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AGREEMENT
This Agreement executed as of the 9th day of May, 1997 by and among
SweetWater, Inc. (the "Company") and Xxxx X. Xxxxxxxx, Xxxxxxx Xxxxxx and Xxxxx
Xxxxxxx (individually, a "Management Party" and collectively, the "Management
Parties").
WHEREAS, the Management Parties constitute the top level management
of the Company's business including its "Outdoor Business" (as defined below);
and
WHEREAS, the Company desires to maintain and increase
the cash flow from the Outdoor Business; and
WHEREAS, the Management Parties are intimately familiar with the
Outdoor Business and the Company believes that cash flow from the Outdoor
Business can be maximized only while the Outdoor Business is managed by the
Management Parties; and
WHEREAS, in furtherance of its objectives the Company desires the
Management Parties to agree to continue in their present positions to and
including December 31, 1997; and
WHEREAS, the commitment on the part of the Management Parties to
remain in their present positions may cause them to forego valuable
opportunities for other employment; and
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WHEREAS, the Company desires to provide compensation and incentive
to induce the Management Parties to remain in their present positions and to
maximize cash flow to the Company.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained the parties hereto agree as follows:
1. AGREEMENT TO SERVE. (a) Each of the Management Parties will
continue to serve in his present position with the Company to and including
January 31, 1998 for the benefit of the Company and its shareholders; will
continue to perform the executive and technical functions on behalf of the
Company which such executive has been performing and such additional functions
as shall be requested by the Board (as defined below); and will report regularly
and accurately to the Board in respect of the affairs of the Company.
(b) During the course of their employment hereunder, the
Management Parties shall operate the Outdoor Business in a manner intended to
maximize cash flow, provided, however, that the consent of the Board shall be
required for any borrowing, for capital expenditures in excess of $25,000 in the
aggregate, or for sales of assets, excluding inventory, in excess of $10,000 in
the aggregate, during the term of this Agreement.
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(c) By entering into this Agreement, none of the Management
Parties are guaranteeing any level of results for the operation of the Company.
2. CERTAIN DEFINITIONS. For purposes of this Agreement the following
definitions shall apply:
(a) The term "Adjusted Year End Cash" shall mean the Year End Cash
plus (I) any costs paid in connection with an acquisition of a business or asset
not included in the Outdoor Business, including without limitation, any legal,
accounting or investment banker or other fees related thereto, plus (II) the net
total of the items listed on Schedule 2(a) (which may be a positive or negative
number).
(b) The term "Board" shall mean the Board of Directors of the
Company and any duly authorized committee thereof as the same shall exist at the
time in question.
(c) The term "Cause" means (i) neglect, refusal or failure (other
than by reason of illness, accident or other physical or mental incapacity), in
any material respect, to attend to the Management Party's duties as reasonably
assigned by the Company and consistent with past practice; (ii) failure to
follow the established, reasonable and material policies, standards, and
regulations of the Company; (iii) engagement in
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deliberate misconduct injurious to the Company or to any of its affiliates; or
(iv) conviction in a court of law of, or pleading of guilty or nolo contendere
to, any crime that constitutes a felony in the jurisdiction involved.
(d) The term "Management Sale" shall have the meaning set forth in
Section 5(c) hereof.
(e) The term "Management Sale Price" shall mean $475,000 minus the
excess, if any, of (I) the sum of the Adjusted Year End Cash over (II) the
Target Amount; provided, however, that the Management Sale Price shall not be
reduced below $1.00.
(f) The term "Non-Management Sale" shall have the meaning set forth
in Section 5(b) hereof.
(g) The term "Outdoor Business" shall mean the Acquired Assets, as
listed and defined on Exhibit 2(g), which are intended to include all of the
assets of the Company related to the manufacture, sale and distribution of
portable water filtration and purification devices and accessories thereto,
other than Excluded Assets, as defined on such schedule.
(h) The term "Outdoor Business Liabilities" shall mean the Assumed
Liabilities, as listed and defined on Schedule 2(h), other than Excluded
Liabilities, as defined on such schedule.
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(i) The term "Performance Bonus" shall have the meaning set forth in
Section 3(a) hereof.
(j) The term "Sale" shall include any Management Sale or
Non-Management Sale.
(k) The term "Target Amount" shall mean $525,000 and the "Target"
shall be deemed satisfied if the sum of the Adjusted Year End Cash equals or
exceeds the Target Amount.
(l) The term "Year End Balance Sheet" shall mean (i) the audited
balance sheet of the Company as of December 31, 1997 prepared on an
unconsolidated basis, if the Company has subsidiaries as of such date, or (ii)
if the Company does not have subsidiaries as of such date but has acquired a
business or asset after the date hereof, the audited balance sheet as of
December 31, 1997 reflecting the assets and liabilities of the Company as if the
Outdoor Business were the Company's only operating business, which balance sheet
shall exclude any assets or liabilities of any business or asset acquired after
the date hereof.
(m) The term "Year End Cash " shall mean cash, certificates of
deposit and similar cash equivalents as set forth on the Year End Balance Sheet.
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(n) The term "Value Appreciation Bonus" shall have the meaning set
forth in Section 4(b) hereof.
(o) The term "Withholding Tax Obligation" shall mean any amount of
tax which the Company is required to withhold under applicable federal, state or
local laws.
3. PERFORMANCE BONUS. (a) If the Adjusted Year End Cash exceeds
$1,000,000, regardless of whether the Management Parties or any other parties
purchase the Outdoor Business, the Management Parties, as a group, shall be
entitled to a bonus in the aggregate equal to 50% of the amount of such excess
(the "Performance Bonus"), provided, however, that if the Board reasonably
determines, that the increase in Adjusted Year End Cash has not resulted from
the operation of the business in the ordinary course, the Board may determine
that the Performance Bonus shall not be paid, in whole or in part.
(b) One-third of the Performance Bonus, less any Withholding
Tax Obligation, shall be paid in cash to each of the Management Parties
individually, within 30 days after the sooner to occur of: (i) the receipt of
the Company's Year End Balance Sheet; or (ii) March 31, 1998.
(c) In the event this Agreement is terminated as
a result of a Sale on or prior to December 31, 1997, a
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computation shall be made, to the satisfaction of the Board, as of the date
which is five business days prior to the closing of any such sale, to determine
if a Performance Bonus has been earned and, in such event, the Performance Bonus
earned shall be paid at such closing.
4. VALUE APPRECIATION BONUS. (a) It is recognized that the efforts
of the Management Parties may result in a substantial appreciation of the value
of the Outdoor Business as evidenced by the sale of the Outdoor Business in a
Non-Management Sale.
(b) Therefore, the Management Parties shall be entitled to a
"Value Appreciation Bonus" if all of the following conditions are met:
(i) the Target shall have been met and this Agreement shall
not have been terminated under Section 6(a), (b) or (c); and
(ii) On or before July 1, 1998, the Board determines to
effectuate a Non-Management Sale and such sale is consummated for a
purchase price (the "Non-Management Sales Price") in excess of the
Management Sale Price. Any consideration other than cash payable in
a Non-Management Sale shall be valued at fair market
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value as reasonably determined by the Board after consultation with
its advisors.
(c) The Value Appreciation Bonus shall be equal to (i) 30% of
the amount by which the Non-Management Sales Price exceeds the Management Sale
Price, less (ii) the amount of any Performance Bonus. If the Performance Bonus
is larger than the amount set forth in (i) above, no Value Appreciation Bonus
shall be payable hereunder.
(d) One-third of the Value Appreciation Bonus, if any, less
any Withholding Tax Obligation, shall be paid to each Management Party no later
than 30 days following the receipt by the Company of the Non-Management Sale
Price.
(e) In the event this Agreement is terminated as a result of a
Non-Management Sale on or prior to December 31, 1997, a computation shall be
made, to the satisfaction of the Board, as of the date which is five business
days prior to the closing of any such sale, to determine if a Value Appreciation
Bonus (as computed in Section 4(b) above) has been earned and, in such event,
the Value Appreciation Bonus earned shall be paid at such closing.
5. RIGHT OF FIRST REFUSAL. (a) If this Agreement has not been
terminated, the Target has been met, and, during the
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period commencing with January 1, 1998 and ending on July 1, 1998, the Board
determines to effectuate a Sale, the Company shall give the Management Parties
ten (10) business days written notice (the "Sale Notice") of its desire to
effectuate a Sale of the Outdoor Business in accordance with the terms of this
Section 5. Notwithstanding anything herein to the contrary, a Sale shall not be
deemed to have taken place as a result of a merger, consolidation or similar
transaction and this Agreement shall not restrict the Company from entering into
any such transaction at any time. The Board will use its best efforts to
commence its evaluation of the Outdoor Business as early as possible and to
notify the Management Parties by January 15, 1998 as to the likelihood of a Sale
of the Outdoor Business to the Management Parties.
(b) Non-Management Sale. If the Company desires to effect a Sale of
the Outdoor Business to a party or parties other than the Management Parties (a
"Non-Management Sale"), the Sale Notice shall include the purchase price and the
terms and conditions of the proposed Non-Management Sale. If, within ten (10)
business days from the date of the Sale Notice, the Management Parties notify
the Company that they wish to purchase the Outdoor Business on the same terms
and conditions stated in the Sale Notice (including, without limitation, the
assumption of any liabilities of the Company which the non-management purchaser
intends to assume) and demonstrate to the satisfaction of the
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Board their financial ability to do so, the Outdoor Business shall be sold to
the Management Parties under the terms and conditions so stated. In such event,
the Company and the Management Parties shall execute a document reasonably
satisfactory to such parties providing for the sale of the Outdoor Business to
the Management Parties on the terms and conditions set forth in the Sale Notice.
The closing in respect of such Non-Management Sale shall take place at a time
and place designated by the Company within ten (10) business days after the
receipt of notification to the Company that the Management Parties wish to
purchase such business under such terms and conditions. If the Management
Parties elect to purchase the Outdoor Business, they may designate an entity
solely owned by them or members of their immediate family to effect such
purchase. If the Management Parties do not so notify the Company within such ten
(10) day period of their intention to purchase the Outdoor Business, the Company
shall be free for a period of thirty (30) business days after the expiration of
such ten (10) day period, to sell the Outdoor Business to the party named in the
notice for the purchase price stated in the notice to the Management Parties. In
the event there is a material decrease in the purchase price stated in the
notice, the Company shall comply again with the right of first refusal set forth
herein. Subject to the foregoing right of first refusal, the Company shall be
free at any time to sell the business to any party.
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(c) Management Sale. If the Company desires to effect a Sale of the
Outdoor Business to the Management Parties (a"Management Sale"), the Sale Notice
shall include the Company's calculation of the Management Sale Price. In such
event, the Management Parties shall have the right to purchase the Outdoor
Business in consideration of the payment of the Management Sale Price and the
assumption of the Outdoor Business Liabilities. The Management Parties shall
have ten (10) business days from the date of the Sale Notice to notify the
Company that they wish to purchase the Outdoor Business on the terms and
conditions stated in the Sale Notice and to demonstrate to the satisfaction of
the Board their financial ability to do so. In such event, the Company and the
Management Parties shall execute a document reasonably satisfactory to such
parties (an "Asset Purchase Agreement") providing for the sale of the Outdoor
Business to the Management Parties for the price set forth in the Sale Notice,
the assumption of the Outdoor Business Liabilities by the Management Parties,
the indemnification of the Company against loss, claims or expenses resulting
from the Outdoor Business Liabilities, the indemnification of the Management
Parties against loss, claims or expenses resulting from liabilities retained by
the Company, the payment by the Management Parties of Withholding Tax
Obligations, if any, which may result from the Management Sale, and such other
terms and conditions as are customarily included in asset purchase agreements
and which are reasonably acceptable to the parties. The closing in respect of
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such Management Sale shall take place at a time and place designated by the
Company within 10 business days after the receipt of notification to the Company
that the Management Parties wish to purchase such business under such terms and
conditions. At the closing, the Management Parties shall pay the Management Sale
Price to the Company and shall execute the Asset Purchase Agreement, if not
previously executed, and shall deliver such other documents and payments as may
be specified therein. In the event the Management Parties do not elect to
purchase the Outdoor Business, within ten (10) business days after receipt of
notice from the Company, the right of first refusal set forth herein shall
terminate. If the Management Parties elect to purchase the Outdoor Business,
they may designate an entity solely owned by them or members of their immediate
family to effect such purchase.
6. TERMINATION. The term of this Agreement shall commence on the day
and year first above written and shall end on the date of its termination
pursuant to the following provisions. This Agreement may be terminated:
(a) By the Company in the event that (i) any of the Management
Parties are discharged for Cause, or (ii) two of the Management Parties
voluntarily leave the employment of the Company, or (iii) one of the Management
Parties voluntarily leaves the employment of the Company and, in the case of
(iii)
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only, the Board reasonably determines, that the departure of such Management
Party constitutes a material adverse change in the business, financial condition
or prospects of the Company. Notwithstanding anything to the foregoing set forth
herein, (i) a Management Party shall not be deemed to have left the employment
of the Company if, with the consent of the Board, such party works part-time for
the Company, and (ii) in the event a Management Party leaves the employment of
the Company, such party shall be entitled to a severance payment, payable in
cash, equal to such party's monthly base salary multiplied by three.
(b) By the Company, in the event the Board reasonably determines,
that there has been a material adverse change in the business, financial
condition or prospects of the Company including, without limitation, a
significant reduction in the Company's cash position.
(c) By the Management Parties at any time after January 31, 1998.
(d) Automatically upon the closing of a Sale, provided that all
amounts required to be paid hereunder by the Company or the Management Parties
shall have been paid.
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(e) Notwithstanding the foregoing, the provisions of Section 7 and 8
shall survive for the periods stated in such Sections.
7. CONFIDENTIALITY. By executing this Agreement, each of the
Management Parties hereby agrees that the terms of the Assignment and Agreement
Concerning Non-Disclosure of Proprietary Information attached hereto as Exhibit
A are expressly incorporated into this Agreement and shall apply to such
Management Party during the continuance of the Management Party's employment by
the Company and thereafter in accordance with the terms set forth in such
agreement as if such terms were set forth herein, provided however that, the
provisions of the such Agreement shall terminate with respect to any Management
Party who participates in the purchase of the Outdoor Business by the Management
Parties pursuant hereto.
8. NON-COMPETITION. By executing this Agreement, each of the
Management Parties hereby agrees that the terms of the Non-Competition Agreement
attached hereto as Exhibit B are expressly incorporated into this Agreement and
shall apply to such Management Party during the continuance of the Management
Party's employment by the Company and thereafter in accordance with the terms
set forth in such agreement as if such terms were set forth herein, provided
however that, the provisions of the Non-Competition Agreement shall terminate
with respect to any
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Management Party who participates in the purchase of the Outdoor Business by the
Management Parties pursuant hereto.
9. MISCELLANEOUS. (a) Management Party Agent. The Management Parties
irrevocably appoint Xx. Xxxxxxx Xxxxxx as the Agent for all of the Management
Parties and their heirs, successors and assigns for all purposes relevant to
this Agreement. Any notices or other communications required or permitted to be
sent to the Management Parties shall be duly given if given to Xx. Xxxxxx in
accordance with section 9(g) below. The Company shall be entitled to act on
requests and notices by Xx. Xxxxxx as if they were the requests and notices sent
separately by each of the Management Parties regardless of notices to the
contrary by individual parties. The Company shall have no responsibility in
respect of the division among the Management Parties of any monies required or
permitted to be sent hereunder, which monies shall be duly delivered to the
Management Parties if delivered to Xx. Xxxxxx and the Company shall have no
responsibility in respect of transaction among or between Management Parties.
(b) No Third Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any person or entity other than the Company, the
Management Parties and their respective successors and permitted assigns.
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(c) Entire Agreement; Governing Law. This Agreement (including the
documents referred to herein) constitutes the entire agreement among the Company
and the Management Parties and supersedes any prior understandings, agreements,
or representations by or among the parties, written or oral, to the extent they
have related in any way to the subject matter hereof. This Agreement shall be
governed by the laws of the state of New York applicable to contracts made and
to be performed entirely in such state.
(d) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Company and its respective successors and
assigns. This Agreement may not be assigned by any of the Management Parties
without the prior written approval of the Company and the other Management
Parties.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
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(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if it is personally
delivered or sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:
If to the Company: Copy to:
------------------ --------
SweetWater, Inc. Xxxxxxx X. Xxxxxxxx
c/o Xxxxxx X. Xxxxxx Zimet, Haines, Xxxxxxxx & Xxxxxx
Evergreen Management Corporation 000 Xxxx Xxxxxx
000 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, XX 00000
If to the Management Parties: Copies to:
Xx. Xxxxxxx Xxxxxx Xx. Xxxx X. Xxxxxxxx
SweetWater, Inc. SweetWater, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, #X 0000 Xxxxx Xxxxxx Xxxxxx, #X
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Xx. Xxxxx Xxxxxxx
SweetWater, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, #X
Xxxxxxxx, XX 00000
Any party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
parties notice in the manner herein set forth.
(h) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Company and the Management Parties. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder,
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whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(i) General. Each of the parties will use its best efforts to take
all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
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(l) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
IN WITNESS WHEREOF, the parties thereto have duly executed this
Agreement or, in the case of the Company have caused this Agreement to be duly
executed by its officer thereunto duly authorized.
SWEETWATER, INC.
By:________________________________
MANAGEMENT PARTIES
________________________________
Xxxx X. Xxxxxxxx
________________________________
Xxxxxxx Xxxxxx
________________________________
Xxxxx Xxxxxxx
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Schedule 2(a)
The net total of the following items will be used to calculate the adjustment to
"Adjusted Year End Cash" as set forth in Section 2(a)(II):
1. legal, accounting, or investment banking fees or disbursements
(not related to an acquisition described in Section 2(a)(I) above) in excess of
$32,500 for the period commencing on the date hereof and ending on December 31,
1997 will be added;
2. the difference between $32,000 and the actual severance costs for
the Management Parties, if any, will be subtracted;
3. investor relations and Board fees and expenses in excess of
$10,000 will be added;
4. $50,000, which is intended to defray insurance costs related to
the Assumed Liabilities, will be added.
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Schedule 2(g)
Acquired Assets. All the assets and properties of the Company of
every kind and description in current use or held for future use related to the
manufacturing, marketing and sale of the Company's portable water filtration and
purification products and accessories thereto or related to the microbiological
laboratory, wherever located and whether tangible or intangible or real,
personal or mixed, as the same shall exist on the date such assets are
transferred, other than Excluded Assets (as defined below), including, without
limitation, all right, title and interest of the Company in, to and under the
following assets, except to the extent that any such assets are Excluded Assets:
(a) all leases of real property and all other interests in
real property of the Company, together with all improvements,
fixtures and all other appurtenances thereto;
(b) all accounts receivable and indebtedness owed to the
Company with respect to the Acquired Assets and all inventories,
deferred items, machinery, equipment, supplies, computer hardware,
office furniture and other assets of the Outdoor Business;
(c) all right, title and interest of the Company in and to all
patents, patent applications, copyrights (registered or
unregistered), trademarks (registered or unregistered), trademark
registrations, trademark registration applications, service marks
(registered or unregistered) and trade names used or employed by the
Company in or associated with the Acquired Assets or the Outdoor
Business, and all license and other rights of the Company associated
with, used or employed by the Company, together with the goodwill of
such business;
(d) all inventions, discoveries, processes, formulae,
specifications, data, computer software, trade secrets, know-how and
proprietary information of the Outdoor Business;
(e) all sales and promotional literature and other selling
material owned, associated with, used or employed in or by the
Company in the Outdoor Business;
(f) all books of account, records, files, invoices, customers'
lists, suppliers' lists, mailing lists and other data owned,
associated with, used or employed by the Company in connection with
the Outdoor Business;
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(g) all rights of the Company under all contracts, agreements,
licenses, leases (whether as lessee or lessor), commitments, and
sales and purchase orders relating to the Acquired Assets or the
Outdoor Business and under all commitments, bids and offers and all
rights and claims (including, without limitation, refunds and claims
thereto) with respect to all Assumed Liabilities (as defined on
Schedule 2(h));
(h) all prepaid expenses and security deposits relating to
the Acquired Assets or the Outdoor Business;
(i) all rights, claims and causes of action relating to the
Acquired Assets or the Outdoor Business including all rights to
indemnification under any agreement pursuant to which the Company
acquired any of the Acquired Assets and all rights under any
insurance policies of the Company with respect to the Acquired
Assets; and
(j) all assets of, under or held in connection with any
employee benefit plan maintained, or contributed to, by the Company
for the benefit of any employees of the Company.
Excluded Assets. The term "Excluded Assets" means,
collectively, the following:
(a) the business and all assets and properties of the Company
not related to the Outdoor Business including, without limitation,
any business, assets or intellectual property (including, without
limitation, any items set forth in (c) or (d) under the definition
of Acquired Assets above) related to the development of, or which
the Company has elected to sell in connection with a sale of, its
water filtration and purification product for the home use market
(the "Home Use Product");
(b) any and all minute books, stock transfer records,
corporate seals and records of taxes, including without limitation
all tax returns and related files (including without limitation
payroll records and paid invoices) and backup documentation with
respect to taxes of the Company and all corporate and other records
and files located at the Company's corporate headquarters at 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxx X, Xxxxxxxx, XX 00000 ("Corporate
Headquarters");
(c) all cash in banks and all marketable securities held by
the Company;
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(d) all rights under any insurance policies covering
Excluded Liabilities of the Company; and
(e) all computer equipment, computer software, supplies,
records, historical documents and other assets located at the
Company's Corporate Headquarters which the Board reasonably
determines should be retained for the continued operation of the
Company as a public entity.
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Schedule 2(h)
Assumed Liabilities. All liabilities and obligations of the Company
(other than Excluded Liabilities, as defined below) arising out of or related to
the Acquired Assets or the Outdoor Business, whether known or unknown, fixed or
contingent, including without limitation the following:
(a) all liabilities and obligations that arise or have arisen
in connection with the Acquired Assets or the operation of the
Outdoor Business regardless of whether such liabilities or
obligations relate to periods prior to the transfer of such Acquired
Assets and regardless of whether such liabilities or obligations are
reflected or reserved for on the Year End Balance Sheet;
(b) all liabilities and obligations arising out of or related
to any litigation or claims with respect to the Acquired Assets or
the Outdoor Business, including without limitation the existing EEOC
claims and any such claims which may arise in the future;
(c) all liabilities and obligations arising out of or related
to any contract, agreement or lease comprising part of the Acquired
Assets or the Outdoor Business;
(d) all liabilities and obligations arising out of or related
to any environmental law or regulation or otherwise relating to the
environment;
(e) all liabilities and obligations arising out of or related
to any event occurring after the transfer of the Acquired Assets in
connection with the operation of the Outdoor Business or the use or
ownership of any of the Acquired Assets;
(f) all pension or similar liabilities and obligations of the
Company to any employee or retired employee of the Company under any
pension or similar employee benefit plan or medical, life or
long-term disability program or plan maintained, or contributed to,
by the Company for the benefit of any employees of the Company; and
(g) all liabilities and obligations for workers compensation
or medical insurance for any event or occurrence either before or
after the transfer of the Acquired Assets.
Excluded Liabilities. The term "Excluded Liabilities" means,
collectively, the following liabilities and obligations:
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(a) all liabilities and obligations arising out of or related
to any of the Excluded Assets; and
(b) all liabilities and obligations of a type recorded by the
Company on their books of account or related records as a
"corporate" or intercompany liability, including federal and state
income tax liability relating to periods prior to the sale,
shareholder litigation or other litigation arising from the
Company's status as a public company or the filing requirements of
the Securities and Exchange Commission and the National Association
of Securities Dealers, Inc.; legal, investment banker, audit,
accounting and tax compliance costs; or broker fees and premiums
payable to any insurance company except, in each case, to the extent
that the Board determines, in its sole discretion, that any such
liabilities are directly related to the Outdoor Business, the
Acquired Assets or the Assumed Liabilities.
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