Asset Purchase Agreement
Exhibit
10.30
This
Asset
Purchase Agreement
(the
“Agreement”) is made and entered into this 26th
day of
November, 2004 by and among Xxxxxxx
Electric, LLC,
an
Indiana limited liability company with a principal office located at 0000
Xxxxx
Xxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxx 00000 (the “Buyer”), Xxxxxxxx,
Inc.,
an
Indiana corporation with a principal office located at 00000 Xxxxx Xxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000 (the “Seller”), and Xxxxx
Xxxxx,
the
sole shareholder of Seller with a residence at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxx 00000 (the “Shareholder”).
RECITALS:
A. Seller
is
engaged in providing commercial and industrial electrical contracting and
related services in Elkhart County and other parts of northern Indiana (the
“Business”).
B. Since
2002, Buyer has been in the business of providing commercial and industrial
electrical contracting and related services primarily in Indiana, including
Elkhart County, Indiana.
C. Seller
desires to sell to Buyer, and Buyer desires to purchase from Seller, those
assets, properties and rights of the Business at the price and subject to
the
terms and conditions set forth in this Agreement.
NOW
THEREFORE, in consideration of the promises hereinafter made, and other good
and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1.
Purchase
and Sale of Assets.
(a) Assets
of the Business.
On and
subject to the terms and conditions set forth herein, on the Closing Date
(as
defined below), Seller and Shareholder shall sell, assign, convey, transfer
and
deliver to Buyer, and Buyer shall purchase from Seller, the all of Seller’s
property or rights used or useful in the operation of the Business, excluding
the Excluded Assets (defined below), (collectively, the “Purchased Assets”),
which Purchased Assets shall include, but not be limited to:
(i) All
trucks, vehicles, trailers, machinery, equipment, tools, tooling and other
tangible personal property, including all spare and replacement parts, materials
and supplies used in the Business (collectively, the “Equipment”);
(ii) All
of
Seller’s saleable inventory used or useful in the operation of the Business that
are not part of an existing project of Seller (collectively, the
“Inventory”);
(iii) All
of
Seller’s rights, title and interest to office equipment, including computers and
software, to the extent assignable, used or useful in connection with the
Business; and
(iv) All
goodwill and all other assets used or useful in the operation of the
Business.
(b) Excluded
Assets.
The
parties expressly exclude from the Purchased Assets the assets identified
on
Exhibit
A,
attached hereto and made a part hereof, (collectively, the “Excluded
Assets”).
2. No
Assumed Liabilities.
Buyer
will not assume or be responsible for any obligations or liabilities of the
Business, the Purchased Assets and/or Seller’s other operations or business
activities, accrued or unaccrued, known or unknown, actual or contingent,
including without limitation, any and all contracts in process, taxes,
third-party claims, environmental liabilities and employee benefits and wages
(collectively, the “Non-Assumed Liabilities”).
3. Purchase
Price.
(a) Payment
of Purchase Price.
Upon
the terms and conditions set forth in this Agreement, and in reliance upon
the
representations, warranties and covenants of Seller and Shareholder, Buyer
shall
pay Seller the amount of One Hundred Thousand Dollars ($100,000) as the full
purchase price for the Purchased Assets (the “Purchase Price”), of which (i)
Fifty Thousand Dollars ($50,000) (“Closing Payment”) shall be paid in cash or
other immediately available funds at Closing (as defined below), (ii)
Twenty-five Thousand Dollars ($25,000) shall be paid three (3) months following
the Closing, and (iii) Twenty-five Thousand Dollars ($25,000) shall be paid
six
(6) months following the Closing.
(b) Allocation
of Purchase Price.
The
Purchase Price shall be allocated among the Assets as set forth on Exhibit
B.
The
parties agree to furnish each other and the Internal Revenue Service with
such
applicable information as may be required under Section 1060 of the Internal
Revenue Code, as amended, and to cooperate in the completion and timely filing
of IRS Form 8594 (Asset Acquisition Statement). A party may change the
agreed-upon allocations only in order to be consistent with any finally
adjudicated adjustments made to the returns of the other party.
4. Documents
of Transfer and Assignment.
Before
the Closing, the parties shall cause to be prepared and approved by counsel
for
each of the parties all documents and instruments necessary or advisable
to
effect the transfers and assignments contemplated by this Agreement. At Closing,
Seller will execute and deliver such bills of sale and other documents or
instruments of transfer or assignment as may be necessary or appropriate
to vest
in or confirm to Buyer full and complete title to all of the Purchased Assets,
free and clear of all liens, claims, security interests, charges, encumbrances
and liabilities, against delivery by Buyer of the Closing Payment. All
deliveries made at Closing shall be deemed to be simultaneously made, and
no
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party
shall be obligated to consummate the transactions contemplated by this Agreement
unless and until all deliveries required hereunder have been fully
made.
5.
Closing.
The
consummation of the transactions contemplated hereby (the “Closing”) shall take
place at 2:00 p.m. local time on November 26, 2004, or such earlier time
and
date as the parties may agree (the “Closing Date”) at the offices of Xxxxxx
& Xxxxxxxxx LLP, 600 1st Source Bank Center, 100 North Michigan Avenue,
South Bend, Indiana, or at such other time, place and date as the parties
may
agree.
6. Additional
Agreements.
(a)
Consummation
of Agreement.
At any
time after Closing, if any further action is necessary, proper or advisable
to
carry out the purposes of this Agreement, then, as soon as is reasonably
practicable, each party to this Agreement shall take, or cause to be taken,
such
action. Nothing contained in this Agreement shall be construed as an attempt
to
agree to assign any contract which is in law non-assignable without the consent
of the other party or parties to such contract, and each of the parties hereto
agrees to use its best efforts to obtain all consents and approvals of any
other
person required in connection with the transactions contemplated
hereby.
(b) Employment
Agreement.
As an
inducement for Buyer to enter into this Agreement, Shareholder and Buyer
shall
enter into an Employment Agreement substantially in the form attached hereto
as
Exhibit
C
(the
“Employment Agreement”), which agreement contains certain confidentially and
related non-competition and solicitation provisions protecting, among other
things, the confidential information of the Business acquired by Buyer
hereunder.
(c) Lease
Agreement.
As an
inducement for Buyer to enter into this Agreement, Shareholder and Buyer
shall
have entered into a Lease Agreement for Seller’s existing facility substantially
in the form attached hereto as Exhibit
D
(“Lease
Agreement”)
7. Conditions
to Obligations of Buyer.
The
obligation of Buyer to purchase the Purchased Assets from Seller under this
Agreement is subject to the satisfaction on or before the Closing Date of
the
following conditions, unless any such condition shall be waived in writing
in
whole or in part by Buyer:
(a) Representations
and Warranties.
All
representations and warranties of Seller and Shareholder contained in this
Agreement shall have been true and correct on the date of this Agreement
and on
the Closing Date, as though made on and as of the Closing Date, and Seller
and
Shareholder shall have delivered to Buyer a certificate, signed and dated
the
Closing Date, to the foregoing effect.
(b) Performance
of Agreement.
Seller
and Shareholder shall have performed, observed and complied with all the
obligations and conditions required by this Agreement to be performed, observed
or complied with by them, including, but not
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limited
to, the execution and delivery of all agreements, documents or instruments
required to be delivered at Closing.
(c)
Closing
Conditions.
All
conditions to Closing specified in this Section 7 shall have been either
satisfied or waived.
(d) Completion
of Due Diligence.
Buyer
shall have completed its due diligence investigation of Seller’s Business and
shall be reasonably satisfied that its financial condition, prospects, results
of operations, assets, liabilities and Business are as represented by Seller
and
Shareholder, at least one week prior to the Closing.
(e) Lien
Searches.
Seller
shall perform, if not yet undertaken, and have delivered to Buyer: (i) final
state and local Uniform Commercial Code financing statement searches disclosing
all liens and encumbrances on any Purchased Assets; and (ii) written releases
from the holders of any security interests, liens or other encumbrances on
any
of the Purchased Assets to be purchased by Buyer pursuant to this Agreement.
(f) Litigation;
Injunctions.
No
order of any court or administrative agency shall be in effect which restrains
or prohibits the transactions contemplated hereby, and there shall not have
been
threatened, nor shall there be pending, any action or proceeding by or before
any court or governmental agency or other regulatory or administrative agency
or
commission challenging any of the transactions contemplated by this
Agreement.
(g) Corporate
Certificates.
Seller
shall have delivered to Buyer: (i) a certificate of existence of Seller issued
as of a current date by the Indiana Secretary of State; and (ii) copies of
resolutions of the shareholders and Board of Directors of Seller, certified
by
its secretary, authorizing (A) the execution, delivery and performance of
this
Agreement, and (B) the taking of all steps necessary to consummate the
transactions contemplated by and to fulfill Seller’s obligations under this
Agreement.
(h) Deliveries
and Agreements.
The
Shareholder shall have delivered to the Buyer the Employment Agreement and
Lease
Agreement and any other documents, agreements and instruments called for
by this
Agreement.
(i) Absence
of Changes.
On or
prior to the Closing Date there shall have been no loss, damage or destruction
to the Purchased Assets or the Business which materially impairs the value
of
the Purchased Assets or the Business.
(j) Taxes.
Seller
shall have paid all state and federal employment related tax obligations
due and
owing as of the Closing Date, or a means for satisfying such tax obligations
acceptable to Buyer shall have been arranged between Seller and the appropriate
taxing authority no later than the Closing Date.
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8. Conditions
to Obligations of Seller and Shareholder.
The
obligation of Seller to sell and transfer the Purchased Assets to Buyer under
this Agreement is subject to the satisfaction on or before the Closing Date
of
the following conditions, unless any such condition shall be waived in writing
in whole or in part by Seller:
(a) Representations
and Warranties.
All
representations and warranties of Buyer contained in this Agreement shall
have
been true and correct on the date of this Agreement and on the Closing Date,
as
though made on and as of the Closing Date, and Buyer shall have delivered
to
Seller and Shareholder a certificate, signed and dated the Closing Date,
to the
foregoing effect.
(b) Performance
of Agreement.
Buyer
shall have performed, observed and complied with all the obligations and
conditions required by this Agreement to be performed, observed or complied
with
by it, including, but not limited to, the execution and delivery of all
agreements, documents or instruments required to be delivered at
Closing.
(c) Closing
Conditions.
All
conditions to Closing specified in this Section 8 shall have been either
satisfied or waived.
(d) Litigation;
Injunctions.
No
order of any court or administrative agency shall be in effect which restrains
or prohibits the transactions contemplated hereby, and there shall not have
been
threatened, nor shall there be pending, any action or proceeding by or before
any court or governmental agency or other regulatory or administrative agency
or
commission challenging any of the transactions contemplated by this
Agreement.
(e) Company
Certificates.
Buyer
shall have delivered to Seller: (i) a certificate of existence of Buyer issued
as of a current date by the Indiana Secretary of State; and (ii) copies of
certified resolutions of the Manager of Buyer authorizing (A) the execution,
delivery and performance of this Agreement, and (B) the taking of all steps
necessary to consummate the transactions contemplated by and fulfill Buyer’s
obligations under this Agreement.
(f) Deliveries
and Agreements.
The
Buyer shall have delivered to Seller all documents, agreements and instruments
called for by this Agreement.
9. Representations
and Warranties of Seller and Shareholder.
Seller
and Shareholder hereby jointly and severally represent and warrant to Buyer
the
following:
(a) Organization;
Power and Authority.
Seller
is a corporation duly organized and validly existing under the laws of the
State
of Indiana and is duly qualified to do business and in good standing under
the
laws of all jurisdictions in which its ownership or use of property or the
conduct of its business requires it to qualify, except where failure to qualify
would not have a material adverse affect on the financial condition of business
of Seller. Attached hereto and incorporated herein as Exhibit
E
is a
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true
and
complete list of shareholders of Seller, and their respective interests in
Seller, along with a true and complete list of the existing members of the
Board
of Directors of Seller. Seller has all requisite corporate power and authority
to own all of its properties and assets, to conduct its business as now being
conducted, and to make, execute, deliver, and perform this Agreement and
the
other documents and instruments contemplated hereby. Shareholder has full
capacity, power and authority to execute, deliver and perform this Agreement
and
the agreements contemplated herein.
(b) Execution,
Delivery and Validity.
The
execution and delivery of this Agreement by Seller, and the consummation
of the
transactions contemplated hereby, have been duly and validly authorized by
the
Board of Directors and shareholders of Seller. This Agreement and all other
agreements contemplated hereby to which Seller is a party have been duly
executed and delivered by Seller, and each constitutes the legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with
its
terms. This Agreement and all other agreements contemplated hereby to which
Shareholder is a party have been duly executed and delivered by Shareholder,
and
each constitutes the legal, valid and binding obligation of Shareholder,
enforceable against Shareholder in accordance with its terms.
(c) Non-contravention.
The
execution, delivery and performance of this Agreement by Seller, and the
consummation of the transactions contemplated hereby, do not and will not:
(i)
conflict with or violate any provision of the Articles of Incorporation or
By-laws of Seller; (ii) to the knowledge of Seller, contravene any law, rule
or
regulation or any order, writ, award, judgment, decree or other determination
which affects or binds Seller or any of its properties; (iii) conflict with,
violate, breach, or constitute a default under, or an event which (with notice
or the passage of time or both) would constitute a default under, or give
rise
to a right of acceleration, termination or the imposition of penalties under
any
permit or other authorization, or any note, mortgage, real property lease,
or
any other material agreement, instrument or restriction to which Seller is
a
party or by which any of its properties may be affected or bound; or (iv)
require the approval, consent or authorization of, or the making of any
declaration, filing or registration with, or the giving of any notice to,
any
court, governmental authority or regulatory body or any lender, landlord
or
other third party.
(d) Financial
Statements.
Seller
and Shareholder have delivered to Buyer balance sheets of Seller and related
statements of income or loss for each of the twelve-month periods ending
December 31, 2003 and 2002 (collectively, the “Financial Statements”). The
Financial Statements accurately reflect the books and accounts of Seller
in all
material respects and present fairly the financial position of Seller as
of the
dates given and the results of operations of Seller for the periods
indicated.
(e) Undisclosed
Liabilities.
Seller
has no material liabilities or obligations relating to the Business or the
Purchased Assets of any type, nature or description, known or unknown, asserted
or unasserted, direct or indirect, absolute or contingent, including without
limitation, unfunded allocations for or under any employee benefit plans
or
arrangements, liabilities with respect to labor or environmental matters,
liabilities relating
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to
services, products and warranties of the Business, or liabilities for federal,
state, local, foreign or other taxes or assessments.
(f) Absence
of Changes.
Since
December 31, 2003: (i) the Business has been operated in the ordinary course;
(ii) there have been no material liabilities or obligations of any nature
incurred in connection with the Business other than in the regular, ordinary
and
customary course of business and all are recorded on Seller’s books of original
entry; (iii) there have been no alterations in the manner of keeping the
books,
accounts or records of the Business, or in the accounting practices therein
reflected; (iv) there have been no sales or transfers of any material assets
of
the Business, nor has Seller entered into any other material transaction
relating to the Business, other than in the ordinary and customary course
of
business; (v) no action has been taken that has resulted or reasonably could
be
expected to result in any of Seller ’s Purchased Assets being mortgaged, pledged
or subjected to any lien or encumbrance of any nature; and (vi) there have
been
no increases in the salary, bonus or other compensation arrangements payable,
or
to become payable, to such employees of the Business, beyond normal annual
increases (consistent with past practices).
(g) Taxes.
Seller
has duly and timely filed or caused to be filed all tax returns and information
returns (including, without limitation, income, business or occupation, sales
or
use, employment, or property tax returns) relating to the Business and the
Purchased Assets and has paid or properly accrued all taxes and any other
governmental charges, duties, penalties, interest and fines that became due
and
payable with respect to the Business or the Purchased Assets through the
Closing
Date. Seller has withheld or collected from each payment made to employees
or
agents of the Business all taxes (including, but not limited to, federal
income
taxes, Federal Insurance Contribution Act taxes, and federal, state and local
income, unemployment, payroll and wage taxes) required to be withheld or
collected and, if due, has paid the same to the proper tax receiving officers.
Seller has collected sales and use taxes for all sales made to customers
making
purchases from the Business as required by law to be collected and, if due,
has
remitted the same to the proper tax receiving officers.
(h) Litigation.
No
actions, suits, claims, orders, audits, investigations, inquiries or other
proceedings (judicial, administrative or arbitration) are pending or, to
the
knowledge of Seller and Shareholder, have been threatened, except as disclosed
on Schedule
9(h),
against
Seller or affecting the Purchased Assets or the Business, whether at law
or in
equity and whether civil or criminal in nature, before or by any court,
arbitration panel, governmental department, commission, board, bureau, agency
or
instrumentality. Except as disclosed on Schedule
9(h),
neither
Seller nor Shareholder has knowledge of any facts which reasonably could
be
expected to form the basis for any such action or other proceeding.
(i) Compliance
with Laws; Permits.
At all
times prior to the date hereof: (i) Seller has conducted its Business in
compliance in all material respects with all governmental statutes, ordinances,
laws, rules, regulations, orders, permits, licenses or other authorizations
applicable to the Business; and (ii) Seller owns, holds, possesses and
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is
in
material compliance with all permits, licenses or other authorizations that
are
necessary to own or lease, operate and use the Purchased Assets and to carry
on
and conduct the Business as now conducted, the failure of which to hold or
comply with could have a material adverse effect on the Business or Purchased
Assets.
(j) Title
to Assets.
Except
as disclosed on Schedule
9(j),
Seller
has good and marketable title to all of the Purchased Assets, free and clear
of
any and all security interests, pledges, liens, conditional sales agreements,
claims, encumbrances or charges or restraints on transfer. No person, firm
or
corporation other than Seller has any right to the use or possession of any
of
the Purchased Assets. Further, except as disclosed on Schedule
9(j):
(i) no
currently effective financing statement under the Uniform Commercial Code
with
respect to any of the Purchased Assets has been filed in any jurisdiction;
(ii)
no currently effective lien or encumbrance with respect to any of the Purchased
Assets has been filed with the Indiana Secretary of State or any County
Recorder’s Office; and (iii) no agent of Seller has signed any financing
statement or security agreement authorizing anyone to file any financing
statement, lien or other encumbrance.
(k) Condition
of Tangible Assets.
Except
as located elsewhere in the ordinary course of business, all of the tangible
property included in the Purchased Assets is located at the main location
of the
Business. The Equipment is in working order, free from any material defect
and
suitable for the ordinary and regular conduct and operation of the
Business.
(l) Labor
Relations.
During
the twelve (12) months preceding the date of this Agreement, there have been
no
material adverse changes in the relationship between the Business and, except
in
the ordinary course of its Business, its employees. The Seller does not have
any
defined benefit pension plans for employees of the Business. Seller has no:
(i)
contracts with individual employees; (ii) “employee benefit plans” as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended,
(“ERISA”), including pension, profit sharing, deferred compensation, bonus,
stock option, stock purchase and welfare plans, non-qualified deferred
compensation, phantom stock or other similar plans; or (iii) other plans
or
arrangements for the benefit of employees (such as vacation, holiday or sick
pay
plans) which are maintained or contributed to by Seller. All employees of
the
Business are terminable at will with no cost to the Seller or Business. Except
as disclosed on Schedule
9(l),
all
wages, benefits and other amounts due and owing to, or on behalf of, all
of
Seller’s employees have been paid by Seller and will be paid through the Closing
Date. Seller and shareholder, jointly and severally, covenant and agree that
all
amounts listed on Schedule
9(l)
and
which are not otherwise properly paid under Seller’s wage and welfare bond, will
be paid by Seller or Shareholder as such amounts come due.
(m) Environment,
Health and Safety.
(i) For
purposes of this Section 9(m):
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(A) “Environmental
Law” means any federal, state or local statute, rule, regulation or ordinance
having as its primary purpose the protection of the environment or the
protection of human health from the effects of environmental pollutants and
any
permit, license or authorization required thereunder, as well as common
law.
(B) “Health
and Safety Law” means any federal, state or local statute, rule, regulation or
ordinance having as its primary purpose the protection of worker safety or
health in the workplace.
(C) “Hazardous
Substance, Pollutant or Contaminant” means any “hazardous substance” as defined
in 42 U.S.C. § 9601(14), any “pollutant or contaminant” as defined in 42
U.S.C. § 9601(33), and petroleum, including crude oil or any fraction
thereof.
(D) “Claim”
means and includes any claim, action, suit, demand, administrative proceeding,
notice of violation, notice of deficiency, or general notice of potential
liability alleging any failure to comply with or any liability under any
Environmental Law or Health and Safety Law, including, without limitation,
any
liability under common law for damages or injury to person or
property.
(E) “Environmental
or Health and Safety Circumstance” means any fact, circumstance, activity,
practice, incident, action, plan or condition which would constitute a failure
to comply with any Environmental Law or Health and Safety Law, or would give
rise to potential liability under any such Law.
(ii) The
Business and the Purchased Assets are, and at all times prior hereto have
been,
in compliance with any and all Environmental Laws and Health and Safety Laws,
and no Claim relating to a violation of any such Laws has been made with
respect
to the Business or the Purchased Assets.
(iii) To
the
best of Seller and Shareholder’s knowledge, there is no Environmental or Health
and Safety Circumstance related to past or present operations of the Business
or
the Purchased Assets at the Facility or on or off any other properties,
facilities or premises on which the Business or the Purchased Assets have
been
operated. Neither the facilities nor any real property that is owned, operated
or used in connection with the Business or the Purchased Assets contains
any
underground storage tank, asbestos containing material, polychlorinated
biphenyls, or landfills, surface impoundments or disposal area.
(iv) Seller
has not, either expressly or by operation of law, assumed or undertaken any
liability, including without limitation, any obligation for corrective or
remedial action, of any other person or entity with respect to any Environmental
Law, nor has Seller caused, permitted or allowed any “release” (as
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defined
in 42 U.S.C. § 9601(22)) of any Hazardous Substance, Pollutant or
Contaminant on any real property owned, operated or used by Seller in connection
with the Business.
(v) Seller
has obtained (or has pending timely filed applications for) any and all material
environmental permits legally required to operate the Business and the Purchased
Assets as they are presently being operated.
(n) Brokers.
Neither
Seller nor Shareholder has employed any broker, agent or finder in connection
with the transactions contemplated by this Agreement. Any obligation in respect
of fees, commissions or expenses due any broker, agent or finder who may
have
been employed in this transaction by Seller or Shareholder is an obligation
solely of such party.
(o) Termination
of Employees.
Seller
shall terminate all of its employees and agents as of the Closing Date, and
all
such terminations shall be in compliance with all applicable laws. Seller
acknowledges and agrees that, except for Buyer’s obligation to employ
Shareholder pursuant to the terms and conditions of the Employment Agreement,
Buyer shall have no obligation to hire any such terminated
employees.
(p) Disclosure.
None of
the statements or information contained in any of the representations,
warranties or agreements of Seller or Shareholder set forth in this Agreement
contains any untrue statement of a material fact or omits a material fact
necessary to make the statements contained in this Agreement or in any Exhibit
or Schedule to this Agreement, in light of the circumstances in which those
statements were made, not misleading.
(q) Closing
Conditions.
All of
the conditions to Closing specified in Section 8 of this Agreement have been
satisfied or waived.
10. Representations
and Warranties of Buyer.
Buyer
hereby represents and warrants to Seller and Shareholder the
following:
(a) Company
Organization.
Buyer
is a limited liability company duly organized and validly existing under
the
laws of the State of Indiana, and shall so remain until all obligations
hereunder to Seller and Shareholder have been fulfilled. Buyer has all requisite
company power and authority to own all of its properties and assets, to conduct
its business as now being conducted, and to make, execute, deliver, and perform
this Agreement and the other documents and instruments contemplated hereby.
Buyer shall not dissolve its company existence or liquidate its assets until
such time as it has fulfilled all its obligations to Seller and Shareholder
hereunder.
(b) Execution,
Delivery and Validity.
The
execution and delivery of this Agreement by Buyer, and the consummation of
the
transactions contemplated hereby, have been duly and validly authorized by
all
necessary company action. This Agreement and all other agreements contemplated
hereby to which Buyer is a party have been duly
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and
validly executed by Buyer, and each constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
(c) Non-contravention.
The
execution, delivery and performance of this Agreement by Buyer, and the
consummation of the transactions contemplated hereby, do not and will not:
(i)
conflict with or violate any provision of the Articles of Organization or
Operating Agreement of Buyer; (ii) to the knowledge of Buyer, contravene
any
law, rule or regulation or any order, writ, award, judgment, decree or other
determination which affects or binds Buyer or any of its properties; (iii)
conflict with, violate, breach, or constitute a default under, or an event
which
(with notice or the passage of time or both) would constitute a default under,
or give rise to a right of acceleration, termination or the imposition of
penalties under any governmental or other license, permit or other
authorization, or any note, mortgage, real property lease, or any other material
agreement, instrument or restriction to which Buyer is a party or by which
any
of its properties may be affected or bound; or (iv) require the approval,
consent or authorization of, or the making of any declaration, filing or
registration with, or the giving of any notice to, any court, governmental
authority or regulatory body or any lender, landlord or other third
party.
(d) Brokers.
Buyer
has not employed any broker, agent or finder in connection with the transactions
contemplated by this Agreement, and any obligation in respect of fees,
commissions and expenses due any broker, agent or finder who may have been
employed in this transaction by Buyer is an obligation solely of
Buyer.
(e) Closing
Conditions.
All of
the conditions to Closing specified in Section 7 of this Agreement have been
satisfied or waived.
11. Indemnification.
(a)
By
Seller and Shareholder.
From
and after Closing, Seller and Shareholder will jointly and severally indemnify,
defend and hold Buyer and its members, managers, employees, successors and
assigns (collectively, “Buyer’s Indemnitees”) harmless of and from any and all
damages, liabilities, losses, costs or expenses (including reasonable attorneys’
fees and fees or costs incurred in investigation) (collectively, “Losses”)
incurred or suffered by Buyer’s Indemnitees which arise out of, result from or
relate to: (i) any material breach by Seller or Shareholder or failure by
Seller
or Shareholder to perform, any representation, warranty, covenant or condition
contained in or made pursuant to this Agreement; (ii) any liabilities or
obligations of Seller, including the Non-Assumed Liabilities, that are not
expressly assumed by Buyer pursuant to Section 2 of this Agreement; and (iii)
the operation of the Business by Seller prior to the Closing.
(b) By
Buyer.
From
and after Closing, Buyer shall indemnify, defend and hold Seller and Shareholder
and their respective directors, officers, successors and permitted assigns
(collectively, “Seller’s Indemnitees”) harmless of and from any Losses incurred
or suffered by Seller’s Indemnitees which arise out of, result from or relate
to:
-11-
(i)
any
material breach by Buyer or failure by Buyer to perform, any representation,
warranty, covenant or condition contained in or made pursuant to this Agreement;
and (ii) the operation of the Business by Buyer from and after the Closing.
(c) Conditions
for Indemnification of Third Party Claims.
The
respective obligations and liabilities of Seller and Shareholder or Buyer
(the
“Indemnifying Party”) to the Buyer’s Indemnitees or the Seller’s Indemnitees, as
the case may be, as indemnified parties (the “Indemnified Party”) under Sections
11(a) and 11(b) hereof with respect to claims resulting from the assertion
of
liability by third parties shall be subject to the following terms and
conditions:
(i) Within
a
reasonable period of time after receipt of notice of commencement of any
action
evidenced by service of process or other legal pleading, or with reasonable
promptness after the assertion of any claim by a third party, the Indemnified
Party shall give the Indemnifying Party written notice thereof together with
a
copy of such claim, process or other legal pleading, and the Indemnifying
Party
shall have the right to undertake the defense thereof by representatives
of its
own choosing and at its own expense; provided, that the Indemnified Party
may
participate in the defense with counsel of its own choice and at its own
expense
(provided that the Indemnifying Party will bear the expense of counsel for
the
Indemnified Party if the Indemnified Party could have an inconsistent or
conflicting interest from that of the Indemnifying Party or one or more legal
defenses that are different from or additional to those available to the
Indemnifying Party).
(ii) If
the
Indemnifying Party, by the thirtieth (30th) day after receipt of notice of
any
such claim (or, if earlier, by the tenth (10th) day preceding the day on
which
an answer or other pleading must be served in order to prevent judgment by
default in favor of the person asserting such claim), does not elect to defend
against such claim, the Indemnified Party, upon further notice to the
Indemnifying Party, will have the right to undertake the defense, compromise
or
settlement of such claim on behalf of or for the account and risk of the
Indemnifying Party and at the Indemnifying Party ’s expense, subject to the
right of the Indemnifying Party to assume the defense of such claim at any
time
prior to settlement, compromise or final determination thereof. Upon assumption
by the Indemnifying Party of the defense of any claim, the Indemnified Party
shall have no further right to settle, compromise or defend the claim except
to
the extent expressly provided under subparagraph (i) above.
(iii) Anything
in this Section 11(c) to the contrary notwithstanding, the Indemnifying Party
shall not settle any claim without the consent of the Indemnified Party unless
such settlement involves only the payment of money and the claimant provides
to
the Indemnified Party a release from all liability in respect of such claim.
If
the settlement of the claim involves more than the payment of money, the
Indemnifying Party shall not settle the claim without the
-12-
prior
consent of the Indemnified Party, which consent shall not be unreasonably
withheld.
(iv) The
Indemnified Party and the Indemnifying Party will each cooperate with all
reasonable requests of the other for the purpose of defending against any
claims.
(d) Payment
of Losses.
The
Indemnifying Party shall make all payments pursuant to the indemnification
provisions contained in this Section 11 within ten (10) business days after
final determination of the amount thereof.
(e) Survival.
The
obligations of Buyer, Seller and Shareholder under this Section 11 shall
survive
the expiation or termination of this Agreement.
12. Restrictive
Covenants.
(a) Acknowledgments.
Seller
and Shareholder acknowledge and agree that the trade secrets and other
confidential information acquired by Buyer pursuant to this Agreement,
including, without limitation, methods, techniques, equipment, marketing
and
sales information, the sources, costs and pricing of products and services,
business and marketing strategies and plans, the identity and needs of customers
and potential customers, financial data, personnel data, and all the other
know-how and “trade secrets” pertaining in any respect to the Business or its
customers or suppliers, are valuable, special and unique assets of Buyer.
Seller
and Shareholder further acknowledge and agree that Seller and Shareholder
have
worked together to establish strong customer relationships and considerable
goodwill relating to the Business, and that Buyer has paid valuable
consideration for the Purchased Assets and the Business, including the trade
secrets, confidential information and goodwill of the Business.
(b) Confidentiality.
Seller
and Shareholder agree that it or he will not, directly or indirectly, except
with the prior consent of Buyer, use, divulge or disclose or communicate,
or
cause or permit any other person or entity to use, divulge, disclose or
communicate, to any person, firm, corporation or entity, in any manner
whatsoever, any trade secrets or other confidential information conveyed
to
Buyer pursuant to this Agreement. The foregoing covenants shall remain in
effect
for so long as any such information remains confidential information of Buyer,
and, in any event, for a minimum period of three (3) years after Closing.
Notwithstanding anything to the contrary in this Agreement, neither Seller
nor
Shareholder will never disclose or use confidential information which remains
a
trade secret of Buyer.
(c) Covenants
Against Competition and Solicitation.
To
preserve the value of the goodwill purchased by Buyer, and to reduce the
cost to
Buyer of monitoring and enforcing the compliance of Seller and Shareholder
with
the confidentiality obligations contained in Section
12(b) hereof,
Seller and Shareholder covenant and agree that, during the Prohibit Period
(as
defined below), it or he will not, and Seller and Shareholder will cause
any of
related party to not, without the express written consent of Buyer and only
to
the extent authorized by Buyer:
-13-
(i) Except
as
expressly permitted under this Section
12(c),
directly or indirectly, alone or in concert with others, whether as principal,
agent, representative, partner, lender, consultant, shareholder or otherwise,
under or through any form of business entity, own, operate, manage, control
or
actively participate in any business which provides competing services of
the
Business anywhere in the Prohibited Territory (as defined below) (“Competing
Business”);
(ii) Except
as
expressly permitted under this Section
12(c),
either
for themselves or for any other person, firm, corporation or entity solicit,
divert or accept, or attempt to solicit, divert or accept any persons or
entities which were customers of the Business at any time during the Prohibited
Period to contract or otherwise transact business with any Competing Business
anywhere within the Prohibited Territory; and
(iii) Induce
or
solicit or seek to induce or solicit any person who was engaged in the Business
as an employee, agent or otherwise within the one (1) year period prior to
the
Closing to terminate his or her engagement with Buyer or otherwise participate
in any business activity directly or indirectly competitive with the
Business.
The
covenants contained in Sections
12(c)(i), (ii) and
(iii)
of this
Agreement are separate and distinct covenants of each of Seller and
Shareholder.
(d) Definition
of Prohibited Territory
and
Prohibited Period. For
purposes of this Agreement, the “Prohibited Territory” means anywhere within a
one hundred (100) mile radius of each of Buyer’s locations, including Buyer’s
new Elkhart, Indiana location, unless that geographic restriction is deemed
to
be of unreasonably broad scope, and therefore unenforceable, by a court of
competent jurisdiction, in which case the next sentence shall define the
Prohibited Territory. The Prohibited Territory means anywhere within a
seventy-five (75) mile radius of each of Buyer’s locations, including Buyer’s
new Elkhart, Indiana location, unless that geographic restriction is deemed
to
be of unreasonably
broad scope, and therefore unenforceable, by a court of competent jurisdiction,
in which case the next sentence shall define the Prohibited Territory. The
Prohibited Territory means anywhere within a fifty (50) mile radius of each
of
Buyer’s locations, including Buyer’s new Elkhart, Indiana
location.
The
term
“Prohibited Period” shall be defined as a period of three (3) years from and
after Closing, unless that term is deemed to be unreasonable, and therefore
unenforceable, by a court of competent jurisdiction, in which case the next
sentence shall define the Prohibited Period. The Prohibited Period means
a
period of two (2) years from and after Closing, unless that term is deemed
to be
unreasonable, and therefore unenforceable, by a court of competent jurisdiction,
in which case the next sentence shall define the Prohibited Period. The
Prohibited Period means a period of one (1) year from and after
Closing.
(e) Reasonableness.
Seller
and Shareholder hereby expressly acknowledge and agree that the territorial,
time and other limitations set forth above are reasonable and properly required
for the adequate protection of the goodwill and other Assets acquired by
Buyer
pursuant to this Agreement and shall be fully enforceable to the fullest
extent
permitted by law. The
parties estimate that the value of the goodwill being purchased will not
begin
to dissipate for at least three (3) years. In
the
event, however, a court determines that any of the terms, provisions, or
covenants contained in this Section 12 are unreasonable, a court may limit
the
application of any such term, provision or covenant, or modify any such term,
provision or covenant and proceed to enforce this Section 12 as so limited
or
modified.
-14-
(f) Remedies.
Seller
and Shareholder acknowledge and agree that any violation of Sections
12(b) or 12(c) hereof would
cause Buyer irreparable damage and that if any Seller and/or Shareholder
violates or threatens to violate such restrictions, Buyer shall be entitled
to
injunctive relief against Seller and/or Shareholder, without the necessity
of
proof of actual damage or the posting of bond, in addition to any other remedies
available under this Agreement, at law, or in equity, and including compensatory
damages incurred by Buyer as a result of such violation and including costs,
expenses and reasonable attorneys’ fees incurred in enforcing any of its rights
under this Section
12.
(g) Shareholder’s
Work as Estimator.
Notwithstanding anything to the contrary contained herein or contained in
the
Employment Agreement and only in the event Shareholder is terminated by Buyer
pursuant to Section
6(a)(vi)
of the
Employment Agreement, the restrictions contained in Section
12(c)
of this
Agreement and Section
5(b)
of the
Employment Agreement shall not prohibit Shareholder from working in the
Prohibited Territory as an estimator.
13. Miscellaneous
Provisions.
(a) Personal
Property Taxes.
All
taxes and assessments that have accrued for all time periods prior to or
as of
Closing shall be paid or properly accrued by Seller prior to or at Closing.
(b) Expenses.
Except
as otherwise specifically provided in this Agreement, Seller, Shareholder
and
Buyer shall each bear his or its own expenses, including the fees of any
attorneys, accountants or others engaged by such party in connection with
this
Agreement and the transactions contemplated hereby.
(c) Survival.
Notwithstanding any term or provision of this Agreement to the contrary,
all
representations and warranties contained in this Agreement and any agreement
executed in connection herewith shall survive the execution, delivery and
performance of this Agreement and the Closing as follows: (i) the
representations and warranties contained in Sections
9(a), 9(b) and 9(j) shall
survive indefinitely and shall not terminate; (ii) the representations and
warranties contained in Sections
9(g), 9(m) and 9(l)
shall
survive for the applicable statutes of limitation; and (iii) all other
representations and warranties shall survive for a period of two (2) years
after
the Closing
-15-
Date;
provided,
that
any representation or warranty in respect of which indemnity may be sought
under
Section
9,
and the
indemnity with respect thereto, shall survive the time at which it would
otherwise terminate pursuant to this section if notice of the breach thereof
giving rise to such right or potential right of indemnity shall have been
given
to the party against whom such indemnity may be sought prior to such time.
No
investigation by the parties made heretofore or hereafter shall affect the
representations and warranties of the parties contained in or made pursuant
hereto.
(d) Governing
Law.
This
Agreement shall be governed in all respects, including validity, interpretation
and effect, by the laws of the State of Indiana, without regard to conflicts
of
law principles.
(e) Entire
Agreement; Amendment.
This
Agreement, including all Exhibits and Schedules hereto sets forth the entire
understanding of the parties, there being no oral or other written agreements
or
understandings affecting the subject matter of this Agreement. No modification,
amendment, waiver or release of any provision of this Agreement or of any
right,
obligation, claim or cause of action arising under this Agreement shall be
valid
or binding for any purpose unless in writing and duly executed by the party
against whom the same is sought to be asserted.
(f) Assignment;
Binding Effect.
No
party to this Agreement may assign this Agreement or such party’s rights, duties
and obligations hereunder without the prior written consent of the other
parties
hereto. This Agreement shall be binding upon and inure to the benefit of
the
parties to this Agreement and their personal and legal representatives,
successors and assigns.
(g) No
Waiver.
The
failure of any party to enforce at any time or for any period of time any
of the
provisions of this Agreement shall not be construed as a waiver of such
provision or of the right of the party to enforce such provision. The waiver
of
any breach or default or the failure to exercise any right shall not be deemed
a
waiver of any subsequent breach or default or waiver of the right to exercise
any other right.
(h) Notices.
All
notices and other communications hereunder must be in writing and shall be
deemed given if delivered personally or by overnight courier, or transmitted
by
facsimile or mailed by registered or certified mail, postage pre-paid, return
receipt requested, to the persons at the addresses set forth above (or such
other address for a party as shall be specified by like notice). Notice given
personally or by courier, or transmitted by facsimile, shall be deemed delivered
when received by the addressee. Notice given by mail shall be deemed delivered
on the third (3rd) business day following the date on which it is so mailed.
(i) Remedies
Cumulative.
All
rights and remedies provided by this Agreement or existing at law or in equity
shall be cumulative of all other rights and remedies, and the pursuit of
one
right or remedy shall in no way operate as an exclusive election or otherwise
preclude or limit any party from pursuing any other or additional right or
remedy.
-16-
(j) Severability.
If any
provision of this Agreement shall be held invalid or unenforceable by any
court
of competent jurisdiction or as a result of legislative or administrative
action, such holding or action shall be strictly construed and shall not
affect
the validity or affect any other provision of this Agreement.
(k) Conflicts.
This
Agreement shall govern in the event of a conflict between the provisions
hereof
and those of any other document signed by the parties in connection with
the
Closing.
(l) Execution
of Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
considered an original instrument, but all of which shall be considered one
and
the same agreement, and shall become binding when one or more counterparts
have
been signed by and delivered to each of the parties.
IN
WITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement
to
be duly executed and delivered on the date or dates below indicated, effective
as of the day and year first above written.
|
“Seller”
|
“Shareholder”
|
|||||
|
Xxxxxxxx,
Inc.
|
||||||
|
By:
|
/s/ Xxxxx Xxxxx | /s/ Xxxxx Xxxxx | ||||
|
Xxxxx
Xxxxx, President
|
Xxxxx
Xxxxx, Individually
|
|||||
|
Date:
|
November
26, 2004
|
Date:
|
November
26, 2004
|
|||
|
“Buyer”
|
||||||
|
Xxxxxxx
Electric, LLC
|
||||||
|
By:
|
/s/ Xxxx X. Xxxxxxx | |||||
|
Xxxx
X. Xxxxxxx, President
|
||||||
|
Date:
|
November
26, 2004
|
|||||
-17-
Exhibit
A
Excluded
Assets
1. Cash;
2. Accounts
Receivable;
3. Other
Receivables;
4. Cadillac
Escalade;
5. Red
Chevy
Pick-up Truck;
6. Red
Ford
Stake Truck;
7. Leased
Equipment; and
8. Prepaid
Expenses.
Exhibit
B
Allocation
of Purchase Price
Exhibit
C
Xxxxx
Employment Agreement
See
Attached.
Exhibit
D
Lease
Agreement
See
Attached.
Exhibit
E
Shareholders
and Directors of Xxxxxxxx, Inc.
|
Sole
Shareholder of Xxxxxxxx, Inc.:
|
Xxxxx
Xxxxx
|
|
Board
of Directs of Xxxxxxxx, Inc.:
|
Xxxxx
Xxxxx
|
|
Xxxxxxx
X. Xxxxx
|
Schedule
9(h)
Litigation
See
attached.
Schedule
9(j)
Title
to Assets
None.
Schedule
9(l)
Labor
Relations
Union
benefits in an amount estimated at $13,000, but which will not exceed
$15,000.
