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EXHIBIT 10.49
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STOCK PURCHASE AGREEMENT
among
XXXXXXXXX INDUSTRIES, INC.,
CERTIFIED AIRCRAFT PARTS, INC.,
R. XXXX XXXXXXXX
and
XXXXXX X. XXXXXXXX
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March 27, 1999
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into as of
March 27, 1999 among Xxxxxxxxx Industries, Inc., a Delaware corporation
("Xxxxxxxxx"), Certified Aircraft Parts, Inc., a Florida corporation
("Certified"), R. Xxxx Xxxxxxxx ("Xxxxxxxx") and Xxxxxx X. Xxxxxxxx
("Xxxxxxxx"), each of whom is a resident of the State of Florida and who
together constitute the sole shareholders of Certified (together the
"Shareholders").
RECITALS
Certified is engaged in the purchase, sale and support of aircraft
parts and the provision of related services. Xxxxxxxxx desires to purchase, and
the Shareholders desire to sell, all of the issued and outstanding shares of
capital stock of Certified, on the terms and subject to the conditions contained
in this Agreement.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
"Acquisition" means the acquisition of the Shares (as
hereinafter defined) by Xxxxxxxxx from the Shareholders.
"Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations promulgated under
the Exchange Act (as hereinafter defined), as in effect on the
date hereof.
"Common Stock" means the shares of common stock, $5.00 par
value per share, of Certified.
"Contract" means any agreement, contract, lease, note,
mortgage, indenture, loan agreement, franchise agreement,
covenant, employment agreement, license agreement, instrument,
purchase or sales order, commitment, undertaking or
obligation, in each case, whether written or oral, express or
implied.
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"Designated Automobiles" means that certain 1998 BMW 7401L,
vehicle identification number WBAGJ83234WDM16459, and that
certain 1998 Chrysler Van, vehicle identification number
K4GP54G3WB557836, owned by Certified.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Environmental Report" means that certain Environmental Report
dated March 17, 1999 prepared by Xxxxxxxxx'x Environmental
Consultant (as hereinafter defined), and any further reports
prepared by Xxxxxxxxx'x Environmental Consultant based on any
samples taken during the course of the preparation thereof.
"Familial Affiliate" means (a) any descendent of a common
grandparent of any officer, director or shareholder of
Certified, (b) any spouse of any person covered by subsection
(a) of this definition, and (c) any entity in which any person
covered by subsections (a) or (b) of this definition owns or
has any beneficial interest.
"GAAP" means generally accepted accounting principles in
effect in the United States of America from time to time.
"Governmental Authority" means any nation or government, any
state, regional, local or other political subdivision thereof,
and any entity or official exercising executive, legislative,
judicial, regulatory or administrative functions of or
pertaining to government.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Indebtedness" means any indebtedness for borrowed money
(including, but not limited to, accrued but unpaid interest),
whether owed to a bank or any other Person, remaining payments
on capitalized equipment leases and remaining payments on
covenants not to compete.
"Independent Accountants" means a firm of independent
certified public accountants of national reputation which has
not performed services for Xxxxxxxxx, Certified or either of
the Shareholders or any of their respective Affiliates during
the preceding three (3) year period, which is selected by
Xxxxxxxxx and the Shareholders (or if they cannot agree, by
Xxxxxxxxx'x Accountants and the Shareholders' Accountants).
"Xxxxxxxxx'x Environmental Consultant" means Xxxxxx Xxxx and
Associates, Inc.
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"Xxxxxxxxx'x Accountants" means KPMG LLP.
"Lease" means that certain Lease dated January 1, 1996 between
the Partnership (as hereinafter defined) and Certified with
respect to the Leased Premises (as hereinafter defined)
located at 0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxx 00000 (the
"Property"), as amended by that certain Addendum to Lease
dated January 1, 1996 and that certain Second Addendum to
Lease dated December 17, 1997.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, but not
limited to, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of
or agreement to give any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction in
connection with such mortgage, pledge, security interest,
encumbrance, lien or charge).
"Material Adverse Change (or Effect)," with respect to any
Person, means a change (or effect) in condition (financial or
otherwise), properties, assets, liabilities, rights,
obligations, operations or business of such Person which
change (or effect), individually or in the aggregate, is
materially adverse to such condition (financial or otherwise),
properties, assets, liabilities, rights, obligations,
operations or business.
"Modified GAAP" means GAAP which has been applied in the
manner and with the modifications and adjustments consistently
applied by Certified in the preparation of its audited
financial statements, which manner, modifications and
adjustments are set forth on SCHEDULE 1.1(A).
"Partnership" means the Xxxxxxxx and Xxxxxxxx Partnership.
"Permitted Liens" means (a) Liens arising by operation of law,
including, without limitation, materialmen's, mechanics',
workmen's and repairmen's Liens, in each case securing
obligations of Certified (i) which are reflected on the
Current Balance Sheet and not heretofore paid or discharged,
(ii) incurred in the ordinary course of business consistent
with past practice since the date of the Current Balance
Sheet, or (iii) set forth on SCHEDULE 4.11(A) which were
incurred in the ordinary course of business prior to the date
of the Current Balance Sheet and, in accordance with GAAP
consistently applied, were not required to be recorded
therein; and (b) Liens for Taxes not yet due and payable.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, estate, trust,
unincorporated association, joint venture, Governmental
Authority or other entity, of whatever nature.
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"Post-Closing Period" means a Tax period beginning and ending
after the Closing Date.
"Pre-Closing Period" means a Tax period ending on or prior to
the Closing Date.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholders' Environmental Consultant" means Xxxxxxx
Environmental of Florida, Inc.
"Shareholders' Accountants" means Xxxxx Xxxxxxxx LLP.
"Shares" means all of the issued and outstanding shares of
Common Stock.
"Tax Return" means any return (including any information
return), report, statement, schedule, notice, form or other
document or information filed with or submitted to or required
to be filed with or submitted to any Governmental Authority in
connection with or with respect to the determination,
assessment, collection or payment of any Taxes.
"Taxes" means all taxes, including, but not limited to,
income, excise, property, sales, franchise, intangible,
withholding, social security and unemployment taxes, levies,
assessments, tariffs, duties (including customs duties),
deficiencies or other fees, imposed, assessed or collected by
or under the authority of any Governmental Authority, or
payable pursuant to any tax sharing agreement or other
contract relating to the sharing or payment of any such tax,
levy, assessment, tariff, duty (including customs duties),
deficiency or other fee, and any related charge or amount,
including, but not limited to, any fine, penalty, interest or
additional tax.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) All terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
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(c) All matters of an accounting nature in connection with
this Agreement and the transactions contemplated hereby shall, except as
expressly set forth herein, be determined in accordance with GAAP applied on a
basis consistent with prior periods.
(d) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the neuter
and feminine, where the context so permits.
(e) Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation."
(f) Whenever this Agreement provides for a payment to be made
by any party, such payment shall be made by wire transfer of immediately
available United States funds.
(g) Whenever Xxxxxxxxx shall be required to make a payment to
the Shareholders under this Agreement, the Escrow Agreement (as defined below)
or the Environmental Escrow Agreement (as defined below), Xxxxxxxxx shall make
such payment to the Shareholders in proportion to the number of Shares owned by
each Shareholder.
(h) Any reference in this Agreement to the knowledge of a
Person shall mean the actual knowledge of such Person or any then current
officer or director of such Person, after diligent inquiry; provided, however,
that such diligent inquiry shall not be deemed to require any Person to engage a
third party professional or consultant to conduct such inquiry.
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 THE ACQUISITION. Subject to the terms and conditions of this
Agreement, the Shareholders shall at the Closing (as defined below) sell,
convey, transfer, assign and deliver to Xxxxxxxxx, and Xxxxxxxxx shall at the
Closing purchase, acquire and accept from the Shareholders, the Shares, free and
clear of any Liens (including, without limitation, any Liens disclosed herein or
in any of the schedules attached hereto).
2.2 PURCHASE PRICE. The aggregate purchase price to be paid by
Xxxxxxxxx to the Shareholders in exchange for the Shares (the "Purchase Price")
shall be Sixteen Million Seventy Five Thousand Dollars ($16,075,000) MINUS the
positive amount, if any, by which the Net Worth of Certified as of the time of
the Closing is less than Six Million Nine Hundred Fifty Thousand Dollars
($6,950,000). As used throughout this document, "Net Worth" means the amount if
any, by which the aggregate total assets of Certified exceeds the aggregate
total liabilities of Certified, in each case, determined in accordance with
Modified GAAP.
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2.3 PAYMENT OF ESTIMATED PURCHASE PRICE. At least two days prior to the
Closing Date, Xxxxxxxxx and the Shareholders shall estimate by mutual agreement
the amount of the Purchase Price (the "Estimated Purchase Price"). The Estimated
Purchase Price shall be calculated from the books and records of Certified, and
the parties shall endeavor to cause the Estimated Purchase Price to accurately
reflect the Net Worth of Certified as of the time of the Closing. At the
Closing, Xxxxxxxxx shall pay the Estimated Purchase Price, as follows:
(a) Xxxxxxxxx shall deliver to IBJ Whitehall Bank & Trust
Company or such other third party as may be agreed upon by the parties (the
"Escrow Agent") (i) the sum of Three Million Two Hundred Twenty Thousand Dollars
($3,220,000) (the "Escrowed Amount") to be held in accordance with the terms of
Article IX and the Escrow Agreement (as hereinafter defined), and (ii) the sum
of Seven Hundred Fifty Thousand Dollars ($750,000) (or such lesser amount as may
be mutually agreed upon by the parties on or prior to the Closing Date) (the
"Environmental Escrowed Amount") to be held in accordance with the terms of
Article IX and the Environmental Escrow Agreement (as hereinafter defined); and
(b) Xxxxxxxxx shall pay to the Shareholders the balance of the
Estimated Purchase Price (the "Closing Date Payment").
2.4 CLOSING DATE PAYMENT ADJUSTMENT. Within ninety (90) days following
the Closing Date, Xxxxxxxxx shall cause Xxxxxxxxx'x Accountants to prepare an
audit of the financial statements of Certified for the portion of the fiscal
year in which the Closing took place through and including the time of the
Closing, and such financial statements shall be prepared in accordance with GAAP
(the "Audited Closing Date Financial Statements"). The Shareholders shall be
entitled to participate in the conduct of such audit. Upon completion of the
audit, Xxxxxxxxx shall prepare and deliver to the Shareholders a certificate
verified as to accuracy by its Chief Financial Officer (the "Actual Purchase
Price Certificate") (a) attaching a copy of the Audited Closing Date Financial
Statements, (b) attaching a copy of the unaudited, internally prepared balance
sheet of Certified as of the time of the Closing (the "Adjusted Closing Date
Balance Sheet"), which shall be based upon the balance sheet of Certified as of
the time of the Closing included in the Audited Closing Date Financial
Statements (the "Audited Closing Date Balance Sheet"), as adjusted by (i)
applying Modified GAAP consistent with the methodology used in the preparation
of the Current Balance Sheet (as hereinafter defined), (ii) reversing any
reserve set forth on the Audited Closing Date Balance Sheet on account of any
Remediation (as hereinafter defined) required to be paid for by the Shareholders
under Section 6.23, (iii) writing down the book value of the inventory as
reflected on the Audited Closing Date Balance Sheet by the book value of any
inventory which was owned by Certified as of the date of the Current Balance
Sheet but was not reflected on the Current Balance Sheet or was reflected on the
Current Balance Sheet at zero value, and (iv) increasing the Net Worth of
Certified as of the time of the Closing by the book value as of the time of the
Closing of any Designated Automobiles which have been transferred to the
Shareholders, and (c) setting forth the actual amount of the Purchase Price
(which actual amount is referred to as the "Actual Purchase Price") and the
method of calculation thereof in reasonable detail, which amount shall be
determined based upon the Net Worth of Certified as of the time of the Closing
as set forth in the Adjusted Closing Date Balance Sheet. Xxxxxxxxx shall pay any
costs or expenses incurred by it in connection with the preparation of the
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Audited Closing Date Financial Statements. If within twenty (20) business days
after the Actual Purchase Price Certificate is delivered to the Shareholders,
the Shareholders shall not have given written notice to Xxxxxxxxx setting forth
in detail any objection to the Actual Purchase Price, then such determination of
the Actual Purchase Price shall be final and binding on the parties hereto. If
within such twenty (20) business day period following delivery of the Actual
Purchase Price Certificate, the Shareholders shall give written notice to
Xxxxxxxxx setting forth in reasonable detail any objection to such determination
of the Actual Purchase Price, Xxxxxxxxx and the Shareholders shall endeavor to
reach agreement within the twenty (20) business day period following the receipt
by Xxxxxxxxx of the notice of objection. If the parties shall reach agreement on
the objections of the Shareholders, then the Actual Purchase Price as adjusted
by the parties shall become the Actual Purchase Price for purposes of this
Agreement (except as otherwise specifically provided herein). If the parties are
unable to reach agreement within such twenty (20) business day period, then (i)
the matter shall be submitted as soon as practicable to the Independent
Accountants for determination of the Actual Purchase Price, and (ii) to the
extent that any portion of the Actual Purchase Price is undisputed by the
parties, such undisputed portion shall be paid within ten (10) business days
following the end of such period. If the parties shall submit the determination
of the Actual Purchase Price to the Independent Accountants, then the
determination of the Independent Accountants shall be final and binding on the
parties and such amount shall become the Actual Purchase Price for purposes of
the remainder of this Agreement (except as otherwise specifically provided
herein). The parties (and their professional advisors) shall cooperate with one
another in furtherance of determining the Actual Purchase Price, and the parties
shall make their books and records and personnel reasonably available, and
Xxxxxxxxx shall make the work papers utilized by Xxxxxxxxx'x Accountants and
shall make Xxxxxxxxx'x Accountants reasonably available, in furtherance of
making such determination. In connection with the resolution of any dispute,
each party shall pay its own fees and expenses, including, without limitation,
legal, accounting and consultant fees and expenses. If the Actual Purchase Price
as determined by the Independent Accountants is greater than the Actual Purchase
Price as set forth in the Actual Purchase Price Certificate by more than two
percent (2%), then the cost and expense of the Independent Accountants shall be
paid by Xxxxxxxxx. If the Actual Purchase Price as determined by the Independent
Accountants is greater than the Actual Purchase Price as set forth in the Actual
Purchase Price Certificate by two percent (2%) or less, or is less than the
Actual Purchase Price as set forth in the Actual Purchase Price Certificate,
then the cost and expense of the Independent Accountants shall be paid by the
Shareholders. If the Estimated Purchase Price is greater than the Actual
Purchase Price, then the Shareholders shall repay to Xxxxxxxxx within ten (10)
business days following receipt of the Actual Purchase Price Certificate or, if
disputed, within ten (10) business days following the earlier of the date on
which the parties resolve the dispute or the date of determination of the Actual
Purchase Price by the Independent Accountants, the difference between the
Estimated Purchase Price and the Actual Purchase Price. If the Shareholders
shall fail to pay such amount when due, then Xxxxxxxxx shall have the right (but
not the obligation), in addition to any other remedies which it may have, to
deem such amount to be Xxxxxxxxx Indemnifiable Damages in accordance with
Article IX (provided that the Xxxxxxxxx Indemnification Threshold shall not be
applicable to such amount and such amount shall not count against the Xxxxxxxxx
Indemnification Cap). If the Actual Purchase Price is greater than the Estimated
Purchase Price, then Xxxxxxxxx shall pay to the Shareholders within ten (10)
business days following receipt of the Actual Purchase Price Certificate or, if
disputed, within ten (10) business
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days following the earlier of the date on which the parties resolve the dispute
or the date of determination of the Actual Purchase Price by the Independent
Accountants, the difference between the Actual Purchase Price and the Estimated
Purchase Price.
2.5 THE CLOSING. Subject to the terms and conditions of this Agreement,
the consummation of the Acquisition (the "Closing") shall take place as promptly
as practicable (and in any event within five (5) business days) after
satisfaction or waiver of the conditions set forth in Articles VII and VIII, at
the offices of Akerman, Senterfitt & Xxxxxx, P.A., Ft. Lauderdale, Florida, or
such other time and place as the parties may otherwise agree (the "Closing
Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX
As a material inducement to the Shareholders to enter into this
Agreement and to consummate the transactions contemplated hereby, Xxxxxxxxx
makes the following representations and warranties to the Shareholders:
3.1 CORPORATE STATUS. Xxxxxxxxx is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to own or lease its
properties and to carry on its business as now being conducted.
3.2 CORPORATE POWER AND AUTHORITY. Xxxxxxxxx has the corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. Xxxxxxxxx has
taken all actions necessary to authorize the execution and delivery of this
Agreement, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby.
3.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
by Xxxxxxxxx and constitutes a legal, valid and binding obligation of Xxxxxxxxx,
enforceable against Xxxxxxxxx in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.
3.4 NO VIOLATION. Except as set forth in SCHEDULE 3.4, none of the
execution or delivery of this Agreement by Xxxxxxxxx, the performance by
Xxxxxxxxx of its obligations hereunder or the consummation by it of the
transactions contemplated by this Agreement will (i) contravene any provision of
the Restated Certificate of Incorporation or Bylaws of Xxxxxxxxx, each as
amended to date, (ii) violate or conflict with any law, statute, ordinance,
rule, regulation, decree, writ, injunction, judgment or order of any
Governmental Authority or of any arbitration award which is either applicable
to, binding upon or enforceable against Xxxxxxxxx, (iii) conflict with, result
in any breach of, or constitute a default (or an event which would, with the
passage of time or the giving of notice
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or both, constitute a default) under, or give rise to a right to terminate,
amend, modify, abandon or accelerate, any Contract which is applicable to,
binding upon or enforceable against Xxxxxxxxx, (iv) result in or require the
creation or imposition of any Lien upon or with respect to any of the property
or assets of Xxxxxxxxx or (v) require the consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Authority, any
court or tribunal or any other Person, except any SEC and other filings required
to be made by Xxxxxxxxx and any filings required to be made by the parties under
the HSR Act, if any.
3.5 NO COMMISSIONS. Xxxxxxxxx has not incurred any obligation for any
finder's or broker's or agent's fees or commissions or similar compensation in
connection with the transactions contemplated hereby, other than fees which will
be paid by, and are the sole obligation of, Xxxxxxxxx.
3.6 SECURITIES AND EXCHANGE COMMISSION FILINGS. Xxxxxxxxx has
heretofore furnished or made available to Certified a true and complete copy of
each Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report
on Form 8-K and definitive proxy statement filed by Xxxxxxxxx with the SEC since
January 1, 1998. None of such documents as of the dates they were respectively
filed with the SEC contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Except as heretofore disclosed in filings with the SEC, as
otherwise publicly announced or as disclosed to Certified in writing, since
December 31, 1997, Xxxxxxxxx has conducted its business only in the ordinary and
usual course and there has not occurred any Material Adverse Change with respect
to Xxxxxxxxx.
3.7 INVESTMENT INTENT. Xxxxxxxxx is an accredited investor (as defined
in Regulation D promulgated under the Securities Act), and is a sophisticated
investor which has such knowledge and experience in financial, business and
aviation industry matters, that it is capable of evaluating the risk of
acquiring the Shares. The Shares are being acquired by Xxxxxxxxx for its own
account and without any view towards distribution, transfer or resale. Xxxxxxxxx
acknowledges that the Shares are subject to various restrictions on resale under
state and federal securities laws.
3.8 NO ADDITIONAL REPRESENTATIONS OR WARRANTIES. Xxxxxxxxx acknowledges
that neither of the Shareholders, Certified nor any other Person has made any
representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding Certified or either Shareholder,
except as expressly set forth in this Agreement or the schedules attached
hereto, or in any certificates, instruments or other documents delivered
pursuant to the terms of this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
CERTIFIED AND THE SHAREHOLDERS
As a material inducement to Xxxxxxxxx to enter into this Agreement and
to consummate the transactions contemplated hereby, Certified and the
Shareholders, jointly and severally, make the following representations and
warranties to Xxxxxxxxx:
4.1 CORPORATE STATUS. Certified is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida and
has the requisite corporate power and authority to own or lease its properties
and to carry on its business as now being conducted. Certified is legally
qualified to transact business as a foreign corporation, and is in good standing
as such, in those jurisdictions set forth on SCHEDULE 4.1, which jurisdictions
represent all of the jurisdictions in which the nature of its properties and/or
the conduct of its business requires such qualification. Certified has complied
in all material respects with all of the requirements of any statute governing
the use and registration of fictitious names, and has the legal right to use the
names under which it operates its business. Except as set forth on SCHEDULE 4.1,
(a) Certified has not changed its name or at any time used any assumed or
fictitious name since the date of its organization, (b) Certified has not been
the surviving entity in a merger or acquired any businesses since the date of
its organization, and (c) Certified has not changed its principal place of
business or chief executive office since December 31, 1991. There is no pending
or threatened proceeding for the dissolution, liquidation, insolvency or
rehabilitation of Certified.
4.2 POWER AND AUTHORITY. Certified has the corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. Certified has
taken all action necessary to authorize the execution and delivery of this
Agreement, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby. The Shareholders are individual United
States citizens residing in the State of Florida, and have the requisite
competence and authority to execute and deliver this Agreement, to perform their
obligations hereunder and to consummate the transactions contemplated hereby.
4.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
by Certified and each of the Shareholders, and constitutes the legal, valid and
binding obligation of each of them, enforceable against each of them in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at law
or in equity.
4.4 CAPITALIZATION. Certified has (a) one hundred (100) shares of
Common Stock authorized and no shares of any other class of capital stock
authorized, (b) one hundred (100) shares of Common Stock issued and outstanding,
and (c) no shares of Common Stock held in treasury. All of the Shares have been
duly authorized and validly issued and are fully paid and non-assessable,
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and were issued in compliance with all applicable state and federal securities
laws, and none of the Shares were issued in violation of any preemptive rights
or rights of first refusal. No preemptive rights or rights of first refusal
exist with respect to the shares of capital stock of Certified, and no such
rights arise by virtue of or in connection with the transactions contemplated
hereby. There are no outstanding or authorized rights, options, warrants,
convertible securities, subscription rights, conversion rights, exchange rights
or other agreements or commitments of any kind that could require Certified to
issue or sell any shares of its capital stock (or securities convertible into or
exchangeable for shares of its capital stock). There are no outstanding stock
appreciation, phantom stock, profit participation or other similar rights with
respect to Certified. There are no proxies, voting rights or other agreements or
understandings with respect to the voting or transfer of the capital stock of
Certified. Certified is not obligated to redeem or otherwise acquire any of its
outstanding shares of capital stock.
4.5 SHAREHOLDERS. SCHEDULE 4.5 sets forth the name, address and social
security number of each shareholder of Certified and the number of Shares owned
beneficially and of record by each such shareholder. Except as set forth on
SCHEDULE 4.5, the Shareholders own beneficially and of record all of the issued
and outstanding shares of capital stock of Certified, and the Shareholders own
such shares free and clear of any Liens, claims or restrictions of any kind.
4.6 NO VIOLATION. Except as set forth in SCHEDULE 4.6, none of the
execution or delivery of this Agreement by Certified or either of the
Shareholders, the performance by any of them of their respective obligations
hereunder or the consummation by any of them of the transactions contemplated by
this Agreement will (i) contravene any provision of the Articles of
Incorporation or Bylaws (or other organizational documents), as amended to date,
of Certified, (ii) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon or enforceable against Certified or either of the Shareholders, (iii)
conflict with, result in any breach of, or constitute a default (or an event
which would, with the passage of time or the giving of notice or both,
constitute a default) under, or give rise to a right to terminate, amend,
modify, abandon or accelerate, any Designated Contract (as hereinafter defined)
or any Contract which is binding upon or enforceable against either of the
Shareholders, (iv) result in or require the creation or imposition of any Lien
upon or with respect to any of the property or assets of either Certified or the
Shares or (v) require the consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Authority, any court or
tribunal or any other Person, except any SEC and other filings required to be
made by Xxxxxxxxx and any filings required to be made by the parties under the
HSR Act, if any.
4.7 RECORDS OF CERTIFIED. The copies of the Articles of Incorporation
and Bylaws of Certified which were provided to Xxxxxxxxx are true, accurate and
complete and reflect all amendments made through the date of this Agreement. The
minute books for Certified made available to Xxxxxxxxx for review were correct
and complete in all material respects as of the date of such review; no further
entries have been made therein through the date of this Agreement; and the
records contained in such minute books contain the true signatures of the
persons purporting to have signed them, and each such minute book contains an
accurate record of all material corporate
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actions of the shareholders and directors (and any committees thereof) of
Certified taken by written consent or at a meeting since the date of its
organization. All material corporate actions taken by Certified have been duly
authorized or ratified. The stock ledgers of Certified, as previously made
available to Xxxxxxxxx, contain complete and accurate records of all issuances,
transfers and cancellations of shares of the capital stock of Certified.
4.8 SUBSIDIARIES. Certified does not own, directly or indirectly, any
outstanding voting securities of or other interests in, or control, any
corporation, partnership, joint venture or other business entity.
4.9 FINANCIAL STATEMENTS. The Shareholders have delivered to Xxxxxxxxx
the unaudited financial statements of Certified for the year ended July 31,
1996, including the notes thereto, reviewed by Seldine & Xxxxxx (the "Unaudited
Annual Financial Statements"), and the audited financial statements of Certified
for the year ended July 31, 1997, including the notes thereto, audited by the
Shareholders' Accountants (the "Audited Annual Financial Statements", and
together with the Unaudited Annual Financial Statements, the "Annual Financial
Statements"), and the unaudited financial statements of Certified for the five
(5) month period ended December 31, 1998 (the "Interim Financial Statements",
and together with the Annual Financial Statements, the "Financial Statements"),
copies of which are attached to SCHEDULE 4.9 hereto. The balance sheet of
Certified dated as of December 31, 1998 included in the Interim Financial
Statements is referred to herein as the "Current Balance Sheet." Except as set
forth on SCHEDULE 4.9, the Financial Statements fairly present in all material
respects the financial position of Certified at each of the balance sheet dates
and the results of operations for the periods covered thereby, and in the case
of the Audited Annual Financial Statements, have been prepared in accordance
with GAAP consistently applied throughout the periods indicated. There are no
extraordinary items of income or expense during the periods covered by the
Financial Statements, and the balance sheets included in the Financial
Statements do not reflect any writeup or revaluation increasing the book value
of any assets, except as specifically disclosed in the notes thereto or
otherwise reflected therein.
4.10 CHANGES SINCE THE CURRENT BALANCE SHEET DATE. Except as set forth
on SCHEDULE 4.10, since the date of the Current Balance Sheet, Certified has
operated in the ordinary course of business consistent with past practice and
has not (i) issued any capital stock or other securities; (ii) made any
distribution of or with respect to its capital stock or other securities, or
purchased or redeemed any of its securities; (iii) paid any bonus to or
increased the rate of compensation of any of its officers or salaried employees
(in the case of salaried employees, other than in the ordinary course of
business consistent with past practice), or amended any other terms of
employment of any officers or salaried employees (in the case of salaried
employees, other than in the ordinary course of business consistent with past
practice); (iv) sold, leased or transferred any of its properties or assets
other than the sale of inventory in the ordinary course of business consistent
with past practice; (v) made or obligated itself to make capital expenditures in
excess of Fifty Thousand Dollars ($50,000) in the aggregate; (vi) made any
payment in respect of its liabilities other than in the ordinary course of
business consistent with past practice; (vii) incurred any obligations or
liabilities (including any Indebtedness) or entered into any transaction or
series of transactions involving in excess of Fifty Thousand Dollars ($50,000)
in the aggregate out of the ordinary course
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of business, except for this Agreement and the transactions contemplated hereby;
(viii) suffered any theft, damage, destruction, casualty loss or extraordinary
loss, whether or not covered by insurance and whether or not a timely claim was
filed with respect thereto, in excess of Fifty Thousand Dollars ($50,000) in the
aggregate; (ix) waived, canceled, compromised or released any rights having a
value in excess of Fifty Thousand Dollars ($50,000) in the aggregate; (x) made
or adopted any change in its accounting practice or policies; (xi) made any
adjustment to its books or records other than in respect of the conduct of its
business activities in the ordinary course consistent with past practice; (xii)
entered into any transaction with any Affiliate or Familial Affiliate; (xiii)
entered into any employment agreement; (xiv) terminated, amended or modified any
Designated Contract; (xv) imposed any security interest or other Lien on any of
its assets other than Permitted Liens; (xvi) delayed paying any accounts payable
which are due and payable except to the extent being contested in good faith,
other than in the ordinary course of business consistent with past practice;
(xvii) made or pledged any charitable contributions in excess of Fifty Thousand
Dollars ($50,000) in the aggregate; (xviii) entered into any other transaction
or, to the knowledge of Certified or either of the Shareholders, been subject to
any event specifically applicable to Certified and not generally to similarly
situated companies, which has or may have a Material Adverse Effect on
Certified; or (xix) agreed to do or authorized any of the foregoing.
4.11 LIABILITIES OF CERTIFIED. Certified does not have any liabilities
or obligations, whether accrued, absolute, contingent or otherwise, except (a)
to the extent reflected on the Current Balance Sheet and not heretofore paid or
discharged, (b) liabilities incurred in the ordinary course of business
consistent with past practice since the date of the Current Balance Sheet (none
of which relates to breach of contract, breach of warranty, tort, infringement
or violation of law, or which arose out of any action, suit, claim, governmental
investigation or arbitration proceeding), (c) liabilities set forth on SCHEDULE
4.11(A) and (d) liabilities which were incurred in the ordinary course of
business prior to the date of the Current Balance Sheet and which, in accordance
with GAAP consistently applied, were not required to be recorded thereon (none
of which relates to breach of contract, breach of warranty, tort, infringement
or violation of law of which arose out of any action, suit, claim, governmental
investigation or arbitration proceeding) and which in the aggregate would not
have a Material Adverse Effect on Certified. SCHEDULE 4.11(B) contain a true and
complete list of Indebtedness of Certified, including the name of the lender,
pay-off amount, per diem interest and any prepayment penalties or premiums.
4.12 LITIGATION. Except as disclosed on SCHEDULE 4.12 hereto, there is
no action, suit, or other legal or administrative proceeding or governmental
investigation pending, or, to the knowledge of Certified or either of the
Shareholders, threatened against or by Certified or any of Certified's
properties or assets or the Shares or which relates to or questions the validity
or enforceability of this Agreement or the transactions contemplated hereby, and
to the knowledge of Certified and each of the Shareholders, there is no basis
for any of the foregoing. There are no outstanding orders, decrees or
stipulations issued by any Governmental Authority in any proceeding to which
Certified is or was a party which have not been complied with in full by
Certified or which continue to impose any obligations on Certified.
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4.13 ENVIRONMENTAL MATTERS.
(a) Except as set forth on SCHEDULE 4.13, each of the
Companies (as defined in clause (g) below) is and has at all times been in full
compliance with all Environmental Laws (as defined in clause (g) below)
governing its business, operations, properties or assets, including, without
limitation: (i) all requirements under Environmental Laws relating to the
Discharge (as defined in clause (g) below) or Handling (as defined in clause (g)
below) of Hazardous Substances (as defined in clause (g) below); (ii) all
requirements under Environmental Laws relating to notice, record keeping or
reporting; (iii) all requirements under Environmental Laws relating to obtaining
or maintaining Licenses (as defined in clause (g) below) for the ownership
and/or use of its properties or assets or the operation of its business as
presently conducted, including Licenses relating to Hazardous Substances; and
(iv) all applicable writs, orders, judgements, injunctions, governmental
communications, decrees, informational requests or demands issued pursuant to,
or arising under, any Environmental Laws.
(b) Except as set forth in SCHEDULE 4.13, there are no (and
there is no reasonable basis for any) non-compliance orders, warning letters,
notices of violation (collectively "Notices"), claims, suits, actions,
judgments, penalties, fines, or administrative or judicial investigations or
proceedings (collectively "Proceedings") pending or, to the knowledge of
Certified or either of the Shareholders, threatened against or involving any of
the Companies or any of their respective businesses, operations, properties or
assets, issued by any Governmental Authority or third party with respect to any
Environmental Laws or Licenses issued to any of the Companies thereunder in
connection with, related to or arising out of the ownership by any of the
Companies of their respective properties or assets or the operation of their
respective businesses, which have not been resolved to the satisfaction of the
issuing Governmental Authority or third party in a manner that would not impose
any obligation, burden or continuing liability on Xxxxxxxxx or any of the
Companies in the event that the transactions contemplated by this Agreement are
consummated, or which could have a Material Adverse Effect on Xxxxxxxxx or any
of the Companies, including, without limitation: (i) Notices or Proceedings
related to any of the Companies being a potentially responsible party or a
possible potentially responsible party for a federal or state environmental
cleanup site or for corrective action under any applicable Environmental Laws;
(ii) Notices or Proceedings relating to any of the Companies being responsible
to undertake any response, removal or remedial actions or clean-up actions under
any applicable Environmental Law; or (iii) Notices or Proceedings related to any
of the Companies being liable under any Environmental Laws for personal injury,
property damage, natural resource damage, or clean up obligations.
(c) Except as set forth on SCHEDULE 4.13, none of the
Companies has Discharged, or allowed or arranged for any third party to
Discharge, Hazardous Substances in violation of Environmental Laws, to, at or
upon (i) any location other than a site lawfully permitted to receive such
Hazardous Substances, (ii) any real property currently or previously owned or
leased by any of the Companies, or (iii) any site which, pursuant to any
Environmental Laws, (x) has been placed on the National Priorities List or its
state equivalent, or (y) the Environmental Protection Agency or the relevant
state agency or other Governmental Authority has notified any of the Companies
that such Governmental Authority has proposed or is proposing to place on the
National Priorities List
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or its state equivalent. There has not occurred, nor is there presently
occurring, a Discharge, or, to the knowledge of the Companies or either of the
Shareholders, threatened Discharge, of any Hazardous Substance on, into or
beneath the surface of, or adjacent to, any real property currently or
previously owned or leased by any of the Companies in an amount requiring a
notice or report to be made to a Governmental Authority or in violation other
than of any applicable Environmental Laws. Except as set forth on SCHEDULE 4.13,
there does not presently exist on any real property currently or previously
owned or leased by any of the Companies any conditions or circumstances which
require or may, in the future, require cleanup, removal or other remedial action
or other response under applicable Environmental Laws, permits or licenses, to
be undertaken by Certified or Xxxxxxxxx or that would subject Certified or
Xxxxxxxxx to penalties, damages or injunctive relief.
(d) SCHEDULE 4.13 identifies the operations and activities,
and locations thereof, which have been conducted or are being conducted by any
of the Companies on any real property currently or previously owned or leased by
any of the Companies within the last ten (10) years which have involved the
Handling or Discharge of Hazardous Substances.
(e) None of the Companies use, nor has used, any Aboveground
Storage Tanks (as defined in clause (g) below) or Underground Storage Tanks (as
defined in clause (g) below), and there are not now nor have there ever been any
Underground Storage Tanks beneath any real property currently or previously
owned or leased by any of the Companies that are required to be registered under
applicable Environmental Laws.
(f) SCHEDULE 4.13 identifies (i) all environmental audits,
assessments or occupational health studies undertaken by any of the Companies or
any of their agents or undertaken by any Governmental Authority or any third
party, in any case undertaken by or on behalf of Certified or either of the
Shareholders within the last six years or which are otherwise known to and
reasonably available to Certified or either of the Shareholders, relating to or
affecting any of the Companies or any real property currently or previously
owned or leased by any of the Companies; (ii) the results of any ground, water,
soil, air or asbestos monitoring undertaken by any of the Companies or any of
their agents or undertaken by any Governmental Authority or any third party, in
any case undertaken by or on behalf of Certified or either of the Shareholders
within the last six years or which are otherwise known to and reasonably
available to Certified or either of the Shareholders, relating to or affecting
any of the Companies or any real property currently or previously owned or
leased by any of the Companies which indicate the presence of Hazardous
Substances at levels requiring a notice or report to be made to a Governmental
Authority or in violation of any applicable Environmental Laws; (iii) all
material written communications between any of the Companies and any
Governmental Authority during the last six years or which are otherwise known to
and reasonably available to Certified or either of the Shareholders, arising
under or related to Environmental Laws; and (iv) all outstanding citations
issued under OSHA, or similar state or local statutes, laws, ordinances, codes,
rules, regulations, orders, ruling, or decrees, relating to or affecting any of
the Companies or any real property currently or previously owned or leased by
any of the Companies.
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(g) For purposes of this Section 4.13, the following terms
shall have the meanings ascribed to them below:
"Aboveground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Aboveground Storage
Tanks.
"Companies" means Certified and any Affiliates of Certified
for whose acts or omissions Certified may be held liable under any
Environmental Law.
"Discharge" means any manner of spilling, leaking, dumping,
discharging, releasing or emitting, as any of such terms may further be
defined in any Environmental Law, into any medium including, without
limitation, ground water, surface water, soil or air.
"Environmental Laws" means all existing federal, state, regional or
local statutes, laws, rules, regulations, codes, orders, plans,
injunctions, decrees, rulings and ordinances, and changes or judicial
or administrative interpretations thereof, or similar laws of foreign
jurisdictions where any of the Companies conducts business, any of
which govern (or purport to govern) or relate to pollution, protection
of the environment, public health and safety, air emissions, water
discharges, hazardous or toxic substances, solid or hazardous waste or
occupational health and safety, as any of these terms are or may be
defined in such statutes, laws, rules, regulations, codes, orders,
plans, injunctions, decrees, rulings and ordinances, or changes or
judicial or administrative interpretations thereof, including, without
limitation: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendment and
Reauthorization Act of 1986, 42 U.S.C. Section 9601, et seq.
(collectively "CERCLA"); the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act of 1976 and subsequent
Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. Section 6901 et
seq. (collectively "RCRA"); the Hazardous Materials Transportation Act,
as amended, 49 U.S.C. Section 1801, et seq.; the Clean Water Act, as
amended, 33 U.S.C. Section 1311, et seq.; the Clean Air Act, as amended
(42 U.S.C. Section 7401- 7642); the Toxic Substances Control Act, as
amended, 15 U.S.C. Section 2601 et seq.; the Federal Insecticide,
Fungicide, and Rodenticide Act as amended, 7 U.S.C. Section 136-136y
("FIFRA"); the Emergency Planning and Community Right-to-Know Act of
1986 as amended, 42 U.S.C. Section 11001, et seq. (Title III of XXXX)
("EPCRA"); and the Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C. Section 651, et seq. ("OSHA").
"Environmental Liabilities" means any and all expenses,
losses, costs, deficiencies, liabilities and damages (including,
without limitation, reasonable counsel and paralegal fees and expenses)
of any kind, whether known or unknown, fixed or contingent, arising
from or relating to any (i) violations of Environmental Laws by any of
the Companies on or prior to the Closing Date, (ii) Existing Conditions
(as hereinafter defined) and any other matters set forth on SCHEDULE
4.13, (iii) breach of any representation or warranty set forth in
Section 4.13 or any covenant set forth in Section 6.23, (iv) release of
Hazardous Substances in violation
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of Environmental Laws on or from the Leased Premises on or prior to the
Closing Date, (v) exposure of any Person to Hazardous Substances in
violation of Environmental Laws by any of the Companies on or prior to
the Closing Date, (vi) contamination of waste disposal facilities or
waste disposal sites in violation of Environmental Laws by Hazardous
Substances generated by any of the Companies on or prior to the Closing
Date or (vii) death or bodily injuries to any person, destruction or
damage to any real or personal property, or contamination of or adverse
effects on the environment arising from or relating to any of the
foregoing.
"Handle" means any manner of generating, accumulating,
storing, treating, disposing of, transporting, transferring, labeling,
handling, manufacturing or using, as any of such terms may be defined
in any Environmental Law, of any Hazardous Substances or Waste.
"Hazardous Substances" shall mean any toxic or hazardous
substance, material, or waste, and any other contaminant, pollutant or
constituent thereof, whether liquid, solid, semi-solid, sludge and/or
gaseous, including without limitation chemicals, compounds,
by-products, pesticides, asbestos containing materials, petroleum or
petroleum products, and polychlorinated biphenyls, the presence of
which requires investigation or remediation under any Environmental
Laws or which are or become regulated, listed or controlled by, under
or pursuant to any Environmental Laws, including, without limitation,
RCRA, CERCLA, the Hazardous Materials Transportation Act, the Toxic
Substances Control Act, the Clean Air Act, the Clean Water Act, FIFRA,
EPCRA and OSHA, or any similar state statute, or regulations
implementing such statutes, laws, ordinances, codes, rules,
regulations, orders, rulings, or decrees, or which has been determined
or interpreted by any Governmental Authority to be a hazardous or toxic
substance regulated under any other statute, law, regulation, order,
code, rule, order, or decree.
"Licenses" means all licenses, certificates, permits,
approvals and registrations required to comply with any Environmental
Law.
"Underground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Underground Storage
Tanks.
4.14 REAL ESTATE.
(a) Certified does not own and has never owned any real
property or any interest therein.
(b) SCHEDULE 4.14 sets forth a list of all leases, licenses or
similar agreements of or relating to real property (collectively, "Leases") to
which Certified is a party (copies of which have previously been furnished to
Xxxxxxxxx), in each case setting forth the lessor and lessee thereof and the
date and term of each of the Leases, and the street address of each property
covered thereby
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(the "Leased Premises"). In the case of the Lease which is denoted with an '*'
on SCHEDULE 4.14, Certified has provided Xxxxxxxxx with a copy of such Lease
which has not been fully executed by all of the parties thereto; PROVIDED,
HOWEVER, that Certified and the Shareholders represent and warrant to Xxxxxxxxx
that such copy conforms to the copy that has been fully executed by all of the
parties thereto. Except as set forth in SCHEDULE 4.14, the Leases are in full
force and effect and have not been amended. Except as set forth in SCHEDULE
4.14, (i) Certified is not in default or breach under any Lease, (ii) to the
knowledge of Certified and the Shareholders, no other party thereto is in
default or breach under any Lease, and (iii) no event has occurred which, with
the passage of time or the giving of notice or both, would cause a breach by
Certified of or default by Certified under any Lease or, to the knowledge of
Certified or either of the Shareholders, would cause a breach by any other party
or a default by any other party under any Lease, in any case which default or
breach gives rise to, or with the passage of time or the giving of notice or
both, would give rise to, any right of Certified or any other party thereto to
terminate such Lease or which could have a Material Adverse Effect on Certified.
With respect to each of the Leased Premises (i) Certified has valid leasehold
interests in the Leased Premises, free and clear of any Liens or any covenants,
easements or title defects created by or of which Certified or either
Shareholder has knowledge, except Permitted Liens, and (ii) neither Certified
nor either of the Shareholders has received notice of any condemnation
proceeding with respect to any portion of any of the Leased Premises or any
access thereto or any special assessment which may affect any of the Leased
Premises.
(c) SCHEDULE 4.14 contains a list of (i) the principal place
of business and chief executive office of Certified, (ii) all other offices and
places of business maintained by Certified and (iii) all other locations where
the equipment, inventory, chattel paper and books and records of Certified are
located.
4.15 GOOD TITLE TO AND CONDITION OF ASSETS.
(a) SCHEDULE 4.15(a) contains a list as of the date of this
Agreement of all inventory owned by Certified which is included in the inventory
line item on Certified's financial statements (collectively, the "Designated
Inventory"), setting forth for each such item of inventory, a description, the
quantity and the value at which such item of inventory is carried on the books
and records of Certified. All of the Designated Inventory is of a quality usable
or salable in the ordinary course of business of Certified. All inventory owned
by Certified which is obsolete or of below- standard quality has been written
off, written down or adequately reserved against to its net realizable value on
the books and records of Certified. All Designated Inventory has been recorded
at the lower of cost or net realizable value on the books and records of
Certified, and has been depreciated consistent with its economic life. Any
inventory purchased by Certified on or after January 1, 1999 from the
Shareholders or any Familial Affiliate or any privately held entity in which any
such Person has or owns a beneficial interest was, taken as a whole, purchased
on terms no less favorable to Certified than the terms on which such inventory
could be purchased from an unaffiliated third party in an arms length
transaction and are, taken as a whole, saleable by Certified in the ordinary
course of business consistent with past practice. Except as set forth on
SCHEDULE 4.15(A), Certified has good and marketable title to all of the
Designated Inventory and all of its other inventory and Assets (as hereinafter
defined), free and clear of any Liens or restrictions or use other
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than Permitted Liens. For purposes of this Agreement, the term "Assets" means
all of the properties and assets of Certified (other than the Leased Premises),
whether personal or mixed, tangible or intangible, wherever located, reflected
on the Current Balance Sheet or acquired in the ordinary course of business
since such date. Except as set forth in SCHEDULE 4.15(a), Certified does not own
any aircraft or aircraft engines.
(b) SCHEDULE 4.15(b) contains a list as of the date of this
Agreement of all inventory owned by third parties and held by Certified on a
consignment basis (the "Consigned Inventory"), setting forth for each such item
of inventory, a description, the quantity and the name, address and telephone
number of the owner thereof.
(c) The Fixed Assets (as hereinafter defined) necessary for
the business or operations of Certified as currently conducted are in good
operating condition and repair, normal wear and tear excepted. For purposes of
this Agreement, the term "Fixed Assets" means all vehicles, machinery,
equipment, tools, supplies, leasehold improvements, furniture and fixtures used
by or located on the premises of Certified or set forth on the Current Balance
Sheet or acquired by Certified since the date of the Current Balance Sheet.
SCHEDULE 4.15(C) lists the vehicles owned, leased or used by Certified, setting
forth the make, model, vehicle identification number, and year of manufacture,
and for each vehicle, whether it is owned or leased, and if owned, the name of
any lienholder and the amount of the lien, and if leased, the name of the lessor
and the general terms of the lease.
4.16 COMPLIANCE WITH LAWS.
(a) Certified is and has been in compliance with all laws,
regulations and orders applicable to it, its properties and assets (in each
case, owned or used by it now or in the past), and its business and operations
(as conducted by it now and in the past). Certified has not been cited, fined or
otherwise notified of any asserted past or present failure to comply with any
laws, regulations or orders and no proceeding with respect to any such violation
is pending or threatened.
(b) Neither Certified nor any of its employees or agents has
made any payment of funds in connection with the business of Certified which is
prohibited by law, and no funds have been set aside to be used in connection
with the business of Certified for any payment prohibited by law.
(c) Certified is and at all times has been in full compliance
with the terms and provisions of the Immigration Reform and Control Act of 1986,
as amended (the "Immigration Act"). With respect to each Employee (as defined in
8 C.F.R. 274a.1(f)) of Certified for whom the compliance with the Immigration
Act is required, Certified has on file a true, accurate and complete copy of (i)
each Employee's Form I-9 (Employment Eligibility Verification Form) and (ii) all
other records, documents or other papers prepared, procured and/or retained
pursuant to the Immigration Act. Certified has not been cited, fined, served
with a Notice of Intent to Fine or with a Cease and
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Desist Order, nor has any action or administrative proceeding been initiated or,
to the knowledge of Certified or either of the Shareholders, threatened against
Certified, by the Immigration and Naturalization Service by reason of any actual
or alleged failure to comply with the Immigration Act.
(d) Certified is not subject to any contract or decree, or any
injunction specifically applicable to it and not generally to similarly situated
companies, which restricts the continued operation of Certified or the expansion
thereof to other geographical areas, customers and suppliers or lines of
business.
4.17 LABOR AND EMPLOYMENT MATTERS. SCHEDULE 4.17 sets forth the name,
address, social security number and current rate of compensation of each of the
employees of Certified as of the date of this Agreement. Certified is not a
party to or bound by any collective bargaining agreement or any other agreement
with a labor union, and there has been no effort by any labor union during the
twenty-four (24) months prior to the date hereof to organize any employees of
Certified into one or more collective bargaining units. There is no pending or,
to the knowledge of Certified or either of the Shareholders, threatened labor
dispute, strike or work stoppage which affects or which may affect the business
of Certified or which may interfere with its continued operations. Neither
Certified nor any agent, representative or employee of Certified has within the
last twenty-four (24) months committed any unfair labor practice as defined in
the National Labor Relations Act, as amended, and there is no pending or, to the
knowledge of Certified or either of the Shareholders, threatened charge or
complaint against Certified by or with the National Labor Relations Board or any
representative thereof. There has been no strike, walkout or work stoppage or
threat of union activity involving any of the employees of Certified during the
twenty-four (24) months prior to the date hereof. Neither Certified nor either
of the Shareholders has knowledge that any executive has, or that a material
number of employees have, any plans to terminate his, her or their employment
with Certified as a result of the Acquisition or otherwise. Certified has
complied with applicable laws, rules and regulations relating to employment,
civil rights and equal employment opportunities, including but not limited to,
the Civil Rights Act of 1964, the Fair Labor Standards Act, the Americans with
Disabilities Act, as amended, and the Immigration Reform and Control Act of
1986, as amended.
4.18 EMPLOYEE BENEFIT PLANS.
(a) EMPLOYEE BENEFIT PLANS. SCHEDULE 4.18 contains a list
setting forth each employee benefit plan or arrangement of Certified, including
but not limited to employee pension benefit plans, as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
multiemployer plans, as defined in Section 3(37) of ERISA, employee welfare
benefit plans, as defined in Section 3(1) of ERISA, deferred compensation plans,
stock option plans, bonus plans, stock purchase plans, hospitalization,
disability and other insurance plans, severance or termination pay plans and
policies, whether or not described in Section 3(3) of ERISA, in which employees,
their spouses or dependents participate ("Employee Benefit Plans") (true and
accurate copies of which, together with the most recent annual reports on Form
5500 and summary plan descriptions with respect thereto, were furnished to
Xxxxxxxxx).
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(b) COMPLIANCE WITH LAW. With respect to each Employee Benefit
Plan, (i) each has been administered in compliance with its terms and with all
applicable laws, including, but not limited to, ERISA and the Internal Revenue
Code of 1986, as amended (the "Code"); (ii) no actions, suits, claims or
disputes are pending or, to the knowledge of Certified or either of the
Shareholders, threatened, except for claims for benefits in the normal course of
the Plan; (iii) no audits, inquiries, reviews, proceedings, claims, or demands
are pending with any governmental or regulatory agency; (iv) there are no facts
which provide a reasonable basis for any liability in the event of any such
investigation, claim, action, suit, audit, review, or other proceeding; (v) all
material reports, returns, and similar documents required to be filed with any
governmental agency or distributed to any plan participant have been duly or
timely filed or distributed; and (vi) no "prohibited transaction" has occurred
within the meaning of the applicable provisions of ERISA or the Code that would
subject Certified to any liability.
(c) QUALIFIED PLANS. With respect to each Employee Benefit
Plan intended to qualify under Code Section 401(a) or 403(a), (i) the Internal
Revenue Service has issued a favorable determination letter, true and correct
copies of which have been furnished to Xxxxxxxxx, that such plans are qualified
and exempt from federal income taxes; (ii) no such determination letter has been
revoked nor has revocation been threatened, nor has any amendment or other
action or omission occurred with respect to any such plan since the date of its
most recent determination letter or application therefor in any respect which
would adversely affect its qualification or materially increase its costs,
except for plan changes required by the Small Business Job Protection Act of
1996 and the Tax Reform Act of 1997; (iii) no such plan has been amended in a
manner that would require security to be provided in accordance with Section
401(a)(29) of the Code; (iv) no reportable event (within the meaning of Section
4043 of ERISA) has occurred, other than one for which the thirty (30) day notice
requirement has been waived; (v) as of the Closing Date, the present value of
all liabilities that would be "benefit liabilities" under Section 4001(a)(16) of
ERISA if benefits described in Code Section 411(d)(6)(B) were included will not
exceed the then current fair market value of the assets of such plan (determined
using the actuarial assumptions used for the most recent actuarial valuation for
such plan); (vi) all contributions to, and payments from and with respect to
such plans, which may have been required to be made in accordance with such
plans and, when applicable, Section 302 of ERISA or Section 412 of the Code,
have been timely made; and (vii) all such contributions to the plans, and all
payments under the plans (except those to be made from a trust qualified under
Section 401(a) of the Code) and all payments with respect to the plans
(including, without limitation, PBGC (as defined below) and insurance premiums)
for any period ending before the Closing Date that are not yet, but will be,
required to be made are properly accrued and reflected on the Current Balance
Sheet.
(d) MULTIEMPLOYER PLANS. None of the Employee Benefit Plans is
a multiemployer plan, as described in Section 4001(a)(3) of ERISA.
(e) WELFARE PLANS. (i) Certified is not obligated under any
employee welfare benefit plan as described in Section 3(1) of ERISA ("Welfare
Plan") to provide medical or death benefits with respect to any employee or
former employee of Certified or its predecessors after termination of
employment, except as required by applicable law; (ii) Certified has complied
with
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the notice and continuation coverage requirements of Section 4980B of the Code
and the regulations thereunder with respect to each Welfare Plan that is, or was
during any taxable year for which the statute of limitations on the assessment
of federal income taxes remains, open, by consent or otherwise, a group health
plan within the meaning of Section 5000(b)(1) of the Code; and (iii) there are
no reserves, assets, surplus or prepaid premiums under any Welfare Plan which is
an Employee Benefit Plan. The consummation of the transactions contemplated by
this Agreement will not entitle any individual to severance pay, and will not
accelerate the time of payment or vesting, or increase the amount of
compensation, due to any individual under any Employee Benefit Plan.
(f) CONTROLLED GROUP LIABILITY. Neither Certified nor any
entity that would be aggregated with it under Code Section 414(b), (c), (m) or
(o), (i) has ever terminated or withdrawn from any employee benefit plan under
circumstances resulting (or expected to result) in liability to the Pension
Benefit Guaranty Corporation ("PBGC"), the fund by which the employee benefit
plan is funded, or any employee or beneficiary for whose benefit the plan is or
was maintained (other than routine claims for benefits); (ii) has any assets
subject to (or expected to be subject to) a lien for unpaid contributions to any
employee benefit plan; (iii) has failed to pay premiums to the PBGC when due;
(iv) is subject to (or expected to be subject to) an excise tax under Code
Section 4971; (v) has engaged in any transaction which would give rise to
liability under Section 4069 or Section 4212(c) of ERISA; or (vi) has violated
Code Section 4980B or Section 601 through 608 of ERISA.
(g) OTHER LIABILITIES. (i) None of the Employee Benefit Plans
obligates Certified to pay separation, severance, termination or similar
benefits solely as a result of any transaction contemplated by this Agreement or
solely as a result of a "change of control" (as such term is defined in Section
280G of the Code); (ii) all required or discretionary (in accordance with
historical practices) payments, premiums, contributions, reimbursements, or
accruals for all periods ending prior to or as of the Closing Date shall have
been made or properly accrued on the Current Balance Sheet or will be properly
accrued on the books and records of Certified as of the Closing Date; and (iii)
none of the Employee Benefit Plans has any unfunded liabilities which are not
reflected on the Current Balance Sheet or the books and records of Certified.
4.19 TAX MATTERS. All Tax Returns required to be filed on or prior to
the date hereof with respect to Certified or any of its income, properties,
franchises or operations, have been timely filed where required to be filed,
each such Tax Return has been prepared in compliance with all applicable laws
and regulations, and all such Tax Returns are true and accurate in all respects.
All Taxes due and payable by or with respect to Certified have been fully and
timely paid or are accrued on the Current Balance Sheet and adequate reserves or
accruals for Taxes have been provided in its books and records with respect to
any period for which Tax Returns have not yet been filed or for which Taxes are
not yet due and payable. Except as set forth on SCHEDULE 4.19: (i) with respect
to each taxable period of Certified, either such taxable period has been audited
by the relevant taxing authority or the time for assessing or collecting Taxes
with respect to each such taxable period has closed and such taxable period is
not subject to review by any relevant taxing authority; (ii) no deficiency or
proposed adjustment which has not been settled or otherwise resolved for any
amount of Taxes has been asserted or assessed by any taxing authority against
Certified; (iii) Certified has not consented to extend the time in which any
Taxes may be assessed or collected by any taxing
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authority; (iv) Certified has not requested or been granted an extension of the
time for filing any Tax Return to a date later than the Closing Date; (v) there
is no action, suit, taxing authority proceeding, or audit or claim for refund
now in progress, pending or threatened against or with respect to Certified
regarding Taxes; (vi) Certified has not made an election or filed a consent
under Section 341(f) of the Code (or any corresponding provision of state, local
or foreign law) on or prior to the Closing Date; (vii) there are no Liens for
Taxes (other than for current Taxes not yet due and payable) upon the assets of
Certified; (viii) Certified will not be required (A) as a result of a change in
method of accounting for a taxable period ending on or prior to the Closing
Date, to include any adjustment under Section 481(c) of the Code (or any
corresponding provision of state, local or foreign law) in taxable income for
any taxable period (or portion thereof) beginning after the Closing Date or (B)
as a result of any "closing agreement," as described in Section 7121 of the Code
(or any corresponding provision of state, local or foreign law), to include any
item of income or exclude any item of deduction from any taxable period (or
portion thereof) beginning after the Closing Date; (ix) Certified has not been a
member of an affiliated group (as defined in Section 1504 of the Code) or filed
or been included in a combined, consolidated or unitary income Tax Return; (x)
Certified is not a party to or bound by any tax allocation or tax sharing
agreement or has any current or potential contractual obligation to indemnify
any other Person with respect to Taxes; (xi) there are no Taxes due or owing or
which may become due or owing by Certified for or on account of any period for
which Tax Returns have been filed, except as reflected on the Current Balance
Sheet; (xii) Certified has not made any payments, nor will it become obligated
(under any Contract entered into on or before the Closing Date) to make any
payments, that will be non-deductible under Sections 162(m) or 280G of the Code
(or any corresponding provision of state, local or foreign law); (xiii)
Certified has not been a United States real property holding corporation within
the meaning of Section 897(c)(2) of the Code (or any corresponding provisions of
state, local or foreign law) during the applicable period specified in Section
897(c)(1)(a)(ii) of the Code (or any corresponding provision of state, local or
foreign law); (xiv) no claim has ever been made by a taxing authority in a
jurisdiction where Certified does not file Tax Returns that it is or may be
subject to Taxes assessed by such jurisdiction; (xv) Certified has no permanent
establishment in any foreign country, as defined in the relevant tax treaty
between the United States of America and such foreign country; (xvi) true,
correct and complete copies of (A) all income and sales Tax Returns filed by or
with respect to Certified for the past three years and (B) any audit report
issued within the last five years, have been furnished or made available to
Xxxxxxxxx, and all material tax elections of Certified are clearly set forth on
such Tax Returns; (xvii) Certified will not be subject to any Taxes for the
period ending at the Closing Date or any period for which a Tax Return has not
been filed imposed pursuant to Section 1374 or Section 1375 of the Code (or any
corresponding provision of state, local or foreign law); (xviii) no sales or use
tax, non-recurring intangible tax, documentary stamp tax or other excise tax (or
comparable tax imposed by any Governmental Entity) will be payable by Xxxxxxxxx
by virtue of the transactions contemplated by this Agreement; and (xix) no issue
has been raised by any taxing authority in any examination which, by application
of the same or similar principles, could reasonably be expected to result in a
proposed deficiency for any subsequent taxable period.
4.20 INSURANCE. SCHEDULE 4.20 contains (i) a complete and correct list
of all insurance policies covering Certified and its properties, assets and
business (the "Insurance Policies") (copies of which have been provided to
Xxxxxxxxx) designating the insurance company, type of insurance,
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insured's name and policy number and (ii) a detailed description of each claim
pending as of the date of this Agreement under any of the Insurance Policies for
an amount in excess of Ten Thousand Dollars ($10,000) that relates to loss or
damage to the properties, assets or business of Certified. Such Insurance
Policies are in full force and effect, and all premiums due thereon have been
paid. As of the Closing Date, each of the Insurance Policies will be in force
and effect. Certified has complied with the provisions of the Insurance
Policies. Certified has not failed to give, in a timely manner, any notice
required under any of the Insurance Policies necessary to preserve its rights
thereunder, and neither Certified nor either of the Shareholders has any
knowledge of any uninsured claims or losses.
4.21 RECEIVABLES. All of the Receivables (as hereinafter defined) are
valid and legally binding, represent bona fide transactions and arose in the
ordinary course of business of Certified. All of the receivables are good and
collectible receivables, and will be collected in full in accordance with the
terms of such receivables (and in any event within twelve (12) months following
the Closing), without setoff or counterclaims, subject to the allowance for
doubtful accounts, if any, set forth on the Current Balance Sheet. For purposes
of this Agreement, the term "Receivables" means all receivables of Certified,
including all trade account receivables arising from the provision of services,
sale of inventory, notes receivable and insurance proceeds receivable. SCHEDULE
4.21 contains a true, complete and correct list of all receivables of Certified
as of the date hereof.
4.22 LICENSES, PERMITS AND APPROVALS. Certified possesses all licenses
and required governmental or official approvals, permits or authorizations
(collectively, the "Permits") for its businesses and operations, except where
Certified's failure to possess a Permit would not have a Material Adverse Effect
on Certified, and SCHEDULE 4.22 contains a true and complete list of all such
Permits. All such Permits are valid and in full force and effect, and Certified
is in full compliance with the respective requirements thereof, and no
proceeding is pending or, to the knowledge of Certified or either of the
Shareholders, threatened to revoke or amend any of them.
4.23 ADEQUACY OF THE ASSETS; RELATIONSHIPS WITH CUSTOMERS AND
SUPPLIERS; AFFILIATED TRANSACTIONS. Except as set forth in SCHEDULE 4.23(a), the
Inventory and other Assets and the Leased Premises constitute, in the aggregate,
all of the assets and properties necessary for the conduct of the business of
Certified in substantially the manner in which and to the extent to which such
business is currently being conducted. No current supplier to Certified of items
essential to the conduct of its business has threatened within the last twenty
four (24) months to terminate such current supplier's business relationship with
Certified for any reason. Except as set forth in SCHEDULE 4.23(b), Certified
does not have any direct or indirect interest in any customer, supplier or
competitor of Certified, or in any person from whom or to whom Certified leases
real or personal property. Except as set forth in SCHEDULE 4.23(b), no officer,
director, shareholder or other Affiliate of Certified or any Familial Affiliate,
or any entity in which any such person owns any beneficial interest, is a party
to any Contract or transaction with Certified or has any interest in any
property used by Certified. Other than Pride Aircraft Parts Company, Inc.
("Pride") and Air Xxxxxxxx, Inc. ("Air Xxxxxxxx"), none of the entities listed
on SCHEDULE 4.23(b) presently owns any aircraft parts or aircraft engine parts.
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4.24 INTELLECTUAL PROPERTY. Certified owns or has the right to use all
trademarks, service marks, trade names, copyrights, know-how, patents, trade
secrets, proprietary computer software, data bases and compilations, licenses
(including licenses for the use of computer software programs) and other
intellectual property used by it in the conduct of its business as currently
conducted (the "Intellectual Property"), and SCHEDULE 4.24 contains a true and
complete list of the Intellectual Property. Certified has not granted any rights
in any Intellectual Property to any third party. The business of Certified as
presently conducted does not infringe or misappropriate any intellectual
property rights held or asserted by any Person. No Person is infringing on the
Intellectual Property owned by Certified. Except as set forth on SCHEDULE 4.24,
no payments are required for the continued use of the Intellectual Property.
None of the Intellectual Property owned by Certified and, to the knowledge of
Certified and the Shareholders, none of the other Intellectual Property, has
ever been declared invalid or unenforceable, or is the subject of any pending
or, to the knowledge of Certified or either of the Shareholders, threatened
action for opposition, cancellation, declaration, infringement, or invalidity,
unenforceability or misappropriation or like claim, action or proceeding.
4.25 CONTRACTS. SCHEDULE 4.25 sets forth a list of each Contract to
which Certified is a party or by which it or its properties and assets are bound
that provides for aggregate payments of more than Fifty Thousand Dollars
($50,000) or has a duration of more than six months or which is material to its
business, assets, prospects or properties, in any instance which is in effect on
the date of this Agreement (the "Designated Contracts"). In the case of those
Designated Contracts which are denoted with an "*" on SCHEDULE 4.25, Certified
has provided Xxxxxxxxx with copies of such Designated Contracts which have not
been fully executed by all of the parties thereto; PROVIDED, HOWEVER, that
Certified and the Shareholders represent and warrant to Xxxxxxxxx that each such
copy conforms to the copy that has been fully executed by the parties thereto.
True and correct copies of each written Designated Contract have been provided
to Xxxxxxxxx and true and correct summaries of each oral Designated Contract are
set forth on SCHEDULE 4.25. The copy of each written Designated Contract and the
summary of each oral Designated Contract furnished to Xxxxxxxxx is a true and
complete copy or summary of all material terms, as the case may be, of the
document it purports to represent and reflects all amendments thereto. Certified
has complied with all of the covenants to be performed by it under, and has not
violated any of the terms or conditions of, any of the Designated Contracts, and
to the knowledge of Certified and each of the Shareholders, each of the other
parties to the Designated Contracts has complied with all of the covenants to be
performed by it under, and has not violated any of the terms or conditions of,
any of the Designated Contracts. No party to any Designated Contract has made a
claim for breach of, or indemnification under, or has delivered a notice of
termination or default under, any Designated Contract. No event has occurred
which constitutes, or after notice or the passage of time, or both, would
constitute, a default by Certified under any Designated Contract, and, to the
knowledge of Certified and each of the Shareholders, no such event has occurred
which constitutes or would constitute a default by any other party. Certified is
not subject to any liability or payment resulting from renegotiation of amounts
paid to it or required to be paid to it under any Designated Contract.
4.26 ACCURACY OF INFORMATION FURNISHED BY CERTIFIED OR THE SHAREHOLDER.
No representation or warranty made under this Agreement to Xxxxxxxxx contains
any untrue statement of fact or omits to state any fact necessary to make the
information contained therein not misleading
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in light of the circumstances under which they were made. Certified and the
Shareholders have provided Xxxxxxxxx with true, accurate and complete copies of
all documents listed or described in the various Schedules attached hereto.
4.27 BANK ACCOUNTS. SCHEDULE 4.27 sets forth all accounts of Certified
with any bank, broker or other depository institution, and the names of all
persons authorized to withdraw funds from each such account.
4.28 NO COMMISSIONS. Neither Certified nor either of the Shareholders
has incurred any obligation for any finder's or broker's or agent's fees or
commissions or similar compensation in connection with the transactions
contemplated hereby, other than the fee set forth in SCHEDULE 4.28, which shall
be the sole responsibility of the Shareholders.
4.29 YEAR 2000 COMPLIANCE. All computer applications used by Certified
are able to perform properly date-sensitive functions for all dates before and
during the year 2000, except where such failure would not have a Material
Adverse Effect on Certified. Neither Certified nor the Shareholders have
knowledge that any of its suppliers or vendors use computer applications that
will not be able to perform properly date-sensitive functions for any dates
before or during the year 2000, except where such failure would not have a
Material Adverse Effect on Certified.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE ACQUISITION
5.1 CONDUCT OF BUSINESS BY CERTIFIED PENDING THE ACQUISITION. Certified
and each of the Shareholders covenants and agrees that, between the date of this
Agreement and the Closing Date, the business of Certified shall be conducted
only in, and Certified shall not take any action except in, the ordinary course
of business, consistent with past practice. Certified shall during such period
use its best efforts to preserve intact its business organization, to keep
available the services of its current officers, employees and consultants, and
to preserve its present relationships with customers, suppliers and other
Persons with which it has significant business relations. By way of
amplification and not limitation, Certified shall not, between the date of this
Agreement and the Closing Date, except as set forth in SCHEDULE 5.1, directly or
indirectly, do or propose or agree to do any of the following without the prior
written consent of Xxxxxxxxx:
(a) amend or otherwise change its Articles of Incorporation or
Bylaws or equivalent organizational documents;
(b) (i) issue, sell, pledge, dispose of or encumber, or
authorize the issuance, sale, pledge or disposition of, or grant of an
encumbrance on, any shares of its capital stock of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest, of it, or (ii)
issue, sell, pledge, dispose of, encumber or lease, or authorize the issuance,
sale, pledge, disposition or lease of, or grant of an
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encumbrance on, any of its assets, tangible or intangible, except sales of
inventory in the ordinary course of business, consistent with past practice, in
transactions not exceeding One Hundred Thousand Dollars ($100,000) in the
aggregate;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, for cash or
shares of stock, by merger, consolidation, or acquisition of stock or assets)
any interest in any corporation, partnership or other business organization or
division thereof, or make any investment either by purchase of stock or
securities, contributions of capital or property transfer, or, except in the
ordinary course of business, consistent with past practice, in transactions not
exceeding One Hundred Thousand Dollars ($100,000) in the aggregate, purchase any
property or assets of any other Person, (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse or otherwise
as an accommodation become responsible for, the obligations of any Person, or
make any loans or advances other than de minimus advances to employees, (iii) to
the extent not prohibited by any other provision of this Section 5.1, enter into
any Contract other than in the ordinary course of business, consistent with past
practice, providing for a term of not more than six months and payments not
exceeding Fifty Thousand Dollars ($50,000) in the aggregate over the term of
such Contract, (iv) make capital expenditures exceeding Fifty Thousand Dollars
($50,000), or purchases of inventories exceeding Fifty Thousand Dollars
($50,000), in each case, in the aggregate, or (v) engage in any transaction with
(A) any officer, director, shareholder or other Affiliate of Certified, (B) any
Familial Affiliate, or (C) any entity in which any person covered by subsections
(A) or (B) above owns or has any beneficial interest;
(f) increase the compensation payable or to become payable to
its officers or employees or, except as presently bound to do, grant any
severance or termination pay to, or enter into any employment or severance
agreement with, any of its directors, officers or other employees, or establish,
adopt, enter into or amend or take any action to accelerate any rights or
benefits which any collective bargaining, bonus, profit sharing, trust,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any directors, officers or
employees;
(g) take any action other than in the ordinary course of
business and in a manner consistent with past practice with respect to
accounting policies or procedures;
(h) pay, discharge or satisfy any existing claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business and consistent with past practice of due and payable
liabilities reflected or reserved against in its financial statements, as
appropriate, or
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liabilities incurred after the date hereof in the ordinary course of business
and consistent with past practice;
(i) materially increase or decrease prices charged to its
customers, or take any other action which might reasonably be expected to result
in any material increase in the loss of customers through non-renewal or
termination of contracts or other causes; or
(j) agree, in writing or otherwise, to take or authorize any
of the foregoing actions.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 FURTHER ASSURANCES; COMPLIANCE WITH COVENANTS. Each party shall
execute and deliver such additional instruments and other documents and shall
take such further actions as may be necessary or appropriate to effectuate,
carry out and comply with all of the terms of this Agreement and the
transactions contemplated hereby. The Shareholders shall cause Certified to use
its best efforts to comply with all of the covenants of Certified under this
Agreement.
6.2 COOPERATION. Each of the parties agrees to use its best efforts to
cooperate with the others in the preparation and filing of all forms,
notifications, reports and information, if any, required or deemed advisable
pursuant to any law, rule or regulation (including, without limitation, any
rules or regulations of any securities exchange upon which the securities of
Xxxxxxxxx may be listed or traded) in connection with the transactions
contemplated by this Agreement, and to use its best efforts to agree jointly on
a method to overcome any objections by any Governmental Authority to any such
transactions.
6.3 HSR ACT AND OTHER ACTIONS. Each of the parties hereto shall (i)
make promptly (and in no event later than five (5) business days following the
execution of this Agreement) its respective filings, if any, and thereafter make
any other required submissions, under the HSR Act, with respect to the
transactions contemplated hereby, and shall seek early termination of the
applicable waiting period under the HSR Act, (ii) take all appropriate
reasonable actions, and do, or cause to be done, all things necessary, proper or
advisable under any applicable laws, rules and regulations and Contracts to
consummate and make effective the transactions contemplated herein, including,
without limitation, obtaining all licenses, permits, consents, approvals,
authorizations, qualifications and orders of any Governmental Authority and
parties to Contracts with Certified as are necessary for it to consummate the
transactions contemplated hereby, (iii) make on a prompt and timely basis all
governmental or regulatory notifications and filings required to be made by it
to consummate and make effective the transactions contemplated hereby, (iv)
defend all lawsuits or other legal proceedings brought against it which
challenge this Agreement or the consummation of the transactions contemplated
hereby, and (v) take all actions necessary or advisable to lift or rescind
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any injunction or restraining order or other order adversely affecting its
ability to consummate the transactions contemplated hereby.
6.4 ACCESS TO INFORMATION. From the date hereof to the Closing Date,
Certified shall (and shall cause its directors, officers, employees, auditors,
counsel and agents to) afford Xxxxxxxxx and Xxxxxxxxx'x officers, employees,
auditors, counsel and agents access during normal business hours to its
properties, offices and other facilities, to its officers and employees and to
all books and records, and shall furnish such persons with all financial,
operating and other data and information as may be requested. The parties agree
and acknowledge that all such information shall be and remain subject to that
certain Confidentiality Agreement dated April 14, 1998 between Xxxxxxxxx and
Geneva Corporate Finance, Inc. Notwithstanding anything to the contrary set
forth herein, neither the due diligence investigation made by Xxxxxxxxx in
connection with the Acquisition nor the information provided to or obtained by
Xxxxxxxxx shall affect any representation or warranty contained in this
Agreement.
6.5 NOTIFICATION OF CERTAIN MATTERS. Certified and the Shareholders
shall give prompt notice to Xxxxxxxxx of the occurrence or non-occurrence of any
event of which Certified or either of the Shareholders has knowledge which would
likely cause any representation or warranty contained herein made by either of
them to be materially untrue or inaccurate, or any covenant, condition, or
agreement contained herein applicable to it not to be materially complied with
or satisfied. Xxxxxxxxx shall give prompt notice to Certified and the
Shareholders of the occurrence or non-occurrence of any event of which Xxxxxxxxx
has knowledge which would likely cause any representation or warranty contained
herein made by Xxxxxxxxx to be materially untrue or inaccurate, or any covenant,
condition, or agreement contained herein applicable to it not to be materially
complied with or satisfied.
6.6 RESTRICTIVE COVENANTS. In order to assure that Xxxxxxxxx will
realize the benefits of the Acquisition, each of the Shareholders severally, but
not jointly, agrees with Xxxxxxxxx that he will not:
(i) for the period commencing on the Closing Date
and ending on the third anniversary of the Closing Date, directly or
indirectly, alone or as a partner, joint venturer (either expressly or
as a participant in the profits under the terms of any lease
arrangement), officer, director, employee, consultant, agent,
independent contractor, lender or security holder of any company or
business, engage in purchasing, refurbishing, overhauling, marketing,
distributing, selling or leasing of (a) aircraft, (b) aircraft engines,
(c) aircraft parts or (d) engine parts anywhere in the world; provided,
however, that the beneficial ownership of less than five percent (5%)
of the shares of stock of any other corporation having a class of
equity securities actively traded on a natural securities exchange or
over the counter market shall not be deemed in and of itself, to
violate the prohibitions of this Section 6.6;
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(ii) for the period commencing on the Closing Date
and ending on the third anniversary of the Closing Date, directly or
indirectly, employ any person, other than any child or the spouse of
such Shareholder, who was employed by Xxxxxxxxx or Certified, or any of
their respective Affiliates, subsidiaries, successors or assigns
(collectively, the "Xxxxxxxxx Companies") at or within the then prior
six (6) months, or in any manner seek to induce any such person to
leave his or her employment; or
(iii) at any time following the Closing Date, directly
or indirectly, in any way utilize, disclose, copy, reproduce or retain
in its possession any of the Xxxxxxxxx Companies' proprietary rights or
records, including, but not limited to, any of their respective
customer lists.
Each of the Shareholders agrees and acknowledges that the restrictions contained
in this Section 6.6 are reasonable in scope and duration and are necessary to
protect the Xxxxxxxxx Companies after the Closing Date. If any provision of this
Section 6.6 as applied to any party or to any circumstance is adjudged by a
court to be invalid or unenforceable, the same will in no way affect any other
circumstance or the validity or enforceability of this Agreement. If any such
provision, or any part thereof, is held to be unenforceable because of the
duration of such provision or the area covered thereby, the parties agree that
the court making such determination shall have the power to reduce the duration
and/or area of such provision, and/or to delete specific words or phrases, and
in its reduced form, such provision shall then be enforceable and shall be
enforced. The parties agree and acknowledge that the breach of this Section 6.6
will cause irreparable damage to the Xxxxxxxxx Companies and upon breach of any
provision of this Section 6.6, the Xxxxxxxxx Companies shall be entitled to
injunctive relief, specific performance or other equitable relief without the
need to post a bond or other security or prove special damages; PROVIDED,
HOWEVER, that, this shall in no way limit any other remedies which the Xxxxxxxxx
Companies may have (including, without limitation, the right to seek monetary
damages). Xxxxxxxxx and the Shareholders hereby agree that Xxxxxxxxx may assign,
without limitation, the foregoing restrictive covenants to any successor to or
Affiliates of Xxxxxxxxx.
6.7 CONFIDENTIALITY; PUBLICITY. No party hereto or their respective
Affiliates, employees, agents or representatives shall disclose to any third
party the existence of this Agreement or the subject matter or terms hereof and
no party hereto shall issue any press release or other public announcement
related to this Agreement or the transactions contemplated hereby, in each such
case, except (a) with the prior approval of the other parties, (b) if such party
believes in good faith such disclosure to be required by law or by the terms of
any listing agreement with or requirements of a securities exchange upon which
its securities may be listed or traded or (c) if such disclosure relates to any
legal proceeding between Xxxxxxxxx and Certified or the Shareholders arising out
of this Agreement; PROVIDED, HOWEVER, that each party shall use commercially
best efforts to coordinate with the other parties in making any public
disclosure pursuant to clause (b) of this sentence.
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6.8 NO OTHER DISCUSSIONS. From the date hereof until the Closing Date,
neither Certified nor either of the Shareholders nor any of their respective
Affiliates, employees, agents representatives shall (a) solicit, encourage,
consider or accept any offer from any Person to acquire all or any portion of
the assets (other than in the case of inventory, in the ordinary course of
business consistent with past practice) of or any interest in Certified, (b)
participate in any negotiations or discussions with any other Person concerning
the sale of all or any portion of the assets (other than in the case of
inventory, in the ordinary course of business consistent with past practice) of
or any interest in Certified, (c) provide any non-public information about
Certified (other than to Certified's lenders or advisors or Xxxxxxxxx and its
agents and consultants as provided herein), (d) enter into any agreement or
commitment (whether or not binding) with respect to any of the foregoing, or (e)
otherwise cooperate in any way with, or assist, facilitate or encourage any
effort by any other person seeking to acquire all or any portion of the assets
(other than in the case of inventory, in the ordinary course of business
consistent with past practice) of or any interest in Certified. Certified and
the Shareholders shall immediately notify Xxxxxxxxx in writing of any such
inquiry or proposal which any of Certified or the Shareholders may receive with
respect to the foregoing transactions, including the terms and identity of the
inquirer or offeror.
6.9 TRADING IN COMMON STOCK OF XXXXXXXXX. Except as otherwise expressly
consented to by Xxxxxxxxx in writing, from the date of this Agreement until the
Closing Date, neither Certified nor either of the Shareholders (nor any
Affiliate thereof) will directly or indirectly purchase or sell (including short
sales) any shares of common stock of Xxxxxxxxx or securities derivative
therefrom in any transactions effected on the Nasdaq Stock Market or otherwise.
6.10 CERTAIN TAX MATTERS.
(a) The books of Certified shall be closed as of the Closing
Date and its income Tax liability for the period ending on the Closing Date
shall be determined in accordance with Treasury Regulation Section 1.1502.76(b),
and no election shall be made under subsection (2)(ii) thereof. The Shareholders
shall duly prepare, or cause to be prepared, and file, or cause to be filed, on
a timely basis, all Tax Returns for income Taxes due and owing by Certified for
any Pre-Closing Period and shall in connection therewith pay any Taxes required
to be paid thereunder in an amount which exceeds the amount reserved therefor on
the Adjusted Closing Date Balance Sheet. The Shareholders shall provide such Tax
Returns to Xxxxxxxxx for review at least sixty (60) days prior to their due date
(including extensions where applicable). The Shareholders shall not file any
amended Tax Returns for Certified without the prior written consent of
Xxxxxxxxx, which will not be unreasonably withheld. Xxxxxxxxx shall not permit
Certified to agree to any extension of the statute of limitations applicable to
a review of the income Taxes payable by Certified on account of any Pre-Closing
Period without the prior written consent of the Shareholders, which shall not be
unreasonably withheld. Xxxxxxxxx shall pay to the Shareholders any Tax refunds
received by Certified for income Taxes paid by Certified on account of any
Pre-Closing Periods.
(b) The Shareholders shall duly prepare, or cause to be
prepared, and file, or cause to be filed, as of the Closing Date, a Tax Return
for sales Tax due and owing to the State of Florida
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by Certified for any Pre-Closing Period and Certified shall in connection
therewith pay any Taxes required to be paid thereunder.
6.11 SHAREHOLDER VOTE. Each of the Shareholders, in executing this
Agreement, consents as a shareholder of Certified to the Acquisition and the
transactions contemplated hereby, and waives notice of any meeting in connection
therewith, and hereby releases and waives all rights with respect to the
Acquisition and the transactions contemplated hereby under the Articles of
Incorporation and/or Bylaws of Certified, applicable state law, and any
agreements relating to the sale, purchase or voting of any capital stock of the
Certified. At Closing, the Shareholder and Certified agree that any and all
agreements relating to the sale, purchase or voting of capital stock of
Certified shall be, and hereby are, terminated.
6.12 DELIVERY OF SHARES, RELEASES AND LANDLORD'S WAIVER. At the
Closing, the Shareholders shall deliver to Xxxxxxxxx (a) all certificates
evidencing the Shares, duly endorsed for transfer to Xxxxxxxxx, free and clear
of any Liens (including, without limitations, any Liens disclosed hereunder or
on any Schedule hereto), (b) a release from each of the Shareholders in such
form as is reasonably satisfactory to Xxxxxxxxx, releasing all claims of any
nature against Certified, if any PROVIDED, HOWEVER, that such releases shall not
cover any rights of the Shareholders against Xxxxxxxxx under this Agreement or
any other agreement executed in connection herewith, (c) a release from the
Partnership, in such form as is reasonably satisfactory to Xxxxxxxxx, releasing
any and all claims which it may have under Section VI of that certain Addendum
to Lease dated January 1, 1996 between the Partnership and Certified, and (d) a
Landlord's Waiver and Agreement executed by the Partnership in the form attached
hereto as EXHIBIT A, with such changes or modifications thereto as may be
reasonably required by Xxxxxxxxx'x lenders.
6.13 RESIGNATIONS. Each of the Shareholders shall resign from their
respective positions as directors, officers and/or employees of Certified at the
Closing.
6.14 PAYOFF AND ESTOPPEL LETTERS. Prior to the Closing, Certified shall
request and deliver to Xxxxxxxxx payoff and estoppel letters from First Union
National Bank and the holders of any Indebtedness of Certified designated by
Xxxxxxxxx, which letters shall contain payoff amounts, per diem interest and
wire transfer instructions.
6.15 CONSULTING AGREEMENTS AND EMPLOYMENT AGREEMENTS. Xxxxxxxxx and
each of the Shareholders shall on the Closing Date enter into a consulting
agreement in the form attached as EXHIBIT B hereto (the "Consulting
Agreements"), and the Shareholders shall provide such assistance as may
reasonably be requested by Xxxxxxxxx in causing each of the employees of
Certified listed on SCHEDULE 6.15 to on the Closing Date enter into employment
agreements with Xxxxxxxxx in the form attached as EXHIBIT C hereto (the
"Employment Agreements").
6.16 LEASE AMENDMENT. On the Closing Date, Certified shall and the
Shareholders shall cause the Partnership to enter into that certain Amendment to
Lease, Landlord's Consent and Tenant Acknowledgment in the form attached as
EXHIBIT D hereto (the "Lease Amendment"), amending the Lease.
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6.17 ESCROW AGREEMENT AND ENVIRONMENTAL ESCROW AGREEMENT. Prior to or
at the Closing, Xxxxxxxxx, the Shareholders and the Escrow Agent shall enter
into (i) an agreement (the "Escrow Agreement") in the form attached as EXHIBIT E
hereto, providing for the retention of the Escrowed Amount by the Escrow Agent
in accordance with the terms of Article IX and the terms thereof, and (ii) an
agreement (the "Environmental Escrow Agreement") in the form attached as EXHIBIT
F hereto, providing for the retention of the Environmental Escrowed Amount by
the Escrow Agent in accordance with the terms of Article IX and the terms
thereof.
6.18 POST-CLOSING ACCESS AND COOPERATION. Xxxxxxxxx shall for a period
of seven (7) years from the date hereof preserve and keep any books and records
of Certified which may be needed by the Shareholders in connection with the
preparation of Tax Returns for, or the prosecution or defense of Tax audits
relating to, Certified for any Pre-Closing Period. After the Closing, Xxxxxxxxx
shall permit the Shareholders reasonable access to all books and records of
Certified as may be necessary or advisable in connection with the preparation of
Tax Returns for, or the prosecution or defense of Tax audits relating to,
Certified or other third party claims or as may otherwise be reasonably
requested by the Shareholders for a reasonable business purpose.
6.19 1998 FINANCIAL STATEMENTS. As soon as reasonably possible
following the date hereof (but in no event less than five (5) business days
prior to the Closing Date), the Shareholders shall deliver to Xxxxxxxxx the
audited financial statements of Certified for the year ended July 31, 1998,
including the notes thereto, audited by the Shareholders' Accountants and
prepared in accordance with GAAP consistently applied (the "1998 Financial
Statements"), which financial statements shall indicate that Certified's
operating profits for the year ended July 31, 1998 were not less than the amount
set forth in SCHEDULE 6.19. On the Closing Date, Certified and the Shareholders
shall deliver to Xxxxxxxxx a certificate, dated as of such date and duly signed
by Certified and each of the Shareholders (in the case of Certified by its
President), in which Certified and the Shareholders, jointly and severally,
shall represent and warrant to Xxxxxxxxx that, notwithstanding any fact or
matter disclosed in SCHEDULE 4.9, (a) the 1998 Financial Statements fairly
present in all material respects the financial position of Certified as of July
31, 1998 and the results of operations for the year ended July 31, 1998, and
have been prepared in accordance with GAAP consistently applied, (b) there are
no extraordinary items of income or expense during the period covered by the
1998 Financial Statements, and (c) the balance sheet included in the 1998
Financial Statements does not reflect any writeup or revaluation increasing the
book value of any assets, except as may specifically be disclosed in the notes
thereto or otherwise reflected therein.
6.20 PERSONAL GUARANTEES. Xxxxxxxxx shall use its best efforts to cause
the release as of the Closing of all guarantees previously made by the
Shareholders (or either of them) on behalf of Certified which are identified on
SCHEDULE 6.20 (the "Shareholder Guarantees") and shall, if requested by the
recipient of any such Shareholder Guarantee, provide a guarantee of Xxxxxxxxx in
replacement of such Shareholder Guarantee. If Xxxxxxxxx is unable to obtain the
release of any Shareholder Guarantees as of the Closing, Xxxxxxxxx shall
indemnify and hold harmless the Shareholders with respect to any obligations of
Certified arising after the Closing for which the Shareholders are responsible
thereunder and Xxxxxxxxx hereby waives any right of set off which it
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may have with respect thereto. If Xxxxxxxxx shall fail to pay any amount due
under the previous sentence, then the Shareholders shall have the right (but not
the obligation), in addition to any other remedies they may have, to deem such
amount to be Shareholder Indemnifiable Damages in accordance with Article IX
hereof (provided that the Shareholder Indemnification Threshold shall not be
applicable to such amount and such amount shall not count against the
Shareholder Indemnification Cap).
6.21 REPAYMENT OF INDEBTEDNESS TO FIRST UNION. Xxxxxxxxx shall on the
Closing Date repay the Indebtedness owed by Certified to First Union National
Bank under that certain First Amended and Restated Revolving Credit and Security
Agreement dated December 13, 1996, as amended (the "First Union Loan"), in an
amount not to exceed the maximum amount set forth therefor on SCHEDULE 4.11(B).
6.22 ACCOUNTS RECEIVABLE. Xxxxxxxxx shall cause Certified to use
commercially reasonable efforts consistent with past practice to collect all
accounts receivables reflected on the Adjusted Closing Date Balance Sheet. Any
payments received by Certified from a customer following the Closing Date shall
be applied to the unpaid invoices issued to such customer in the order in which
such invoices were issued; PROVIDED, HOWEVER, that if any such customer shall
dispute in writing all or a portion of an unpaid invoice (a copy of any
correspondence relating to such dispute shall be provided to the Shareholders),
then any payment thereafter received from such customer shall not be applied to
the disputed invoice or portion thereof, but shall be applied to the balance of
such invoice and then to the next invoice issued to such customer (in each case,
until the dispute with such customer shall be resolved).
6.23 CERTAIN ENVIRONMENTAL MATTERS.
(a) The Shareholders and Xxxxxxxxx each acknowledge receipt of
the Environmental Report. The parties agree that the following actions shall be
taken to remedy certain of the matters identified in the Environmental Report:
(i) The Shareholders shall cause an environmental
assessment to be performed at the Property to fully delineate the
horizontal and vertical extent of impacts of chlorinated solvents and
RCRA metals contamination (if any) to the ground water previously
identified in the Environmental Report or chemical impacts to the soil
and ground water, if any, identified in any subsequent environmental
assessment activities conducted by Certified or the Shareholders (in
the case of Certified, on or prior to the Closing Date) (collectively,
the "Existing Conditions"), and shall prepare a report documenting any
such delineated soil and ground water impacts in accordance with
applicable Environmental Laws.
(ii) Promptly after the date hereof, the Shareholders
shall provide written notice to all applicable regulatory agencies
(collectively, the "Regulatory Agencies") of the Existing Conditions at
the Property.
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(iii) The Shareholders shall cause all assessments,
remedial and monitoring actions as required by the Regulatory Agencies
to be performed to respond to the Existing Conditions until they shall
have been corrected and are no longer in violation of the applicable
cleanup criteria and the Shareholders shall have received written
approval from the Regulatory Agencies that no further action is
required for the Property.
(iv) The Shareholders shall cause the following
corrective actions to be undertaken at the Property: (A) the removal or
sealing-off of each catch basin located within the Property's chemical
operational areas, or such other reasonable actions as shall be
necessary to prevent any chemical or stormwater runoff in such areas
from reaching any such catch basin; (B) installation of secondary
containment for all chemical/waste handling and storage areas; (C)
installation of paving on all pervious surfaces located within the
Property's operation area, after the completion of any assessment
report and the remediation of soil contamination, if any, found on the
Property; and (D) installation of proper identification signage for all
chemical/waste storage areas and implementation of facility procedures
and policies for continued compliance with Environmental Laws.
(v) The Shareholders shall pay for any penalties
arising out of Certified's past operations at the Property without the
required air permits.
(vi) Xxxxxxxxx shall (A) cause an air emissions
evaluation of quantities of volatile organic compounds (VOCs) and
hazardous air pollutants (HAPs) emitted by Certified's operations at
the Property to be conducted and (B) apply for and obtain any federal,
state and/or local permits, licenses and registrations which, based on
such evaluation, are necessary for Certified's operations at the
Property, provided that Xxxxxxxxx shall be responsible for any costs in
excess of Seventy Five Thousand Dollars ($75,000) incurred in
connection therewith.
(vii) Xxxxxxxxx shall implement an Environmental
Safety and Health Program which complies with the Occupational Safety
and Health Administration's General Industry Standard, 29 CFR 1910, to
document the procedures and policies facility-wide for the handling of
chemicals and wastes, provided that Xxxxxxxxx shall be responsible for
any costs in excess of Twenty Five Thousand Dollars ($25,000) incurred
in connection therewith.
(b) Promptly after the date hereof, the Shareholders shall
undertake the actions set forth in items (i) through (v) of Section 6.23(a)
above (collectively, the "Cleanup"). Any written contract entered into by the
Shareholders with the Shareholders' Environmental Consultant or any other party
in connection with the Cleanup (collectively, the "Shareholders' Environmental
Advisors") shall be in writing and shall require that Xxxxxxxxx and Certified be
named as additional insured parties under any policies of liability insurance
maintained by such Shareholders' Environmental Advisor in connection with its
operations, and the Shareholders shall use best efforts
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to cause any such written contract to provide for the indemnification of
Certified and Xxxxxxxxx to the same extent as the indemnification of the
Shareholders. The Shareholders shall provide Xxxxxxxxx with copies of any
correspondence with or reports from any of the Shareholders' Environmental
Advisors and the Regulatory Agencies promptly upon the receipt thereof.
Xxxxxxxxx shall provide the Shareholders and the Shareholders' Environmental
Advisors with reasonable access to the Leased Premises in connection with the
Cleanup. All activities related to assessment and Cleanup shall be scheduled and
coordinated with Xxxxxxxxx in such a manner as to not unreasonably interfere
with Xxxxxxxxx'x or Certified's use of the Property. The Shareholders shall use
their best efforts to cause the Cleanup to be conducted and completed as
promptly as reasonably possible.
(c) Promptly after the date hereof, Xxxxxxxxx shall undertake
the actions set in items (vi) and (vii) of Section 6.23(a) above (collectively,
the "Corrective Actions", and together with the Cleanup, the "Remediation").
Xxxxxxxxx shall use its best efforts to cause the Corrective Actions to be taken
and completed as promptly as reasonably possible.
(d) Any costs and expenses incurred by (i) the Shareholders in
connection with the Remediation activities undertaken by it under Section
6.23(a)(i) through (v) above, (ii) Xxxxxxxxx in connection with the Remediation
activities undertaken by it under Section 6.23(a)(vi) above in an amount not to
exceed Seventy Five Thousand Dollars ($75,000), and (iii) Xxxxxxxxx in
connection with the Remediation activities undertaken by it under Section
6.23(a)(vii) above in an amount not to exceed Twenty Five Thousand Dollars
($25,000), shall, upon the request of the party incurring such costs and
expenses, be paid out of the Environmental Escrowed Amount, in accordance with
the provisions of Section 9.8 of this Agreement and the provisions of the
Environmental Escrow Agreement.
6.24 CERTAIN AUTOMOBILES. Notwithstanding Section 5.1 hereof, Certified
may, prior to the Closing Date, transfer the Designated Automobiles to the
Shareholders at no cost, and Certified may, prior to the Closing, transfer to
any party any other automobile owned by Certified together with any outstanding
obligations therefor, PROVIDED, HOWEVER, that for purposes of calculating the
Actual Purchase Price, the Net Worth of Certified as of the time of the Closing
shall be reduced by the net book value as of the Closing Date of any automobiles
so transferred (other than the Designated Automobiles).
6.25 CONTRIBUTION OF PRIDE INVENTORY. At or prior to the Closing, the
Shareholders shall cause Pride to contribute each item of inventory currently
owned by Pride, as set forth in SCHEDULE 4.15(B) (the "Pride Inventory"), free
and clear of any Liens or other restrictions, to Certified, at no cost to
Certified.
6.26 CERTAIN INSURANCE MATTERS. The Shareholders shall, if and to the
extent requested by Xxxxxxxxx, cause Q.C. Laboratories, Inc. ("Q.C.
Laboratories") to continue to make available to Certified, for up to six (6)
months after the Closing, coverage under any insurance policy or policies owned
by Q.C. Laboratories and made available to Certified as of the date hereof, and
Certified shall reimburse Q.C. Laboratories for Certified's pro-rata share of
the cost to maintain such policy or policies.
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ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF XXXXXXXXX
The obligations of Xxxxxxxxx to effect the Acquisition shall be subject
to the fulfillment at or prior to the Closing Date of the following conditions,
any or all of which may be waived in whole or in part in writing by Xxxxxxxxx:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of Certified and the
Shareholders contained in this Agreement shall be true and correct at and as of
the Closing Date with the same force and effect as though made at and as of that
time except (i) for changes specifically permitted by or disclosed on any
schedule to this Agreement, (ii) that those representations and warranties which
address matters only as of a particular date shall remain true and correct as of
such date, and (iii) for such changes which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect on Certified.
Certified and the Shareholders shall have performed and complied in all material
respects with all of their respective obligations required by this Agreement to
be performed or complied with at or prior to the Closing Date. Certified and the
Shareholders shall have delivered to Xxxxxxxxx a certificate, dated as of the
Closing Date, duly signed (in the case of Certified, by its President and Chief
Financial Officer), certifying that such representations and warranties are true
and correct except for such changes which, individually or in the aggregate,
could not reasonably be expected to have Material Adverse Effect on Certified
and that all such obligations have been complied with and performed in all
material respects.
7.2 NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY. Between the
date hereof and the Closing Date, (i) there shall have been no Material Adverse
Change to Certified, and (ii) none of the properties or assets of Certified
shall have been damaged by fire, flood, casualty, act of God or the public enemy
or other cause, in any instance not covered by insurance, which damage may have
a Material Adverse Effect on Certified, and there shall have been delivered to
Xxxxxxxxx a certificate to that effect, dated the Closing Date and duly signed
(in the case of Certified by its President and Chief Financial Officer) by or on
behalf of Certified and the Shareholders.
7.3 CORPORATE CERTIFICATE. The Shareholders shall have delivered to
Xxxxxxxxx (i) copies of the Articles of Incorporation and Bylaws of Certified as
in effect immediately prior to the Closing Date, (ii) copies of resolutions
adopted by the Board of Directors and the shareholders of Certified authorizing
the transactions contemplated by this Agreement, and (iii) a certificate of good
standing for Certified issued by the Secretary of State of the state of its
incorporation as of a date not more than ten (10) business days prior to the
Closing Date, certified in the case of subsections (i) and (ii) of this Section
as of the Closing Date by the Secretary of Certified as being true, correct and
complete.
7.4 CONSENTS. Xxxxxxxxx shall have received the consents to the
transactions contemplated hereby and waivers of rights to terminate or modify
any of their respective rights or obligations from any Person from whom such
consent or waiver is required under any Contract set
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forth on SCHEDULE 3.4, or under the HSR Act or other law, rule or regulation
(except in the case of such other law, rule or regulation, where the failure to
obtain such consent would not have a Material Adverse Effect on Certified or
Xxxxxxxxx).
7.5 LICENSES. Xxxxxxxxx shall have received all material permits and
licenses that are necessary to own and operate the business of Certified as
currently being conducted.
7.6 NO ADVERSE LITIGATION. There shall not be pending any action or
proceeding by or before any court or other governmental body which shall seek to
restrain, prohibit, invalidate or collect damages which would if determined
adversely to Certified or Xxxxxxxxx have a Material Adverse Effect on Certified.
7.7 HSR ACT WAITING PERIOD. Any applicable HSR Act waiting period shall
have expired or been terminated.
7.8 RESIGNATIONS. The Shareholders shall have delivered the
resignations referred to in Section 6.13 hereof.
7.9 DELIVERY OF SHARES AND MINUTE BOOKS. The Shareholders shall have
delivered to Xxxxxxxxx (i) the original certificates evidencing the Shares,
endorsed in blank and free and clear of any Liens (including without limitation,
any Liens disclosed herein or in the schedules attached hereto), and (ii) the
original corporate minute book and stock transfer ledger of Certified.
7.10 DELIVERY OF PAYOFF AND ESTOPPEL LETTERS. The Shareholders shall
have delivered to Xxxxxxxxx the payoff and estoppel letters referred to in
Section 6.14 hereof.
7.11 DELIVERY OF CONSULTING AGREEMENTS AND EMPLOYMENT AGREEMENTS. The
Shareholders shall have executed and delivered to Xxxxxxxxx the Consulting
Agreements and shall have delivered to Xxxxxxxxx the Employment Agreements
executed by those Persons set forth on SCHEDULE 6.15.
7.12 DELIVERY OF LEASE AMENDMENT. The Shareholders shall have delivered
to Xxxxxxxxx the Lease Amendment fully executed by Certified and the
Partnership.
7.13 DELIVERY OF ESCROW AGREEMENT AND ENVIRONMENTAL ESCROW AGREEMENT.
The Shareholders and the Escrow Agent shall have executed and delivered to
Xxxxxxxxx the Escrow Agreement and the Environmental Escrow Agreement.
7.14 DELIVERY OF 1998 FINANCIAL STATEMENTS AND CERTIFICATE. The
Shareholders shall have delivered to Xxxxxxxxx the 1998 Financial Statements,
which financial statements shall indicate that Certified's operating profits for
the year ended July 31, 1998 were not less than the amount set forth in SCHEDULE
6.19, and Certified and the Shareholders shall have executed and delivered the
certificate referred to in Section 6.19 hereof.
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7.15 CONTRIBUTION OF PRIDE INVENTORY. The Pride Inventory shall have
been contributed to Certified pursuant to the terms of Section 6.25 hereof.
7.16 DELIVERY OF RELEASES AND LANDLORD'S WAIVER. The Shareholders shall
have delivered to Xxxxxxxxx the releases and the Landlord's Waiver and Agreement
referred to in Section 6.12 hereof.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF
THE SHAREHOLDERS
The obligation of the Shareholders to effect the Acquisition shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions, any or all of which may be waived in whole or in part in writing by
the Shareholders:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of Xxxxxxxxx contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date with the same force and effect as though made at and as of that
time except (i) for changes specifically permitted by or disclosed pursuant to
this Agreement, and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of such
date; PROVIDED, HOWEVER, that if any such representation or warranty is already
qualified by materiality, for purposes of determining whether this condition has
been satisfied, such representation or warranty as so qualified shall be true
and correct in all respects. Xxxxxxxxx shall have performed and complied in all
material respects with all of its obligations required by this Agreement to be
performed or complied with by it at or prior to the Closing Date. Xxxxxxxxx
shall have delivered to the Shareholders a certificate, dated as of the Closing
Date, and signed by its President and Chief Financial Officer, certifying that
such representations and warranties are true and correct in all material
respects and that all such obligations have been complied with and performed in
all material respects.
8.2 CORPORATE CERTIFICATE. Xxxxxxxxx shall have delivered to the
Shareholders (i) copies of resolutions adopted by the Board of Directors of
Xxxxxxxxx authorizing the transactions contemplated by this Agreement, and (ii)
a certificate of good standing for Xxxxxxxxx issued by the Secretary of State of
the state of its incorporation as of a date not more than ten (10) business days
prior to the Closing Date, certified in the case of subsection (i) of this
Section as of the Closing Date by the Secretary of Xxxxxxxxx as being true,
correct and complete.
8.3 PURCHASE PRICE. Xxxxxxxxx shall have made the Closing Date Payment
in respect of the Purchase Price.
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8.4 NO ORDER OR INJUNCTION. No court of competent jurisdiction or other
governmental body shall have issued or entered any order or injunction
restraining or prohibiting the transactions contemplated hereby, which remains
in effect at the time of Closing.
8.5 HSR ACT WAITING PERIOD. Any applicable HSR Act waiting period shall
have expired or been terminated.
8.6 ESCROW AGREEMENT AND ENVIRONMENTAL ESCROW AGREEMENT. Xxxxxxxxx and
the Escrow Agent shall have executed and delivered to the Shareholders the
Escrow Agreement and the Environmental Escrow Agreement, and Xxxxxxxxx shall
have delivered the Escrowed Amount and the Environmental Escrow Amount in
accordance therewith.
8.7 DELIVERY OF CONSULTING AGREEMENTS. Xxxxxxxxx shall have delivered
to the Shareholders the Consulting Agreements.
8.8 PAY OFF OF FIRST UNION LOAN. Xxxxxxxxx shall have repaid the First
Union Loan.
ARTICLE IX
INDEMNIFICATION
9.1 AGREEMENT BY THE SHAREHOLDERS TO INDEMNIFY. The Shareholders
jointly and severally (except that the Shareholders shall be severally, but not
jointly, liable for any breach of Section 6.6) agree to indemnify and hold
Xxxxxxxxx and each of the Xxxxxxxxx Companies and each of their respective
officers, directors, employees, attorneys and Affiliates (each a "Xxxxxxxxx
Indemnified Party" and collectively the "Xxxxxxxxx Indemnified Parties")
harmless from and against the aggregate of all expenses, losses, costs,
deficiencies, liabilities and damages (including, without limitation, reasonable
counsel and paralegal fees and expenses) incurred or suffered by any of the
Xxxxxxxxx Indemnified Parties arising out of or resulting from (i) any breach of
a representation or warranty made by Certified or the Shareholders (or either of
them) in or pursuant to this Agreement (including the schedules hereto and any
certificates executed and delivered by Certified or the Shareholders (or either
of them) pursuant to or in connection herewith), (ii) any breach of a covenant
or agreement made by Certified or the Shareholders (or either of them) in or
pursuant to this Agreement, (iii) any inaccuracy in any statement made by
Certified or the Shareholders (or either of them) in any certificate executed
and delivered by Certified or the Shareholders (or either of them) pursuant to
or in connection with this Agreement, (iv) any liability of Certified or the
Shareholders (or either of them) for income Taxes arising from or relating to
any Pre-Closing Period (whether or not disclosed in this Agreement or disclosed,
referenced or incorporated by reference in any of the schedules hereto) in an
amount which exceeds the amount set forth or reserved therefor in the Adjusted
Closing Date Balance Sheet, (v) any Environmental Liabilities (whether or not
disclosed in this Agreement or disclosed, referenced or incorporated by
reference in any of the schedules hereto) arising from or relating to any facts,
circumstances or events occurring on or prior to the Closing Date with respect
to Certified or its business or the Property, except for any Environmental
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Liabilities arising from any change in any law, rule or regulation following the
Closing Date, (vi) any claims of any third parties arising from or relating to
any facts, circumstances or events occurring on or prior to the Closing Date
with respect to Certified or its business other than those (a) arising from a
change in any law, rule or regulation following the Closing Date, (b) set forth
or reserved for on the Adjusted Closing Date Balance Sheet, or (c) expressly and
specifically disclosed in this Agreement or any of the schedules hereto, and
(vii) any claims, obligations or liabilities arising from or relating to the
business and operations of QC Metallurgical, Inc. (collectively, "Xxxxxxxxx
Indemnifiable Damages"). Notwithstanding the foregoing provisions or anything
contained herein to the contrary, (a) no claim for Xxxxxxxxx Indemnifiable
Damages shall be asserted by the Xxxxxxxxx Indemnified Parties until the
aggregate of all Xxxxxxxxx Indemnifiable Damages exceeds Three Hundred Thousand
Dollars ($300,000) (the "Xxxxxxxxx Indemnification Threshold"), at which time
the Xxxxxxxxx Indemnified Parties shall only be entitled to the aggregate amount
by which the Xxxxxxxxx Indemnifiable Damages exceeds the Xxxxxxxxx
Indemnification Threshold, PROVIDED, HOWEVER, that the Xxxxxxxxx Indemnification
Threshold shall not apply to (i) any Xxxxxxxxx Indemnifiable Damages arising
under subsections (iv) or (vii) of this Section 9.1 above, (ii) a breach of any
covenant or agreement of Shareholders contained in Article II, Section 6.6,
Section 6.10 or Section 6.23 hereof, or (iii) any Xxxxxxxxx Indemnifiable
Damages arising with subsection (v) of this Section 9.1 which constitute
Remediation Costs, and (b) the total Xxxxxxxxx Indemnifiable Damages for which
the Shareholders shall be liable hereunder shall not exceed an aggregate of
Eight Million Dollars ($8,000,000) (the "Xxxxxxxxx Indemnification Cap"),
PROVIDED, HOWEVER, that the Xxxxxxxxx Indemnification Cap shall not apply to and
there shall be no limitation or restriction whatsoever on the liability of the
Shareholders under this Article IX for Xxxxxxxxx Indemnifiable Damages with
respect to or arising from any one or more of the following, and no Xxxxxxxxx
Indemnifiable Damages arising therefrom shall be included in determining whether
the Xxxxxxxxx Indemnification Cap has been met: (i) a breach of any one or more
of the representations or warranties set forth in the first or last sentence of
Section 4.1, or in Section 4.2, Section 4.3, Section 4.4, Section 4.5, Section
4.13 or the sixth sentence of Section 4.15(a), (ii) any Xxxxxxxxx Indemnifiable
Damages arising under subsections (iv), (v) or (vii) of this Section 9.1 above,
(iii) any act of fraud in connection with the execution, delivery or performance
of this Agreement, including, without limitation, any fraudulent representation
or warranty made in or pursuant to this Agreement, or (iv) a breach of any
covenant or agreement contained in Article II or Section 6.6, Section 6.10 or
Section 6.23 hereof.
9.2 AGREEMENT BY XXXXXXXXX TO INDEMNIFY. Xxxxxxxxx agrees to indemnify
and hold the Shareholders and their respective heirs and personal
representatives (each a "Shareholder Indemnified Party" and together the
"Shareholder Indemnified Parties") harmless from and against the aggregate of
all expenses, losses, costs, deficiencies, liabilities and damages (including,
without limitation, reasonable counsel and paralegal fees and expenses) incurred
or suffered by any of the Shareholder Indemnified Parties arising out of or
resulting from (i) any breach of a representation or warranty made by Xxxxxxxxx
in or pursuant to this Agreement (including the schedules hereto and any
certificates executed and delivered by Xxxxxxxxx pursuant to or in connection
herewith), (ii) any breach of a covenant or agreement made by Xxxxxxxxx in or
pursuant to this Agreement, (iii) any inaccuracy in any statement made by
Xxxxxxxxx in any certificate executed and delivered by Xxxxxxxxx pursuant to or
in connection with this Agreement, (iv) any liability of Certified for income
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Taxes arising from or relating to any Post-Closing Tax Period, and (v) any
claims of any third parties arising from or relating to any facts, circumstances
or events occurring after the Closing Date with respect to Certified or its
business (collectively, "Shareholder Indemnifiable Damages"). Notwithstanding
the foregoing provisions or anything contained herein to the contrary, (a) no
claim for Shareholder Indemnifiable Damages shall be asserted by the Shareholder
Indemnified Parties until the aggregate of all Shareholder Indemnifiable Damages
exceeds Three Hundred Thousand Dollars ($300,000) (the "Shareholder
Indemnification Threshold"), at which time the Shareholder Indemnified Parties
shall only be entitled to the aggregate amount by which the Shareholder
Indemnifiable Damages exceeds the Shareholder Indemnification Threshold,
PROVIDED, HOWEVER, that, the Shareholder Indemnification Threshold shall not
apply to (i) any Shareholder Indemnifiable Damages arising under subsection (iv)
of this Section 9.2 above, (ii) a breach of any covenant or agreement by
Xxxxxxxxx contained in Article II or Sections 6.10, 6.18, 6.20, 6.21 or 6.23
hereof, (iii) any obligation to the Shareholders or any Familial Affiliates
reflected on the Adjusted Closing Date Balance Sheet, or (iv) any obligations to
make payments under the Lease from and after the Closing Date, and (b) the total
Shareholder Indemnifiable Damages for which Xxxxxxxxx shall be liable hereunder
shall not exceed an aggregate of Eight Million Dollars ($8,000,000) (the
"Shareholder Indemnification Cap"), PROVIDED, HOWEVER, that the Shareholder
Indemnification Cap shall not apply to and there shall be no limitation or
restriction whatsoever on the liability of Xxxxxxxxx under this Article IX for
Shareholder Indemnifiable Damages with respect to or arising from any one or
more of the following, and no Shareholder Indemnifiable Damages arising
therefrom shall be included in determining whether the Shareholder
Indemnification Cap has been met: (i) a breach of any one or more of the
representations or warranties set forth in Section 3.1, Section 3.2 or Section
3.3, (ii) any Xxxxxxxxx Indemnifiable Damages arising under subsection (iv) of
this Section 9.2 above, (iii) any act of fraud in connection with the execution,
delivery or performance of this Agreement including, without limitation, any
fraudulent representation or warranty made in or pursuant to this Agreement,
(iv) a breach of any covenant or agreement contained in Article II or Sections
6.10, 6.18, 6.20, 6.21 or 6.22 hereof, (v) any obligation to the Shareholders or
any Familial Affiliates reflected on the Adjusted Closing Date Balance Sheet,
and (vi) any obligations to make payments under the Lease from and after the
Closing Date.
9.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties and each of the indemnities set forth in
subsections (i), (ii), (iii) and (vi) of the first sentence of Section 9.1 and
subsections (i), (ii), (iii) and (v) of the first sentence of Section 9.2 made
by the Shareholders or Xxxxxxxxx in this Agreement or pursuant hereto shall
survive the closing of the transactions contemplated hereby for a period of two
(2) years following the Closing Date; PROVIDED, HOWEVER, that (i) the
representations and warranties set forth Section 3.1, and in Section 3.2 and
Section 3.3, the first and last sentence of Section 4.1, and in Section 4.2,
Section 4.3, Section 4.4, Section 4.5 and the sixth sentence of Section 4.15(a)
and the indemnities set forth in subsections (vii) of the first sentence of
Section 9.1 shall survive indefinitely, (ii) the representations and warranties
set forth in Section 4.19 and the indemnities set forth in subsection (iv) of
the first sentence of Section 9.1 and subsection (iv) of the first sentence of
Section 9.2 shall expire thirty (30) days following the time the latest
applicable statute of limitations expires for the enforcement by an applicable
Governmental Authority or any other Person of any remedy with respect to a
violation of or the subject matter covered by such representations and
warranties and (iii) the representations
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and warranties set forth in SECTION 4.13 and the indemnities set forth in
subsection (v) of the first sentence of Section 9.1 shall survive the closing of
the transactions contemplated hereby for a period of six (6) years following the
Closing Date. No claim for the recovery of any Xxxxxxxxx Indemnifiable Damages
or Shareholder Indemnifiable Damages with respect to any of the representations,
warranties and indemnities set forth in this Agreement may be asserted by any of
the Xxxxxxxxx Indemnified Parties or by the Shareholder Indemnified Parties
after the survival period for such representations, warranties and indemnities
shall expire in accordance with the terms of this Agreement; PROVIDED, HOWEVER,
that claims for Xxxxxxxxx Indemnifiable Damages or Shareholder Indemnifiable
Damages first asserted in writing within the applicable period shall not
thereafter be barred. Notwithstanding any knowledge of facts determined or
determinable by any party by investigation, each party shall have the right to
fully rely on the representations, warranties, covenants, agreements and
indemnities of the other parties contained in this Agreement or in any other
documents or papers delivered in connection herewith. Each representation,
warranty, covenant, agreement and indemnity of the parties contained in this
Agreement is independent of each other representation, warranty, covenant,
agreement and indemnity.
9.4 THIRD PARTY ACTIONS.
(a) For the purpose of this Section 9.4, the term
"Indemnifiable Damages" means Xxxxxxxxx Indemnifiable Damages or Shareholder
Indemnifiable Damages, as the context requires, the term "Indemnified Party"
means the Xxxxxxxxx Indemnified Parties or the Shareholder Indemnified Parties,
as the context requires, and the term "Indemnifying Party" means the party
(Xxxxxxxxx or the Shareholders) against whom a claim for Indemnifiable Damages
is to be made.
(b) If any claim or action shall be commenced or asserted
against an Indemnified Party which, if successful, could give rise to
Indemnifiable Damages, the Indemnified Party shall give the Indemnifying Party
prompt written notice of such claim or action (provided that the failure to give
such notice shall not relieve the Indemnifying Party of its indemnification
obligations except where, and solely to the extent that, the failure to provide
such notice actually and materially prejudices the rights of the Indemnifying
Party). Upon receipt of written notice of any such claim or action, the
Indemnifying Party shall have the option to assume the defense thereof by
providing written notice of such election to the Indemnified Party within ten
(10) business days after receipt of written notice of any such claim or action
(an "Indemnification Notice"). If the Indemnifying Party shall elect to assume
the defense of any claim or action by the delivery of an Indemnification Notice
within such ten (10) business day period, then, subject to the terms set forth
below, (i) the Indemnifying Party shall have the right to assume and control the
defense of the claim or action , (ii) the Indemnified Party may at its own cost
and expense participate in (but not control) the defense thereof, and (iii) the
Indemnifying Party shall be fully responsible (with no reservation of rights)
for all Indemnifiable Damages relating to the claim or action. If the
Indemnifying Party states in an Indemnification Notice that it will not assume
the defense of the claim or action, or if the Indemnifying Party fails to
provide the Indemnified Party with an Indemnification Notice within such ten
(10) business day period, then (i) the Indemnified Party shall have the right to
assume and control the defense of the claim or action, (ii) the Indemnifying
Party may at its own cost and expense participate in (but not control) the
defense thereof, and (iii) the Indemnifying Party shall be
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responsible for any Indemnifiable Damages (including, without limitation, the
costs incurred by the Indemnified Party in the defense thereof) relating to the
claim or action subject to and in accordance with the terms and conditions set
forth in this Agreement. If the Indemnifying Party provides, within such ten
(10) business day period, an Indemnification Notice stating that it shall assume
the defense of the claim or action, then the Indemnifying Party shall, at its
own cost and expense, diligently defend such claim or action, and the
Indemnifying Party will not be liable to the Indemnified Party pursuant to the
provisions of Sections 9.1 or 9.2 for any related counsel and paralegal fees and
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation, unless (i) the
defendants in any action include both the Indemnified Party and the Indemnifying
Party and there is a conflict of interest as reasonably determined by counsel
for the Indemnifying Party which would prevent such counsel from also
representing the Indemnified Party, (ii) the Indemnifying Party shall not have
employed counsel reasonably satisfactory to the Indemnified Party to represent
the Indemnified Party within a reasonable time after notice of the commencement
of the action, or shall have failed to diligently defend such action, or (iii)
the Indemnifying Party has authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. Notwithstanding
anything to the contrary in this Section 9.4, the Indemnifying Party shall have
no right to settle or compromise any action for which it has assumed the defense
to the extent the settlement or compromise provides for any injunctive or other
equitable relief against the Indemnified Party or otherwise provides for any
continuing obligations of any nature against the Indemnified Party or loss of
rights of the Indemnified Party, and nothing stated in this Section 9.4 shall
otherwise affect the Indemnifying Party's obligation to pay the Indemnified
Party all Indemnifiable Damages (other than such related counsel and paralegal
fees and expenses) pursuant to Section 9.1 or Section 9.2. With respect to any
such third party action, the parties agree to provide each other with all
material information that they request relating to the handling of such matter.
The parties shall reasonably cooperate with one another in furtherance of
resolving any claims for which indemnification is sought hereunder. No
Indemnified Party shall admit liability with respect to, or settle, compromise,
pay or discharge, any Indemnifiable Claim without the prior written consent of
the Indemnifying Party, so long as the Indemnifying Party is diligently
defending same in accordance with this Section 9.4. An Indemnified Party shall
not unreasonably withhold its consent to a settlement of a matter.
9.5 SET OFF AGAINST THE ESCROWED AMOUNT. As security for Xxxxxxxxx'x
rights under Section 9.1 hereof, at Closing Xxxxxxxxx shall deliver the Escrowed
Amount to the Escrow Agent. The Shareholders acknowledge that for tax purposes
Xxxxxxxxx shall be deemed the owner of the Escrowed Amount until disbursed in
accordance with the provisions of the Escrow Agent, and each of Xxxxxxxxx and
the Shareholders shall under the terms of the Escrow Agreement grant each other
reciprocal security interests in and to the Escrowed Amount and all interest
that may accrue on the Escrowed Amount. Any claims by Xxxxxxxxx for Xxxxxxxxx
Indemnifiable Damages shall first be satisfied out of the Escrowed Amount before
any payments shall be required to be made by the Shareholders. Xxxxxxxxx may
claim against the Escrowed Amount any Indemnifiable Damages for which the
Shareholders (or either of them) are responsible pursuant to this Agreement,
subject, however, to the following terms and conditions:
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(a) Xxxxxxxxx shall give written notice to the Escrow Agent
and the Shareholders of any claim for Indemnifiable Damages or any other damages
hereunder, which notice shall set forth (i) the amount of Indemnifiable Damages
which Xxxxxxxxx claims to have sustained by reason thereof, and (ii) the basis
of the claim therefor in reasonable particularity, including the Section of this
Agreement (or other document or instrument) under which such claim arises;
(b) The Escrow Agent shall deliver to Xxxxxxxxx the actual
amount of Indemnifiable Damages sustained by Xxxxxxxxx on the later to occur of
the expiration of ten (10) business days from the date of such notice (the
"Notice of Contest Period") or, if such claim is contested, the date the dispute
is resolved in favor of Xxxxxxxxx, and such amount, if any, shall be charged
against and reduce the Escrowed Amount; and
(c) If, prior to the expiration of the Notice of Contest
Period, the Shareholders shall notify the Escrow Agent and Xxxxxxxxx in writing
of an intention to dispute the claim and if such dispute is not resolved within
ninety (90) days after expiration of such period, then Xxxxxxxxx may take any
action or exercise any remedy available to it by appropriate legal proceedings
to enforce its rights and remedies hereunder.
9.6 DELIVERY OF ESCROWED AMOUNT. The Escrow Agent shall deliver to the
Shareholders no later than ten (10) business days following the two (2) year
anniversary of the Closing Date any Escrowed Amount then held by it unless there
then remains unresolved any claim for Xxxxxxxxx Indemnifiable Damages or other
damages hereunder as to which written notice has been given, in which event the
Escrow Agent shall deliver to the Shareholders any Escrowed Amount in excess of
the maximum amount of Xxxxxxxxx Indemnifiable Damages at issue in connection
with any then unresolved claim, and any Escrowed Amount remaining on deposit
after such claim shall have been satisfied or resolved shall be returned to the
Shareholders promptly after the time of satisfaction.
9.7 NO BAR; WAIVER. If the Escrowed Amount is insufficient to set off
any claim for Xxxxxxxxx Indemnifiable Damages made hereunder (or has been
delivered to the Shareholders prior to the making or resolution of such claim),
then Xxxxxxxxx may take any action or exercise any remedy available to it by
appropriate legal proceedings to collect the Xxxxxxxxx Indemnifiable Damages to
which it may be entitled under Section 9.1, subject to the limitations contained
in this Article IX.
9.8 SET OFF AGAINST THE ENVIRONMENTAL ESCROWED AMOUNT.
(a) As security for the Shareholders' obligations and for
Xxxxxxxxx'x rights under Section 6.23 hereof, at Closing Xxxxxxxxx shall deliver
the Environmental Escrowed Amount to the Escrow Agent. The Shareholders
acknowledge that for tax purposes Xxxxxxxxx shall be deemed the owner of the
Environmental Escrowed Amount until disbursed in accordance with the provisions
of the Environmental Escrow Agreement, and each of Xxxxxxxxx and the
Shareholders shall under the terms of the Environmental Escrow Agreement grant
each other reciprocal security interests in and to the Environmental Escrowed
Amount and all interest that may accrue on the Environmental Escrowed Amount.
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(b) Subject to the terms of Section 6.23(d), either the
Shareholders or Xxxxxxxxx may from time to time request that portions of the
Environmental Escrowed Amount be disbursed to satisfy amounts paid or payable to
conduct the Remediation activities to be undertaken by them under Section
6.23(a), (collectively, "Remediation Costs"). The Shareholders shall give
written notice to Xxxxxxxxx, and Xxxxxxxxx shall give written notice to the
Shareholders (in either case, an "Environmental Claim Notice"), of any
Remediation Costs which the party providing such notice (the "Notifying Party")
claims to have incurred, which notice shall include (i) the amount of
Remediation Costs which the Notifying Party claims to have incurred, (ii) a
description of the services or work performed or other claim which gave rise to
such Remediation Costs, (iii) a copy of the invoice delivered to the Notifying
Party, if applicable, for such Remediation Costs and (iv) a proposed form of
joint instruction letter to be signed by authorized representatives of each of
Xxxxxxxxx and the Shareholders, instructing the Escrow Agent to disburse that
portion of the Environmental Escrowed Amount sufficient to satisfy the claimed
Remediation Costs. Within fifteen (15) business days of receipt of an
Environmental Claim Notice, the receiving party shall either (i) deliver to the
Notifying Party the joint instruction letter included in the Environmental Claim
Notice, signed by a person authorized to give disbursement instructions pursuant
to the terms of the Environmental Escrow Agreement, or (ii) advise the Notifying
Party in writing of any objection it may have to the Notifying Party's claim for
recovery of Remediation Costs, in which case Xxxxxxxxx and the Shareholders
shall endeavor to reach agreement within the twenty (20) business day period
following such notice of objection. If the parties shall reach agreement within
such twenty (20) day period, the parties shall, if appropriate, promptly execute
and deliver to the Escrow Agent a joint instruction letter authorizing the
disbursement of the mutually agreed upon amount of Remediation Costs incurred or
suffered by the Notifying Party. If the parties are unable to reach agreement
within such twenty (20) day period, then the Notifying Party may take any action
or exercise any remedy available to it by appropriate legal proceedings to
collect any Remediation Costs to which it may be entitled under this Agreement.
The Escrow Agent shall deliver to the party specified in any joint instruction
letter delivered pursuant hereto the amount of Remediation Costs no later than
(10) business days from its receipt of any such joint instruction letter, and
such amount shall be charged against and reduce the Environmental Escrowed
Amount.
(c) Within ten (10) business days following the completion of
the Remediation, Xxxxxxxxx shall deliver to the Escrow Agent written
instructions, authorizing the Escrow Agent to release to the Shareholders the
balance, if any, of the Environmental Escrowed Amount, and all interest earned
thereon; PROVIDED, HOWEVER, that if there then remains unresolved any claim by
Xxxxxxxxx for disbursement of any portion of the Environmental Escrowed Amount
as to which written notice has been given, then Xxxxxxxxx shall deliver to the
Escrow Agent written instructions authorizing the Escrow Agent to release to the
Shareholders any Environmental Escrowed Amount in excess of the maximum amount
of costs and expenses at issue in connection with any then unresolved claim for
Remediation Costs, and, after such claim shall have been satisfied or resolved,
Xxxxxxxxx shall deliver to the Escrow Agent written instructions authorizing the
Escrow Agent to release to the Shareholders any Environmental Escrowed Amount
then remaining on deposit, and all interest thereon.
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(d) If Xxxxxxxxx'x Environmental Consultant and the
Shareholders' Environmental Consultant shall at any time after the Regulatory
Agencies' approval of the remediation plan mutually agree that the total amount
of Remediation Costs likely to be incurred by the Shareholders and Xxxxxxxxx,
together with the total amount of any Remediation Costs which shall at such time
have been incurred but not yet paid out of the Environmental Escrowed Amount, is
less than the portion of the Environmental Escrowed Amount then remaining, then
Xxxxxxxxx shall deliver to the Escrow Agent written instructions authorizing the
Escrow Agent to release to the Shareholders any such excess amount.
(e) Notwithstanding anything to the contrary contained in this
Agreement, if the Environmental Escrowed Amount is insufficient to set off any
claim for Remediation Costs, then any unpaid Remediation Costs which Xxxxxxxxx
shall be entitled to be paid shall be deemed Xxxxxxxxx Indemnifiable Damages,
and Xxxxxxxxx may take any action or exercise any remedy available to it by
appropriate legal proceedings to collect such Xxxxxxxxx Indemnifiable Damages to
which it may be entitled under Section 9.1 (provided that the Xxxxxxxxx
Indemnification Threshold shall not be applicable to any such amount and such
amount shall not count against the Xxxxxxxxx Indemnification Cap).
9.9 ADJUSTMENT TO PURCHASE PRICE. All set offs, recoupments and
payments for Indemnifiable Damages made pursuant to this Article shall be
treated as adjustments to the Purchase Price.
9.10 WAIVER. The Shareholders hereby waive any right to contribution or
any similar rights they may have against Certified as a result of their
agreement to indemnify Xxxxxxxxx under this Article IX.
9.11 REDUCTION FOR TAX BENEFIT. To the extent that any Xxxxxxxxx
Indemnified Party shall receive any tax benefit as a result of any Xxxxxxxxx
Indemnifiable Damages, the amount payable by the Shareholders on account of such
Xxxxxxxxx Indemnifiable Damages shall be reduced by the amount of the tax
benefit actually received by the Xxxxxxxxx Indemnified Party (assuming the
application of the highest marginal State and Federal tax rates applicable to
the Xxxxxxxxx Indemnified Party in the year in which such tax benefit is
received). To the extent that any Shareholder Indemnified Party shall receive
any tax benefit as a result of any Shareholder Indemnifiable Damages, the amount
payable by Xxxxxxxxx on account of such Shareholder Indemnifiable Damages shall
be reduced by the amount of the tax benefit actually received by the Shareholder
Indemnified Party (assuming the application of the highest marginal State and
Federal tax rates applicable to the Shareholder Indemnified Party in the year in
which such tax benefit is received).
9.12 REDUCTION FOR INSURANCE PROCEEDS. To the extent that any Xxxxxxxxx
Indemnified Party shall receive payment under any insurance policies on account
of damages which constitute Xxxxxxxxx Indemnifiable Damages which are payable to
the Xxxxxxxxx Indemnified Party under the terms of Section 9.1, (a) if the
Shareholders shall have paid the Xxxxxxxxx Indemnified Party under this Article
IX on account of such Xxxxxxxxx Indemnifiable Damages, then such Xxxxxxxxx
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Indemnified Party shall repay (or if it shall fail to repay, then Xxxxxxxxx
shall pay) to the Shareholders the amount of such payment up to the amount
actually received by the Xxxxxxxxx Indemnified Party under such insurance
policies (net of any reasonable costs incurred by the Xxxxxxxxx Indemnified
Party in collecting under such insurance policies), (b) if the Shareholders
shall be required to pay (but shall not yet have paid) the Xxxxxxxxx Indemnified
Party under this Article IX on account of such Xxxxxxxxx Indemnifiable Damages,
then Xxxxxxxxx and the Xxxxxxxxx Indemnified Party shall credit to the
Shareholders the amount of such payment up to the amount actually received by
the Xxxxxxxxx Indemnified Party under such insurance policies (net of any
reasonable costs incurred by the Xxxxxxxxx Indemnified Party in collecting under
such insurance policies), and (c) any such amount repaid, paid or credited to
the Shareholders shall not be deemed Xxxxxxxxx Indemnifiable Damages for
purposes of calculating whether the Xxxxxxxxx Indemnification Threshold shall
have been met, and shall not count against the Xxxxxxxxx Indemnification Cap for
purposes of determining whether the Xxxxxxxxx Indemnification Cap shall have
been met. To the extent that any Shareholder Indemnified Party shall receive
payment under any insurance policies on account of damages which constitute
Shareholder Indemnifiable Damages which are payable to the Shareholder
Indemnified Party under the terms of Section 9.2, (x) if Xxxxxxxxx shall have
paid the Shareholder Indemnified Party under this Article IX on account of such
Shareholder Indemnifiable Damages, then such Shareholder Indemnified Party shall
repay (or if it shall fail to repay, then the Shareholder shall pay) to
Xxxxxxxxx the amount of such payment up to the amount actually received by the
Shareholder Indemnified Party under such insurance policies (net of any costs
incurred by the Shareholder Indemnified Party in collecting under such insurance
policies), (y) if Xxxxxxxxx shall be required to pay (but shall not yet have
paid) the Shareholder Indemnified Party under this Article IX on account of such
Shareholder Indemnifiable Damages, then the Shareholder and the Shareholder
Indemnified Party shall credit to Xxxxxxxxx the amount of such payment up to the
amount actually received by the Shareholder Indemnified Party under such
insurance policies (net of any costs incurred by the Shareholder Indemnified
Party in collecting under such insurance policies), and (z) any such amount
repaid, paid or credited to Xxxxxxxxx shall not be deemed Shareholder
Indemnification Damages for purposes of calculating whether the Shareholder
Indemnification Threshold shall have been met and shall not count against the
Shareholder Indemnification Cap for purposes of determining whether the
Shareholder Indemnification Cap shall have been met. Notwithstanding anything to
the contrary set forth herein, no party required to make a payment under
Sections 9.1 or 9.2 of this Agreement shall be permitted to delay making such
payment when due on account of the availability of any insurance policies to the
party to which such payment is to be made. Each party shall use its best efforts
to avail itself of any insurance provisions which inure to such party's benefit
in connection with any claims for which indemnification is sought hereunder.
9.13 EXCLUSIVE REMEDY. The remedies provided herein shall,
notwithstanding any provisions contained herein to the contrary, be the sole
remedies for Xxxxxxxxx Indemnifiable Damages and Shareholders Indemnifiable
Damages, but shall not preclude any party from asserting any other rights or
seeking any other remedies against each other for fraud or from seeking any
equitable relief.
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ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by mutual written consent of all of the parties; or
(b) by Xxxxxxxxx in the event of a material breach by
Certified or either of the Shareholders of any provision of this Agreement which
material breach is not cured within thirty (30) days of the Shareholders'
receipt of written notice thereof from Xxxxxxxxx or which breach by its nature
cannot be cured prior to Closing; or
(c) by the Shareholders in the event of a material breach by
Xxxxxxxxx of any provision of this Agreement which material breach is not cured
within thirty (30) days of Xxxxxxxxx'x receipt of written notice thereof from
the Shareholders or which breach by its nature cannot be cured prior to Closing;
or
(d) by any party in the event that the Closing shall not have
occurred on or prior to May 15, 1999, PROVIDED, HOWEVER, that the failure of the
Closing to occur by such date shall not have been the result of the failure of
the party seeking to terminate this Agreement to perform or fulfill any of its
obligations hereunder; and PROVIDED FURTHER that any party shall have the right
to extend such date for up to an additional thirty (30) days upon written notice
to the other parties in the event that the only then-unsatisfied condition to
Closing is the expiration or termination of any applicable HSR Act waiting
period as required pursuant to Sections 7.7 and 8.5.
10.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to Section 10.1, this Agreement (other than the provisions of
Section 6.7 and Articles IX and XI, which shall survive any expiration or
termination of this Agreement) shall forthwith become void and of no further
force and effect and the parties shall be released from any and all obligations
and liabilities hereunder; PROVIDED, HOWEVER, that (a) nothing herein shall
relieve any party from liability for fraud or any act in the nature of fraud
committed in connection with any of its representations, warranties, covenants
or agreements set forth in this Agreement, (b) nothing herein shall relieve any
party from any liability for any breach or violation hereof, and (c) the
Confidentiality Agreement shall survive any termination hereof.
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ARTICLE XI
GENERAL PROVISIONS
11.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall designate
in writing to the other party):
(a) IF TO XXXXXXXXX TO:
Xxxxxxxxx Industries, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Zivi X. Xxxxxx, President
Telecopy: (000) 000-0000
WITH A COPY TO:
Akerman, Senterfitt & Xxxxxx, P.A.
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. March, Esq.
Telecopy: (000) 000-0000
(b) IF TO CERTIFIED (PRIOR TO CLOSING) AND/OR THE SHAREHOLDERS
TO:
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000-0000
Telecopy: (000) 000-0000
WITH A COPY TO:
Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx &
Xxxxxxxxx, P.A.
Museum Tower
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
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Notice shall be deemed given on the date sent if sent by facsimile transmission
and on the date delivered (or the date of refusal of delivery) if sent by
overnight delivery or certified or registered mail.
11.2 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules attached hereto) and the other documents delivered at the Closing
pursuant hereto contains the entire understanding of the parties in respect of
its subject matter and supersedes all prior agreements and understandings (oral
or written) between or among the parties with respect to such subject matter.
The Exhibits and Schedules constitute a part hereof as though set forth in full
above.
11.3 EXPENSES. Except as otherwise provided herein, the Shareholders
shall pay their own and Certified's fees and expenses, including accounting and
counsel fees, incurred in connection with this Agreement and the transactions
contemplated hereby, and Xxxxxxxxx shall pay its own fees and expenses,
including accounting and counsel fees, incurred in connection with this
Agreement and the transactions contemplated hereby. Any HSR fees of, and any
documentary stamp or intangible taxes imposed on, the parties hereto in
connection with the transactions contemplated hereby shall be paid by Xxxxxxxxx.
11.4 AMENDMENT; WAIVER. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
all parties. No failure to exercise, and no delay in exercising, any right,
power or privilege under this Agreement shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
the exercise of any other right, power or privilege. No waiver of any breach of
any provision shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision, nor shall any waiver be implied from
any course of dealing between the parties. No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations
or any other acts. Except as otherwise provided herein, the rights and remedies
of the parties under this Agreement are in addition to all other rights and
remedies, at law or equity, that they may have against each other.
11.5 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective heirs, executors, personal representatives, trustees, guardians,
attorneys-in-fact, successors and assigns. Nothing expressed or implied herein
shall be construed to give any other person any legal or equitable rights
hereunder. Except as expressly provided herein, no party may assign any of its
rights or delegate any of its obligations under this Agreement without the prior
written consent of the non-assigning or non- delegating parties; PROVIDED,
HOWEVER, that notwithstanding anything to the contrary contained in this
Agreement, Xxxxxxxxx may assign any or all of its rights and privileges under
this Agreement to its lenders from time to time, without the consent of
Certified or the Shareholders, provided that any such assignee shall take such
assignment subject to all of the terms, conditions and limitations set forth in
the Agreement.
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11.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which taken together
shall constitute one and the same instrument.
11.7 INTERPRETATION. Any reference made in this Agreement to an
article, section, paragraph, clause, schedule or exhibit shall be deemed to be
to the referenced article, section, paragraph, clause, schedule or exhibit of
this Agreement unless otherwise indicated. The headings contained in this
Agreement and on the Exhibits and Schedules hereto are for reference purposes
only and shall in no way affect in any way the meaning or interpretation of this
Agreement or the Exhibits or Schedules hereto. Time shall be of the essence in
this Agreement.
11.8 SEVERABILITY. If any word, phrase, sentence, clause, section,
subsection or provision of this Agreement as applied to any party or to any
circumstance is adjudged by a court to be invalid or unenforceable, the same
will in no way affect any other circumstance or the validity or enforceability
of any other word, phrase, sentence, clause, section, subsection or provision of
this Agreement. If any provision of this Agreement, or any part thereof, is held
to be unenforceable because of the duration of such provision or the area
covered thereby or otherwise, the parties agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision, and/or to delete specific words or phrases, and in its reduced form,
such provision shall then be enforceable and shall be enforced.
11.9 GOVERNING LAW; JURISDICTION. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of
Florida applicable to contracts executed and to be wholly performed within such
State. Any suit, action or proceeding against Xxxxxxxxx, Certified or the
Shareholders (or either of them) arising out of, or with respect to, this
Agreement or any judgment entered by any court in respect thereof shall be
brought in the courts of Broward County, Florida or in the U.S. District Court
for the Southern District of Florida and each party hereby irrevocably (a)
accepts and consents to the exclusive personal jurisdiction of such courts for
the purpose of any suit, action or proceeding (b) waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this
Agreement or any judgment entered by any court in respect thereof brought in
such courts and (c) waives any claim that any suit, action or proceedings
brought in such courts has been brought in an inconvenient forum.
11.10 ARM'S LENGTH NEGOTIATIONS. Each party hereto expressly agrees
that (a) before executing this Agreement, it has fully informed itself of the
terms, contents, conditions and effects of this Agreement; (b) it has relied
solely and completely upon its own judgment in executing this Agreement; (c) it
has had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement; (d) it has acted voluntarily and of its own free will
in executing this Agreement; (e) it is not acting under duress, whether economic
or physical, in executing this Agreement; and (f) this Agreement is the result
of arm's length negotiations conducted by and among the parties and their
respective counsel.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
XXXXXXXXX INDUSTRIES, INC., a Delaware
corporation
By: _______________________________________
Zivi X. Xxxxxx
President and Chief Executive Officer
CERTIFIED AIRCRAFT PARTS, a Florida
corporation
By:_______________________________________
Xxxxxx X. Xxxxxxxx
President
------------------------------------------
R. XXXX XXXXXXXX, individually
------------------------------------------
XXXXXX X. XXXXXXXX, individually
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Landlord's Waiver and Agreement
Exhibit B Form of Shareholder Consulting Agreements
Exhibit C Employment Agreements
Exhibit D Form of Lease Amendment
Exhibit E Form of Escrow Agreement
Exhibit F Environmental Escrow Agreement
Schedule 1.1(a) Modified GAAP
Schedule 3.4 Xxxxxxxxx Consents
Schedule 4.1 Foreign Qualifications/Names
Schedule 4.5 Shareholders
Schedule 4.6 Violations
Schedule 4.9 Financial Statements
Schedule 4.10 Changes Since the Current Balance Sheet Date
Schedule 4.11(a) Liabilities of Certified
Schedule 4.11(b) Indebtedness
Schedule 4.12 Litigation
Schedule 4.13 Environmental Matters
Schedule 4.14 Real Estate
Schedule 4.15(a) Inventory
Schedule 4.15(b) Consigned Inventory
Schedule 4.15(c) Vehicles
Schedule 4.17 Employees
Schedule 4.18 Employee Benefit Plans
Schedule 4.19 Tax Matters
Schedule 4.20 Insurance Policies
Schedule 4.21 Receivables
Schedule 4.22 Permits
Schedule 4.23(a) Adequacy of the Assets
Schedule 4.23(b) Affiliated Transactions
Schedule 4.24 Intellectual Property
Schedule 4.25 Contracts
Schedule 4.27 Bank Accounts
Schedule 4.28 Commissions
Schedule 5.1 Conduct of Business Pending the Acquisition
Schedule 6.15 Certain Employees
Schedule 6.19 1998 Financial Statements
Schedule 6.20 Personal Guarantees
Schedule 7.4 Consents Under Designated Contracts
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