exemptions for transactions not involving any public offering;
(b) is acquiring the TRC Shares solely for his own account for investment
purposes and not with a present intention to the distribution thereof; (c) is a
sophisticated investor with knowledge and experience in business and financial
matters; (d) has received certain information concerning the Parent and has had
the opportunity to obtain additional information as desired in order to evaluate
the merits and risks inherent in holding the TRC Shares; (e) is able to bear the
economic risk of holding the TRC Shares; and (f) qualifies as an "Accredited
Investor" as defined under the Securities Act of 1933 and regulations pursuant
thereto.
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4. REPRESENTATIONS AND WARRANTIES BY PARENT
Parent represents and warrants as of the date hereof and as of the
Effective Date as follows:
4.1 ORGANIZATION, STANDING AND AUTHORITY OF PARENT AND MERGER SUB. Parent
and Merger Sub are corporations duly organized, validly existing and in good
standing under the laws of the jurisdiction of their incorporation, and have all
requisite corporate power to enter into this Agreement and all of the Ancillary
Documents to which they are or will be a party, to perform their obligations
hereunder and thereunder, to carry out the transactions contemplated hereby and
thereby and to carry on their business as currently being conducted.
4.2 DUE AUTHORIZATION. The execution, delivery and performance by Parent
and Merger Sub of this Agreement and the Ancillary Documents to which they are
or will be a party, and the consummation by Parent and Merger Sub of the
transactions contemplated hereby and thereby, have been or will be duly
authorized by all requisite corporate action. This Agreement and the Ancillary
Documents to which Parent and Merger Sub are or will be a party have been or
will be duly and validly executed and delivered by them and constitute or will
constitute valid and binding obligations of them enforceable against them in
accordance with their respective terms.
4.3 CONSENTS, APPROVALS, ETC. No Governmental Approval is required in
connection with the execution, delivery or performance by Parent and Merger Sub
of this Agreement or any of the Ancillary Documents to which they are or will be
a party or the consummation by Parent and Merger Sub of the transactions
contemplated hereby or thereby.
4.4 NO VIOLATION. Except as set forth on SCHEDULE 4.4, the execution,
delivery and performance by Parent and Merger Sub of this Agreement and the
Ancillary Documents to which they are or will be a party and the consummation by
them of the transactions contemplated hereby and thereby will not, with or
without the giving of notice and the lapse of time, or both, (a) violate any
judgment, order, writ or decree of any court applicable to Parent and Merger Sub
or (b) result in the breach of or conflict with any term, covenant, condition or
provision of, result in the modification or termination of, constitute a default
under, or result in the creation or imposition of any Lien, upon any of the
assets or properties of Parent and Merger Sub pursuant to, the Articles of
Incorporation or By-laws of Parent and Merger Sub or any contract, agreement,
note, mortgage, indenture or other instrument to which either Parent and Merger
Sub is a party or by which any of their assets or properties are or may be
bound.
4.5 SEC REPORTS. Except as provided in SCHEDULE 4.8 hereto, all reports,
statements and schedules required to be filed by Parent with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), since December 31, 2000 (collectively, the "SEC Reports")
(a) have been furnished Company and Shareholders, (b) comply in all material
respects with all applicable requirements of the
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Exchange Act, (c) as of their respective filing dates, did not contain any
untrue statement of material fact or omit to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading, and (d) the audited and unaudited
consolidated financial statements included in the SEC Reports have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis (except as stated in the financial statements) and fairly
present the financial position of Parent and its consolidated subsidiaries as of
the dates thereof and the results of their operations and changes in financial
position for the periods then ended, subject, in the case of the unaudited
financial statements, to normal year-end audit adjustments.
4.6 TRC SHARES. The TRC shares to be delivered as provided in this
Agreement will be duly authorized, validly issued, fully paid and nonassessable,
and free and clear of all Liens; and Parent will use its best efforts to have
the TRC Shares registered under the Federal Securities Act of 1933 as amended,
as well as under all applicable state and federal securities law, as provided in
Section 2.2 (d) (ii), so that the Shareholders may publicly sell, trade,
transfer, pledge, hypothecate and exchange the TRC shares without restriction.
4.7 ACCURACY OF INFORMATION. None of the representations and warranties of
Parent contained herein contains any material misstatement of fact, or omits any
material fact required to be stated herein or necessary to make the statements
herein not misleading.
4.8 ADVERSE MATTERS. Except as set forth in the SEC Reports or as provided
on SCHEDULE 4.8 hereto, Parent is unaware of any fact or circumstance which is
reasonably likely to have a material adverse effect on the business, financial
condition, results of operation, assets, liabilities, value or prospects of
Parent.
4.9 TAX-FREE EXCHANGE. To Parent's knowledge, Parent has not taken any
action that would prevent the Merger, which is the subject of this Agreement to
be a non-taxable transaction. Shareholders have sought and have relied solely
upon independent tax advice they have received from their own legal and tax
advisors and are not relying on Parent for any tax advice or with respect to
transaction structuring.
4.10 MERGER SUB'S OPERATIONS. Merger Sub is a direct, wholly owned
subsidiary of Parent that was formed solely for the purpose of engaging in the
transactions contemplated hereby and has not (i) engaged in any business
activities, (ii) conducted any operations other than in connection with the
transactions contemplated hereby, or (iii) incurred any liabilities.
4.11 SECTION 481 ADJUSTMENT. Parent acknowledges that because of this
transaction, the Company will be required to convert from an S corporation to a
C corporation for income tax purposes. In connection with the change in tax
status, the Company or Parent will be required to compute a Section 481(a)
adjustment pursuant to the code as a result of the Company's change of its
method of accounting for tax purposes from the cash method to the accrual
method. The change in tax status will require the Company or the Parent to incur
an additional tax liability related to the change in method of accounting as
well as with other differences between financial accounting and tax accounting
methods. Such tax liability is not disclosed upon the financial statements of
the Company.
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5. REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent, as of the date hereof and as of
the Effective Time, each of the following matters:
5.1 ORGANIZATION AND STANDING. Company's constituent corporations are
corporations duly organized, validly existing and in good standing under the
laws of the jurisdiction of their incorporation and have the requisite corporate
power to carry on their business as currently being conducted and to own, lease
and operate their assets, and are duly qualified or licensed to do business as a
foreign corporation and are in good standing in each jurisdiction in which the
character of any of their assets or the nature of their business makes such
qualification necessary. Attached hereto as SCHEDULE 5.1 is a true and complete
list of the states in which Company conducts business or has offices. Other than
as set forth in SCHEDULE 5.1, the Company does not have any subsidiaries, and
all subsidiaries are wholly-owned.
5.2. ARTICLES OF INCORPORATION, BY-LAWS AND CERTAIN OTHER COMPANY BOOKS AND
RECORDS. Company has delivered to Parent correct and complete copies of the
Articles of Incorporation and By-laws of the Company, as amended to date. The
minute books (containing the records of meetings of the stockholders, the board
of directors and any committees of the board of directors), the stock
certificate books, and the stock record books of the Company are true, correct
and complete. The Company is not in default under or in violation of any
provision of its Articles of Incorporation or By-laws.
5.3 DUE AUTHORIZATION. The execution, delivery and performance by Company
of this Agreement and all Ancillary Documents delivered by Company on or prior
to the Closing Date in connection with the transactions contemplated hereby to
which they are or will be a party, and the consummation by them of the
transactions contemplated hereby and thereby have been or will be duly
authorized by all requisite actions.
5.4 CONSENTS, APPROVALS, ETC. No material consent, approval or
authorization of, or waiver or exemption by, or filing with, or permit from any
governmental, public or self-regulatory body or authority (collectively
"Governmental Approvals") is required in connection with the execution, delivery
or performance by Company of this Agreement or any of the Ancillary Documents to
which Company is or will be a party or the consummation by Company of the
transactions contemplated hereby or thereby.
5.5 NO VIOLATION. Except as set forth on SCHEDULE 5.5, the execution,
delivery and performance by Company of this Agreement and the Ancillary
Documents to which Company is or will be a party and the consummation by Company
of the transactions contemplated hereby and thereby will not, with or without
the giving of notice or the lapse of time, or both, (a) violate any law,
statute, regulation, rule, judgment, order, writ or decree of any court
applicable to Company or have any material adverse effect on any of the permits
referred to in Section 5.15 hereof, or (b) result in the breach of or conflict
with any term, covenant, condition or provision of, result in the modification
or termination of, constitute a default under or result in the creation
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of or imposition of any Lien upon any of the Company's assets pursuant to, (i)
the Articles of Incorporation or By-laws of Company or (ii) any material
contract, agreement, note, mortgage, indenture or other instrument to which
Company is a party or by which any of their respective assets or properties is
or may be bound.
5.6 FINANCIAL STATEMENTS. Company has delivered to Parent true and complete
copies of the unaudited financial statements of Company as of and for the
six-month period ended June 30, 2001 and audited financial statements of Company
for the years ended December 31, 2000, and December 31, 1999 (the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis and
fairly present the financial position of Company as of the dates of such
statements and the results of its operations and changes in financial position
for the periods then ended. Company has no material obligations, liabilities or
commitments of any kind whatsoever, accrued or unaccrued, contingent or
absolute, other than obligations, liabilities or commitments (i) which are fully
reflected or fully reserved against in Company's balance sheet as of June 30,
2001 or the footnotes to the Financial Statements, (ii) which are not required
to be so reflected under generally accepted accounting principles, or (iii)
which were incurred in the ordinary course of business since June 30, 2001.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 2001, Company has
operated its business only in the ordinary course and there has not occurred:
(i) any event which had or is reasonably likely to have a material adverse
effect on the business, financial condition, results of operations, assets,
liabilities or prospects of the business conducted by Company; (ii) any
commitment or promise to enter into, amend or terminate, or entry into,
amendment or termination of, an employment, consulting, severance, termination
or indemnification agreement, policy, plan, arrangement or practice, or (other
than normal increases in the ordinary course of business that are consistent
with past practices and that, in the aggregate, have not resulted in a material
increase in benefits or compensation expense and other than as required under
the terms of any agreement or plan in effect on the date of this Agreement) any
increase in the compensation payable or to become payable to any employee of
Company or any entry into or increase in any bonus, insurance, pension or other
employee benefit plan, payment, policy, agreement, practice or arrangement made
to, for or with any such employees; (iii) except as set forth on SCHEDULE 5.7
hereto, any entry into any commitment or transaction material to Company
(including, without limitation, any borrowing, capital expenditure or sale of
assets); (iv) any change in accounting principles or methods; (v) any
commencement or to Company's knowledge threat of any litigation or governmental
investigation; (vi) any amendments or changes in the Articles of Incorporation
or By-laws of Company; or (vii) any taking of any action referred to in Section
6.2, except as permitted or required thereby; (viii) any damage to or
destruction of any of the assets of the Company, whether or not covered by
insurance; or (ix) any dividend or distribution in respect of shares of capital
stock of Company or any redemption or repurchase of any shares.
5.8 LITIGATION. (i) Except as set forth on SCHEDULE 5.8, there is no claim,
action, suit, proceeding, arbitration, investigation, hearing or notice of
hearing (collectively, "Litigation"), pending or to Company's knowledge
threatened, by or before any court or governmental or administrative authority
or private arbitration tribunal, against any Shareholders or Company
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which relates to or affects the business of Company, any of Company's assets or
the transactions contemplated hereby; (ii) neither Company nor any officer,
director or employee of Company has been permanently or temporarily enjoined or
barred by order, judgment or decree of any court or other tribunal or any agency
or self-regulatory body from engaging in or continuing any conduct or practice
in connection with the business of Company; and (iii) there is not in existence
any order, judgment or decree of, or agreement with any court or other tribunal
or any agency or self-regulatory body requiring Company or any officer, director
or employee of Company to take any action of any kind with respect to the
business of Company or Company's assets or to which Company or any officer,
director or employee of Company is a party or by which any of them is bound
affecting the business of Company or Company's assets.
5.9 AGREEMENTS, PLANS, ARRANGEMENTS, ETC. Except as set forth on SCHEDULE
5.9, (a) Company has made available to Parent correct and complete copies of all
agreements, plans and arrangements to which the Company is a party or by which
Company or its operating assets is bound or affected (or, if oral, true and
complete written summaries thereof) (collectively referred to herein as
"Contracts"), (b) each such Contract under which any obligation of Company or
any other party remains unperformed is now valid, in full force and effect and
enforceable in accordance with its terms and Company has fulfilled, or taken all
action reasonably necessary to enable it to fulfill when due, all of its
obligations under the Contracts, (c) to Company's knowledge there has not
occurred any default by Company, or any event which, with or without the lapse
of time or the election of any person other than Company, or any combination
thereof, will become a default, nor has there occurred any default by others or
any event which, with or without the lapse of time or the election of Company,
will become a default by any other party under any of the Contracts, and (d)
except as reflected in the Company's accounts receivables, neither Company nor
any other party is in arrears in respect of the performance or satisfaction of
the terms or conditions on its part to be performed or satisfied under any of
the Contracts and no waiver or indulgence has been granted by any of the parties
thereto.
5.10 ACCOUNTS RECEIVABLE. All accounts receivable of the Company arose in
the ordinary course of business from bona fide transactions and, to Company's
knowledge, are fully collectible, subject to any reserve reflected on the
balance sheet of Company as of June 30, 2001 or established since such date and
disclosed to Parent in writing.
5.11 CUSTOMERS. To Company's knowledge there has been no termination,
cancellation, or limitation of or modification or change in the business
relationship of Company with any customer which individually provided more than
5% of gross revenues of Company for the annual period ended June 30, 2001, and
to Company's knowledge, no such customer nor any group of such customers has
expressed any material dissatisfaction with the services provided by Company or
any unwillingness to continue any such relationship.
5.12 BOOKS AND RECORDS. All the books, records and accounts of Company are
in all material respects true and complete, are maintained in accordance with
good business practice and all laws applicable to its business, and accurately
present and reflect in all material respects all of the transactions therein
described.
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5.13 POWERS OF ATTORNEY. Company has no power of attorney or comparable
delegation of authority to non-Company personnel or entities outstanding in
connection with its business.
5.14 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth on SCHEDULE 5.14,
the Company's business as currently conducted does not violate or infringe any
material applicable law, statute, ordinance, rule, regulation, decree or order
(each and all of the foregoing being herein referred to as "Laws") currently in
effect except as set forth on SCHEDULE 5.14; and Company has not received any
notice of any violation of any Laws which might have a material adverse affect
on the Company and its business and the Company knows of no basis for the
allegation of any such violation; and the Company's past operations have
complied in all material respects with all applicable Laws.
5.15 PERMITS. To Company's knowledge, it possesses all permits and has made
all registrations that are required to own, maintain and operate its business
and to Company's knowledge each such permit is valid and in full force and
effect and it is not in default of any provision thereof, has not received
notice of any threatened cancellation, modification or nonrenewal thereof, and,
to the best of Company's knowledge, no basis for any such cancellation,
modification or nonrenewal exists.
5.16 INSURANCE AND INSURANCE REQUIREMENTS
(a) (i) Subject to certain policy deductibles, the Company carries
liability, property and casualty and automobile insurance, workers'
compensation and professional liability insurance and has made available to
Parent all policies of insurance; and (ii) all of the foregoing insurance
is in full force and effect. To Company's knowledge, it and any of its
predecessors have been continuously covered by insurance of like kind,
without gaps in coverage, and will continue to be covered by such insurance
until and after the Effective Time, with respect to acts and omissions
occurring prior to the Effective Time.
(b) All insurance policy and bond premiums due and payable by Company
have been paid, and to Company's knowledge there are no pending or
threatened terminations for the current policy period with respect to any
of such policies or bonds, and to Company's knowledge, it is in compliance
with all conditions contained in such policies or bonds.
(c) To Company's knowledge, it has given all notices and presented all
claims under any of its insurance policies in due and timely fashion.
Except as set forth on SCHEDULE 5.16 (c), there are no pending, or to
Company's knowledge, threatened disputes relating to coverage or other
disputed claims under any of Company's insurance policies.
5.17 TRANSACTIONS WITH AFFILIATES. Except as set forth on SCHEDULE 5.17
hereto, there is no contract, arrangement or transaction currently in effect
between Company and any officer, director, stockholder or other person related
to, controlled by, or under common control with, any of the foregoing persons,
other than arrangements for the payment of salary, including bonuses and fringe
benefits, for services rendered to Company, which arrangements have previously
been disclosed to Parent.
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5.18 INTELLECTUAL PROPERTY. Except as disclosed on SCHEDULE 5.18, (a)
Company owns or Company possesses adequate licenses or other valid rights to use
(without the making of any payment to others or the obligation to grant rights
to others in exchange) all intellectual property necessary to the conduct of its
business as presently conducted or proposed to be conducted; (b) the validity of
such items and the title thereto of Company has not been questioned in any
litigation to which Company is a party, nor is any such Litigation threatened;
and (c) title to such items (for which Company possesses licenses or other
rights of use) is not necessary to the conduct of its business as presently
conducted or proposed to be conducted; (d) Company has no reason to believe that
the conduct of the business of Company as now conducted or proposed to be
conducted does or will conflict with any intellectual property rights of others;
(e) Company has purchased the requisite number of copies of software programs to
comply with all licensing requirements for its computers; and (f) to Company's
knowledge, to the extent permissible under applicable law, all intellectual
property heretofore owned or held by any employee or officer of Company and
relating directly to the business of Company has been duly and effectively
transferred to Company with no restrictions on its subsequent transfer by
Company.
5.19 EMPLOYEE MATTERS. (a) Company has made available to Parent information
with respect to and copies of each plan, contract, program, policy or
arrangement maintained, contributed to, or required to be contributed to, by
Company for the benefit of, or pursuant to which Company has or may have any
liability to, any current or former employee, consultant, partner, director or
agent of Company or their beneficiaries or dependents (collectively, the
"Employees"), whether or not subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), (collectively the "Plans"). All such Plans
are listed on SCHEDULE 5.19 (a). Except as set forth on SCHEDULE 5.19 (a),
Company does not have any commitment to create any additional Plan or modify or
change any existing Plan that would affect any Employee, except as required by
applicable law.
(b) Neither Company nor any ERISA Affiliate maintains, contributes to
or is required to contribute to, or has in the past maintained, contributed
to or been required to contribute to or otherwise has any actual or
potential liability with respect to any Plan which is or may be subject to
Part III of Subtitle B of Title I of ERISA, Title IV of ERISA or Section
412 of the Internal Revenue Code of 1986, as amended (the "Code"). Neither
the Company nor any ERISA Affiliate contributes to or is required to
contribute to, or has in the past contributed to or been required to
contribute to or otherwise has any actual or potential liability with
respect to any "multi-employer plan" as defined in Section 3(37) and
4001(a)(3) of ERISA. For purposes of this Section 5.19 (b), the term "ERISA
Affiliate" means any business or entity which is a member of a "controlled
group of corporations" or an "affiliated service group" with Company or
under "common control" with Company within the meaning of Sections 414(b),
(c) or (m) of the Code or is required to be aggregated with the Company
under Section 414(o) of the Code or is under "common control" with the
Company within the meaning of Section 4001(a)(14) of ERISA or any
regulations promulgated or proposed under any of the foregoing Sections.
(c) Except as set forth on SCHEDULE 5.19 (c), (i) each of the Plans
that is intended to meet the requirements of Section 401(a) of the Code, is
and has always been qualified under Section 401(a) of the Code and its
related trust is now, and since its inception has
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been, exempt from taxation under Section 501(a) of the Code and nothing has
occurred that would materially adversely affect the qualified status of any
such Plan, (ii) Company and Shareholders have performed in all material
respects all obligations required to be performed by them under, and are
not in default under or in violation of, any Plan, and are in compliance
with, and each Plan has been operated in all respects in accordance with
its provisions and the rules and regulations governing each such Plan and
with all applicable federal, state and local laws, rules and regulations,
(iii) no event has occurred and there has been no failure to act on the
part of Company, any fiduciary of any Plan or any "plan official" (as
defined in Section 412 of ERISA) that could subject Company, Parent, any
Plan, fiduciary or plan official to the imposition of any tax, penalty,
liability or other disability, whether by way of indemnity or otherwise,
with respect to any Plan, and (iv) there are no actions, suits or claims
pending, threatened or anticipated (other than routine claims for benefits)
with respect to any Plan or the assets of any Plan.
(d) Except as set forth on SCHEDULE 5.19 (d), (i) the delivery and
execution of, and performance of the transactions contemplated by, this
Agreement will not (either alone or upon the occurrence of any additional
or subsequent events) constitute an event that will or may result in any
payment (whether of severance pay or otherwise) to, or acceleration,
vesting, funding of, or increase in, benefits, or obligation to fund
benefits with respect to, any Employee or the forgiveness of any obligation
under any Plan, agreement, trust or loan and (ii) no payment that will or
may be made to any Employee shall constitute an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code which shall subject
the Company to loss of deductions under Section 162 of the Code.
(e) Except as set forth on SCHEDULE 5.19 (e), neither Company nor any
ERISA affiliate maintains, provides or contributes to, or has any material
liability with respect to any "employee welfare benefit plan" (as described
in Section 3(1) of ERISA) for the benefit of retired or former employees,
directors or consultants.
(f) Except as set forth on SCHEDULE 5.19 (f), Company (i) is in
compliance with all applicable federal, state and local laws, rules and
regulations respecting employment, employment practices, labor relations,
terms and conditions of employment and wages and hours, in each case, with
respect to Employees, and (ii) is not a party to any pending or threatened
employment-related claims, charges, litigation or grievances of any kind.
(g) The Company is not a party to any collective bargaining agreement,
and to Company's knowledge no action has been taken by any person to
organize any employees of Company.
5.20 TAXES. (a) Except as set forth in SCHEDULE 5.20 hereto, Company and
each of its subsidiaries has timely filed or will timely file with the
appropriate governmental authorities all material Tax Returns (as hereinafter
defined) required to be filed before the Effective Time, in respect of periods
ending on or prior to the Effective Time, and the Company and each of its
subsidiaries has maintained or caused to be maintained, all required records
with respect to Taxes (as hereinafter defined), and has timely paid, or caused
to be paid or will pay or cause to be paid all Taxes, if any, that are due prior
to the Effective Time; and Company has not been
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requested to give and has not executed or filed with the Internal Revenue
Service or any other taxing authority any agreement extending the period for
assessment or collection of any Taxes, nor is Company a party to any pending
audit or to Company's knowledge any pending action or proceeding by any
governmental authority for assessment or collection of Taxes, and to Company's
knowledge no claim for assessment or collection of Taxes has been asserted
against Company.
(b) As used in this agreement, "Taxes" or "Tax" means all income,
capital gains, gross receipts, sales, use, ad valorem, franchise, profits,
license, withholding, payroll, employment, workers' compensation, excise,
severance, stamp, occupation, premium, property, or windfall profit taxes,
customs duties, estimated payments, estimated taxes, or other taxes, fees,
levies, assessments, or charges of any kind whatsoever relating to Company,
its business or assets, together with any interest and any penalties,
additions to tax, or additional amounts imposed by the United States or any
other jurisdiction, and any state, province, county, local or other
government, taxing authority, or subdivision thereof. "Tax Return" shall
mean any return, report, information return or other document (including
any related or supporting information) filed or required to be filed by
Company with any governmental entity or other authority in connection with
the determination, assessment or collection of any Tax (whether or not such
Tax is imposed on the Company) or the administration of any laws,
regulations or administrative requirements relating to any Tax.
5.21 ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE 5.21, to the
knowledge of Company, there are no claims, notices, civil, criminal or
administrative actions, suits, hearings, investigations, inquiries or
proceedings pending or threatened against the Company that are based on or
related to any health, safety or environmental laws ("Environmental Laws"),
including any disposal of hazardous substances at any place, or the failure to
have any required environmental permits, and to Company's knowledge there are no
past or present conditions that Company has reason to believe are likely to give
rise to any liability or other obligation of Company under any environmental
laws.
5.22 PROFESSIONAL LIABILITY. Except as set forth on SCHEDULE 5.22 hereto,
neither Company nor its predecessors has incurred, nor does Company have
knowledge of any basis for any unresolved claim of liability of any kind
relating to any activity or service rendered or performed by Company or its
predecessors.
5.23 ACCURACY OF INFORMATION. To the extent of the warranties and
representations made herein, none of the representations and warranties of
Company contained herein contains any material misstatement of fact, or omits to
state any material fact required to be stated herein or necessary to make the
statements herein not misleading.
5.24 CAPITALIZATION. The entire authorized capital stock of the Company,
par value and shares issued and outstanding is set forth on SCHEDULE 5.24
hereto. The Shares have been duly authorized, are validly issued, fully paid and
non-assessable, and Shareholders hold of record all of the outstanding shares of
the Company. There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require the Company to issue, sell, or
otherwise cause to
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become outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Company. There are no voting trusts, promises or
other agreements or understandings with respect to the voting of the Company's
capital stock. There are no other classes of stock outstanding other than common
stock.
5.25 CAPITAL STOCK. The Shareholders hold of record and own beneficially
the number of shares of capital stock of the Company as set forth on SCHEDULE
5.25, free and clear of any liens, restrictions on transfer, taxes, liens,
options, warrants, purchase rights, contracts, commitments, equities, claims and
demands (other than any restrictions under The Securities Act of 1933 or state
securities laws); the Company is not a party to any option, warrant, purchase
right, or other contract or commitment that could require the Company to sell,
transfer or otherwise dispose of any capital stock (other than this Agreement);
and Company is not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock.
5.26 PROPERTIES. Company has good and marketable title to all owned
property, and valid and enforceable leasehold interests in all leased property.
Except to the extent fully depreciated, all assets of Company are reflected on
the balance sheet of Company as of June 30, 2001, except for assets acquired or
sold after June 30, 2001 in the ordinary course of business consistent with past
practices. Except as set forth on SCHEDULE 5.26 hereto, none of the Company's
assets is subject to any Liens, except for (i) Liens disclosed on the balance
sheets and the notes thereto of Company as of June 30, 2001, (ii) Liens for
taxes not yet due and payable or being contested in good faith by appropriate
proceedings which have been fully reserved against on such balance sheet, (iii)
inchoate material men's, mechanics and other similar Liens arising or incurred
in the ordinary course of business, and (iv) other Liens that do not detract
from or interfere with the present use or value of, title to, marketability or
insurability of, the assets (collectively, "Permitted Liens").
5.27 CONDITION OF TANGIBLE ASSETS. The tangible assets of Company are in
good condition and repair (ordinary wear and tear which is not such as to affect
adversely the operation of the business excepted) and suitable for the uses for
which intended. All such equipment conforms in all material respects with all
applicable laws, ordinances, regulations, orders and other requirements relating
thereto currently in effect or, to the knowledge of Company, proposed to be
adopted.
6. COVENANTS OF COMPANY
6.1 AFFIRMATIVE COVENANTS. Except as described herein or as Parent may
otherwise consent in writing, between the date of this Agreement and the
Effective Time, the Company shall have:
(a) operated its business only in the usual, regular and ordinary
course and in accordance with past practice and used its best efforts to
(i) preserve its business organization intact; (ii) keep available the
services of its employees; (iii) continue normal marketing,
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advertising and promotional expenditures and (iv) preserve all beneficial
business relationships with customers, suppliers, subcontractors and others
having business dealings with it;
(b) (i) maintained all the tangible assets in good condition and
repair, normal wear and tear and damage due to fire or other unavoidable
casualty excepted and (ii) maintained insurance in full force and effect
with responsible companies, comparable in amount, scope and coverage to
that in effect on the date of this Agreement;
(c) (i) duly complied with all laws applicable to the Company's
business; (ii) performed all of its obligations without default; and (iii)
maintained its books, records and accounts in the usual, regular and
ordinary manner on a basis consistent with past practice;
(d) satisfied in full in accordance with past practice all of its
liabilities, including accounts payable, or contested in good faith such
liabilities;
(e) performed and complied with all of its obligations under all
contracts and instruments;
(f) given to Parent and to its counsel, accountants, and other
representatives full access during normal business hours to all of the
properties, personnel, books, tax returns, contracts, commitments and
records of Company and furnished to Parent and such representatives all
such additional documents, financial information and information with
respect to the business affairs of Company as Parent may from time to time
reasonably request;
(g) authorized Company's independent accountants to permit Parent's
independent accountants and Parent's accounting personnel to examine and
copy, when and as reasonably requested by Parent, the records and working
papers of Company's independent accountants pertaining to its review of the
Financial Statements;
(h) furnished Parent, as soon as possible, with true and correct
copies of all monthly and quarterly financial statements which are prepared
by or for Company at any time from the date hereof until September 30,
2001; and
(i) informed Parent promptly of any development which may materially
interfere with the consummation of the transactions contemplated hereby.
6.2 NEGATIVE COVENANTS. Except as described on SCHEDULE 6.2 or as Parent
may otherwise consent in writing, between the date of this Agreement and the
Effective Time, the Company shall not have:
(a) incurred or permitted to be incurred any Lien on any of the assets
of the Company, except for Permitted Liens;
(b) transferred, sold, assigned or otherwise conveyed any part of the
Company's assets, except in each case in the ordinary course of business
consistent with past practice;
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(c) granted or sold any option or right to purchase any of the
Company's assets;
(d) changed the character of Company's business;
(e) merged with or announced its intention to merge with another party
acquired all or substantially all of the assets of or any interest in any
other corporation, partnership, limited partnership, joint venture,
association, or other entity;
(f) declared, paid, or made any dividend or distribution or other
payment in respect of, or redeemed any of, the outstanding shares of its
capital stock or paid any management fees, except in each case, in the
ordinary course of Company's business consistent with past practice;
(g) adopted, entered into, amended or terminated any employee
agreement or employee plan, or increased in any manner the compensation or
benefits of, or forgiven any indebtedness of, any employee, director or
officer or paid or provided any benefit other than benefits required
pursuant to any employee agreement or employee plan disclosed to Parent
prior to the date hereof, or adopted, entered into or amended any employee
agreement or employee plan, including any severance or termination plan,
policy, arrangement, practice or agreement, or granted any awards under any
bonus, incentive, performance or other compensation plan or arrangement or
(except as may be further required under the terms of any employee
agreement or employee plan as in effect on the date of this Agreement
disclosed to Parent prior to the date hereof), contributed to or otherwise
funded or secured the benefits or compensation provided under any of the
employee agreements or employee plans, or entered into any contract to do
any of the foregoing;
(h) incurred any obligation (fixed or contingent) or entered into any
lease, commitment, agreement or other transaction except in the ordinary
course of business;
(i) taken or agreed to take any action which would make any
representation or warranty of the Company contained in this Agreement
untrue or incorrect in any material respect as of the date when made or as
of any future date on or prior to the Effective Time.
7. COVENANTS OF SHAREHOLDERS
7.1 EXCLUSIVITY. Between the date hereof until either the Closing Date or
the termination date of this Agreement as provided under Section 13 hereof, (i)
the Shareholders shall not and the Shareholders shall cause Company not to
solicit, initiate, or encourage the submission of any proposal or offer from any
person or enter into any understanding, whether binding or not, with respect to
the acquisition of any capital stock or other voting securities or any portion
of the assets or business of the Company, or (ii) participate in any discussions
or negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
person to do or seek any of the foregoing.
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8. COVENANTS OF PARENT
8.1 AFFECTED EMPLOYEES. It is the intention of the parties hereto that the
employees of the Company (including employees on vacation, leave of absence,
short or long-term disability or layoff) (the "Affected Employees") at the
Closing Date will remain employees of the Company immediately following the
Closing Date at the salary levels that were in effect immediately prior to the
Closing Date. Nothing herein, however, shall be construed as an offer of
employment to any individual on other than an employee-at-will basis.
8.2 EMPLOYMENT AGREEMENT. Simultaneously with the Closing, Company will
enter into Employment Agreements with Xxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxxx and F.
Xxxxxx Xxxxxxxxx in a form acceptable to Parent and each of them ("Employment
Agreements").
8.3 STOCK OPTIONS. Parent will grant and issue to key Company employees
identified on SCHEDULE 8.3, options to purchase Twenty-five Thousand (25,000)
TRC Shares under the TRC Stock Option Plan each year for a total of three (3)
consecutive years [Three (3) Year Aggregate Total of Seventy-five Thousand
(75,000) TRC Shares], commencing on the Effective Time as well as the first
(1st) anniversary of the Effective Time and thereafter on the second (2nd)
anniversary of the Effective Time at a price equal to TRC Shares' closing price
on the New York Stock Exchange on the trading day immediately preceding the date
of grant and issuance. None of the Shareholders who are employees of the Company
shall have any right to receive any stock options or any other interest under or
pursuant to this Section 8.3.
8.4 BONUS POOL. Within 60 days of the third anniversary of the Closing
Date, Parent will pay to the Company, to be distributed to key Company
operational managers exclusive of the Shareholders, an aggregate cash amount
equal to five per cent (5%) of Company EBIT [as determined in Section 2.2 (c)
(ii)] above $25.34 Million ($25,340,000.00) for the three fiscal year period
ended September 30, 2004.
8.5 OPERATION OF THE COMPANY. After Closing, as long as Shareholders are or
may become entitled to TRC Shares pursuant to the Initial Exchange under Section
2.2 (a) (ii) and Earnout Exchange under Section 2.2(c) of this Agreement and so
long as annual EBIT for the Company exceeds 75% of the targets set forth under
Section 2.2 (b) above for the indicated Earnout Periods, (a) the Company will
continue to operate its business substantially as it has been operated before
the Closing; (b) the Company will not merge or consolidate with another entity
or be dissolved; (c) the Company will be provided adequate capital for its
operations and projected expansion; (d) there will be a five-member management
committee (the "Management Committee") composed of Xxxxxx X. Xxxxxx, Xxxx X.
Xxxxxxxxx, F. Xxxxxx Xxxxxxxxx, and two (2) members appointed by Parent, or
their successors, which will meet at least quarterly to discuss overall policy
objectives and guidance and direction for the Company [such Management Committee
shall be a consultative body and will operate in the spirit of cooperation and
consensus without the need for formal voting, provided however, that to the
extent any matter is submitted to a vote it will require a two-thirds (2/3)
majority for approval]; (e) after the discussion of the Management Committee,
Xxxxxx X. Xxxxxx (or his designee) shall have the sole right to hire and fire
employees of the Company; (f) neither the Parent nor any of its
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subsidiaries shall solicit or hire an employee of the Company to become an
employee of the Parent or any of its subsidiaries; (g) the Parent shall provide
the Company with sufficient financial and other resources to pursue reasonable
business opportunities in the Company's areas of expertise; (h) except as
provided in the Agreement or in the Employment Agreements, there shall not be
any material change in the compensation paid or benefits provided to any Seller
without the approval of Xxxxxx X. Xxxxxx; and (i) the name of the Company shall
not be changed without the prior written consent of Xxxxxx X. Xxxxxx or his
designee; provided that the Company's name may be changed without Xxxxxx X.
Xxxxxx'x consent to include "TRC" in the Company's present name. Until Xxxxxx X.
Xxxxxx designates one or more successors, he shall serve as Chief Executive
Officer of the Company with authority and responsibility for strategy and
policy, and Xxxx X. Xxxxxxxxx shall serve as Chief Operating Officer of the
Company with responsibility for the day-to-day operations of the Company. In the
event EBIT for any fiscal year falls below seventy-five per cent (75%) of the
Targets specified in Section 2. 2 (c) above for the indicated Earnout Periods,
the foregoing provisions may at Parent's option no longer apply, and Parent may
take whatever steps Parent in its sole discretion deems necessary to operate
Company.
9. GENERAL COVENANTS
9.1 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. Each of the parties hereto
shall use their best efforts (a) as promptly as reasonably practicable after the
date hereof, to file for all consents and approvals necessary for the
consummation of the transactions contemplated hereby and (b) to cooperate with
one another (i) in promptly determining whether any other filings are reasonably
required to be or should be made or consents, approvals, permits or
authorizations are required to be or should be obtained under any federal, state
or local law or regulation or whether any consents, approvals or waivers are
required to be or should be obtained from other parties to loan agreements,
other contracts or permits in connection with the consummation of the
transactions contemplated hereby and (ii) in promptly making any such filings,
furnishing information required in connection therewith and seeking timely to
obtain any such consents, permits, authorizations, approvals or waivers.
9.2 BEST EFFORTS. Subject to the terms and conditions provided in this
Agreement, each of the parties hereto shall use its commercially reasonable best
efforts in good faith to take promptly, or cause to be taken, all actions and to
do promptly, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated hereby, to obtain all necessary waivers, consents and
approvals and to effect all necessary registrations and filings, and to remove
any injunctions or other impediments or delays, legal or otherwise, in order to
consummate and make effective the transactions contemplated by this Agreement
for the purpose of securing to the parties hereto the benefits contemplated by
this Agreement.
9.3 FURTHER ASSURANCES. At any time or from time to time after the Closing,
the parties agree to cooperate with each other to execute and deliver such other
documents, instruments of transfer or assignment, files, books and records and
do all such further acts and things as may reasonably be required to carry out
the intent of the parties hereunder and to effectuate the transactions
contemplated hereby.
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10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARENT
The obligations of Parent to consummate the transactions to be performed at
the Closing are subject to the satisfaction or, where permissible, waiver, on or
before the Closing Date, of each of the following conditions:
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company and Shareholders contained in this Agreement or in any
Ancillary Document shall be true and correct in all material respects as of the
date hereof and (unless made as of a specified date) as of the Closing Date with
the same effect as if made on the Closing Date, and Company and the Shareholders
shall have performed all obligations and agreements and complied with all
covenants contained in this Agreement or in any Ancillary Document to be
performed and complied with by them on or before the Closing Date.
10.2 NO PROHIBITION. No statute, rule or regulation or order or injunction
of any court or administrative agency shall be in effect which prohibits Parent
from consummating the transactions contemplated hereby.
10.3 CONSENTS AND APPROVALS. All Governmental Approvals and third party
consents required in connection with the transactions contemplated hereby shall
have been obtained on terms which are not reasonably likely to adversely affect
the business, financial condition, results of operations, assets, liabilities or
prospects of the Company's business.
10.4 NO LITIGATION. There shall not be any action, suit, preliminary or
permanent injunction or proceeding pending or threatened that seeks to (i) make
the consummation of the transactions contemplated hereby illegal or otherwise
restrict or prohibit consummation thereof or (ii) require the divestiture by
Parent or any of its subsidiaries or affiliates of shares of stock or of any
business, assets or property of any of its subsidiaries or affiliates, or impose
any material limitation on the ability of any of them to conduct their business
or to own or exercise control of such assets, properties or stock.
10.5 ACTIONS, PROCEEDINGS, ETC. All actions, proceedings, instruments and
documents required to carry out the transactions contemplated by this Agreement
or any Ancillary Documents to which Company and Shareholders are a party shall
be reasonably satisfactory to Parent.
10.6 EMPLOYMENT AGREEMENTS. Xxxxxx X. Xxxxxx, Xxxx X. Xxxxxxxxx, and F.
Xxxxxx Xxxxxxxxx shall have entered into the Employment Agreements.
11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF COMPANY AND SHAREHOLDERS
The obligations of Company and Shareholders to consummate the transactions
to be performed at the Closing are subject to the satisfaction or, where
permissible, waiver, on or before the Closing Date, of each of the following
conditions:
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11.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent contained in this Agreement or in any Ancillary Document
shall be true and correct in all material respects as of the date hereof and
(unless made as of a specified date) as of the Closing Date with the same effect
as if they were made on the Closing Date, and Parent shall have performed all
its obligations and agreements and complied with all its covenants contained in
this Agreement or in any Ancillary Document to be performed and complied with by
it on or before the Closing Date.
11.2 NO PROHIBITION. No statute, rule or regulation or order or injunction
of any court or administrative agency shall be in effect which prohibits Company
or Shareholders from consummating the transactions contemplated hereby.
11.3 CONSENTS AND APPROVALS. All Governmental Approvals and third party
consents required in connection with the transactions contemplated hereby shall
have been obtained.
11.4 ACTIONS, PROCEEDINGS, ETC. All actions, proceedings, instruments and
documents required to carry out the transactions contemplated by this Agreement
or any Ancillary Documents to which Parent is a party shall be reasonably
satisfactory to Company.
11.5 NO LITIGATION. There shall not be any action, suit, preliminary or
permanent injunction or proceeding pending or threatened that seeks to make the
consummation of the transactions contemplated hereby illegal or otherwise
restrict or prohibit consummation thereof.
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12. SURVIVAL AND INDEMNIFICATION
12.1 SURVIVAL. The Indemnification by Shareholders, pursuant to Section
12.2, shall survive the Closing for a period of two (2) years and shall
thereupon expire together with any right to indemnification in respect thereof
(except to the extent a Notice as hereinafter defined shall have been given in
good faith prior to such date). The Indemnification by Parent, pursuant to
Section 12.3, shall survive the Closing, generally, and shall be enforceable
until barred by applicable statutes of limitations and/or repose.
12.2 INDEMNIFICATION BY SHAREHOLDERS. From and after the Effective Time,
Shareholders, jointly and severally, shall indemnify and hold harmless Parent
and its affiliates and each of their respective officers, directors, employees,
agents and advisors from and against any and all demands, claims, losses,
liabilities, actions or causes of action, assessments, damages, fines, taxes,
penalties, costs and expenses (including, without limitation, interest, expenses
of investigation, reasonable fees and disbursements of counsel, accountants and
other experts) (collectively "Losses") incurred or suffered by Parent, arising
out of, resulting from, or relating to (a) any breach by Shareholders or the
Company of their representations and warranties contained in this Agreement; (b)
any failure by Shareholders or the Company to perform any of their respective
covenants, undertakings or agreements contained in this Agreement; or (c) except
for any matters disclosed in this Agreement and/or in the Schedules attached
hereto, any valid and enforceable third party claim related to the business or
operations of the Company prior to the Effective Time. Notwithstanding any other
provision of this Agreement, the total aggregate liability of Shareholders for
indemnification under this Section shall be limited to 90% of such losses and
shall not exceed $9,000,000 for Notice of Losses during the first year following
the Closing and $4,500,000.00 for Notice of Losses during the second year
following the Closing. Shareholders' obligation to indemnify hereunder shall not
apply until the cumulative amount of all Losses excluding and net of one half
(1/2) of any interest, expenses of investigation, reasonable fees and
disbursements of counsel, accountants and other experts arising out of and
related thereto subject to indemnification exceeds $150,000.00 (the
"Deductible"); and further Shareholders' obligation to indemnify hereunder shall
be less (-) and net of any tax benefit to as well as any insurance, setoff or
counterclaim recovered by the Company and/or Parent
12.3 INDEMNIFICATION BY PARENT. From and after the Closing, Parent shall
indemnify and hold harmless Shareholders from and against any and all Losses (as
defined in Section 12.2) incurred or suffered by Shareholders arising out of,
resulting from, or relating to (a) any breach of any of the representations or
warranties made by Parent in this Agreement; (b) any failure by Parent to
perform any of its covenants, undertakings or agreements contained in this
Agreement; (c) the business or operations of Company after the Closing, except
(i) to the extent arising out of, resulting from or relating to any breach of
any of the representations and warranties and covenants of Company or
Shareholders under this Agreement or (ii) to the extent arising out of and
resulting from the business or operations of the Company prior to the Effective
Time.
12.4 PROCEDURE. (a) In the event that any party hereto shall sustain or
incur any Losses in respect of which indemnification may be sought by such party
pursuant to this Section 12, the party seeking such indemnification (the
"Indemnitee") shall assert a claim for indemnification by
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giving written notice thereof to the party (or parties) providing
indemnification (the "Indemnitor") within thirty (30) days after (i) receipt of
written notice of commencement of any third party litigation against such
Indemnitee or (ii) receipt by such Indemnitee of written notice of any third
party claim pursuant to an invoice, notice of claim or assessment against such
Indemnitee; or (iii) such Indemnitee becomes aware of the existence of any other
event in respect of which indemnification may be sought from the Indemnitor,
including, without limitation, any inaccuracy of any representation or warranty
or breach of any covenant (collectively "Notice Period"). The Notice shall
describe the claim and the specific facts and circumstances in reasonable
detail, and shall indicate the amount, if known, or an estimate, if possible, of
the Losses that have been or may be incurred or suffered by such Indemnitee. The
failure to timely deliver a Notice shall not relieve the Indemnitor from the
obligation to indemnify hereunder except to the extent that the Indemnitor is
prejudiced thereby; provided, however, that the failure to deliver the Notice
within sixty (60) days after the expiration of the Notice Period the Indemnitor
shall be relieved from the obligation to Indemnify hereunder. In case any third
party claim, action or proceeding ("Claim") is brought against any Indemnitee,
the Indemnitor shall be entitled to assume the defense thereof, by written
notice to the Indemnitee of its intention to do so within 30 days after receipt
of the Notice. If the Indemnitor shall assume the defense of such Claim, without
the consent of the Indemnitee, which shall not be unreasonably withheld, the
Indemnitor shall not settle such Claim unless such settlement includes as an
unconditional term thereof the giving by the claimant or the plaintiff of a
release of the Indemnitee from all liability with respect to such Claim.
Notwithstanding the assumption by the Indemnitor of the defense of any Claim as
provided in this subsection, the Indemnitee shall be permitted to join in the
defense of such Claim and to employ counsel at its own expense; PROVIDED,
HOWEVER, that if the defendants in any action shall include both an Indemnitor
and any Indemnitee, and such Indemnitee shall have reasonably concluded that
counsel selected by the Indemnitor has a conflict of interest because of the
availability of different or additional defenses to such Indemnitee, such
Indemnitee shall have the right to select separate counsel to participate in the
defense of such action on its behalf, and Indemnitee's expense of litigation
shall be borne by Indemnitor if Indemnitor does not prevail in such action or if
Indemnitee is found to have liability in such action.
(b) If the Indemnitor shall fail to notify the Indemnitee of its
desire to assume the defense of any such Claim within the prescribed period
of time, or shall notify the Indemnitee that it will not assume the defense
of any such Claim, then the Indemnitee may assume the defense of any such
Claim, in which event it may do so in such manner as it may deem
appropriate, and the Indemnitor shall be bound by any determinations made
in any litigation with respect to any Claim or any settlement thereof,
provided that any such determinations or settlement shall not affect the
right of the Indemnitor to dispute any claim for indemnification by the
Indemnitee.
12.5 INVESTIGATIONS; WAIVERS. The survival periods and rights to
indemnification provided for in this Article shall remain in effect for the
period set forth in Section 12.1 above notwithstanding any investigation at any
time by or on behalf of any party hereto or any waiver by any party hereto of
any condition to such party's obligations to consummate the transactions
contemplated hereby.
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13. TERMINATION
13.1 TERMINATION AND ABANDONMENT. This Agreement may be terminated and the
transactions contemplated by this Agreement may be abandoned at any time prior
to the Closing;
(a) by mutual written consent of Parent and Company; or
(b) by Parent, on the one hand, or Company or the Shareholders on the
other hand, if the Closing shall not have occurred on or before October 15,
2001; PROVIDED, HOWEVER, that the right to terminate this Agreement under
this Section 13.1(b) shall not be available to any party whose failure to
fulfill any obligations under this Agreement had been the cause of, or
resulted in, the failure of the Closing to occur on or before such date; or
(c) by Parent, on the one hand, or Company or the Shareholders on the
other hand, if any court of competent jurisdiction shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated under this Agreement
and such order, decree, ruling or other action shall have become final and
nonappealable.
(d) by Parent or Company if the other party, pursuant to any federal
or state law for relief of debtors commences a voluntary case or proceeding
or consents to an order for relief against it in an involuntary case or
proceeding.
13.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 13.1, this Agreement shall forthwith become void,
and (except as provided in Section 13.3) there shall be no liability or
obligation on the part of any party hereto.
13.3 FEES AND EXPENSES. Whether or not the transactions contemplated by
this Agreement are consummated fees and expenses incurred by the parties shall
be paid by the parties as set forth on SCHEDULE 13.3.
14. MISCELLANEOUS
14.1 SPECIFIC PERFORMANCE. Parent and Company acknowledge that the other
will be irreparably harmed and will have no adequate remedy at law if such party
fails to perform any of its obligations under this Agreement. It is accordingly
agreed that, in addition to any other remedies which may be available, the
Parties shall have the right to obtain injunctive relief to restrain a breach or
threatened breach of, or otherwise obtain specific performance of, covenants and
other agreements of the other party contained in this Agreement.
14.2 WAIVERS. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party hereto, shall be deemed to constitute
a waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein. The waiver by any party hereto
of any condition or of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any other condition or other breach. The
waiver by any party of any of the conditions precedent to its obligations under
this
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Agreement shall not preclude it from seeking redress for breach of this
Agreement other than with respect to the condition so waived.
14.3 NOTICES. All notices, requests, demands, applications, and other
communications which are required to be or may be given under this Agreement
shall be deemed to have been duly given if sent by recognized courier, telecopy
or facsimile transmission or delivered or mailed, certified first class mail,
postage prepaid, return receipt requested, to the parties hereto at the
following addresses:
TO SHAREHOLDERS:
Individually to each of the Shareholders as follows:
Xxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Xxxx X. Xxxxxxxxx
000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Xxxx X. Xxxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
F. Xxxxxx Xxxxxxxxx
0000 Xxxx Xxxxx Xxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Fax No.: (000) 000-0000
TO COMPANY:
Site Xxxxxxxx Engineers, Inc.
c/o F. Xxxxxx Xxxxxxxxx, Chief Financial Officer
00000 Xxxxxxxx Xxxxxxx, Xxxxx X
Xxxxx Xxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
TO PARENT:
TRC Companies, Inc.
c/o Vice President and General Counsel
0 Xxxxxxxxx Xxxxxxxx
Xxxxxxx, XX 00000
Fax No: (000) 000-0000
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or to such other address as any party shall furnish to the other by notice given
in accordance with this Section.
14.4 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Ancillary
Documents embody the entire agreement among the parties hereto with respect to
the subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect thereto. This Agreement may not be changed orally,
but only by an agreement in writing signed by the party or parties against whom
any waiver, change, amendment, modification or discharge may be sought.
14.5 BINDING EFFECT BENEFITS. This Agreement shall inure to the benefit of
and shall be binding upon the parties hereto and their respective legal
representatives, successors and assigns; provided that neither this Agreement
nor any of the rights hereunder may be assigned by any of the parties hereto
without the consent of the other parties.
14.6 HEADINGS. The section and other headings contained in this Agreement
are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement. As used in this Agreement, "to the knowledge
of" any person or phrases of similar import mean or refer to information of
which such person has actual knowledge or which such person should reasonably be
expected to know or after reasonable inquiry.
14.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.
14.8 GOVERNING LAW. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Connecticut, without giving effect to the principles of conflicts of law
thereof.
14.9 SEPARABILITY. Any term or provision of this Agreement which is invalid
or unenforceable shall be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement.
14.10 PUBLIC ANNOUNCEMENTS. Neither Company and Shareholders, on the one
hand, nor Parent, on the other hand, nor any of their respective affiliates,
shall make any public statements, including, without limitation, any press
releases, with respect to this Agreement and the transactions contemplated
hereby without the prior consent of the other party hereto (which consent may
not be unreasonably withheld) except as may be required by law.
14.11 NO THIRD-PARTY BENEFICIARIES. Except as expressly provided herein,
the Parties hereto agree that there are no third-party beneficiaries of the
provisions of this Agreement, and
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none of the provisions hereof shall be deemed to inure to the benefit of any
person not a party hereto or an affiliate of a party hereto.
14.12 INCORPORATION BY REFERENCE. All Schedules, Exhibits, statements,
reports, certificates, documents or instruments referred to herein or attached
hereto are incorporated herein by reference and made part hereof, as though
fully set forth at the point referred to in this Agreement. Disbursement made on
any Schedule, Exhibit, statement, report, certificate, document or instrument
shall be deemed to be made on any other Schedule Exhibit, statement, report
certificate, document or instrument on which such disclosure could or should
have been made.
[Balance of this page intentionally left blank.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
first above written.
PARENT:
TRC COMPANIES, INC.
By: S/S XXXXXXX X. XXXXXXX
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
MERGER SUB:
TRC Infrastructure, Inc.,
a New York corporation
By: S/S XXXX X. XXXXXXXX
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
TRC Infrastructure, Inc.
a New Jersey corporation
By: S/S XXXX X. XXXXXXXX
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
TRC Infrastructure, Inc.
a Virginia corporation
By: S/S XXXX X. XXXXXXXX
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
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COMPANY:
SITE-Xxxxxxxx Engineers, Inc.,
a New York corporation
By: S/S X. X. XXXXXX
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman
Site Construction Services, Inc.
a New Jersey corporation
By: S/S X. X. XXXXXX
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman
SITE-Xxxxxxxx Engineers, Inc.
a Virginia corporation
By: S/S X. X. XXXXXX
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman
SHAREHOLDERS:
S/S X. X. XXXXXX
------------------------------------------------
Xxxxxx X. Xxxxxx
S/S F. XXXXXX XXXXXXXXX
------------------------------------------------
F. Xxxxxx Xxxxxxxxx
S/S XXXX X. XXXXXXXXX
------------------------------------------------
Xxxx X. Xxxxxxxxx, by his Attorney-in-Fact,
Xxxx X. Xxxxxxxxx
S/S XXXX X. XXXXXX
------------------------------------------------
Xxxx X. Xxxxxx
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