EXECUTION COPY
ASSET PURCHASE AGREEMENT
BETWEEN
BAAR GROUP, INC.
AND
ATEC GROUP, INC.
November 25, 2002
TABLE OF CONTENTS
1. DEFINITIONS...........................................................1
2. BASIC TRANSACTION.....................................................4
(a) Purchase and Sale of Assets................................4-5
(b) Assumption of Liabilities....................................5
(c) Purchase Price...............................................5
(d) The Closing..................................................5
(e) Deliveries at the Closing....................................5
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER..........................6
(a) Organization of the Seller...................................6
(b) Authorization of Transaction.................................6
(c) Noncontravention...........................................6-7
(d) Brokers' Fees................................................7
(e) Title to Assets..............................................7
(f) Subsidiaries.................................................7
(g) Financial Statements.........................................7
(h) Events Subsequent to Most Recent Fiscal Year End...........7-8
(i) Undisclosed Liabilities......................................8
(j) Legal Compliance.............................................8
(k) Tax Matters..................................................8
(l) Real Property................................................8
(m) Intellectual Property......................................8-9
(n) Inventory....................................................9
(o) Contracts.................................................9-10
(p) Notes and Accounts Receivable...............................10
(q) Powers of Attorney..........................................10
(r) Insurance...................................................10
(s) Litigation..................................................10
(t) Product Warranty.........................................10-11
(u) Employees...................................................11
(v) Employee Benefits........................................11-12
(w) Environment, Health, and Safety.............................12
(x) Disclosure..................................................12
(y) Investment..................................................12
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER..........................13
(a) Organization of the Buyer...................................13
(b) Authorization of Transaction................................13
(c) Noncontravention............................................13
(d) Brokers' Fees...............................................13
(e) Financial Condition.........................................13
(f) Seller's Representations and Warranties.....................13
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5. PRE-CLOSING COVENANTS.............................................13-14
(a) General.....................................................14
(b) Notices and Consents........................................14
(c) Operation of Business.......................................14
(d) Preservation of Business....................................14
(e) Full Access.................................................14
(f) Notice of Developments......................................14
6. CONDITIONS TO OBLIGATION TO CLOSE....................................14
(a) Conditions to Obligation of the Buyer....................14-15
(b) Conditions to Obligation of the Seller...................15-17
7. TERMINATION..........................................................17
(a) Termination of Agreement.................................17-18
(b) Effect of Termination.......................................18
8. MISCELLANEOUS........................................................18
(a) Survival of Representations and Warranties..................18
(b) Press Releases and Public Announcements.....................18
(c) No Third-Party Beneficiaries................................18
(d) Entire Agreement............................................18
(e) Succession and Assignment...................................18
(f) Counterparts................................................18
(g) Headings....................................................19
(h) Notices..................................................19-20
(i) Governing Law...............................................21
(j) Amendments and Waivers......................................21
(k) Severability................................................21
(l) Expenses....................................................21
(m) Construction.............................................21-22
(n) Incorporation of Exhibits and Schedules.....................22
(o) Limitations On Representations And Warranties...............22
(p) Cooperation Following The Closing...........................22
(q) Specific Performance........................................22
(r) Submission to Jurisdiction...............................22-23
(s) Employee Benefits Matters...................................23
(t) Bulk Transfer Laws..........................................23
Schedule 1= List of Acquired Assets
Schedule 2= List of Assumed Liabilities
Exhibit A= Form of Buyer 3 Year Note
Exhibit B= Form of Buyer 6 Month Note
Exhibit C= Form of Guarantee by Principals
Exhibit D= Form of Security Agreement
Exhibit E= Form of Xxxx of Sale and Assignments
Exhibit F= Form of Assumption
Exhibit G= Form of Side Agreements
Exhibit H= intentionally omitted
Exhibit I= Historical Financial Statements
Exhibit J= Form of Opinion of Counsel to the Seller \
Exhibit K= Form of Opinion of the counsel to Buyer
Disclosure Schedule = Exception to Representations and Warranties
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ASSET PURCHASE AGREEMENT
Agreement entered into as of November 25, 2002, by and between BAAR
GROUP, INC., a New York corporation (the "Buyer"), and ATEC GROUP, INC., a
Delaware corporation (the "Seller"). The Buyer and the Seller are referred to
individually herein as a "Party" and collectively herein as the "Parties."
This Agreement contemplates a transaction in which the Buyer will
purchase certain of the assets (and assume certain of the liabilities) of the
Seller in return for cash and the Buyer Note (the "Transaction").
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. Definitions.
"Acquired Assets" means all right, title, and interest in and to the
assets of the Seller set forth on Schedule 1.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Agreement" means this Asset Purchase Agreement.
"Assumed Liabilities" means the liabilities set forth on Schedule 2.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"Buyer" has the meaning set forth in the preface above.
"Buyer 3 Year Note" has the meaning set forth in ss.2(c) below.
"Buyer 12 Month Note" has the meaning set forth in ss.2(c) below.
"Buyer Notes" shall mean the Buyer 3 Year Note and the Buyer 6 Month
Note.
"Cash" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
basis consistent with the preparation of the Financial Statements.
"Closing" has the meaning set forth in ss.2(d) below.
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"Closing Date" has the meaning set forth in ss.2(d) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Disclosure Schedule" has the meaning set forth in ss.3 below.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan, or (d)
Employee Welfare Benefit Plan or material fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Sec.
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Sec.
3(1).
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Fairness Opinion" has the meaning set forth in ss.6(b)(iv) below.
"Financial Statement" has the meaning set forth in ss.3(g) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Guarantee" has the meaning set forth in ss.2(c) below.
"Included Personnel" has the meaning set forth in ss.3(u) below.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
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reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium). Subject to Section
3(m)(i), all rights to the name "ATEC" remain with the Seller.
"Investment Banking Firm" has the meaning set forth in ss.6(b)(v)
below.
"Knowledge" means actual knowledge after reasonable investigation,
provided, the Knowledge of any of the Principals shall not be attributed to the
Seller or its directors, officers or employees. Knowledge of the Buyer shall be
deemed to include the Knowledge of the Principals.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet contained within
the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in ss.3(g)
below.
"Most Recent Fiscal Year End" has the meaning set forth in ss.3(g)
below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Other Party" has the meaning set forth in ss.7(a)(ii) below.
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
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"Principals" means the following persons who are stockholders of Buyer:
Xxxxx Xxxxxxx, X.X. Xxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxxxx.
"Purchase Price" has the meaning set forth in ss.2(c) below.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" has the meaning set forth in ss.2(c) below.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable or for Taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Sec. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Terminating Party" has the meaning set forth in ss.7(a)(ii) below.
"Transaction" has the meaning set forth in the preface above.
2. Basic Transaction.
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase
from the Seller, and the Seller agrees to sell, transfer,
convey, and deliver to the Buyer, all of the Acquired Assets
at the Closing for the consideration specified below in this
ss.2.
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(b) Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and
become responsible for the Assumed Liabilities at the Closing.
The Buyer will not assume or have any responsibility, however,
with respect to any other obligation or Liability of the
Seller not included within the definition of Assumed
Liabilities.
(c) Purchase Price. The Buyer agrees to pay to the Seller at the
Closing $4,278,184 (the "Purchase Price"), subject to the
closing adjustments set forth below, by delivery of (i) its
promissory note (the "Buyer 3 Year Note") in the form of
Exhibit A attached hereto in the aggregate principal amount of
$750,000; (ii) its promissory note (the "Buyer 12 Month Note")
in the form of Exhibit B attached hereto in the aggregate
principal amount of $1,000,000; and (ii) cash for the balance
of the Purchase Price payable by wire transfer or delivery of
other immediately available funds. The Buyer 3 Year Note shall
bear an adjustable interest at the rate of one and a half
percent (1.5%) per annum in excess of the prime rate as
published by Citibank, from time to time, with all principal
and interest amortized over a three year period and payable in
equal monthly installments. The Buyer 12 Month Note shall bear
an adjustable interest at the rate of one and a half percent
(1.5%) per annum in excess of the prime rate as published by
Citibank, from time to time, with all principal and interest
amortized over a six month period and payable in equal monthly
installments. In addition, payment of all principal and
interest under each of the Buyer Notes shall be (i) guaranteed
by the Principals (other than X.X. Xxxxx) and (ii) secured by
a security interest in substantially all of the assets of the
Buyer in accordance with a security agreement. The forms of
guarantee (the "Guarantee") and security agreement (the
"Security Agreement") are attached hereto as Exhibits C and D,
respectively.
The Purchase Price shall be adjusted at Closing, as follows:
(i) increased by an amount equal to thirty-four percent (34%)
of the income from operations from Albany, New York City and
New Jersey operations for the period commencing July 1, 2002
through and including the Closing Date; and (ii) reduced by an
amount equal to the expenses allocated to the Long Island, New
York operations (as agreed to between Seller and Buyer) for
the period commencing July 1, 2002 through and including the
Closing Date.
(d) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices
of Xxxxxxxxx Xxxxx Xxxxx Xxxx & Xxxxx P.C. at 000 Xxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, commencing at 9:00 a.m. local
time on the second business day following the satisfaction or
waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will
take at the Closing itself) or such other date as the Parties
may mutually determine (the "Closing Date").
(e) Deliveries at the Closing. At the Closing: (i) the Seller will
deliver to the Buyer the various certificates, instruments,
and documents referred to in ss.6(a) below; (ii) the Buyer
will deliver to the Seller the various certificates,
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instruments, and documents referred to in ss.6(b) below; (iii)
the Seller will execute, acknowledge (if appropriate), and
deliver to the Buyer (A) a xxxx of sale and assignments
(including, if applicable, Intellectual Property transfer
documents) in the form attached hereto as Exhibits E and (B)
such other instruments of sale, transfer, conveyance, and
assignment as the Buyer and its counsel reasonably may
request; (iv) the Buyer will execute, acknowledge (if
appropriate), and deliver to the Seller (A) an assumption in
the form attached hereto as Exhibit F and (B) such other
instruments of assumption as the Seller and its counsel
reasonably may request; Buyer will deliver to the Seller
agreements from the Principals who are employees of the Seller
to the effect that they acknowledge the termination of their
employment and employment agreements with the Seller and they
release the Sellers from any further obligations arising out
of such employment and employment agreements; (v) the Seller
and Buyer will execute and deliver to each other the side
agreements in the forms attached hereto as Exhibits G-1, G-2
and G-3; and (vi) the Buyer will deliver to the Seller the
consideration specified in ss.2(c) above.
3. Representations and Warranties of the Seller. The Seller represents and
warrants to the Buyer that to the Knowledge of the Seller, the statements
contained in this ss.3 are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though made then and
as though the Closing Date were substituted for the date of this Agreement
throughout this ss.3), except as set forth in the disclosure schedule
accompanying this Agreement and initialed by the Parties (the "Disclosure
Schedule"). The Disclosure Schedule will be arranged in paragraphs corresponding
to the lettered and numbered paragraphs contained in this ss.3.
(a) Organization of the Seller. The Seller is a corporation duly
organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation..
(b) Authorization of Transaction. Except for approval of the
stockholders of the Seller, which approval is a condition
precedent to the Closing of the Transaction, the Seller has
full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and, upon
approval of the stockholders of the Seller, to perform its
obligations hereunder. Without limiting the generality of the
foregoing, the board of directors of the Seller has duly
authorized the execution, delivery, and performance of this
Agreement by the Seller. This Agreement constitutes the valid
and legally binding obligation of the Seller, enforceable in
accordance with its terms and conditions, except as such
enforceability may be limited by general principals of equity
or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to or
affecting creditors generally.
(c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the Transactions
(including the assignments and assumptions referred to in ss.2
above), will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental
agency, or court to which any of the Seller and its
Subsidiaries is subject or any provision of the charter or
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bylaws of any of the Seller and its Subsidiaries or (ii)
conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which any of the Seller
and its Subsidiaries is a party or by which it is bound or to
which any of the Acquired Assets is subject (or result in the
imposition of any Security Interest upon any of the Acquired
Assets). None of the Seller and its Subsidiaries needs to give
any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the
assignments and assumptions referred to in ss.2 above).
(d) Brokers' Fees. The Seller has not employed any broker or
finder or incurred any liability for any brokerage fees,
commissions or finder's fees in connection with this Agreement
of the Transaction.
(e) Title to Assets. The Seller and its Subsidiaries have good and
marketable title to, or a valid leasehold interest in, the
Acquired Assets.
(f) Subsidiaries.ss.3(f) of the Disclosure Schedule sets forth for
each Subsidiary of the Seller its name and jurisdiction of
incorporation and the extent to which it owns any of the
Acquired Assets.
(g) Financial Statements. Attached hereto as Exhibit I are the
following financial statements (collectively the "Financial
Statements"): (i) audited consolidated balance sheets as of
June 30, 2002 and 2001 and statements of income, changes in
stockholders' equity, and cash flow for the fiscal years ended
June 30, 2002, 2001 and 2000 (June 30, 2002 being the "Most
Recent Fiscal Year End") for the Seller and its Subsidiaries;
and (ii) an unaudited consolidated balance sheet as of
September 30, 2002 and statements of income, changes in
stockholders' equity, and cash flow (the "Most Recent
Financial Statements") for the three and nine months ended
September 30, 2002 and 2001 for the Seller and its
Subsidiaries. The Financial Statements (including the Notes
thereto) have been prepared in accordance with GAAP applied on
a consistent basis throughout the periods covered thereby
(except such changes required by change in GAAP and approved
by the certified public accountants of ATEC), present fairly
the financial condition of the Seller and its Subsidiaries as
of such dates and the results of operations of the Seller and
its Subsidiaries for such periods, are correct and complete,
and are consistent with the books and records of the Seller
and its Subsidiaries (which books and records are correct and
complete); provided, however, that the Most Recent Financial
Statements are subject to normal year-end adjustments (which
will not be material individually or in the aggregate) and
lack complete footnote disclosures and other presentation
items.
(h) Events Subsequent to Most Recent Fiscal Year End. Since the
Most Recent Fiscal Year End, there has not been any material
adverse change in the business, financial condition,
operations, results of operations, or future prospects of any
of the Seller and its Subsidiaries that would materially
affect the Acquired Assets in an adverse manner.
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(i) Undisclosed Liabilities. None of the Seller and its
Subsidiaries has any Liability that would materially affect
the Acquired Assets in an adverse manner (and to the best of
the Seller's Knowledge, there is no Basis for any present or
future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against any of them giving
rise to any Liability), except for (i) Liabilities set forth
in the Most Recent Balance Sheet (and/or in any notes
thereto); (ii) the Assumed Liabilities; and (iii) Liabilities
which have arisen after the date of the Most Recent Balance
Sheet in the Ordinary Course of Business (none of which
results from, arises out of, relates to, is in the nature of,
or was caused by any breach of contract, breach of warranty,
tort, infringement, or violation of law).
(j) Legal Compliance. Each of the Seller, its Subsidiaries, and
their respective Affiliates has complied with all applicable
laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder)
of federal, state, local, and foreign governments (and all
agencies thereof), and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has
been filed or commenced against any of them alleging any
failure so to comply, for which the failure to so comply would
materially affect the Acquired Assets in an adverse manner.
(k) Tax Matters. There are no Security Interests on any of the
Acquired Assets that arose in connection with any failure (or
alleged failure) of the Seller to pay any Tax.
(l) Real Property. There is no real property included in the
Acquired Assets.
(m) Intellectual Property.
(i) The Seller and its Subsidiaries own or have the right
to use pursuant to license, sublicense, agreement, or
permission its Intellectual Property. All rights to
the names "ATEC" and "ATEC GROUP" and the logos
related thereto remain with the Seller until such
time as the Seller changes its name. Notwithstanding
the foregoing; until such time as the Seller changes
its name, the Seller shall license the foregoing
names and logos to the Buyer in perpetuity. If and
when the Seller changes its name, the foregoing names
and Logos shall transfer to the Buyer.
(ii) None of the Seller and its Subsidiaries has
interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual
Property rights of third parties, and none of the
directors and officers (and employees with
responsibility for Intellectual Property matters) of
the Seller and its Subsidiaries has received any
charge, complaint, claim, demand, or notice alleging
any such interference, infringement,
misappropriation, or violation (including any claim
that any of the Seller and its Subsidiaries must
license or refrain from using any Intellectual
Property rights of any third party). To the Knowledge
of any of the directors and officers (and employees
with responsibility for Intellectual Property
matters) of the Seller and its Subsidiaries, no third
party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with
the Intellectual Property.
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(iii) ss.3(m)(iii) of the Disclosure Schedule identifies
each license, agreement, or other permission which
any of the Seller and its Subsidiaries has granted to
any third party with respect to the Intellectual
Property.
(n) Inventory. The inventory of the Seller and its Subsidiaries is
valued at the lower of cost or market and consists of raw
materials and supplies, manufactured and purchased parts,
goods in process, and finished goods, all of which is
merchantable and fit for the purpose for which it was procured
or manufactured, and none of which is slow-moving, obsolete,
damaged, or defective.
(o) Contracts.ss.3(o) of the Disclosure Schedule lists the
following contracts and other agreements included in the
Acquired Assets to which any of the Seller and its
Subsidiaries is a party (collectively, the "Contracts"):
(i) any agreement (or group of related agreements) for
the lease of personal property to or from any Person
providing for lease payments in excess of $10,000 per
annum;
(ii) any agreement (or group of related agreements) for
the purchase or sale of raw materials, commodities,
supplies, products, or other personal property, or
for the furnishing or receipt of services, the
performance of which will extend over a period of
more than one year, result in a material loss to any
of the Seller and its Subsidiaries, or involve
consideration in excess of $10,000;
(iii) any agreement concerning a partnership or joint
venture;
(iv) any agreement concerning confidentiality or
noncompetition;
(v) any profit sharing, stock option, stock purchase,
stock appreciation, deferred compensation, severance,
or other material plan or arrangement for the benefit
of its current or former directors, officers, and
employees;
(vi) any collective bargaining agreement;
(vii) any agreement for the employment of any individual on
a full-time, part-time, consulting, or other basis
providing annual compensation in excess of $20,000 or
providing severance benefits;
(viii) any agreement under which it has advanced or loaned
any amount to any of its directors, officers, and
employees outside the Ordinary Course of Business;
(ix) any agreement under which the consequences of a
default or termination could have a material adverse
effect on any of the Acquired Assets; or
(x) any other agreement (or group of related agreements)
the performance of which involves consideration in
excess of $10,000.
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The Seller has delivered to the Buyer a correct and complete copy of
each written agreement listed in ss.3(o) of the Disclosure Schedule (as amended
to date) and a written summary setting forth the terms and conditions of each
oral agreement referred to in ss.3(o) of the Disclosure Schedule. With respect
to each such agreement: (A) the agreement is legal, valid, binding, enforceable,
and in full force and effect; (B) the agreement will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby (including
the assignments and assumptions referred to in ss.2 above); (C) no party is in
breach or default, and no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (D) no party has repudiated any provision
of the agreement.
(p) Notes and Accounts Receivable. All notes and accounts
receivable of the Seller and its Subsidiaries included in the
Acquired Assets are reflected properly on their books and
records, are valid receivables subject to no setoffs or
counterclaims, are current and collectible, and will be
collected in accordance with their terms at their recorded
amounts, subject only to the reserve for bad debts set forth
in the Most Recent Balance Sheet (and/or in any notes thereto)
as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of the Seller
and its Subsidiaries.
(q) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of any of the Seller and its
Subsidiaries related to or that affect the Acquired Assets.
(r) Insurance. There are no insurance policies or insurance
included in the Acquired Assets.
(s) Litigation. ss.3(s) of the Disclosure Schedule sets forth each
instance related to or that affects the Acquired Assets in
which any of the Seller and its Subsidiaries (i) is subject to
any outstanding injunction, judgment, order, decree, ruling,
or charge or (ii) is a party or, to the Knowledge of any of
the directors and officers (and employees with responsibility
for litigation matters) of the Seller and its Subsidiaries, is
threatened to be made a party to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator. None
of the actions, suits, proceedings, hearings, and
investigations set forth in ss.3(s) of the Disclosure Schedule
could result in any material adverse change in the Acquired
Assets. None of the stockholders of the Seller and the
directors and officers (and employees with responsibility for
litigation matters) of the Seller and its Subsidiaries has any
reason to believe that any such action, suit, proceeding,
hearing, or investigation may be brought or threatened against
any of the Seller and its Subsidiaries.
(t) Product Warranty. To the extent included in the Acquired
Assets, each product manufactured, sold, leased, or delivered
by any of the Seller and its Subsidiaries has been in
conformity with all applicable contractual commitments and all
express and implied warranties, and none of the Seller and its
Subsidiaries has any Liability (and there is no Basis for any
present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any
- 10 -
of them giving rise to any Liability) for replacement or
repair thereof or other damages in connection therewith,
subject only to the reserve for product warranty claims set
forth in the Most Recent Balance Sheet (and/or in any notes
thereto) as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice
of the Seller and its Subsidiaries.
(u) Employees. To the Knowledge of any of the directors and
officers (and employees with responsibility for employment
matters) of the Seller and its Subsidiaries, no executive, key
employee, or group of employees whose employment and/or
consulting agreements are included in the Acquired Assets
(collectively, the "Included Personnel") has any plans to
terminate employment with any of the Seller and its
Subsidiaries. None of the Seller and its Subsidiaries is a
party to or bound by any collective bargaining agreement
covering any Included Personnel, nor has any of them
experienced any strikes, grievances, claims of unfair labor
practices, or other collective bargaining disputes related to
any Included Personnel. None of the Seller and its
Subsidiaries has committed any unfair labor practice with
regard to any Included Personnel. None of the directors and
officers (and employees with responsibility for employment
matters) of the Seller and its Subsidiaries has any Knowledge
of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to
any Included Personnel.
(v) Employee Benefits.
(i) ss.3(v) of the Disclosure Schedule lists each
Employee Benefit Plan that any of the Seller and its
Subsidiaries maintains or to which any of the Seller
and its Subsidiaries contributes that covers Included
Personnel.
(A) Each such Employee Benefit Plan (and,
insurance contract, or fund) complies in
form and in operation in all respects with
the applicable requirements of ERISA, the
Code, and other applicable laws.
(B) All required reports and descriptions
(including Form 5500 Annual Reports, Summary
Annual Reports, PBGC-1's, and Summary Plan
Descriptions) have been filed or distributed
appropriately with respect to each such
Employee Benefit Plan.
(C) All contributions (including all employer
contributions and employee salary reduction
contributions) which are due have been paid
to each such Employee Benefit Plan which is
an Employee Pension Benefit Plan and all
contributions for any period ending on or
before the Closing Date which are not yet
due have been paid to each such Employee
Pension Benefit Plan or accrued in
accordance with the past custom and practice
of the Seller and its Subsidiaries. All
premiums or other payments for all periods
ending on or before the Closing Date have
been paid with respect to each such Employee
Benefit Plan .
(D) Each such Employee Benefit Plan which is an
Employee Pension Benefit Plan meets the
requirements of a "qualified plan" under
Code Sec. 401(a)
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(E) The Seller has delivered to the Buyer
correct and complete copies of the plan
documents and summary plan descriptions, the
most recent determination letter received
from the Internal Revenue Service, the most
recent Form 5500 Annual Report, and all
related trust agreements, insurance
contracts, and other funding agreements
which implement each such Employee Benefit
Plan.
(ii) None of the Seller and its Subsidiaries maintains or
ever has maintained or contributes, ever has
contributed, or ever has been required to contribute
to any Employee Welfare Benefit Plan providing
medical, health, or life insurance or other
welfare-type benefits for current or future retired
or terminated employees, their spouses, or their
dependents (other than in accordance with Code Sec.
4980B).
(w) Environment, Health, and Safety. Each of the Seller, its
Subsidiaries, and their respective Affiliates has complied
with all Environmental, Health, and Safety Laws, and no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or
commenced against any of them alleging any failure so to
comply, for which the failure to so comply would materially
affect the Acquired Assets in an adverse manner.
(x) Disclosure. The representations and warranties contained in
this ss.3 do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements and information contained in this ss.3 not
misleading.
(y) Investment. The Seller (i) understands that the Buyer Notes
have not been, and will not be, registered under the
Securities Act, or under any state securities laws, and is
being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering
pursuant to section 4(2) of the Securities Act and applicable
state securities laws; (ii) is acquiring the Buyer Notes
solely for its own account for investment purposes, and not
with a view to the distribution thereof, (iii) is a
sophisticated investor with knowledge and experience in
business and financial matters, (iv) has received certain
information concerning the Buyer and has had the opportunity
to obtain additional information as desired in order to
evaluate the merits and the risks inherent in holding the
Buyer Notes, (v) is able to bear the economic risk and lack of
liquidity inherent in holding the Buyer Notes, and (vi) the
Seller acknowledges that the Buyer Notes shall bear a legend
in substantially the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
sold, hypothecated or otherwise transferred or disposed of in
the absence of such registration, unless an exemption from the
requirement of such registration is available under the
circumstances at the time obtaining and demonstrated by
opinion of counsel satisfactory to the Buyer."
4. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller that the statements contained in this ss.4 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
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substituted for the date of this Agreement throughout this ss.4), except as set
forth in the Disclosure Schedule. The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this ss.4.
(a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation.
(b) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid
and legally binding obligation of the Buyer, enforceable in
accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions
contemplated hereby (including the assignments and assumptions
referred to in ss.2 above), will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer
is subject or any provision of its charter or bylaws or (ii)
conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party
or by which it is bound or to which any of its assets is
subject. The Buyer does not need to give any notice to, make
any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for
the Parties to consummate the transactions contemplated by
this Agreement (including the assignments and assumptions
referred to in ss.2 above).
(d) Brokers' Fees. Neither the Buyer nor any of the Principals has
employed any broker or finder or incurred any liability for
any brokerage fees, commissions or finder's fees in connection
this Agreement or the Transaction.
(e) Financial Condition. At Closing, the Buyer shall have cash of
at least $500,000 and no material liabilities.
(f) Seller's Representations and Warranties. To the Knowledge of
the Buyer, each and every representation and warranty of the
Seller contained in Section 3 of this Agreement and in the
Seller's Disclosure Statement is true, complete and correct in
all material respect.
5. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable best
efforts to take all action and to do all things necessary,
proper, or advisable in order to consummate and make effective
the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set
forth in ss.7 below).
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(b) Notices and Consents. The Seller and the Buyer will give (and
will cause each of the Seller's Subsidiaries to give) any
notices to third parties, and the Seller will use its
reasonable best efforts (and will cause each of its
Subsidiaries to use its reasonable best efforts) to obtain any
third party consents, that the Buyer reasonably may request in
connection with the matters referred to in ss.3(c) above. Each
of the Parties will (and the Seller will cause each of its
Subsidiaries to) give any notices to, make any filings with,
and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred
to in ss.3(c) and ss.4(c) above.
(c) Operation of Business. The Seller will not (and will not cause
or permit any of its Subsidiaries) to take action out of the
Ordinary Course of Business, if such action would materially
affect the Acquired Assets in an adverse manner.
(d) Preservation of Business. The Seller will keep (and will cause
each of its Subsidiaries to keep) its business and properties
substantially intact, including its present operations,
physical facilities, working conditions, and relationships
with lessors, licensors, suppliers, customers, and employees
except to the extent that keeping its business and properties
substantially intact does not materially affect the Acquired
Assets in an adverse manner.
(e) Full Access. The Seller will permit (and will cause each of
its Subsidiaries to permit) representatives of the Buyer to
have full access at all reasonable times, and in a manner so
as not to interfere with the normal business operations of the
Seller and its Subsidiaries, to all premises, properties,
personnel, books, records (including Tax records), contracts,
and documents of or pertaining to each of the Seller and its
Subsidiaries to the extent that such access reasonably relates
to the Buyer's due diligence investigation of the Acquired
Assets.
(f) Notice of Developments. Each Party will give prompt written
notice to the other Party of any material adverse development
causing a breach of any of its own representations and
warranties in ss.3 and ss.4 above. No disclosure by any Party
pursuant to this ss.5(f), however, shall be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
6. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth inss.3
above shall be true and correct in all material
respects at and as of the Closing Date;
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(ii) the Seller shall have performed and complied with all
of its covenants hereunder in all material respects
through the Closing;
(iii) the Seller and its Subsidiaries shall have procured
all of the third party consents specified inss.5(b)
above;
(iv) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or
administrative agency of any federal, state, local,
or foreign jurisdiction wherein an unfavorable
injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B)
cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, or
(C) affect adversely the right of the Buyer to own
the Acquired Assets;
(v) the Seller shall have delivered to the Buyer a
certificate to the effect that each of the conditions
specified above inss.6(a)(i)-(iv) is satisfied in all
respects;
(vi) the relevant parties shall have entered into side
agreement in form and substance as set forth in
Exhibit G-1 (agreement pursuant to which the Seller
licenses the "Atec Group" name and logo to the Buyer)
and the same shall be in full force and effect;
(vii) the Buyer shall have received from counsel to the
Seller an opinion in form and substance as set forth
in Exhibit J attached hereto, addressed to the Buyer,
and dated as of the Closing Date;
(viii) the Buyer shall have obtained a minimum of $500,000
in financing; and
(ix) all actions to be taken by the Seller in connection
with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments,
and other documents required to effect the
transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this ss.6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth inss.4
above shall be true and correct in all material
respects at and as of the Closing Date;
(ii) the Buyer shall have performed and complied with all
of its covenants hereunder in all material respects
through the Closing;
(iii) the Buyer shall have delivered to the Seller
agreements from the Principals who are employees of
the Seller and from Xxxx Xxxxxx to the effect that
they acknowledge the termination of their employment
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and employment agreements with the Seller and they
release the Seller from any further obligations
arising out of such employment and employment
agreements (including, but not limited to any rights
upon termination, or any unvested stock appreciation
rights, options, warrants or other rights to acquire
stock of the Seller);
(iv) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or
administrative agency of any federal, state, local,
or foreign jurisdiction wherein an unfavorable
injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B)
cause any of the transactions contemplated by this
Agreement to be rescinded following consummation (and
no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
(v) The Seller's shall have obtained an opinion (the
"Fairness Opinion") from a recognized investment
banking firm or other firm experienced in business
appraisals (the "Investment Banking Firm") chosen by
a committee of its Board of Directors (a majority of
whose members are independent directors) to the
effect that the Purchase Price to be paid for the
Acquired Assets is fair;
(vi) the Seller's stockholders shall have approved this
Agreement and the Transactions in conformance with
the requirements of the Delaware General Corporation
Law and the rules of the American Stock Exchange;
(vii) the Seller shall have complied with all relevant
requirements of the American Stock Exchange and
determined that effectuation of the Transactions will
not result in the delisting of the Seller's
securities from the American Stock Exchange;
(viii) the Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions
specified above in ss.6(b)(i)-(iv) is satisfied in
all respects;
(ix) the relevant parties shall have entered into side
agreements in form and substance as set forth in (a)
Exhibit C (the Guarantees by each of the Principals);
(b) Exhibit D (the Security Agreement); (c) Exhibit
G-2 (agreement pursuant to which the Buyer agrees to
deliver 50% of the gross proceeds from the sale,
lease or other form of disposition of any interest in
or to any of the aforementioned Acquired Assets
effected during the one year period commencing upon
the Closing Date); and (d) Exhibit G-3 (agreement
pursuant to which the Buyer agrees to pay to Seller
certain New York State receivables upon receipt of
such receivables); and the same shall be in full
force and effect;
(x) the Buyer shall have delivered the consideration
specified in ss.2(c), including, but not limited to,
the Buyer 3 Year Note and the Buyer 12 Month Note;
(xi) the transaction by which all of the issued and
outstanding capital stock of Interpharm Inc., a New
York corporation, are exchanged for the capital stock
of the Seller shall have been consummated;
- 16 -
(xii) the Seller shall have received from counsel to the
Buyer an opinion in form and substance as set forth
in Exhibit K attached hereto, addressed to the
Seller, and dated as of the Closing Date;
(xiii) the Seller shall have entered into a Pledge and
Security Agreement with Xxxx Prefer wherein Xxxx
Prefer pledges 100,000 shares of common stock of
Buyer as security for the full performance of his
obligations under than certain promissory note dated
April 1, 2002, in the original principal amount of
$40,000, and
(xiv) all actions to be taken by the Buyer in connection
with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments,
and other documents required to effect the
transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.
The Seller may waive any condition specified in this ss.6(b) if it executes a
writing so stating at or prior to the Closing.
7. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate
this Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement
by mutual written consent at any time prior to the
Closing;
(ii) the Buyer or Seller (the "Terminating Party") may
terminate this Agreement by giving written notice to
the other party (the "Other Party") on or before the
30 days following the date of this Agreement,
provided, however, that should the Terminating Party
terminate this Agreement pursuant to this
ss.7(a)(ii), the Terminating Party shall pay to the
Other Party the Other Party's accountable expenses
associated with the Transaction up to a maximum of
$250,000;
(iii) the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the
Closing (A) in the event the Seller has breached any
material representation, warranty, or covenant
contained in this Agreement in any material respect,
the Buyer has notified the Seller of the breach, and
the breach has continued without cure for a period of
30 days after the notice of breach or (B) if the
Closing shall not have occurred on or before February
1, 2003, by reason of the failure of any condition
precedent under ss.6(a) hereof (unless the failure
results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in
this Agreement); and
(iv) the Seller may terminate this Agreement by giving
written notice to the Buyer at any time prior to the
Closing (A) in the event the Buyer has breached any
material representation, warranty, or covenant
contained in this Agreement in any material respect,
the Seller has notified the Buyer of the breach and
the breach has continued without cure for a period of
30 days after the notice of breach or (B) if the
Closing shall not have occurred on or before February
1, 2003, by reason of the failure of any condition
- 17 -
precedent under ss.6(b) hereof (unless the failure
results primarily from the Seller itself breaching
any representation, warranty, or covenant contained
in this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to ss.7(a) above, all rights and obligations of the
Parties hereunder shall terminate without any Liability of any
Party to any other Party (except for any Liability of any
Party then in breach).
8. Miscellaneous.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Parties contained in
this Agreement, or in any schedule, exhibit, document,
certificate or other instrument delivered by or on behalf of
the Parties pursuant to this Agreement shall survive the
Closing hereunder for a period of thirty-six (36) months after
the Closing Date; regardless of any investigation or
disclosure made by or on behalf of the Parties.
Notwithstanding the foregoing, if any schedule, exhibit,
document, certificate or other instrument delivered by or on
behalf of the Parties pursuant to this Agreement specifically
states a different survival period, such different survival
period shall govern with regard to that document.
(b) Press Releases and Public Announcements. No Party shall issue
any press release or make any public announcement relating to
the subject matter of this Agreement without the prior written
approval of the other Party; provided, however, that any Party
may make any public disclosure it believes in good faith is
required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable best efforts to
advise the other Party prior to making the disclosure.
(c) No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties
and their respective successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between
the Parties and supersedes any prior understandings,
agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the
subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and
their respective successors and permitted assigns. No Party
may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written
approval of the other Party.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but
all of which together will constitute one and the same
instrument.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
- 18 -
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice,
request, demand, claim, or other communication hereunder shall
be deemed duly given if (and then three business days after)
it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended
recipient as set forth below:
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If to the Seller:
Atec Group, Inc.
00 Xxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Copy to:
Xxxxx Xxxxxxxxx, Esq.
Xxxxxxxxx Xxxxx Xxxxx Xxxx & Xxxxx P.C.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Buyer:
Baar Group, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Copy to:
Xxxxxx X. Xxxx, Esq.
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Party notice in the manner herein set forth.
- 20 -
(i) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement
shall be governed by and construed in accordance with the
domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether of
the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other
than the State of New York. Notwithstanding the foregoing, the
corporate laws of the state of Delaware shall govern all
issues concerning the relative rights of the Seller and its
stockholders.
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing
and signed by the Buyer and the Seller. The Seller may consent
to any such amendment at any time prior to the Closing with
the prior authorization of its board of directors; provided,
however, that the Seller's ability to consent to any such
amendment effected after the stockholders of the Seller have
approved this Agreement will be subject to the restrictions
contained in the Delaware General Corporation Law. No waiver
by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder
or affect in any way any rights arising by virtue of any prior
or subsequent such occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) Expenses. Each of the Buyer, the Seller and its Subsidiaries
will bear his or its own costs and expenses (including legal
fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby. The Seller agrees
that none of its Subsidiaries has borne or will bear any of
the costs and expenses of the Seller (including any of their
legal fees and expenses) in connection with this Agreement or
any of the transactions contemplated hereby.
(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the
Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship
of any of the provisions of this Agreement. Any reference to
any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word
"including" shall mean including without limitation. Nothing
in the Disclosure Schedule shall be deemed adequate to
disclose an exception to a representation or warranty made
herein unless the Disclosure Schedule identifies the exception
with reasonable particularity and describes the relevant facts
in reasonable detail. Without limiting the generality of the
foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be deemed adequate to
disclose an exception to a representation or warranty made
herein (unless the representation or warranty has to do with
the existence of the document or other item itself). The
- 21 -
Parties intend that each representation, warranty, and
covenant contained herein shall have independent significance.
If any Party has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating
to the same subject matter (regardless of the relative levels
of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach
of the first representation, warranty, or covenant.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein
by reference and made a part hereof.
(o) Limitations On Representations And Warranties. Except for the
representations and warranties set forth in this Agreement,
the Acquired Assets are being sold "AS IS, WHERE IS, AND WITH
ALL FAULTS." EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET
FORTH IN THIS AGREEMENT, THE SELLER MAKES NO REPRESENTATIONS
OR WARRANTIES WHATSOEVER CONCERNING THE ASSUMED LIABILITIES,
THE AQUIRED ASSETS, OR ANY OTHER MATTER, EXPRESS OR IMPLIED,
ORAL, OR WRITTEN. THE SELLER HEREBY SPECIFICALLY DISCLAIMS THE
IMPLIED WARRANTY OF MERCHANTABILITY AND THE IMPLIED WARRANTY
OF FITNESS FOR A PARTICULAR PURPOSE.
(p) Cooperation Following The Closing. Following the Closing, the
Parties shall each deliver to the other such further
information and documents and shall execute and deliver to the
other such further instruments and agreements as the other
shall reasonably request to consummate or confirm the
Transactions provided for in this Agreement, to accomplish the
purpose of this Agreement or to assure to the other the
benefits of this Agreement.
(q) Specific Performance. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in
the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise
are breached. Accordingly, each of the Parties agrees that the
other Party shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over
the Parties and the matter (subject to the provisions set
forth in ss.8(p) below), in addition to any other remedy to
which it may be entitled, at law or in equity.
(r) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Albany,
New York, in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in
respect of the action or proceeding may be heard and
determined in any such court. Each party also agrees not to
bring any action or proceeding arising out of or relating to
this Agreement in any other court. Each of the Parties waives
any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety,
or other security that might be required of any other Party
with respect thereto. Any Party may make service on the other
Party by sending or delivering a copy of the process (i) to
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the Party to be served at the address and in the manner
provided for the giving of notices in ss.8(h) above. Each
Party agrees that a final judgment in any action or proceeding
so brought shall be conclusive and may be enforced by suit on
the judgment or in any other manner provided by law or in
equity.
(s) Employee Benefits Matters. The Buyer will adopt and assume at
and as of the Closing each of the Employee Benefit Plans that
the Seller maintains and each trust, insurance contract,
annuity contract, or other funding -arrangement that the
Seller has established with respect thereto. The Buyer will
ensure that the Employee Benefit Plans treat employment with
any of the Seller and its Subsidiaries prior to the Closing
Date the same as employment with any of the Buyer and its
Subsidiaries from and after the Closing Date for purposes of
eligibility, vesting, and benefit accrual. The Seller will
transfer (or cause the plan administrators to transfer) at and
as of the Closing all of the corresponding assets associated
with the Employee Benefit Plans that the Buyer is adopting and
assuming.
(t) Bulk Transfer Laws. The Buyer acknowledges that the Seller
will not comply with the provisions of any bulk transfer laws
of any jurisdiction in connection with the transactions
contemplated by this Agreement.
* * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
BUYER:
BAAR GROUP, INC.
By: /s/ XXXXX XXXXXXX
-------------------------------
Title: President
------------------------
SELLER:
ATEC GROUP, INC.
By: /s/ XXXXX X. XXXXXXX
-------------------------------
Title: VP Finance and CFO
------------------------
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Schedule 1
ACQUIRED ASSETS
All of the Seller's and each of its subsidiaries' properties and assets,
personal, tangible and intangible, of every kind and wherever situated, which
are owned by the Seller or its subsidiaries or in which the Seller or its
subsidiaries has any right, title or interest, including, without limiting the
generality of the foregoing, their goodwill, franchises, telephone numbers,
permits, licenses, Acquired Intellectual Property, supplies, their commercial
papers, stocks, bonds and other investments, their accounts receivables, their
insurance policies, their causes of actions, judgments, claims and demands of
whatever nature, their tangible and intangible personal property of all kinds,
their deferred charges, advance payments, pre-paid items, claims for refunds,
rights of offset and credits of all kinds, all restrictive covenants and
obligations of present and former officers and employees and of individuals and
corporations, their accounts, general intangibles, returned and repossessed
goods, and rights as an unpaid vendor, secured party of licensor, their credit
balances, documents, instruments and other chooses in actions, their rights
under contracts, purchase orders, personal property, leases, joint venture
agreements or arrangements and other agreements, their files, papers and records
relating to the aforesaid properties and assets, their inventory, securities,
machinery, equipment, pre-paid expenses, work in process, contracts, tools,
dies, office furniture and equipment, product literature and customer records,
except the following:
1. Employment agreement of Xxxxxxxx Xxxxxxx.
2. Employment agreement of Xxx Xxxxxxx.
3. Lease for the property located at 00 Xxxx Xxxxx, Xxxxxxx, Xxx Xxxx
00000 (including the security deposit for such lease).
4. All machinery, equipment, fixtures, software, office furniture and
equipment and telephone numbers located at the Commack, New York
facility, including all leases, contracts, agreements and records
relating to the aforesaid assets and properties located at the Commack,
New York facility.
5. Assets and properties in the Xxxxxxx Xxxxx broker account.
6. All insurance policies, including any premium deposits, refunds or
rebates for such policy.
7. Retainer in the amount of $10,000 paid to Xxxxxxx Xxxx Slate Xxxxxxx &
Xxxx.
8. Retainer in the amount of $5,000 paid to Xxxxxxx Xxxxxxx Xxxxxxxxx & Co
LLP.
9. New York State tax receivables in the amount of $71,730 as of June 30,
2002.
10. New York City MTA tax receivable in the amount of $5,153 as of June 30,
2002.
11. Minute book, stock records and similar organizational documents.
12. Captial Stock Exchange Agreement with Interpharm, Inc.
13. Promissory Note of Xxxx Prefer, dated April 1, 2002, in the original
principal amount of $40,000.
14. Intellectual Property other than the other than the Intellectual
Property relating to the Nexar division and, subject to Section 3(m)(i)
of the Agreement, the "ATEC" and "ATEC Group" name and logo .
15. Receivable from Xxxx Prefer in connection with the $14,378 settlement
paid by Seller in connection with garnishment by Xxxx Prefer's former
wife.
16. Pledge and Security Agreement between Xxxx Prefer and Atec Group, Inc.,
dated April 1, 2002.
17. 401(k) Plan.
18. ATEC Group, Inc. 2000 Flexible Stock Plan.
19. ATEC Group, Inc. 1997 Stock Option Plan.
20. Health Care Plan.
21. Dental Insurance.
22. Life Insurance policies.
23. Disability Insurance policies.
24. Any tax receivables, deferred taxes or tax credits, other than the tax
receivables of (a) Micro Computer Store, Inc. in the amount of $12,155
due from New York State and (b) Innovative Business Micros, Inc. in the
amount of $3,071 due from New York State.
25. Stipulation and Agreement of Settlement in the Manavazian class action
claim, including the Release, Indemnity and Settlement Agreement,
between the Seller and National Union fire Insurance Company of
Pittsburg, Pa
26. Capital stock of any of the Seller's Subsidiaries other than Micro
Computer Store, Inc. and Innovative Business Micros, Inc.
Schedule 2
ASSUMED LIABILITIES
All liabilities and obligations, (a) reflected in the Seller's balance sheet as
of June 30, 2002; (b) arising out of any claim asserted by Xxxx Bellaview; (c)
arising out of any claim asserted by AMC Computer Corp.; (d) whether known or
unknown, contingent or absolute, arising or accruing between the period of July
1, 2002 and the Closing Date; or (e) arising or resulting in any way out of an
Acquired Asset, including any agreement, lease, instrument or license assigned
to Buyer, accruing on or after the Closing Date, except the following:
1. Obligations arising out of the Capital Stock Exchange Agreement with
Interpharm, Inc.
2. The following accrued expenses:
x. Xxxxxxxx Realty in the amount of $156,130
x. Xxxxxxxxx litigation in the amount of $39,100
x. Xxxxxx & Xxxxx in the amount of $1,240
d. Prudential in the amount of $23,000
3. Tax liabilities of Seller to the extent of any tax liability arising
out of the income from operations during the period of July 1, 2002 and
the Closing Date from the Seller's Albany, New York City and New Jersey
operations.
4. Any expenses and liabilities arising out of the Manavazian class action
claim.
