STOCK PURCHASE AND SALE AGREEMENT
by and among
Thermo TerraTech Inc.
(as Buyer)
and
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxxx X. XxXxxxxx
Xxxxx X. Xxxxxxx
(the Sellers)
May 12, 1997
PAGE
TABLE OF CONTENTS
ARTICLE 1 - PURCHASE AND SALE OF SHARES 1
Section 1.1. Delivery of Purchased Shares 1
Section 1.2. Purchase Price 1
ARTICLE 2 - CLOSING 2
Section 2.1. Time and Place of Closing 2
Section 2.2. Actions to be Taken by the Sellers at
the Closing 2
Section 2.3. Action to be Taken by the Buyer at
the Closing 2
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF THE SELLERS 3
Section 3.1. Authority 3
Section 3.2. Ownership of Shares; Authority to
Transfer 3
Section 3.3. Brokers and Finders for the Sellers 4
Section 3.4. Organization, Qualification and
Corporate Power 4
Section 3.5. Capitalization 4
Section 3.6. Section 203 of the Delaware General
Corporation Law; Noncontravention 5
Section 3.7. Subsidiaries 6
Section 3.8. Reports and Financial Statements 6
Section 3.9. Absence of Certain Changes 7
Section 3.10. Undisclosed Liabilities 8
Section 3.11. Tax Matters 8
Section 3.12. Assets 10
Section 3.13. Owned Real Property 10
Section 3.14. Intangibles 10
Section 3.15. Real Property Leases 11
Section 3.16. Contracts 11
Section 3.17. Accounts Receivable 13
Section 3.18. Powers of Attorney 13
Section 3.19. Insurance 13
Section 3.20. Litigation 13
Section 3.21. Employees 13
Section 3.22. Employee Benefits 14
Section 3.23. Environmental Laws 16
Section 3.24. Legal Compliance 17
Section 3.25. Permits 17
Section 3.26. Certain Business Relationships with
Affiliates 18
Section 3.27. Brokers and Finders for the Company 18
Section 3.28. Books and Records 18
Section 3.29. Customers and Suppliers 18
Section 3.30. Banking Facilities 19
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Section 3.31. Suretyships 19
Section 3.32. Backlog 19
Section 3.33. Government Contracts 19
Section 3.34. Inventories 19
Section 3.35. Commission Filings 20
Section 3.35. Disclosure 20
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF THE BUYER 20
Section 4.1. Organization 20
Section 4.2. Authorization of Transaction 20
Section 4.3. Noncontravention 21
Section 4.4. Brokers and Finders for the Buyer 21
ARTICLE 5 - CERTAIN COVENANTS 21
Section 5.1. Expenses 21
Section 5.2. Further Assurances 21
Section 5.3. Releases 22
Section 5.4 Covenant Against Competition 22
ARTICLE 6 - INDEMNIFICATION 23
Section 6.1. Indemnification by the Sellers 23
Section 6.2. Limitation of Liability of the Sellers 24
Section 6.3. Indemnification by the Buyer 25
Section 6.4. Limitation of Liability of the Buyer 25
Section 6.5. Definition of "Damages" 26
ARTICLE 7 - DEFINITIONS 26
ARTICLE 8 - MISCELLANEOUS 27
Section 8.1. Press Releases and Announcements 27
Section 8.2. No Third Party Beneficiaries 28
Section 8.3. Entire Agreement 28
Section 8.4. Succession and Assignment 28
Section 8.5. Counterparts 28
Section 8.6. Headings 28
Section 8.7. Notices 28
Section 8.8. Governing Law 29
Section 8.9. Amendments and Waivers 29
Section 8.10. Severability 29
Section 8.11. Construction 30
Section 8.12. Incorporation of Exhibits and Schedules 31
Section 8.13. Survival of Representations and
Warranties 31
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EXHIBITS
Exhibit A - Form of Stock Restriction Agreement
Exhibit B - Form of Letter of Intent
Exhibit C - Disclosure Schedule
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STOCK PURCHASE AND SALE AGREEMENT
This Stock Purchase and Sale Agreement is made and entered
into on May 12, 1997, by and between Thermo TerraTech Inc., a
Delaware corporation (the "Buyer"), and Xxxxxx X. Xxxxxx, Xxxxxxx
X. Xxxxxxxxx, Xxxxxx X. XxXxxxxx and Xxxxx X. Xxxxxxx (each such
person, individually, a "Seller" and all such persons
collectively, the "Sellers").
WITNESSETH:
WHEREAS, the Sellers collectively own certain outstanding
shares (the "Shares") of the capital stock of The Randers Group
Incorporated, a Delaware corporation (the "Company");
WHEREAS, the Buyer wishes to purchase from the Sellers, and
the Sellers wish to sell certain of the Shares to the Buyer, upon
the terms and conditions herewith set forth below; and
WHEREAS, the Buyer and the Sellers jointly desire to enter
into certain restrictive covenants with respect to the balance of
the Shares owned by the Sellers;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, agreements and provisions herein contained, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
Section 1.1. Delivery of Purchased Shares. At the Closing
----------------------------
(as defined in Section 2.1 hereof), and subject to the terms and
conditions contained in this Agreement, each Seller shall
transfer to the Buyer and the Buyer shall acquire from each
Seller, all right, title and interest in and to such number of
Shares as is set forth opposite each such Seller's name in Column
1 of Schedule 1 hereto (the "Purchased Shares"), free and clear
of all liens, encumbrances, charges, equities or restrictions.
Section 1.2. Purchase Price. In exchange for the
--------------
Purchased Shares, and subject to the terms and conditions
contained in this Agreement, the Buyer shall pay to the Sellers
at the Closing $0.625, in cash, for each Purchased Share acquired
by the Buyer (the "Purchase Price").
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ARTICLE 2
CLOSING
Section 2.1. Time and Place of Closing. The closing of the
-------------------------
transactions contemplated by this Agreement (the "Closing") shall
take place immediately upon the execution of this Agreement by
all of the parties hereto. The Closing shall take place at the
offices of XxXxxxx & Bowie, P.L.C., counsel to the Sellers and
the Company, or at such other location as may be agreed upon by
the parties.
Section 2.2. Actions to be Taken by the Sellers at the
-----------------------------------------
Closing. At the Closing, in addition to the taking of such other
-------
actions as may be provided in this Agreement, (i) each Seller
shall deliver certificates for such Seller's Purchased Shares to
the Buyer (or, in the case of Purchased Shares held in brokerage
accounts for the benefit of a Seller, irrevocable instructions to
such broker to deliver the Purchased Shares to the Buyer), in
either case, accompanied by duly executed stock powers; (ii) each
Seller shall execute and deliver to the Buyer a Stock Restriction
Agreement, in the form set forth as Exhibit A hereto (the "Stock
------- -
Restriction Agreements"), with respect to such number of Shares
as is set forth opposite each such Seller's name in Column 2 of
Schedule 1 hereto (the "Restricted Shares"); (iii) each Seller
shall deliver certificates for such Seller's Restricted Shares to
the Buyer (or, in the case of Restricted Shares held in brokerage
accounts for the benefit of a Seller, irrevocable instructions to
such broker to deliver the Restricted Shares to the Buyer), in
either case, together with instructions to the Company's stock
transfer agent to endorse on such certificates the restrictive
legend required by Section 4(b) of the Stock Restriction
Agreements; (iv) the Sellers shall deliver to the Buyer evidence
satisfactory to the Buyer of the repayment in full by First
Venture Associates Limited Partnership of the outstanding
principal balance of, and all interest accrued through and
including December 31, 1996 on, the notes receivable, accrued
interest receivable and the accounts receivable described in Note
6 to the Company's consolidated financial statements for the year
ended December 31, 1996; (v) the Sellers shall cause the Company
to execute and deliver to the Buyer the letter of intent in the
form set forth as Exhibit B hereto (the "Letter of Intent"); and
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(vi) the Sellers shall deliver to the Buyer the closing
certificates, documents and opinions of counsel as may be
requested by counsel to the Buyer.
Section 2.3. Action to be Taken by the Buyer at the
--------------------------------------
Closing. At the Closing, in addition to the taking of such other
-------
actions as may be provided in this Agreement, (i) the Buyer shall
deliver the Purchase Price to the Sellers; (ii) the Buyer shall
cause the Company to execute and deliver to each Seller a Stock
Restriction Agreement with respect to each such Seller's
Restricted Shares; (iii) the Buyer shall execute and deliver to
the Company the Letter of Intent; and (iv) the Buyer shall
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deliver the closing certificates, documents and opinions of
counsel as may be requested by counsel to the Sellers.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers represent and warrant to the Buyer that, except
as set forth in the disclosure schedule attached hereto as
Exhibit C (the "Disclosure Schedule"), the statements contained
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in this Article 3 are true and correct as of the date hereof and
will be true and correct as of the date on which the Closing
occurs (the "Closing Date"). The representations and warranties
set forth in Sections 3.1, 3.2 and 3.3 shall be deemed to be made
by each Seller severally and not jointly; the representations and
warranties set forth in all other sections of this Article 3
shall be deemed to be made jointly and severally by the Sellers.
Matters set forth on the Disclosure Schedule shall be deemed to
qualify only specifically identified sections of this Article 3,
and shall be deemed not to qualify any paragraph of this Article
3 not so specifically identified. Each individual representation
and warranty contained herein shall be interpreted and enforced
separately and no representation or warranty contained herein
shall be construed as limiting any other representation and
warranty contained herein. The Buyer shall be assumed to have
relied upon the representations and warranties contained herein,
notwithstanding any investigation of the Company made by the
Buyer prior to the Closing. The term "Ordinary Course of
Business", when used in this Article 3, shall mean the ordinary
course of business of the Company consistent with its past custom
and practice (including with respect to frequency and amount).
The term "Knowledge", when used in this Article 3, shall mean (i)
the actual knowledge of any Seller and (ii) the knowledge any
such Seller would reasonably be expected to have in his capacity
as an officer and/or director of the Company after diligent
investigation of the matter.
Section 3.1. Authority. This Agreement and the Stock
---------
Restriction Agreement constitute valid and binding obligations of
the Seller enforceable against the Seller in accordance with the
terms hereof and thereof. Neither the execution, delivery and
performance of this Agreement by the Seller, nor the consummation
of the transactions contemplated hereby will (a) conflict with or
result in a violation, breach, termination or acceleration of, or
default under (or would result in such a violation, breach,
termination, acceleration or default with the giving of notice or
passage of time, or both) any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, agreement or
other instrument or obligation to which the Seller is a party or
by which the Seller or any of his properties or assets may be
bound or affected; (b) result in the violation of any order,
writ, injunction, decree, statute, rule or regulation applicable
to the Seller or his properties or assets; or (c) result in the
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imposition of any lien, encumbrance, charge or claim upon the
Shares. No consent or approval by, or notification to or filing
with, any court, governmental authority or third party is
required in connection with the execution, delivery and
performance of this Agreement by the Seller or the consummation
of the transactions contemplated hereby to be performed by the
Seller.
Section 3.2. Ownership of Shares; Authority to Transfer.
------------------------------------------
The Shares are not encumbered and are freely transferable by the
Seller, subject to compliance with, or exemptions from,
applicable federal and state securities laws. The Seller holds
good and marketable title to the Shares and no third party is
entitled to claim any right thereto or make any claim thereon.
The transfer of the Purchased Shares to the Buyer pursuant to
this Agreement will vest in the Buyer title to the Purchased
Shares, free and clear of all liens, claims, equities, options,
calls, voting trusts, agreements, commitments and encumbrances
whatsoever, including without limitation community property
rights.
Section 3.3. Brokers and Finders for the Sellers. The
-----------------------------------
Seller has not, on his own behalf or on behalf of the Company,
employed any broker, agent or finder in connection with the
transactions contemplated hereby.
Section 3.4. Organization, Qualification and Corporate
-----------------------------------------
Power. The Company is a corporation duly organized, validly
-----
existing and in corporate and tax good standing under the laws of
the State of Delaware. The Company is duly qualified to conduct
business and is in corporate and tax good standing as a foreign
corporation in each jurisdiction in which the failure to so
qualify would have a material adverse effect on the assets,
business, financial condition, results of operations or future
prospects of the Company and the Subsidiaries (as defined in
Section 3.6(b) below), taken as a whole (a "Material Adverse
Effect"). The Company has all requisite corporate power and
authority to carry on the businesses in which it is engaged and
to own and use the properties owned and used by it. The Sellers
have caused the Company to furnish to the Buyer true and complete
copies of the Company's Certificate of Incorporation and Bylaws,
each as amended and as in effect on the date hereof. Each
amendment to the Company's Certificate of Incorporation has been
duly adopted by all requisite director and shareholder action and
in accordance with all applicable law. The Company is not in
default under or in violation of any provision of its Certificate
of Incorporation or Bylaws or any other instrument, document or
agreement setting forth the terms and conditions of any shares of
capital stock or other securities of the Company, or the rights
and obligations of any holder of such shares or other securities.
Section 3.5. Capitalization. The authorized capital stock
--------------
of the Company consists of (i) 30,000,000 shares of Common Stock,
$.0001 par value per share ("Common Stock"), of which 14,115,682
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shares are issued and outstanding. Section 3.5 of the Disclosure
Schedule sets forth a complete and accurate list of (i) all
holders of options, warrants and other rights to purchase shares
of the Company's capital stock (collectively, "Options"),
indicating the type and number of shares subject to each such
Option, and the exercise price, vesting status and termination
date of each such Option, and (ii) all holders of any notes or
other securities that are or may be convertible into shares of
the Company's capital stock (collectively, "Convertible
Securities"). All of the issued and outstanding shares of Common
Stock are, and all shares of the Company's capital stock that may
be issued upon the exercise of any Options or upon the exercise
or conversion of any Convertible Securities will be, upon such
issuance, duly authorized, validly issued, fully paid,
nonassessable and free of all preemptive rights. Except as set
forth in Section 3.5 of the Disclosure Schedule, there are no
outstanding or authorized shares of capital stock or other
securities or options, warrants, rights, agreements or
commitments to which the Company is a party or which are binding
upon the Company providing for the issuance, disposition or
acquisition of any of its capital stock or other securities.
There are no outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to the Company.
There are no agreements, voting trusts, proxies, or
understandings with respect to the voting or registration under
the Securities Act of 1933 (the "Securities Act"), of any shares
of any capital stock of the Company to which the Company is
party, and except as set forth in Section 3.5 of the Disclosure
Schedule, no shares of the Company's capital stock are currently
the subject of a registration statement filed under the
Securities Act. The Company is not party to any agreements,
voting trusts, proxies, or understandings with respect to the
voting or registration under the Securities Act of any shares of
any capital stock of the Company. All of the issued and
outstanding shares of Common Stock and other outstanding
securities of the Company were issued in compliance with
applicable federal and state securities laws. No repurchase of
capital stock by the Company (i) violated the Company's
Certificate of Incorporation or Bylaws or any laws, rules or
regulations applicable to the Company or (ii) caused any breach
of any agreement to which the Company is or was a party. The
Common Stock is listed for trading in the Emerging Company
Marketplace of the American Stock Exchange, Inc. (the "Exchange")
and, to the Knowledge of the Sellers, no proceedings to delist
such Common Stock have been commenced or are contemplated by the
Exchange.
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Section 3.6. Section 203 of the Delaware General
-----------------------------------
Corporation Law; Noncontravention.
---------------------------------
(a) The Board of Directors of the Company unanimously
has, after due consideration of its fiduciary duties and
immediately prior to the execution of this Agreement, (i)
determined that this Agreement and the transactions contemplated
hereby are fair to the Company and the shareholders of the
Company and (ii) approved this Agreement and the transactions
contemplated hereby. The transactions contemplated by this
Agreement have been approved by all requisite corporate action of
the Company. The Board of Directors of the Company has approved
the Buyer and its affiliates (including Thermo Electron
Corporation and Thermo Power Corporation) becoming "interested
stockholders" of the Company, as such term is defined in Section
203 of the Delaware General Corporation Law and, by reason of
such approval, the exception to Section 203 contained in Section
203(a)(1) thereof shall apply to the transactions contemplated
hereby and to any future "business combinations," as such term is
defined in Section 203, between the Company and the Buyer and/or
its affiliates (including Thermo Electron Corporation and its
subsidiaries).
(b) Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, require notice to or the approval of the holders of any
portion of the outstanding shares of Common Stock other than the
collective approval of the Sellers, which approval has been
obtained. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, (a)
require on the part of the Company or any corporation with
respect to which the Company, directly or indirectly, has the
power to vote or direct the voting of sufficient securities to
elect a majority of the directors (any of the foregoing being
referred to herein as a "Subsidiary") any filing with, or any
permit, authorization, consent or approval of, any court,
arbitration tribunal, administrative agency or commission or
other governmental or regulatory authority or agency (a
"Governmental Entity"), (b) conflict with or violate any
provision of the charter or Bylaws of the Company or any
Subsidiary, (c) conflict with, result in a breach of, constitute
(with or without due notice or lapse of time or both) a default
under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify or cancel, or require any
notice, consent or waiver under, any material contract, lease,
sublease, license, sublicense, franchise, permit, indenture,
agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest (as defined below) or other
arrangement to which the Company or any Subsidiary is a party or
by which the Company or any Subsidiary is bound or to which any
of their assets is subject except as provided in Section 3.6(b)
of the Disclosure Schedule, (d) result in the imposition of any
Security Interest upon any assets of the Company or any
Subsidiary, (e) violate any order, writ, injunction, decree,
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statute, rule or regulation applicable to the Company, any
Subsidiary or any of their properties or assets or (f) entitle
any employee of the Company or any Subsidiary to severance or
other payments or to any increase in compensation or benefits.
For purposes of this Agreement, "Security Interest" means any
mortgage, pledge, security interest, encumbrance, charge, or
other lien (whether arising by contract or by operation of law),
other than (i) mechanic's, materialmen's, and similar liens, (ii)
liens arising under worker's compensation, unemployment
insurance, social security, retirement, and similar legislation,
and (iii) liens on goods in transit incurred pursuant to
documentary letters of credit, in each case arising in the
Ordinary Course of Business and not material to the Company and
its Subsidiaries taken as a whole.
Section 3.7. Subsidiaries. Section 3.7 of the Disclosure
------------
Schedule sets forth for each Subsidiary (a) its name and
jurisdiction of incorporation, (b) the percentage of each class
of such Subsidiary's outstanding capital stock owned by the
Company or another Subsidiary and (c) its directors and officers.
Each Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation or organization. Each Subsidiary is duly qualified
to conduct business and is in corporate and tax good standing in
each jurisdiction in which the failure to so qualify would have a
Material Adverse Effect. Each Subsidiary has all requisite
corporate power and authority to carry on the businesses in which
it is engaged and to own and use the properties owned and used by
it. All of the issued and outstanding shares of capital stock of
each Subsidiary are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. All shares of each
Subsidiary that are held of record or owned beneficially by
either the Company or any Subsidiary are held or owned free and
clear of any restrictions on transfer (other than restrictions
under the Securities Act and state securities laws), claims,
Security Interests, options, warrants, rights, contracts, calls,
commitments, equities and demands. There are no outstanding or
authorized options, warrants, rights, agreements or commitments
(contingent or otherwise) to which the Company or any Subsidiary
is a party or which are binding on any of them providing for the
issuance, disposition or acquisition of any capital stock of any
Subsidiary. There are no outstanding stock appreciation, phantom
stock or similar rights with respect to any Subsidiary. There
are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of any capital stock of
any Subsidiary. The Company does not control directly or
indirectly or have any direct or indirect equity participation in
any corporation, partnership, trust, or other business
association which is not a Subsidiary.
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Section 3.8. Reports and Financial Statements. The Sellers
--------------------------------
have provided to the Buyer the audited consolidated balance
sheets and statements of operations, changes in shareholders'
equity and cash flows for each of the last three fiscal years for
the Company and its Subsidiaries (or such shorter periods as such
Subsidiaries have been in existence) (collectively, the
"Financial Statements"). The Financial Statements have been
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis throughout
the periods covered thereby ("GAAP"), fairly present the
consolidated financial condition, results of operations and cash
flows of the Company and the Subsidiaries as of the respective
dates thereof and for the periods referred to therein and are
consistent with the books and records of the Company and the
Subsidiaries.
Section 3.9. Absence of Certain Changes. To the Knowledge
--------------------------
of the Sellers, since December 31, 1996, (a) there has not been
any material adverse change in the assets, business, prospects,
financial condition or results of operations of the Company or
its Subsidiaries, nor has there occurred any event or development
which could reasonably be foreseen to result in such a material
adverse change in the future, and (b) neither the Company nor any
Subsidiary has:
(i) issued, sold, delivered or agreed or commit to
issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise) or authorize the issuance,
sale or delivery of, or redeem or repurchase, any stock of
any class or any other securities or any rights, warrants or
options to acquire any such stock or other securities
(except pursuant to the conversion or exercise of Options or
Convertible Securities outstanding as of December 31, 1996
in accordance with their terms), or amend any of the terms
of any such stock, Options or Convertible Securities;
(ii) split, combined or reclassified any shares of its
capital stock; or declared, set aside or paid any dividend
or other distribution (whether in cash, stock or property or
any combination thereof) in respect of its capital stock;
(iii) created, incurred or assumed any debt not
outstanding as of December 31, 1996 (including obligations
in respect of capital leases) except in the Ordinary Course
of Business; assumed, guaranteed, endorsed or otherwise
become liable or responsible (whether directly,
continentally or otherwise) for the obligations of any other
person or entity; or made any loans, advances or capital
contributions to, or investments in, any other person or
entity;
(iv) entered into, adopted or amended any Employee
Benefit Plan or any employment or severance agreement or
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arrangement of the type described in Section 3.22 or (except
for normal increases in the Ordinary Course of Business and
consistent with past practices) increased in any manner the
compensation or fringe benefits of, or modified the
employment terms of, its directors, officers or employees,
generally or individually, or paid any benefit not required
by the terms in effect on December 31, 1996 of any existing
Employee Benefit Plan;
(v) acquired, sold, leased, encumbered or disposed of
any assets or property (including without limitation any
shares or other equity interests in or securities of any
Subsidiary or any corporation, partnership, association or
other business organization or division thereof), other than
purchases and sales of assets in the Ordinary Course of
Business;
(vi) amended its Certificate of Incorporation or
Bylaws;
(vii) changed in any material respect its
accounting methods, principles or practices, except insofar
as may be required by a generally applicable change in GAAP;
(viii) discharged or satisfied any Security Interest
or paid any obligation or liability other than in the
Ordinary Course of Business;
(ix) mortgaged or pledged any of its property or assets
or subjected any such assets to any Security Interest other
than in the Ordinary Course of Business;
(x) sold, assigned, transferred or licensed any
Intellectual Property, other than in the Ordinary Course of
Business;
(xi) entered into any contract of the kind described in
Section 3.16 or, amended, terminated, taken or omitted to
take any action that would constitute a violation of or
default under, or waive any rights under, any contract or
agreement listed in Section 3.16 of the Disclosure Schedule;
(xii) made or committed to make any capital
expenditure in excess of $10,000 per item or any capital
expenditure other than in the Ordinary Course of Business;
(xiii) made any Tax election or, except in the
Ordinary Course of Business, settled or compromise any
federal, state, local or foreign Tax liability;
(xiv) agreed in writing or otherwise to take any of
the foregoing actions.
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Section 3.10. Undisclosed Liabilities. To the Knowledge of
-----------------------
the Sellers, neither the Company nor any of its Subsidiaries has
any liability, whether absolute or contingent, liquidated or
unliquidated, accrued or unaccrued and whether due or to become
due, except for (a) liabilities shown on the audited balance
sheet as of December 31, 1996 (the "Most Recent Balance Sheet"),
(b) liabilities which have arisen since the date of the Most
Recent Balance Sheet in the Ordinary Course of Business and which
are similar in nature and amount to the liabilities which arose
during the comparable period of time in the immediately preceding
fiscal year and (c) contractual liabilities incurred in the
Ordinary Course of Business which are not required by GAAP to be
reflected on a balance sheet.
Section 3.11. Tax Matters.
-----------
(a) Each of the Company and the Subsidiaries has filed
in a timely manner (including permitted extensions) all Tax
Returns (as defined below) that it was required to file and all
such Tax Returns were correct and complete in all material
respects. All Taxes shown on such Tax Returns have been paid in
full on a timely basis or have been accrued on the Most Recent
Balance Sheet, and no other Taxes are owed by the Company with
respect to items or periods covered by such Returns. The unpaid
Taxes of the Company and the Subsidiaries for Tax periods through
the date of the Most Recent Balance Sheet do not exceed the
accruals and reserves for Taxes set forth on the Most Recent
Balance Sheet. Neither the Company nor any Subsidiary has any
actual or potential liability for any Tax obligation of any
taxpayer (including without limitation any affiliated group of
corporations or other entities that included the Company or any
Subsidiary during a prior period) other than the Company and the
Subsidiaries. All Taxes that the Company or any Subsidiary is or
was required by law to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid
to the proper Governmental Entity. There are no liens for Taxes
on the assets of the Company or any Subsidiary other than liens
for Taxes not yet due and payable. For purposes of this
Agreement, "Taxes" means all taxes, charges, fees, levies or
other similar assessments or liabilities, including without
limitation income, gross receipts, ad valorem, premium,
value-added, excise, real property, personal property, sales,
use, transfer, withholding, employment, payroll and franchise
taxes imposed by the United States of America or any state, local
or foreign government, or any agency thereof, or other political
subdivision of the United States or any such government, and any
interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or incurred in connection with
any tax or any contest or dispute thereof. For purposes of this
Agreement, "Tax Returns" means all reports, returns,
declarations, statements or other information required to be
supplied to a taxing authority in connection with Taxes.
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(b) The Sellers have caused the Company to deliver to
the Buyer correct and complete copies of all federal income Tax
Returns, examination reports and statements of deficiencies
assessed against or agreed to by any of the Company or any
Subsidiary since December 31, 1993. The federal income Tax
Returns of the Company for the year ended December 31, 1995 are
currently undergoing audit by the Internal Revenue Service.
Except as set forth in the preceding sentence, the federal income
Tax Returns of the Company have never been audited by the
Internal Revenue Service and are closed by the applicable statute
of limitations for all taxable years through 1993. No
examination or audit of any Tax Returns of the Company or any
Subsidiary by any Governmental Entity is currently in progress
or, to the Knowledge of the Sellers, threatened or contemplated.
Neither the Company nor any Subsidiary has waived any statute of
limitations with respect to Taxes or agreed to an extension of
time with respect to a Tax assessment or deficiency, which waiver
or extension is still in effect. There is no dispute or claim
concerning any Tax liability of any of the Company and its
Subsidiaries, either raised or claimed in writing by any
authority or as to which the Sellers have Knowledge. No claim
has ever been made by an authority in a jurisdiction where any of
the Company and its Subsidiaries does not file Tax Returns that
it is or may be subject to Tax in that jurisdiction.
(c) Neither the Company nor any Subsidiary is a
"consenting corporation" within the meaning of Section 341(f) of
the Internal Revenue Code of 1986 (the "Code") and none of the
assets of the Company nor the Subsidiaries are subject to an
election under Section 341(f) of the Code. None of the Company
and its Subsidiaries has made any payments or is a party to any
agreement that under certain circumstances could obligate it to
make any payments that will not be deductible under Section 280G
of the Code. Neither the Company nor any Subsidiary is a party
to any Tax allocation or sharing agreement.
(d) Neither the Company nor any Subsidiary is or has
ever been a member of an "affiliated group" of corporations
(within the meaning of Section 1504 of the Code), other than a
group of which only the Company and the Subsidiaries are members.
Neither the Company nor any Subsidiary has made an election under
Treasury Reg. Section 1.1502-20(g). Neither the Company nor any
Subsidiary is or has been required to make a basis reduction
pursuant to Treasury Reg. Section 1.1502-20(b) or Treasury Reg.
Section 1.337(d)-2T(b).
(e) All material elections with respect to Taxes,
other than those elections reflected in the Tax Returns referred
to in subsection (b), as of the date hereof are set forth in
Section 3.11 of the Disclosure Schedule. None of the assets of
the Company nor any Subsidiary is property that the Company or
any Subsidiary is required to treat as being owned by any other
person pursuant to the "safe harbor lease" provisions of former
Section 168(f)(8) of the Code. None of the assets of the Company
-11-
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nor any Subsidiary directly or indirectly secures any debt the
interest on which is tax exempt under Section 103(a) of the Code.
None of the assets of the Company nor any Subsidiary is "tax
exempt use property" within the meaning of Section 168(h) of the
Code. Neither the Company nor any Subsidiary has agreed to make
or is required to make any adjustment under Section 481 of the
Code by reason of a change in accounting method or otherwise.
Neither the Company nor any Subsidiary has participated in an
international boycott within the meaning of Section 999 of the
Code. Except as set forth in Section 3.11(e) of the Disclosure
Schedule, neither the Company nor any Subsidiary has or has had a
permanent establishment in any foreign country, as defined in any
applicable treaty or convention between the United States and
such foreign country. Neither the Company nor any Subsidiary is
a party to any joint venture, partnership or other arrangement or
contract that could be treated as a partnership for federal
income tax purposes.
Section 3.12. Assets. Each of the Company and the
------
Subsidiaries owns or leases all tangible assets necessary for the
conduct of its businesses as presently conducted and as presently
proposed to be conducted. To the Knowledge of the Sellers, each
such tangible asset is free from material defects, has been
maintained in accordance with normal industry practice, is in
good operating condition and repair (subject to normal wear and
tear) and is suitable for the purposes for which it presently is
used. Except as described in Section 3.12 of the Disclosure
Schedule, no asset of the Company (tangible or intangible) is
subject to any Security Interest.
Section 3.13. Owned Real Property. Except as set forth in
-------------------
Section 3.13 of the Disclosure Schedule, neither the Company nor
any Subsidiary owns any real property. The Company or the
Subsidiaries have good and marketable title to all such real
property, and no such real property is subject to any Security
Interest.
Section 3.14. Intangibles. Set forth in Section 3.14 of
-----------
the Disclosure Schedule is an accurate list and description of
all patents, trademarks, trade names, service marks, brand names
and copyrights, and registrations and applications therefor, used
in the conduct of the business of the Company and the
Subsidiaries or the use of which is necessary for the business of
the Company and the Subsidiaries as now being conducted (the
"Intangibles") and all licenses, sublicenses or other rights or
obligations entered into or granted by or to the Company and the
Subsidiaries with respect thereto. To the Knowledge of the
Sellers, the Company owns or possesses adequate rights to use,
free and clear of any obligation of payment, encumbrance, lien or
claim, all such Intangibles. No person has made any claim or
demand upon the Company pertaining to, and no proceeding is
pending or, to the Knowledge of the Sellers, threatened which
challenges, the rights of the Company in respect of any
Intangibles. To the Knowledge of the Sellers, the Company has
-12-
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not infringed or engaged in the unauthorized use of any patent,
trademark, trade name, service xxxx, brand name or copyright, or
any invention, technology, technical know-how, process, design,
trade secret or other intellectual property of any third party.
Section 3.15. Real Property Leases. Section 3.15 of the
--------------------
Disclosure Schedule lists and describes briefly all real property
leased or subleased to the Company or any Subsidiary and lists
the term of such lease or sublease, any extension and expansion
options, and the rent payable thereunder. The Sellers have
caused the Company to provide the Buyer with access to correct
and complete copies of the leases and subleases (as amended to
date) listed in Section 3.15 of the Disclosure Schedule. With
respect to each lease and sublease listed in Section 3.15 of the
Disclosure Schedule:
(a) the lease or sublease is legal, valid, binding,
enforceable and in full force and effect;
(b) the lease or sublease will continue to be legal,
valid, binding, enforceable and in full force and effect
immediately following the Closing in accordance with the terms
thereof as in effect prior to the Closing;
(c) neither the Company or any Subsidiary nor, to the
Knowledge of the Sellers, any other party to the lease or
sublease is in breach or default in any material respect, and no
event has occurred which, with notice or lapse of time, would
constitute any such breach or default, or permit termination,
modification, or acceleration thereunder;
(d) to the Knowledge of the Sellers, there are no
disputes, oral agreements or forbearance programs in effect as to
the lease or sublease;
(e) neither the Company nor any Subsidiary has
assigned, transferred, conveyed, mortgaged, deeded in trust or
encumbered any interest in the leasehold or subleasehold; and
(f) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the
operation of said facilities.
Section 3.16. Contracts. Section 3.16 of the Disclosure
---------
Schedule lists the following written arrangements to which the
Company or any Subsidiary is a party:
(a) any written arrangement pursuant to which any
party is indemnified for or against any liability under
Environmental Laws (as defined in Section 3.23 below);
(b) any written arrangement (or group of related
written arrangements) for the lease of personal property from or
-13-
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to third parties providing for lease payments in excess of
$10,000 per annum;
(c) any written arrangement (or group of related
written arrangements) for the purchase or sale of raw materials,
commodities, supplies, products or other personal property or for
the furnishing or receipt of services (i) which calls for
performance over a period of more than one year, (ii) which
involves more than the sum of $10,000, or (iii) in which the
Company or any Subsidiary has granted manufacturing rights, "most
favored nation" pricing provisions or marketing or distribution
rights relating to any products or territory or has agreed to
purchase a minimum quantity of goods or services or has agreed to
purchase goods or services exclusively from a certain party;
(d) any written arrangement establishing a partnership
or joint venture;
(e) any written arrangement (or group of related
written arrangements) under which it has created, incurred,
assumed, or guaranteed (or may create, incur, assume, or
guarantee) indebtedness (including capitalized lease obligations)
involving more than $10,000 or under which it has imposed (or may
impose) a Security Interest on any of its assets, tangible or
intangible;
(f) any written arrangement concerning confidentiality
(other than those entered into the Ordinary Course of Business)
or noncompetition;
(g) any written arrangement involving any shareholder
of the Company or their affiliates, as defined in Rule 12b-2
under the Securities Exchange Act of 1934 (as amended, the
"Exchange Act") ("Affiliates");
(h) any written arrangement for the purchase or sale
of assets or businesses, or for the purchase or sale of
securities;
(i) any written arrangement under which the
consequences of a default or termination could have a Material
Adverse Effect; and
(j) any other written arrangement (or group of related
written arrangements) involving more than $10,000 and not entered
into in the Ordinary Course of Business.
The Sellers have caused the Company to provide the Buyer
with access to a correct and complete copy of each written
arrangement (as amended to date) listed in Section 3.16 of the
Disclosure Schedule. With respect to each written arrangement so
listed: (i) the written arrangement is legal, valid, binding and
enforceable and in full force and effect; (ii) the written
arrangement will continue to be legal, valid, binding and
-14-
PAGE
enforceable and in full force and effect immediately following
the Closing in accordance with the terms thereof as in effect
prior to the Closing; (iii) no party is in material breach or
default, and no event has occurred which with notice or lapse of
time would constitute a material breach or default or permit
termination, modification, or acceleration, under the written
arrangement; and (iv) no such written arrangement contains any
duty of care, form of indemnity or other similar obligation for
which the Company has not obtained insurance coverage. Neither
the Company nor any Subsidiary is a party to any oral contract,
agreement or other arrangement which, if reduced to written form,
would be required to be listed in Section 3.16 of the Disclosure
Schedule under the terms of this Section 3.16.
Section 3.17. Accounts Receivable. To the Knowledge of the
-------------------
Sellers, all accounts receivable of the Company and the
Subsidiaries reflected on the Most Recent Balance Sheet (except
for those that have been collected since December 31, 1996) are
valid receivables subject to no setoffs or counterclaims and are
current and collectible (within 90 days after the date on which
it first became due and payable) net of the applicable reserve
for bad debts on the Most Recent Balance Sheet. To the Knowledge
of the Sellers, all accounts receivable reflected in the
financial or accounting records of the Company that have arisen
since December 31, 1996 (except for those that have been
collected since such date) are valid receivables subject to no
setoffs or counterclaims and are collectible (within 90 days
after the date on which it first became due and payable), net of
a reserve for bad debts in an amount proportionate to the reserve
shown on the Most Recent Balance Sheet.
Section 3.18. Powers of Attorney. There are no outstanding
------------------
powers of attorney executed on behalf of the Company or any
Subsidiary.
Section 3.19. Insurance. To the Knowledge of the Sellers,
---------
neither the Company nor any Subsidiary is in default with respect
to any provisions of any policy of general liability, fire, title
or other form of insurance held by it, except for defaults that
would not result in a cancellation of any such policy or a denial
of coverage thereunder. To the Knowledge of the Sellers, the
Company and each Subsidiary is current in the payment of all
premiums due or has reserved for such premiums due on such
insurance. To the Knowledge of the Sellers, neither the Company
nor any Subsidiary has failed to give any notice or present any
claim under any such policy in due and timely fashion, except
where such failure would not result in a cancellation of any such
policy or a denial of coverage thereunder. All policies of
insurance held by the Company and the Subsidiaries are listed in
Section 3.19 of the Disclosure Schedule. To the Knowledge of the
Sellers, under the terms of the policy relating thereto, no such
insurance will be automatically terminated or canceled by reason
of the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby.
-15-
PAGE
Section 3.20. Litigation. Section 3.20 of the Disclosure
----------
Schedule identifies, and contains a brief description of, (a) any
unsatisfied judgment, or any order, decree, stipulation or
injunction to which the Company or any Subsidiary is subject and
(b) any claim, complaint, action, suit, proceeding, hearing or
investigation by or before any Governmental Entity or before any
arbitrator to which the Company or any Subsidiary is a party or,
to the Knowledge of the Sellers, is threatened to be made a party
or which would otherwise have a Material Adverse Effect. None of
the complaints, actions, suits, proceedings, hearings, and
investigations set forth in Section 3.20 of the Disclosure
Schedule could have a Material Adverse Effect.
Section 3.21. Employees. To the Knowledge of the Sellers,
---------
no employee has any plans to terminate employment with the
Company or any Subsidiary. Neither the Company nor any
Subsidiary is a party to or bound by any collective bargaining
agreement, nor has any of them experienced any strikes,
grievances, claims of unfair labor practices or other collective
bargaining disputes. The Sellers have no Knowledge of any
organizational effort made or threatened, either currently or
within the past five years, by or on behalf of any labor union
with respect to employees of the Company or any Subsidiary.
Section 3.22. Employee Benefits.
-----------------
(a) Section 3.22(a) of the Disclosure Schedule
contains a complete and accurate list of all Employee Benefit
Plans (as defined below) maintained, or contributed to, by the
Company, any Subsidiary, or any ERISA Affiliate (as defined
below). For purposes of this Agreement, "Employee Benefit Plan"
means any "employee pension benefit plan" (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), any "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA), and any other written or oral
plan, agreement or arrangement involving direct or indirect
compensation, including without limitation insurance coverage,
severance benefits, disability benefits, deferred compensation,
bonuses, stock options, stock purchase, phantom stock, stock
appreciation or other forms of incentive compensation or
post-retirement compensation. For purposes of this Agreement,
"ERISA Affiliate" means any entity which is a member of (i) a
controlled group of corporations (as defined in Section 414(b) of
the Code), (ii) a group of trades or businesses under common
control (as defined in Section 414(c) of the Code), or (iii) an
affiliated service group (as defined under Section 414(m) of the
Code or the regulations under Section 414(o) of the Code), any of
which includes the Company or a Subsidiary. Complete and
accurate copies of (i) all Employee Benefit Plans which have been
reduced to writing, (ii) written summaries of all unwritten
Employee Benefit Plans, (iii) all related trust agreements,
insurance contracts and summary plan descriptions, and (iv) all
annual reports filed on IRS Form 5500, 5500C or 5500R for the
-16-
PAGE
last five plan years for each Employee Benefit Plan, have been
delivered to the Buyer. Each Employee Benefit Plan has been
administered in all material respects in accordance with its
terms and each of the Company, the Subsidiaries and the ERISA
Affiliates has in all material respects met its obligations with
respect to such Employee Benefit Plan and has made all required
contributions thereto. The Company and all Employee Benefit
Plans are in compliance in all material respects with the
currently applicable provisions of ERISA and the Code and the
regulations thereunder.
(b) To the Knowledge of the Sellers, there are no
investigations by any Governmental Entity, termination
proceedings or other claims (except claims for benefits payable
in the normal operation of the Employee Benefit Plans and
proceedings with respect to qualified domestic relations orders),
suits or proceedings against or involving any Employee Benefit
Plan or asserting any rights or claims to benefits under any
Employee Benefit Plan that could give rise to any material
liability.
(c) All the Employee Benefit Plans that are intended
to be qualified under Section 401(a) of the Code have received
determination letters from the Internal Revenue Service to the
effect that such Employee Benefit Plans are qualified and the
plans and the trusts related thereto are exempt from federal
income taxes under Sections 401(a) and 501(a), respectively, of
the Code, no such determination letter has been revoked and
revocation has not been threatened, and no such Employee Benefit
Plan has been amended since the date of its most recent
determination letter or application therefor in any respect, and
no act or omission has occurred, that would adversely affect its
qualification or materially increase its cost.
(d) either the Company, any Subsidiary, nor any ERISA
Affiliate has ever maintained an Employee Benefit Plan subject to
Section 412 of the Code or Title IV of ERISA.
(e) At no time has the Company, any Subsidiary or any
ERISA Affiliate been obligated to contribute to any
"multi-employer plan" (as defined in Section 4001(a)(3) of
ERISA).
(f) There are no unfunded obligations under any
Employee Benefit Plan providing benefits after termination of
employment to any employee of the Company or any Subsidiary (or
to any beneficiary of any such employee), including but not
limited to retiree health coverage and deferred compensation, but
excluding continuation of health coverage required to be
continued under Section 4980B of the Code and insurance
conversion privileges under state law.
(g) No act or omission has occurred and no condition
exists with respect to any Employee Benefit Plan maintained by
-17-
PAGE
the Company, any Subsidiary or any ERISA Affiliate that would
subject the Company, any Subsidiary or any ERISA Affiliate to any
material fine, penalty, tax or liability of any kind imposed
under ERISA or the Code.
(h) No Employee Benefit Plan is funded by, associated
with, or related to a "voluntary employee's beneficiary
association" within the meaning of Section 501(c)(9) of the Code.
(i) No Employee Benefit Plan, plan documentation or
agreement, summary plan description or other written
communication distributed generally to employees by its terms
prohibits the Company from amending or terminating any such
Employee Benefit Plan except as required by law.
(j) Section 3.22(j) of the Disclosure Schedule
discloses each: (i) agreement with any director, executive
officer or other key employee of the Company or any Subsidiary
(A) the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction
involving the Company or any Subsidiary of the nature of any of
the transactions contemplated by this Agreement, (B) providing
any term of employment or compensation guarantee or (C) providing
severance benefits or other benefits after the termination of
employment of such director, executive officer or key employee;
(ii) agreement, plan or arrangement under which any person may
receive payments from the Company or any Subsidiary that may be
subject to the tax imposed by Section 4999 of the Code or
included in the determination of such person's "parachute
payment" under Section 280G of the Code; and (iii) agreement or
plan binding the Company or any Subsidiary, including without
limitation any stock option plan, stock appreciation right plan,
restricted stock plan, stock purchase plan, severance benefit
plan, or any Employee Benefit Plan, any of the benefits of which
will be increased, or the vesting of the benefits of which will
be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement.
Section 3.23. Environmental Laws.
------------------
(a) Each of the Company and the Subsidiaries has
complied with all Environmental Laws (as defined below)
applicable to their business operations. For purposes of this
Agreement, "Environmental Law" means any federal, state or local
law, statute, rule or regulation or the common law relating to
the environment or occupational health and safety, including
without limitation any statute, regulation or order pertaining to
(i) treatment, storage, disposal, generation and transportation
of Materials of Environmental Concern (as defined in Section
3.23(b) below); (ii) air, water and noise pollution; (iii)
groundwater and soil contamination; (iv) the release or
threatened release into the environment of Materials of
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Environmental Concern, including without limitation emissions,
discharges, injections, spills, escapes or dumping of pollutants,
contaminants or chemicals; (v) the protection of wild life,
marine sanctuaries and wetlands, including without limitation all
endangered and threatened species; (vi) storage tanks, vessels
and containers; (vii) underground and other storage tanks or
vessels, abandoned, disposed or discarded barrels, containers and
other closed receptacles; (viii) health and safety of employees
and other persons; and (ix) manufacture, processing, use,
distribution, treatment, storage, disposal, transportation or
handling of Materials of Environmental Concern. As used above,
the terms "release" and "environment" shall have the meaning set
forth in the federal Comprehensive Environmental Compensation,
Liability and Response Act of 1980, as amended ("CERCLA").
(b) To the Knowledge of the Sellers, there have been
no releases of any Materials of Environmental Concern into the
environment, at any parcel of real property or any facility
formerly or currently owned or leased by the Company or a
Subsidiary. To the Knowledge of the Sellers, there has been no
release of Materials of Environmental Concern for which liability
can be imposed on the Company or the Subsidiary under any
Environmental Law. For purposes of this Agreement, "Materials of
Environmental Concern" means any chemicals, pollutants or
contaminants, hazardous substances (as such term is defined under
CERCLA), solid wastes and hazardous wastes (as such terms are
defined under the federal Resource Conservation and Recovery
Act), toxic materials, industrial materials, oil or petroleum and
petroleum products, or any other material subject to regulation
under any Environmental Law.
(c) There is no pending or, to the Knowledge of the
Sellers, threatened civil or criminal litigation, written notice
of violation or noncompliance, formal administrative or judicial
proceeding, claim, cause of action, liability, investigation,
citation, order, consent order, consent decree, inquiry or
information request by any Governmental Entity, involving the
Company or any Subsidiary relating to any of the following: (i)
violation of any Environmental Law; (ii) violation of any permit,
license or registration issued under any Environmental Law; (iii)
the disposal, discharge or release of Materials of Environmental
Concern, whether or not in compliance with Environmental Laws;
(iv) the generation, storage, treatment, transportation,
reclamation, recycling or other handling of Materials of
Environmental Concern, whether or not in compliance with
Environmental Laws; (v) the ownership, operation or use of any
landfill, surface impoundment, pit, pond, lagoon, underground
injection well, waste pile, land treatment unit, wastewater
treatment plant, air pollution control equipment, or any other
unit used for the storage, disposal, handling or treatment of
Materials of Environmental Concern; (vi) the exacerbation of
previously existing environmental contamination; or (vii)
exposure to any Materials of Environmental Concern, noises,
odors, or vibrations at or from any real property or facility
-19-
PAGE
formerly or currently owned or leased by the Company or a
Subsidiary. Without limiting the foregoing, none of the Company
nor any Subsidiary has been named a "potentially responsible
party" under any Environmental Law or has received any
correspondence or notice that it may be named a "potentially
responsible party."
(d) The Company and the Subsidiaries possess all
permits, licenses and/or registrations required under
Environmental Laws for their business operations, and all such
permits, licenses and/or registrations are valid and in full
force and effect.
(e) Set forth in Section 3.23(e) of the Disclosure
Schedule is a list of all environmental, health and safety
reports, investigations, audits, assessments, surveys and
analyses, relating to premises currently or previously owned or
occupied by the Company or a Subsidiary which the Company has
possession of or access to. Complete and accurate copies of each
such report, or the results of each such investigation have been
made accessible to the Buyer.
(f) To the Knowledge of Sellers, all entities,
including without limitation transporters, treatment, storage and
disposal facilities, and remediation companies, used by the
Company or a Subsidiary, for the transportation, storage,
disposal, treatment or other handling of Materials of
Environmental Concern possess all permits, licenses and
registrations required under Environmental Laws. None of the
Company or any of its Subsidiaries have or will have any
liability as a result of any act or omission by any of such
entities. To the Knowledge of the Sellers, there is no previous,
pending or threatened civil or criminal litigation, written
notice of violation or noncompliance, formal administrative or
judicial proceeding, investigation, citation, order, consent
order, consent decree, inquiry or information request by any
Governmental Entity, relating to such entities for any violations
of Environmental Laws.
Section 3.24. Legal Compliance. Each of the Company and
----------------
the Subsidiaries, and the conduct and operation of their
respective businesses, are in compliance in all material respects
with all laws (including rules and regulations thereunder) of any
federal, state or local government or foreign government of a
country in which the Company or any of its Subsidiaries does
business, or any Governmental Entity, which are applicable to the
Company or such Subsidiary, and none of the Company or any
Subsidiaries has received any notice from any Governmental Entity
that it is in violation of, or has violated any such laws
(including rules and regulations thereunder).
Section 3.25. Permits. The Company and the Subsidiaries
-------
hold all material permits, licenses, registrations, certificates,
orders or approvals from any Governmental Entity (including
-20-
PAGE
without limitation those issued or required under Environmental
Laws and those relating to the occupancy or use of owned or
leased real property) ("Permits") required for the Company and
the Subsidiaries to conduct their respective businesses as
presently conducted or as proposed to be conducted, except for
those the absence of which would not have any Material Adverse
Effect. Each such Permit is in full force and effect and, to the
Knowledge of the Sellers, no suspension or cancellation of such
Permit is threatened and, to the Knowledge of the Sellers, there
is no basis for believing that such Permit will not be renewable
upon expiration. Each such Permit will continue in full force and
effect following the Closing.
Section 3.26. Certain Business Relationships with
-----------------------------------
Affiliates. No Affiliate of the Company or of any Subsidiary (a)
----------
owns any property or right, tangible or intangible, which is used
in the business of the Company or any Subsidiary, (b) has any
claim or cause of action against the Company or any Subsidiary,
or (c) owes any money to, or is owed by money by, the Company or
any Subsidiary. Section 3.26 of the Disclosure Schedule
describes any transactions or relationships between the Company
and any Affiliate thereof which are not reflected in the
statements of operations of the Company included in the Financial
Statements and identified in the footnotes thereto.
Section 3.27. Brokers and Finders for the Company. The
-----------------------------------
Company has not employed any broker, agent or finder in
connection with the transactions contemplated hereby. The
Company has not and will not incur any liability for any
brokerage fees, agents' commissions or finders' fees in
connection with the transactions contemplated hereby.
Section 3.28. Books and Records. The minute books and
-----------------
other similar records of the Company and each Subsidiary contain
true and complete records of all actions taken at any meetings of
the Company's or such Subsidiary's shareholders, Board of
Directors or any committee thereof and of all written consents
executed in lieu of the holding of any such meeting. The books
and records of the Company and each Subsidiary accurately reflect
in all material respects the assets, liabilities, business,
financial condition and results of operations of the Company or
such Subsidiary and have been maintained in accordance with good
business and bookkeeping practices.
Section 3.29. Customers and Suppliers. To the Knowledge of
-----------------------
the Sellers, no material purchase order or commitment of the
Company or any Subsidiary is in excess of normal requirements,
nor are prices provided therein in excess of current market
prices for the products or services to be provided thereunder.
No material supplier of the Company or any Subsidiary has
indicated to the Company or such Subsidiary within the past year
that it will stop, or materially decrease the rate of, supplying
materials, products or services to them and no material customer
of the Company or any Subsidiary has indicated to the Company or
-21-
PAGE
such Subsidiary within the past year that it will stop, or
materially decrease the rate of, buying, leasing or licensing
materials, products or services from them. Section 3.29 of the
Disclosure Schedule sets forth a list of (a) each customer that
accounted for more than 5% of the consolidated revenues of the
Company during the last full fiscal year and the amount of
revenues accounted for by such customer during such period and
(b) each supplier that is the sole supplier of any significant
product or component to the Company or a Subsidiary.
Section 3.30. Banking Facilities.
------------------
(a) Section 3.30 of the Disclosure Schedule sets forth
a true, correct and complete list of: (i) each bank, savings and
loan or similar financial institution at which the Company or any
Subsidiary has an account, safety deposit box, line of credit or
credit facility and the numbers of the accounts or safety deposit
boxes maintained by the Company or any Subsidiary thereat and
details, including terms, of any line of credit or credit
facility; and (ii) the names of all persons authorized to draw on
each such account or to have access to any such safety deposit
box facility, together with a description of the authority (and
conditions thereof, if any) of each such person with respect
thereto.
(b) All of the outstanding indebtedness (secured or
unsecured) for borrowed money of the Company may be prepaid
without the consent or approval of, or prior notice to, any other
person, and without payment of any premium or penalty.
Section 3.31. Suretyships. None of the Company or any
-----------
Subsidiary has any obligation or liability (whether actual,
accrued, accruing, contingent or otherwise) as guarantor, surety,
co-signer, endorser, co-maker, indemnitor or otherwise in respect
of the obligation of any person, corporation, partnership, joint
venture, association, organization or other entity, except as
endorser or maker of checks or letters of credit, respectively,
endorsed or made in the Ordinary Course of Business.
Section 3.32. Backlog. As of March 31, 1997, the Company's
-------
backlog of binding purchase orders was at least $3,074,158.
Section 3.33. Government Contracts. The Company has not
--------------------
been suspended or debarred from bidding on contracts or
subcontracts with any Governmental Entity and no such suspension
or debarment has been initiated or, to the Sellers' Knowledge,
threatened. The consummation of the transactions contemplated by
this Agreement will not result in any such suspension or
debarment. To the Knowledge of the Sellers, the Company has not
been audited or investigated and is not now being audited or
investigated by the U.S. Government Accounting Office, the U.S.
Department of Defense or any of its agencies, the Defense
Contract Audit Agency, the U.S. Department of Justice, the
Inspector General of any U.S. Governmental Entity, any similar
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agencies or instrumentalities of any foreign Governmental Entity,
or any price contractor with a Governmental Entity nor has any
such audit or investigation been threatened. To the Sellers'
Knowledge, there is no valid basis for (a) the suspension or
debarment of the Company from bidding on contracts or
subcontracts with any Governmental Entity or (b) any claim
pursuant to an audit or investigation by any of the entities
named in the foregoing sentence. The Company has no agreements,
contracts or commitments which require it to obtain or maintain a
security clearance with any Governmental Entity.
Section 3.34. Inventories. All inventories, including all
-----------
stock of raw materials, work-in-process and finished goods,
including demonstration inventory, owned by the Company, for
manufacturing, assembly, processing, finishing, demonstration and
sale or resale to others (collectively, "Inventories"), are of a
quality and quantity usable and salable in the Ordinary Course of
Business. Items included in such Inventories are carried on the
books of the Company at the lower of cost or market and, with
respect to Inventories existing as of December 31, 1996, are
reflected on the Most Recent Balance Sheet, net of applicable
reserves for excess and obsolete items. Such reserves have been
determined in accordance with past practices and conform to GAAP.
Section 3.35. Commission Filings. The Sellers have caused
------------------
the Company to provide access to the Buyer to true and complete
copies of each document (including exhibits, but excluding
exhibits incorporated by reference) filed by the Company with the
Securities and Exchange Commission (the "Commission") since
January 1, 1995 (as such documents have since the time of their
filing been amended, the "Commission Filings"), which are all
documents (other than preliminary material) that the Company was
required to file with the Commission since such date. As of
their respective dates, the Commission Filings complied in all
material respects with the requirements of the Securities Act
and/or the Exchange Act, as the case may be, and the rules and
regulations of the Commission thereunder applicable to such
Commission Filings and none of the Commission Filings when filed
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein, at the time in light of the
circumstances under which they were made, not misleading. The
financial statements of the Company included in the Commission
Filings complied as to form in all material respects with
applicable accounting requirements and with published rules and
regulations of the Commission with respect thereto, have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods
involved (except as may be indicated therein or in the notes
thereto or, in the case of the unaudited statements, as permitted
by the rules of the Commission) and fairly present (subject, in
the case of the unaudited statements, to normal recurring audit
adjustments) the consolidated financial position of the Company
and its consolidated subsidiaries as at the dates thereof and the
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consolidated results of their operations and cash flows for the
periods then ended.
Section 3.36. Disclosure. No representation or warranty of
----------
the Company in this Agreement and no statement in the Disclosure
Schedule omits to state a material fact necessary to make the
statements herein or therein, in light of the circumstances in
which they were made, not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers as follows:
Section 4.1. Organization. The Buyer is a corporation duly
------------
organized, validly existing and in corporate good standing under
the laws of the State of Delaware.
Section 4.2. Authorization of Transaction. The Buyer has
----------------------------
all requisite power and authority to execute and deliver this
Agreement and the Stock Restriction Agreements and to perform its
obligations hereunder and thereunder. The execution and delivery
of this Agreement and the Stock Restriction Agreements by the
Buyer, the performance of this Agreement and the Stock
Restriction Agreements and the consummation of the transactions
contemplated hereby and thereby by the Buyer have been duly and
validly authorized by all necessary corporate action on the part
of the Buyer. This Agreement has been duly and validly executed
and delivered by the Buyer and constitutes a valid and binding
obligation of the Buyer, enforceable against it in accordance
with its terms.
Section 4.3. Noncontravention. Neither the execution and
----------------
delivery of this Agreement or the Stock Restriction Agreements by
the Buyer, nor the consummation by the Buyer of the transactions
contemplated hereby or thereby, will (a) conflict or violate any
provision of the Certificate of Incorporation or Bylaws of the
Buyer, (b) require on the part of the Buyer any filing with, or
permit, authorization, consent or approval of any Governmental
Entity, (c) conflict with, result in breach of, constitute (with
or without due notice or lapse of time or both) a default under,
result in the acceleration of, create in any party any right to
accelerate, terminate, modify or cancel, or require any notice,
consent or waiver under, any contract, lease, sublease, license,
sublicense, franchise, permit, indenture, agreement or mortgage
for borrowed money, instrument of indebtedness, Security Interest
or other arrangement to which the Buyer is a party or by which it
is bound or to which any of its assets are subject, or (d)
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Buyer or any of its properties or
assets.
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Section 4.4. Brokers and Finders for the Buyer. The Buyer
----------------------------------
has not employed any broker, agent or finder in connection with
the transactions contemplated hereby.
ARTICLE 5
CERTAIN COVENANTS
Section 5.1. Expenses. Except as may be otherwise
--------
expressly contemplated hereby, all expenses paid or incurred by
any party hereto shall be borne by such party. All sales,
transfer or similar taxes required to be paid in respect of the
transfer of the Shares contemplated hereby shall be the
responsibility of the Sellers. Notwithstanding the foregoing,
this Section 5.1 shall not be construed as relieving any party
from any liability which it may have for any breach of any
representation or warranty made by it herein or any failure to
perform any obligation or comply with any covenant imposed on it
herein.
Section 5.2. Further Assurances. From time to time and at
------------------
any time after the Closing, and without further expense to the
requesting party, each party will execute and furnish to the
requesting party all documents and will do or cause to be done
all other things that the requesting party may reasonably request
in order to give full effect to this Agreement and to effectuate
the intent of the parties.
Section 5.3. Releases.
--------
(a) Except as set forth in Section 5.3(b), each Seller
hereby releases, holds harmless and forever discharges the
Company and its successors, assigns, agents, servants, employees,
principals, directors, officers, administrators, stockholders,
affiliates, subsidiaries and related companies of and from any
and all actions, causes of action, claims, demands, costs,
liabilities, losses, expenses and compensation, past, present or
future, known or unknown, which he ever had, now has or may have
against any of the foregoing arising from actions, omissions,
circumstances or conditions that existed on or prior to the
Closing Date. This release is binding on the Sellers' heirs,
assigns and successors in interest.
(b) Notwithstanding any provision of this Agreement to
the contrary, including Section 5.3(a) hereof, no Seller hereby
releases or discharges the Company from any indemnification
obligations which the Company may have (i) under its Certificate
of Incorporation or By-Laws with respect to acts or omissions
occurring prior to the date of this Agreement or (ii) under one
or more so-called "Indemnification Statements Covering Registered
Professionals"; provided, however, that this Section 5.3(b) shall
-------- -------
not apply to any indemnification obligation of the Company if and
to the extent that such obligation arises in connection with any
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matter the existence of which would cause any representation or
warranty set forth in Article 3 to be incorrect or misleading in
any respect.
Section 5.4. Covenant against Competition.
----------------------------
(a) Each Seller agrees that, while he is employed by
the Company, and for a period of two years after such Seller's
voluntary resignation or the termination of the Seller's
employment by the Company or by the Seller without Cause (as
defined in Section 5.4(d) below), the Seller will not, directly
or indirectly:
(i) engage in any business that provides any
services or products competitive with those offered by the
Company as of the date of such resignation or termination in
any jurisdiction within the United States of America in
which the Company then offer such services or products, or
(ii) without the prior written consent of the
Company, (i) solicit any person employed by the Company (or
any of its affiliates) to terminate his employment with the
Company (or any of such affiliates) or to become an employee
of the Seller or any person or entity with which the Seller
may be affiliated, or (ii) hire any such employee except
employees involuntarily terminated by the Company (or any of
its affiliates).
(b) The Seller and the Buyer agree that the scope,
duration and geographic area of the covenant against competition
set forth in Section 5.4(a) above are reasonable. In the event
that any court of competent jurisdiction determines that the
scope, the duration, the geographic area, or any of them, are
unreasonable and that such provision is to that extent
unenforceable, the parties hereto agree that the provision shall
remain in full force and effect for the greatest scope, for the
greatest time period and in the greatest area that would not
render it unenforceable. The parties intend that such
noncompetition provision shall be deemed to be a series of
separate covenants, one for each and every county of each and
every state in which this provision is intended to be effective.
(c) The Seller agrees that damages are an inadequate
remedy for any breach of Section 5.4(a) and that the Buyer shall,
whether or not it is pursuing any potential remedies at law, be
entitled to equitable relief in the form of preliminary and
permanent injunctions without bond or other security upon any
actual or threatened breach thereof.
(d) For purposes of this Agreement only, "Cause" for
termination of the Seller's employment by the Company shall be
deemed to exist upon (i) a good faith finding by the Company of
the failure of the Seller to perform his assigned duties for the
Company, a material violation of any policy established by the
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Company (or its affiliates) and made known to the Seller, gross
insubordination, dishonesty, gross negligence or gross
misconduct, or (ii) the conviction of the Seller of, or the entry
of a pleading of guilty or nolo contendere by the Seller to, any
crime involving moral turpitude or any felony; and "Cause" for
termination of the Seller's employment by the Seller shall be
deemed to exist upon the Company's assignment to the Seller of
duties fundamentally incompatible with the duties of the Seller
as of the date of this Agreement.
(e) The Seller acknowledges and agrees that this
Agreement does not constitute a contract of employment and does
not imply that the Company or the Buyer will continue the
Seller's employment for any period of time.
(f) THE SELLER ACKNOWLEDGES THAT HE HAS CAREFULLY READ
THIS SECTION 5.4 AND HAS HAD ADEQUATE TIME AND OPPORTUNITY TO
CONSULT WITH AN ATTORNEY OF HIS OWN CHOOSING REGARDING THE
MEANING OF THE TERMS AND CONDITIONS CONTAINED HEREIN, AND THE
SELLER FURTHER ACKNOWLEDGES THAT HE FULLY UNDERSTANDS THE CONTENT
AND EFFECT OF THIS AGREEMENT AND AGREES TO ALL OF THE PROVISIONS
CONTAINED HEREIN.
ARTICLE 6
INDEMNIFICATION
Section 6.1. Indemnification by the Sellers. Subject to
------------------------------
the provisions of Section 6.2, the Buyer upon its demand shall be
indemnified by the Sellers for all Damages (as defined in Section
6.5 below) suffered by the Buyer as a result of:
(i) the inaccuracy of any representation or
warranty made by the Sellers in this Agreement (including
Article 3) or in any other document executed by the Sellers
at the Closing; and
(ii) any failure by any Seller to perform any
obligation of such Seller, or to comply with any covenant or
agreement of such Seller, specified herein (including
without limitation the covenants set forth in Article 5) or
in any other document executed by such Seller at the
Closing.
The Buyer shall give the Sellers prompt notice of any claim,
action or proceeding by a third party which is reasonably likely
to result in a claim for indemnification under this Section 6.1.
Subject to the provisions of Section 6.2, the Sellers shall have
the right, at their expense and with counsel selected by the
Sellers, to defend, contest, protest, settle and otherwise
control the resolution of any such claim, action or proceeding.
The Sellers shall keep the Buyer apprised of developments with
respect to any such claim, action or proceeding, and the Buyer
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shall have the right to consult with the Sellers, and to
participate therein, subject to the Sellers' right of control
thereof, at the Buyer's expense and with counsel selected by the
Buyer. If the Sellers shall notify the Buyer that the Sellers
have elected to assume any such defense, contest or protest, then
the Sellers shall not be liable to the Buyer hereunder for any
legal or other expense subsequently incurred by the Buyer in
connection therewith.
Section 6.2. Limitation of Liability of the Sellers.
--------------------------------------
(a) Except as set forth below, the right of the Buyer
to be indemnified pursuant to Section 6.1(i) shall not apply
until the sum of the Damages suffered by the Buyer on a
cumulative basis exceeds $50,000, in which case the Buyer shall
be entitled to recover 100% of the Damages suffered, and not just
the Damages in excess of $50,000 (subject to the remainder of
this Section 6.2). Notwithstanding the foregoing, the Buyer
shall be entitled to recover the Damages suffered by it with
respect to claims based solely on representations and warranties
in Section 3.1, 3.2, 3.4, 3.5 and 3.6(a), irrespective of whether
such Damages equal or exceed $50,000.
(b) The right of the Buyer to be indemnified pursuant
to Section 6.1(i) shall:
(i) apply to claims based solely on
representations and warranties in Article 3 (other than
Sections 3.1, 3.2, 3.4, 3.5, 3.6(a) and 3.11) only if
asserted by the Buyer before the second anniversary of the
Closing Date;
(ii) apply to claims based solely on
representations and warranties in Section 3.11 only if
asserted by the Buyer before any applicable statute of
limitations for unpaid Taxes shall expire; and
(iii) with respect to claims based solely on
representations and warranties in Sections 3.1, 3.2, 3.4,
3.5 and/or 3.6(a), survive the Closing Date indefinitely.
(c) The Sellers shall be jointly and severally liable
for all Damages claimed by the Buyer pursuant to Section 6.1(i)
(other than with respect to claims based solely on
representations and warranties in Sections 3.1, 3.2 and/or 3.3,
as to which the liability of any Seller for such Seller's
representations and warranties shall be several and not joint).
The liability of any Seller for Damages claimed by the Buyer
pursuant to Section 6.1(ii) shall be several and not joint. In
no event shall any Seller be liable for Damages pursuant Section
6.1 for (i) misrepresentations in Sections 3.1, 3.2 and/or 3.3 by
any other Seller or (ii) the acts or omissions of any other
Seller in contravention of Section 6.1(ii).
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PAGE
Section 6.3. Indemnification by the Buyer. Subject to the
----------------------------
provisions of Section 6.4, the Sellers upon their demand shall be
indemnified by the Buyer for all Damages suffered by the Sellers
as a result of
(i) the inaccuracy of any representation or
warranty made by the Buyer in this Agreement (including
Article 4) or in any other document executed by the Buyer at
the Closing; and
(ii) any failure by the Buyer to perform any
obligation of the Buyer, or to comply with any covenant or
agreement of the Buyer, specified herein (including without
limitation the covenants set forth in Article 5) or in any
other document executed by the Buyer at the Closing.
The party seeking indemnification shall give the Buyer
prompt notice of any claim, action or proceeding by a third party
which is reasonably likely to result in a claim for
indemnification under this Section 6.3. The Buyer shall have the
right, at its expense, to defend, contest, protest, settle and
otherwise control the resolution of any such claim, action or
proceeding. The Buyer shall keep the party seeking
indemnification apprised of developments with respect to any such
claim, action or proceeding, and such party shall have the right
to consult with the Buyer, and to participate therein, subject to
the Buyer's right of control thereof, at such party's expense and
with counsel selected by such party. If the Buyer shall notify
the party seeking indemnification that the Buyer has elected to
assume any such defense, contest or protest, the Buyer shall not
be liable to such party hereunder for any legal or other expense
subsequently incurred by such party in connection therewith.
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Section 6.4. Limitation of Liability of the Buyer.
------------------------------------
(a) The right of the Sellers to be indemnified
pursuant to Section 6.3(i) shall not apply until the sum of the
Damages suffered by the Sellers on a cumulative basis exceeds
$50,000, in which case the Sellers shall be entitled to recover
100% of the Damages suffered, and not just the Damages in excess
of $50,000 (subject to the remainder of this Section 6.4).
(b) The right of the Sellers to be indemnified
pursuant to Section 6.3(i) shall:
(i) apply to claims based solely on
representations and warranties in Article 4 (other than
Sections 4.1 and 4.2) only if asserted by the Sellers before
the second anniversary of the Closing Date; and
(ii) with respect to claims based solely on
representations and warranties in Sections 4.1 and 4.2,
survive the Closing Date indefinitely.
Section 6.5. Definition of "Damages." For the purpose of
----------------------
this Article 6, the term "Damages" (a) shall be determined and
computed by reference to the effect of the compensable event on
the party or parties entitled thereto, (b) shall mean the amount
finally determined by reason of a settlement or by other final
resolution of the claim, and (c) shall be deemed to include (i)
all losses, liabilities, expenses or costs incurred by such party
or parties, including reasonable attorneys' fees, and (ii)
interest at a rate per annum equal to that announced from time to
time by BankBoston as its "base rate" (or the legal rate of
interest, if lower) from the date on which the amount of Damages
is determined by reason of a settlement or by another final
resolution of the claim. In no event shall any amounts recovered
from any insurer or other party, or any tax benefit allowable, as
a result of the facts giving rise to the claim for
indemnification be deemed to reduce the Damages for which any
party may be liable hereunder.
ARTICLE VII
DEFINITIONS
For purposes of this Agreement, each of the following defined
terms is defined in the Section of this Agreement indicated
below.
DEFINED TERM SECTION
------------ -------
Affiliate 3.16(g)
Buyer Introduction
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Cause 5.4(d)
CERCLA 3.23(a)
Closing 2.1
Closing Date Article 3
Code 3.11(c)
Commission 3.35
Commission Filings 3.35
Common Stock 3.5
Company Introduction
Convertible Securities 3.5
Damages 6.5
Disclosure Schedule Article 3
Employee Benefit Plan 3.22(a)
Environmental Law 3.23(a)
ERISA 3.22(a)
ERISA Affiliate 3.22(a)
Exchange 3.5
Exchange Act 3.16(g)
Financial Statements 3.8
GAAP 3.8
Governmental Entity 3.6(b)
Intangibles 3.14
Inventories 3.34
Knowledge Article 3
Letter of Intent 2.2
Material Adverse Effect 3.4
Materials of Environmental
Concern 3.23(b)
Most Recent Balance Sheet 3.1
Options 3.5
Ordinary Course of Business Article 3
Permit 3.25
Purchase Price 1.1
Purchased Shares 1.1
Restricted Shares 3.5
Securities Act 2.2
Security Interest 2.4
Seller; Sellers Introduction
Shares Introduction
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Stock Restriction Agreements 2.2
Subsidiary 2.4
Taxes 2.9(a)
Tax Returns 2.9(a)
ARTICLE 8
MISCELLANEOUS
Section 8.1. Press Releases and Announcements. No party
--------------------------------
shall issue any press release or public disclosure relating to
the subject matter of this Agreement without the prior approval
of the other parties, which shall not unreasonably be delayed or
withheld; provided, however, that any party may make any public
disclosure it believes in good faith is required by law,
regulation or stock exchange rule (in which case the party making
such disclosure shall advise the other parties and provide them
with a copy of the proposed disclosure prior to making the
disclosure). The Sellers will not permit the Company to issue
any press release or public disclosure relating to the subject
matter of this Agreement without complying with the provisions of
this Section 8.1 as though the Company were a party hereto.
Section 8.2. No Third Party Beneficiaries. This Agreement
----------------------------
shall not confer any rights or remedies upon any person other
than the parties and their respective successors and permitted
assigns.
Section 8.3. Entire Agreement. This Agreement (including
----------------
the documents referred to herein) constitutes the entire
agreement among the parties and supersedes any prior
understandings, agreements, or representations by or among the
parties, written or oral, with respect to the subject matter
hereof.
Section 8.4. Succession and Assignment. This Agreement
-------------------------
shall be binding upon and inure to the benefit of the parties
named herein and their respective successors and permitted
assigns. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior
written approval of the other parties; provided that the Buyer
may assign its rights, interests and obligations hereunder to any
Affiliate of the Buyer.
Section 8.5. Counterparts. This Agreement may be executed
------------
in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the
same instrument.
Section 8.6. Headings. The article and section headings
--------
contained in this Agreement are inserted for convenience only and
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PAGE
shall not affect in any way the meaning or interpretation of this
Agreement.
Section 8.7. Notices. All notices, requests, demands,
-------
consents and other communications which are required or permitted
hereunder shall be in writing, and shall be deemed given when
actually received or if earlier, two days after deposit with the
U.S. postal authorities, certified or registered mail, return
receipt requested, postage prepaid or two days after deposit with
an internationally recognized air courier or express mail,
charges prepaid, addressed as follows:
If to the Buyer:
Thermo TerraTech Inc.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: President
With a copy to:
Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
If to the Sellers:
c/o The Randers Group Incorporated
000 X. Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
With a copy to:
XxXxxxx & Bowie, P.L.C.
0000 Xxxxxx Xxxxxx Xxxxx
00 Xxxxxx Xxxxxx, XX
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Shape, Esq.
or to such other address as any party hereto may designate in
writing to the other parties, specifying a change of address for
the purpose of this Agreement.
Section 8.8. Governing Law. This Agreement shall be
-------------
governed by and construed in accordance with the internal laws
(and not the law of conflicts) of the State of Delaware. In the
event litigation is maintained by a party to this Agreement
against any other party to enforce this Agreement or to seek any
remedy for breach, then the party prevailing in such litigation
shall be entitled to recover from the non-prevailing party
reasonable attorneys' fees and costs of suit.
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PAGE
Section 8.9. Amendments and Waivers. No amendment of any
----------------------
provision of this Agreement shall be valid unless the same shall
be in writing and signed by all of the parties. No waiver by any
party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant hereunder or affect in any way
any rights arising by virtue of any prior or subsequent such
occurrence.
Section 8.10. 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. If the final judgment of
a court of competent jurisdiction declares that any term or
provision hereof is invalid or unenforceable, the parties agree
that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term
or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
Section 8.11. Construction. The language used in this
------------
Agreement shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of
strict construction shall be applied against any party. 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.
Section 8.12. Incorporation of Exhibits and Schedules. The
---------------------------------------
Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
Section 8.13. Survival of Representations and Warranties.
------------------------------------------
Each of the representations and warranties made by the parties
hereto shall survive the Closing and the consummation of the
transactions contemplated hereby in accordance with, and to the
extent set forth in, Article 6 hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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PAGE
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
THERMO TERRATECH INC.
By: /s/ Xxxx X. Xxxxxxxx
Title: President & Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
------------------------- ----------------------------
Xxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxx X. XxXxxxxx /s/ Xxxxx X. Xxxxxxx
------------------------- ----------------------------
Xxxxxx X. XxXxxxxx Xxxxx X. Xxxxxxx
AA971330010
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