EXECUTION COPY
ASSET PURCHASE AGREEMENT
By and Among
CONAM INSPECTION, INC.
and
TOP SOURCE TECHNOLOGIES, INC.
and
UNITED TESTING GROUP, INC.
Dated as of October 30, 1996
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TABLE OF CONTENTS
Section 1. Sale and Purchase of Assets................................................................... 1
1.1 Sale of Purchased Assets...................................................................... 1
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(a) Prepaid Assets.......................................................................... 1
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(b) Personal Property....................................................................... 1
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(c) Inventory............................................................................... 2
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(d) Leases.................................................................................. 2
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(e) Contracts............................................................................... 2
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(f) Licenses and Permits.................................................................... 2
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(g) Intellectual Property................................................................... 2
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(h) Intangible Assets....................................................................... 2
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(i) Records and Documents................................................................... 2
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(j) Telephone Numbers....................................................................... 2
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(k) Corporate Name.......................................................................... 2
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(l) Warranties.............................................................................. 3
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(m) Other Assets............................................................................ 3
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1.2 Excluded Assets............................................................................... 3
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1.3 Method of Conveyance.......................................................................... 3
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1.4 Assumed Obligations........................................................................... 3
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1.5 Excluded Obligations.......................................................................... 4
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1.6 Closing Date.................................................................................. 5
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1.7 Accrued Vacation and Sick Time................................................................ 5
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Section 2. Purchase Price................................................................................ 5
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2.1 Purchase Price................................................................................ 5
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2.2 Payment Terms................................................................................. 5
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2.3 Allocation.................................................................................... 6
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2.4 Adjustment to Purchase Price.................................................................. 6
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Section 3. Representations and Warranties................................................................ 6
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3.1 Seller........................................................................................ 6
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(a) Organization and Qualification.......................................................... 6
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(b) Authorization; No Restrictions, Consents or Approvals................................... 6
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(c) Absence of Certain Changes.............................................................. 7
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(d) Taxes................................................................................... 7
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(e) Title to Purchased Assets............................................................... 8
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(f) Leases.................................................................................. 8
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(g) Contracts and Other Documents........................................................... 8
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(h) Labor Difficulties...................................................................... 9
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(i) ERISA; Employee Benefit Plans........................................................... 9
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(j) Employees............................................................................... 11
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(k) Licenses and Permits.................................................................... 11
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(l) Accounts Receivable..................................................................... 11
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(m) Absence of Undisclosed Liabilities...................................................... 11
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(n) Compliance With Law..................................................................... 12
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(o) Intellectual Property and Intangible Assets............................................. 12
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(p) Pending Litigation...................................................................... 12
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(q) Customer List........................................................................... 13
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(r) Purchased Assets; Ownership of Necessary Assets and Rights.............................. 13
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(s) Subsidiaries and Other Investments...................................................... 13
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(t) Disclosure.............................................................................. 13
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(u) Financial Statements.................................................................... 13
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(v) Inventory............................................................................... 14
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(w) Suppliers............................................................................... 14
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(x) No Third Party Option................................................................... 14
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(y) Related Party Transactions.............................................................. 14
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3.2 Buyer......................................................................................... 14
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(a) Organization and Qualification.......................................................... 14
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(b) Authorization; No Restrictions, Consents or Approvals................................... 15
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Section 4. Environmental Matters......................................................................... 15
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4.1 Definitions................................................................................... 15
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4.2 Environmental Representations and Warranties by Seller and Parent............................. 17
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4.3 Seller's and Parent's Obligations............................................................. 18
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Section 5. Covenants Prior to Closing.................................................................... 19
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5.1 Seller and Parent's Covenants................................................................. 19
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5.2 Access........................................................................................ 20
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5.3 Cooperation................................................................................... 20
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5.4 Environmental Site Assessment................................................................. 21
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5.5 Compliance with Bulk Transfer Law............................................................. 21
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Section 6. Closing....................................................................................... 21
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6.1 Conditions to Buyer's Obligations............................................................. 21
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6.2 Conditions to Seller's Obligations............................................................ 23
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6.3 Conditions to Seller's and Buyer's Obligations................................................ 24
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6.4 Buyer's Closing Documents..................................................................... 24
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6.5 Seller's Closing Documents.................................................................... 24
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6.6 Closing Apportionments........................................................................ 25
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Section 7. Additional Covenants.......................................................................... 26
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7.1 Post-Closing Access........................................................................... 26
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7.2 Covenant Not to Compete....................................................................... 26
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7.3 Nondisclosure................................................................................. 28
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7.4 Cooperation in Third-Party Litigation......................................................... 28
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7.5 Discharge of Business Obligations............................................................. 29
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7.6 Change of Business Name....................................................................... 29
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7.7 Further Assurances............................................................................ 29
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7.8 Accounts Receivable........................................................................... 29
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7.9 Management Fee................................................................................ 30
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7.10 Database...................................................................................... 30
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7.11 Oil Analyzers................................................................................. 30
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7.12 Health Benefits............................................................................... 31
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7.13 Prepaid Kits.................................................................................. 31
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7.14 Support Agreement............................................................................. 31
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7.15 Terminated Employees.......................................................................... 31
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Section 8. Survival of Representations and Warranties; Indemnification................................... 32
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8.1 Survival of Representations and Warranties and Covenants...................................... 32
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8.2 Indemnification by Seller and Parent.......................................................... 32
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8.3 Indemnification by Buyer...................................................................... 33
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8.4 Indemnification Payments...................................................................... 33
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8.5 Procedure for Third Party Claims.............................................................. 33
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8.6 Set-Off....................................................................................... 34
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8.7 Remedies Cumulative........................................................................... 34
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8.8 Successors.................................................................................... 34
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8.9 Limits on Indemnification..................................................................... 34
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Section 9. Brokerage..................................................................................... 34
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9.1 Finders and Brokers Fees...................................................................... 34
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Section 10. General Provisions............................................................................ 35
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10.1 Sales and Transfer Taxes...................................................................... 35
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10.2 No Third Party Beneficiaries.................................................................. 35
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10.3 Expenses of the Parties; Certain Litigation................................................... 35
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10.4 Amendment and Waiver.......................................................................... 35
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10.5 Miscellaneous................................................................................. 35
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10.6 Binding Effect................................................................................ 35
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10.7 Publicity..................................................................................... 36
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10.8 Complete Agreement............................................................................ 36
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10.9 Notices....................................................................................... 36
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10.10 Assignment.................................................................................... 37
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10.11 Severability.................................................................................. 37
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10.12 Effect of Investigation....................................................................... 37
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10.13 Termination................................................................................... 37
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SCHEDULES
Schedule 1.1(b): Personal Property
Schedule 1.2: Excluded Assets
Schedule 1.3(b): Liens
Schedule 1.4(a): Assumed Contracts, Commitments, Etc.
Schedule 1.4(b): Assumed Permits and Licenses
Schedule 2.3: Allocation
Schedule 2.4: Adjustments
Schedule 3.1(b): Events Permitting Termination of Any
Agreement; Necessary Authorizations,
Consents, Etc.
Schedule 3.1(c): Disclosure of Certain Changes
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Schedule 3.1(d): Taxes Not Timely Filed
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Schedule 3.1(e): Real Property
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Schedule 3.1(f): Leases
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Schedule 3.1(g): Contracts and Other Documents
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Schedule 3.1(h): Labor Difficulties
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Schedule 3.1(i): Employee Benefit Plans
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Schedule 3.1(j): Employees
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Schedule 3.1(k): Licenses and Permits
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Schedule 3.1(l): Accounts Receivable
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Schedule 3.1(m): Disclosure of Liabilities and Obligations
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Schedule 3.1(n): Compliance with Law
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Schedule 3.1(o): Intellectual Property and Intangible Assets
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Schedule 3.1(p): Pending Litigation
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Schedule 3.1(q): Customer List
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Schedule 3.1(u): Financial Statements
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Schedule 3.1(y): Related Party Transactions
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Schedule 3.1(z): Capital Structure
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Schedule 3.2(b): Authorizations, Consents, and Approvals
Needed by Buyer
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Schedule 4.2(c): Material Safety Data Sheets
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Schedule 4.2(d): Hazardous Materials or Solid Waste
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Schedule 4.2(e): Legal Compliance
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Schedule 4.3(d): Licenses and Permits
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Schedule 5.1(a): Conduct of the Business
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Schedule 6.1(k): Agreements with Related Parties
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Schedule 7.12: Health Benefits
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Schedule 7.14: Use of Equipment
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CROSS REFERENCE SHEET
Each of the following terms is defined in this Agreement in the
respective Section referenced adjacent to such term:
Defined Term Section Reference
Accounts Receivable.....................................................................................Section 7.8
Acquisition Proposal.................................................................................Section 5.1(e)
Agreement..................................................................................................Preamble
Analyzer Amount........................................................................................Section 7.11
Area.................................................................................................Section 7.2(a)
Assumed Leases.......................................................................................Section 1.1(d)
Assumed Obligations.....................................................................................Section 1.4
Business...................................................................................................Recitals
Buyer......................................................................................................Preamble
Buyer Indemnitee(s).....................................................................................Section 8.2
CERCLA..................................................................................................Section 4.1
Closing.................................................................................................Section 1.6
Closing Date............................................................................................Section 1.6
Closing Date Financial Statements....................................................................Section 3.1(u)
Confidential Information..................................................................................Section ?
Contracts............................................................................................Section 1.1(e)
Consulting Agreement.................................................................................Section 6.1(i)
DataBase...............................................................................................Section 7.10
Employees............................................................................................Section 6.1(i)
Employee Benefit Plans...............................................................................Section 3.1(i)
Environmental Compliance Liability......................................................................Section 4.1
Environmental Conditions................................................................................Section 4.1
Environmental Laws......................................................................................Section 4.1
Environmental Notice....................................................................................Section 4.1
Excluded Assets.........................................................................................Section 1.2
Excluded Obligations....................................................................................Section 1.5
Facilities..............................................................................................Section 4.1
Financial Statements.................................................................................Section 3.1(u)
Hazardous Materials.....................................................................................Section 4.1
Health Period..........................................................................................Section 7.12
Intangible Assets....................................................................................Section 1.1(h)
Intellectual Property................................................................................Section 1.1(g)
Inventory............................................................................................Section 1.1(c)
Laws.................................................................................................Section 3.1(n)
Lease(s).............................................................................................Section 3.1(f)
Licenses and Permits.................................................................................Section 3.1(k)
Liens................................................................................................Section 1.3(b)
Losses..................................................................................................Section 8.2
Consulting Fee..........................................................................................Section 7.9
Management Term.........................................................................................Section 7.9
MSDS.................................................................................................Section 4.2(c)
Non-Competition Agreement............................................................................Section 6.1(i)
Oil Analyzers..........................................................................................Section 7.11
Parent.....................................................................................................Preamble
Pension Plans........................................................................................Section 3.1(i)
Person...............................................................................................Section 1.5(b)
Personal Property....................................................................................Section 1.1(b)
Prepaid Kits............................................................................................Section 1.4
Prepaid Returns........................................................................................Section 7.13
Purchase Price..........................................................................................Section 2.1
Purchased Assets........................................................................................Section 1.1
Real Property........................................................................................Section 3.1(e)
Release.................................................................................................Section 4.1
Response Action.........................................................................................Section 4.1
Seller.....................................................................................................Preamble
Seller Indemnitee(s)....................................................................................Section 8.3
Support Agreement......................................................................................Section 7.14
Taxes................................................................................................Section 3.1(d)
Trade Secrets.............................................................................................Section ?
Transfer Taxes........................................................................................ Section 10.1
USEPA...................................................................................................Section 4.1
Vacation Accrual........................................................................................Section 1.7
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered into this 30th day of
October, 1996 (the "Agreement") by and among CONAM INSPECTION, INC., a Delaware
corporation (the "Buyer"), and TOP SOURCE TECHNOLOGIES, INC., a Delaware
corporation ("Parent") and Parent's wholly-owned subsidiary, United Testing
Group, Inc., a Georgia corporation (the "Seller").
WHEREAS, Seller owns and operates laboratory oil analysis testing
services business (the "Business") with facilities located in Atlanta, Georgia;
Addison, Illinois; and Sparks, Nevada; and
WHEREAS, Buyer wishes to purchase the Purchased Assets, it being the
intention of Buyer to employ such Purchased Assets as part of its own business
and not to continue Seller's enterprise as such, it being understood that Buyer
shall not be deemed to be a successor to, or a continuation of, Seller; and
WHEREAS, subject to the foregoing, Seller desires to sell and Buyer
desires to purchase the Purchased Assets, in accordance with the terms,
conditions, and agreements hereinafter contained.
NOW THEREFORE, in consideration of the mutual premises and the
covenants and promises hereinafter contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto intending to be legally bound hereby agree as follows:
Section 1. Sale and Purchase of Assets
1.1 Sale of Purchased Assets1.1 Sale of Purchased Assets. On the terms
and subject to the conditions set forth in this Agreement, at the Closing,
Seller will sell, convey, transfer and assign to Buyer, and Buyer will purchase
and accept from Seller all right, title and interest in and to all of the assets
of Seller used in or related to the Business, including, without limitation, the
assets described in subsections (a) through (m) hereof, and excluding only the
Excluded Assets (collectively, the "Purchased Assets"), free and clear of all
Liens.
(a) Prepaid Assetsa) Prepaid Assets. All prepaid and
deferred items or credits, such as unbilled charges, deposits and other
similar items including, without limitation, those as set forth on Schedule
1.1(a).
(b) Personal Propertyb) Personal Property. All tangible
personal property, including, without limitation, all machinery, equipment,
tools, dies, molds, parts, furniture, furnishings, leasehold improvements,
fixtures, computer hardware, office equipment, vehicles and supplies including,
without limitation, those assets described on Schedule 1.1(b) (the "Personal
Property").
(c) Inventoryc) Inventory. All inventories,
stock-in-trade, work-in-process, finished units, repair and replacement
parts and raw materials (including goods in transit, consigned inventory,
inventory sold on approval and rental inventory) (the "Inventory").
(d) Leasesd) Leases. All rights of Seller under the
Leases set forth on Schedule 1.4(a) ("Assumed Leases").
(e) Contractse) Contracts. All rights and benefits of Seller
under all contracts, agreements, license agreements, vendor agreements, purchase
orders, commitments, sales orders and supply agreements, including, without
limitation, those set forth on Schedule 3.1(g) (the "Contracts").
(f) Licenses and Permitsf) Licenses and Permits. All right,
title and interest in and to all licenses, permits, approvals, and
authorizations including, without limitation, applications therefor, relating to
Seller's operation of the Business which are held by or have been granted to, or
have been applied for, by Seller, to the extent assignment or transfer is
permitted by applicable Law.
(g) Intellectual Propertyg) Intellectual Property. All right,
title and interest in and to all patents, licenses, copyrights, trademarks,
trade names, service marks (including the trademark and name of Seller or any
derivation thereof), logos and slogans, and all of the goodwill associated
therewith, and all registrations, applications and other rights associated with
the foregoing, if any, whether registered or unregistered, now used or presently
planned to be used by Seller in connection with the Business, including, without
limitation, those set forth on Schedule 3.1(o), including the right to xxx for
past infringement thereof (collectively, the "Intellectual Property").
(h) Intangible Assetsh) Intangible Assets. All right, title
and interest in and to all know-how, technology, slogans, data, studies,
confidential information, restrictive covenants, computer software (including
documentation and related object and source codes), indemnity rights, and other
intangible assets now used or presently planned to be used by Seller, and all of
the goodwill associated therewith, confidentiality obligations and similar
obligations of present and former shareholders, officers and employees of Seller
(collectively, the "Intangible Assets").
(i) Records and Documentsi) Records and Documents. All books,
files, papers, technical and research analyses, engineering, sales, marketing
and other studies, data and plans, records and other data located at Seller's
facilities in Atlanta, Georgia, Addison, Illinois and Sparks, Nevada, or
pertaining to the Business, including, without limitation, all supplier and
customer lists and other databases, licensee lists, distributor lists, bid
information, customer correspondence, quality assurance records, test reports,
invoices, job orders and technique sheets.
(j) Telephone Numbersj) Telephone Numbers.
Seller's interest in and to all telephone and telex (if any) numbers
and telephone and other directory listings utilized in connection with the
Business.
(k) Corporate Namek) Corporate Name. The names "United
Testing Group," "Spectro Metrics," "PSI" and "Pro-Tech" and all goodwill
associated therewith.
l) Warrantiesl) Warranties. All rights benefitting Seller
under any warranty, express or implied, which relate to the Purchased Assets.
(m) Other Assetsm) Other Assets. All tangible, intangible,
real, personal and mixed property, assets and rights which constitute part of
the Business as an ongoing business, wherever located, including, but not
limited to, those assets set forth on the Financial Statements, except as
expressly set forth in Section 1.2, are to be conveyed to Buyer as part of the
Purchased Assets.
1.2 Excluded Assets1.2 Excluded Assets. Any provisions of this
Agreement to the contrary notwithstanding, there shall be excluded from the
purchase and sale contemplated hereunder those assets of Seller described on
Schedule 1.2 to this Agreement, which assets shall not be considered or treated
as Purchased Assets (the "Excluded Assets").
1.3 Method of Conveyance1.3 Method of Conveyance.
(a) Upon payment of the Purchase Price described in Section
2.1, the sale, transfer, conveyance, assignment and delivery by Seller of the
Purchased Assets to Buyer in accordance with Section 1.1 shall be effected on
the Closing Date by Seller's execution and delivery of one or more bills of
sale, assignments, and other instruments of conveyance and transfer.
(b) At the Closing, Seller shall sell, transfer, convey,
assign and deliver to Buyer fee simple absolute title to and exclusive
possession of all of the Purchased Assets free and clear of any and all liens,
encumbrances, claims, charges, security interests, rights of Seller and any
third party, rights of redemption, equities, and any other restrictions of any
kind or nature whatsoever, including any leases, escrows, options, security or
other deposits, rights of redemption, chattel mortgages, conditional sales
contracts, collateral security arrangements and other title or interest
retention arrangements (collectively, "Liens") except as set forth on Schedule
1.3(b).
(c) Seller covenants and agrees that if either (i) any of the
Purchased Assets cannot be transferred or assigned by Seller without the consent
of or notice to a third party and in respect of which any necessary consent or
notice has not been obtained or given as of the Closing Date, or (ii) any of the
Purchased Assets are non-assignable in their nature, Seller will cause the
beneficial interest in and to the same, in any event, to pass to Buyer; and
Seller covenants and agrees, on and after the Closing Date, (x) to hold such
Purchased Assets in trust for, and for the benefit of, Buyer; and (y) to use its
best efforts to obtain and secure and will have obtained and secured such
consent within thirty (30) days of the Closing Date and to give such notice as
may be required to effect valid transfer(s) or assignment(s) of such Purchased
Assets; and (z) to make or complete such transfer(s) or assignment(s) as soon as
possible.
1.4 Assumed Obligations1.4 Assumed Obligations. At the Closing, Buyer
shall assume and shall, subject to all rights of offset, defenses, causes of
action, counterclaims and claims of any nature against third parties that may be
available to Buyer in respect of the Assumed Obligations, agree to satisfy and
discharge, as the same shall become due, (a) all of Seller's obligations under
the contracts, agreements, commitments and Leases of Seller which are
specifically identified in Schedule 1.4(a), and are assigned to Buyer at
Closing, if and to the extent assignable, but only to the extent any such
obligations arise and accrue after the Closing and then only in respect of
events and time periods occurring after the Closing except with respect to the
prepaid kits and partially prepaid kits which arose prior the Closing (the
"Prepaid Kits"); and (b) all of Seller's obligations under all Licenses and
Permits which are specifically identified in Schedule 1.4(b) and are transferred
to Buyer at Closing, if and to the extent transferrable, but only to the extent
any such liabilities and obligations accrue after the Closing and then only in
respect of events and time periods occurring after the Closing (collectively,
the "Assumed Obligations").
1.5 Excluded Obligations1.5 Excluded Obligations. Buyer is not
assuming, and Seller shall remain fully responsible for, all past, present and
future indebtedness, liabilities, obligations, contracts and commitments of
Seller and any predecessors in interest of the Business, known or unknown, fixed
or contingent, whether arising out of or resulting from the Business or the
assets thereof, or otherwise, that are not Assumed Obligations (the "Excluded
Obligations"). Without limiting the foregoing, the Excluded Obligations shall
include, but not limited to, any and all liabilities arising from or related to:
(a) the negligent acts or omissions of Seller, whether
in tort or otherwise;
(b) product liability or similar claims for injury to any
person, corporation, association, partnership, limited liability company, joint
venture, organization, business, individual, government or any agency or
political subdivision thereof or any other entity (a "Person") or property with
respect to products purchased, manufactured or sold by Seller prior to Closing;
(c)any liability of Seller for Taxes subject to the terms of
Section 6.6 hereof;
(d) any suits, actions, or claims alleging infringement by
Seller, prior to Closing, of patents, trademarks, trade names or other
intellectual property rights held by others;
(e) any liability in respect of any Environmental
Condition or any Environmental Compliance Liability;
(f) any warranty or other contingent liability with respect to
(i) products purchased, manufactured or sold by Seller prior to the Closing or
(ii) services provided by Seller prior to the Closing except as set forth on
Schedule 1.4(a);
(g) any liability for commitments made by Seller relating to
the employment, relocation or termination (including, but not limited to,
severance pay) of any employee, officer or director of Seller except as set
forth on Schedule 1.4(a);
(h) any liability or obligation of Seller or Parent in
respect of the Spectro Metrics, PSI
and Pro-Tech purchase and sale transactions;
(i) any liability or obligation of Seller in respect of the
Employee Benefit Plans (including any fees, costs or similar expenses thereto),
employee handbooks, company policy manuals, employment contracts or policies
concerning fringe benefits;
(j) any other suits, actions or claims against Seller;
(k) any liability or obligation relating to an Excluded
Asset;
(l) any intercompany liabilities including liabilities
between Seller and Parent.
(m) any liability or obligation for prepaid kits and partially
prepaid kits in excess of the Prepaid Kits set forth on Schedule 1.4(a).
All Excluded Obligations shall remain the sole responsibility of
Seller, and Seller agrees to pay, perform, discharge, and indemnify, in
accordance with Section 8.2 hereof, Buyer from and against, any and all such
indebtedness, obligations and liabilities.
1.6 Closing Date1.6 Closing Date. The closing of the transactions
contemplated by this Agreement shall take place on October 30, 1996 at 10:00
a.m. (the "Closing" or "Closing Date") at the offices of Conam Inspection, Inc.,
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx or, at such other date, time and
place as may be agreed upon by the parties.
1.7 Accrued Vacation and Sick Time1.7 Accrued Vacation and Sick Time.
On the Closing Date, the Seller shall provide the Buyer with a list of the
Seller's employees and the aggregate of accrued vacation and sick time earned by
such employees as of the Closing Date multiplied by each of such employee's base
wage rate as of the Closing Date (in the aggregate, the "Vacation Accrual"). The
Purchase Price shall be adjusted downward by the Vacation Accrual as set forth
on Schedule 2.4. Buyer shall not be responsible for any severance benefits or
payments, if any, due Seller's employees except as set forth on Schedule 1.4(a).
Section 2. Purchase Price2. Purchase Price.
2.1 Purchase Price2.1 Purchase Price. At the Closing, Seller shall
convey, transfer, assign and deliver to Buyer the Purchased Assets in exchange
for (a) Buyer's assumption of the Assumed Obligations and (b) Buyer's payment to
Seller of the sum of Three Million Five Hundred Thousand dollars ($3,500,000)
(the "Purchase Price").
2.2 Payment Terms2.2 Payment Terms. The Purchase Price as
adjusted shall be payable to Seller as follows:
(i) On the Closing Date, Buyer shall cause the
delivery by wire transfer to Seller of the sum of Three Million Five Hundred
Thousand dollars ($3,500,000) less the adjustments pursuant to Schedule
2.4; and
(ii) On the Closing Date, Buyer shall deliver to
Xxxxx, Chernay, Norris, Xxxxxxxxxx & Xxxxxx, as escrow agent under that
certain escrow agreement (the "Escrow Agreement") by wire transfer, the
sum of Two Hundred Thousand Dollars ($200,000).
2.3 Allocation2.3 Allocation. Seller, Parent and Buyer agree that the
Purchase Price shall be allocated among the Purchased Assets in accordance with
Schedule 2.3. Seller and Parent further agrees to cooperate with Buyer in
completing and delivering to Buyer or the Internal Revenue Service such
information concerning the determination of the purchase price as may be
required pursuant to the Internal Revenue Code.
2.4 Adjustment to Purchase Price2.4 Adjustment to Purchase Price. The
Purchase Price shall be reduced to reflect those adjustments to the Purchase
Price as set forth on Schedule 2.4 as well as those adjustments to give effect
to pro-rated items pursuant to Section 6.6.
Section 3. Representations and Warranties3. Representations and
Warranties.
3.1 Seller3.1 Seller. Seller and Parent, jointly and severally, hereby
represent and warrant to Buyer, all of which representations and warranties are
true, complete, and correct in all respects as of the date hereof and as of the
Closing Date, as follows:
(a) Organization and Qualificationa) Organization and
Qualification. Seller is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation. Seller
has all requisite power and authority to own those properties and conduct those
businesses presently owned or conducted by it, and is duly qualified to do
business as it is now being conducted and is in good standing as a foreign
corporation in each other jurisdiction where the property owned, leased or used
by it or the conduct of its business makes such qualification necessary. The
copies of the Certificate of Incorporation and By-Laws of Seller, which have
been delivered to Buyer, are complete and correct and are in full force and
effect at the date hereof.
(b) Authorization; No Restrictions, Consents or Approvalsb)
Authorization; No Restrictions, Consents or Approvals. Seller and Parent have
full power and authority to enter into and perform this Agreement and all
corporate action necessary to authorize the execution and delivery of this
Agreement and the performance by each of their respective obligations hereunder
has been duly taken. This Agreement has been duly executed by Seller and Parent
and constitutes the legal, valid, binding and enforceable obligation of Seller
and Parent, enforceable against each in accordance with its terms subject to the
qualification that the enforcement of certain rights and remedies contained in
the Agreement may be limited or affected by applicable bankruptcy, insolvency,
reorganization, and other federal and state laws relating to or affecting
creditors or secured parties' rights and remedies and to general principles of
equity. The execution and delivery of this Agreement, the sale of the Purchased
Assets and the consummation by Seller and Parent of the transactions
contemplated herein, do not and will not on the Closing Date (i) conflict with
or violate any of the terms of the Certificate of Incorporation and By-Laws of
Seller or Parent or any applicable Law relating to the Seller or Parent, (ii)
conflict with, or result in a breach of any of the terms of, or result in the
acceleration of any indebtedness or obligations under, any agreement, obligation
or instrument by which Seller is bound or to which any property of Seller is
subject, or constitute a default thereunder, (iii) result in the creation or
imposition of any Lien on any of the Purchased Assets, (iv) except as set forth
in Schedule 3.1(b), constitute an event permitting termination of any agreement
or instrument to which Seller is a party or by which any property or asset of
the Seller is bound or affected, pursuant to the terms of such agreement or
instrument, or (v) conflict with, or result in or constitute a default under or
breach or violation of or grounds for termination of, any license, permit or
other governmental authorization to which Seller is a party or by which Seller
may be bound, or result in the violation by Seller or Parent of any Laws to
which Seller or Parent or any assets of Seller or Parent may be subject, which
would materially adversely affect the transactions contemplated herein. Except
as set forth in Schedule 3.1(b) no authorization, consent or approval of, notice
to, or filing with, any public body or governmental authority or any other
person is necessary or required in connection with the execution and delivery by
Seller and Parent of this Agreement or the performance by Seller and Parent of
their respective obligations hereunder.
(c) Absence of Certain Changesc) Absence of Certain Changes.
Except to the extent set forth on Schedule 3.1(c), since June 30, 1996, there
has not been any material adverse change or development involving a prospective
material adverse change with respect to the Business or the financial position
or results of operations of the Business taken as a whole, including without
limitation, (i) any damage or destruction or property loss whether or not
covered by insurance, materially and adversely affecting the properties or
business of Seller, (ii) any increase in the compensation or bonus, incentive
compensation, profit sharing, retirement, insurance, medical reimbursement or
other employee benefit plan or arrangement payable or owed or to become payable
or owed by Seller, other than increases made on the basis of historical practice
and in the ordinary course of business, compensation increases attendant to
promotions and falling within the normal range for the new position and
scheduled increases under the existing collective bargaining agreement, (iii)
any sale or other disposition of any capital asset other than sales or
disposition of Excluded Assets or sales or disposition of scrap made in the
ordinary course of business, (iv) any entry by Seller into any material
commitment or transaction (including, without limitation, any borrowing, or
capital expenditure), other than those commitments and transactions entered into
in the ordinary course of business, or those contemplated by or within the
limits permitted by this Agreement, (v) any release or waiver of any material
right or claim of Seller with respect to any of the Contracts, the Leases, the
Licenses and Permits or the Intellectual Property, (vi) any Lien on any of the
Purchased Assets, or (vii) any material change by Seller in accounting
principles or methods.
(d) Taxesd) Taxes. Except as set forth on Schedule 3.1(d),
Seller has timely filed (timely being understood to include all properly granted
extensions) all returns required to be filed by it with respect to all foreign,
federal, state and local and foreign income, payroll, employment, unemployment,
withholding, excise, sales, personal property, use, business and occupation,
franchise and occupancy, real estate, or other taxes (all of the foregoing taxes
including interest and penalties thereon and including estimated taxes, being
hereinafter collectively the "Taxes") and has paid or reserved all Taxes which
are shown to have become due pursuant to such returns and has paid or reserved
all other Taxes for which it has received a notice of assessment or demand for
payment or has otherwise been made aware of a deficiency. All such returns or
reports are true and correct in all material respects.
(e) Title to Purchased Assetse) Title to Purchased Assets.
Seller has good and marketable title to all of the Purchased Assets, free and
clear of any Lien. Seller has valid and perfected security interests in all
assets consigned to third parties. Schedule 3.1(e) contains an accurate and
complete list of all the real property owned, leased or operated by Seller,
including without limitation, all structures, improvements and fixtures thereon
and all water lines, rights-of-way, other rights, privileges, uses, licenses,
easements, hereditaments and appurtenances belonging or appertaining thereto
(collectively, the "Real Property").
(f) Leasesf) Leases. Schedule 3.1(f) sets forth a complete and
accurate listing or description of all real and personal property leases,
subleases, concessions, licenses, occupancy agreements, conditional sales
agreements or other title retention agreements (collectively, the "Leases" and
individually a "Lease") to which Seller is a party in connection with the
Business. Each of the Leases is valid, binding and enforceable in accordance
with its terms, subject to the qualification that the enforcement of certain
rights and remedies contained in the Leases may be limited or affected by
applicable bankruptcy, insolvency, reorganization, and other federal and state
laws relating to or affecting creditors or secured parties' rights and remedies
and to general principles of equity, and is in full force and effect; to the
best of Seller's knowledge, there are no existing defaults on the part of Seller
or, to the best of Seller's knowledge, any other party, under any Lease, and no
event of default under any such Lease has occurred and is continuing which
(whether with or without the giving of notice, lapse of time or both, or the
happening of any other event) would constitute a default under such Lease; each
such Lease will, subject to obtaining any consent listed in Schedule 3.1(f),
continue to be in full force and effect on the same terms and conditions
immediately after the Closing without the need for any action on the part of
Buyer; to the best of Seller's knowledge, each such Lease reflects the complete
understanding among the parties thereto; and accurate and complete copies of
each such Lease including all amendments thereto, have been delivered to Buyer
at or prior to the date hereof. Seller's interest in each of the Leases is free
and clear of all Liens or other encumbrances (other than any created by Buyer)
and are not, in the case of real property, except as set forth in Schedule
3.1(f), subject to any rights of way, building use restrictions, exceptions,
variances, easements (recorded or unrecorded), rights of redemption,
reservations or limitations of any nature whatsoever of which Seller has
knowledge which may materially interfere with Buyer's use thereof in a manner
consistent with Seller's use thereof prior to Closing.
(g) Contracts and Other Documentsg) Contracts and Other
Documents. Except for those Contracts which are listed on Schedule 3.1(g) and
those Leases listed on Schedule 3.1(f), or which have been entered into by
Seller in the ordinary course of business and do not involve payment or receipt
of more than $2,500.00, Seller is not a party to any Contract, Lease or similar
document. Neither Seller nor, to the best of Seller's knowledge, any other party
is in default under any Contract or other instrument to which Seller is a party
or by which it is bound. No Contract continues for a period of more than three
(3) months from the Closing Date or is in excess of the normal, ordinary and
usual requirements of the Business.
(h) Labor Difficultiesh) Labor Difficulties. Except as set
forth in Schedule 3.1(h), (i) Seller is not a party with respect to the Business
to a union agreement or collective bargaining agreement and no attempt to
organize any employees of Seller has been made, proposed or threatened; (ii)
there is no labor strike, formal labor dispute, formal labor grievance, labor
arbitration proceeding, general slowdown or stoppage, or charge of unfair labor
practice pending before a court, regulatory body or arbitration tribunal, or, to
the best of Seller's knowledge, threatened against or affecting the Purchased
Assets or the Business, and to the best of Seller's knowledge no event has
occurred which would constitute reasonable grounds for such a strike, dispute,
grievance, proceeding or charge; (iii) no union representation question exists
respecting any employees of Seller; (iv) to the best of Seller's knowledge,
there are no charges or complaints of discrimination pending before the United
States Equal Employment Opportunity Commission or any other federal, state,
local or foreign agency or tribunal against Seller in connection with the
Business; (v) to the best of Seller's knowledge, Seller does not presently
employ, and at no time during the past year did it employ, any illegal alien;
and (vi) Seller is in compliance in all material respects with all federal,
state and local labor and employment-related Laws applicable to the Business.
(i) ERISA; Employee Benefit Plansi) ERISA; Employee Benefit
Plans. Schedule 3.1(i) contains a list of all of the plans, funds, policies,
programs, arrangements or understandings sponsored or maintained by the Seller,
pursuant to which any employee of the Seller (or any dependent or beneficiary of
any such employee) might be or become entitled to (1) retirement or
profit-sharing or stock bonus benefits; (2) severance or separation from service
benefits; (3) incentive, performance, stock, share appreciation or bonus awards;
(4) health care benefits; (5) disability income or wage continuation benefits;
(6) supplemental unemployment benefits; (7) life insurance, death or survivor's
benefits; (8) accrued sick pay or vacation pay; (9) any type of benefit offered
under any arrangement subject to characterization as an "employee welfare
benefit plan" within the meaning of Section 3(3) of ERISA; or (10) benefits of
any other type offered through any arrangement that could be characterized as
providing for additional compensation or fringe benefits and by which the Seller
is a party or by which the Seller is bound (collectively referred to as the
"Employee Benefit Plans"). All of the Employee Benefit Plans are in full force
and effect and neither the Seller nor to Seller's knowledge any other party is
in default under them. The Seller has not received any written notice of
noncompliance, and to Seller's knowledge, Seller is in compliance in all
material respects with all terms of the Employee Benefit Plans and with ERISA,
and all other applicable laws as they affect the Seller and its employees.
Seller has not received written notice of, and to Seller's knowledge there are
no, claims or defaults, nor to Seller's knowledge, are there any facts or
conditions which if continued, or on notice, will result in a default under any
of the Employee Benefit Plans.
Except as set forth in the Schedule 3.1(i), the Seller does
not currently sponsor or maintain and has not at any time since September 2,
1974 sponsored or maintained any qualified or nonqualified "employee pension
plan" as that term is defined in Section 3(2) of ERISA. Each of the pension
plans set forth on Schedule 3.1(i) (the "Pension Plans") which is intended to be
qualified under Sections 401(a) and 501(a) of the Internal Revenue Code has been
determined by the Internal Revenue Service to be "qualified" within the meaning
of Sections 401(a) and 501(a) of the Internal Revenue Code. Except as set forth
in the Schedule 3.1(i), the Seller does not currently contribute to and is not
obligated to contribute to and has not at any time since September 2, 1974
contributed to or been obligated to contribute to any multiemployer plan as that
term is defined in Section 4001(a)(3) of ERISA, or any multiemployer health and
welfare plan which the Seller is or has been required to contribute to pursuant
to a collective bargaining agreement. There are no events or conditions which
may result in the prospective or retroactive loss of qualified status or that
otherwise would have a material adverse effect on the qualified status of any
Pension Plan, and copies of all Internal Revenue Service determination letters
for all Pension Plans have been provided to Buyer. Except as set forth on
Schedule 3.1(i) none of the Pension Plans has incurred any "accumulated funding
deficiency," as such term is defined in Section 412 of the Internal Revenue
Code, whether or not waived, since the effective date of said Section 412; there
is no projected funding deficiency with respect to the Employee Benefits Plans;
and Seller has not engaged in any prohibited transaction with respect to any
qualified employee Pension Plan. None of the Employee Benefit Plans has incurred
a "reportable event," as such term is defined in Section 4043 of ERISA, whether
or not such event is required to be reported, since the effective date of said
Section 4043.
As to any Employee Benefit Plan identified on Schedule 3.1(i),
all of the following are true: (i) all amounts due as contributions, insurance
premiums and benefits to the date hereof have been fully funded and paid by
Seller; (ii) to Seller knowledge, all applicable requirements of Law have been
observed with respect to the operation thereof and all material reporting and
disclosure requirements have been timely satisfied; (iii) Seller has received no
notice, and has no knowledge of any claim or demand by any employee (or
beneficiary or dependent of any employee) for benefits, except those benefits
pending payment or satisfaction in the ordinary course of business; (iv) there
are no claims pending, and Seller has received no written notice of, and to
Seller's knowledge there are no, claims threatened, by any taxing authority for
Taxes or penalties, which have not been satisfied in full except those pending
payment or satisfaction in the ordinary course of business; and (v) Seller has
received no written notice of, and to Seller's knowledge there is no,
litigation, legal action, suit, investigation, claim, counterclaim, or
proceeding threatened against or with respect to any of the Plans. With respect
to all of the Employee Benefit Plans, the Seller has delivered to the Buyer
complete copies of each Employee Benefit Plan, each Employee Benefit Plan's
summary plan description, the last three valuation reports prepared by the
enrolled actuary for each Employee Benefit Plan which is a defined benefit
pension plan, the annual reports for each Employee Benefit Plan for the last
three years as filed with the Internal Revenue Service, and, for any Employee
Benefit Plan which is required by ERISA to be audited by an independent public
accountant, the audited financial statements of the Employee Benefit Plan for
the last three years.
(j) Employeesj) Employees. Schedule 3.1(j) sets forth an
accurate and complete list of: (i) the names and current salaries or wage rate,
as applicable, of all of Seller's employees; (ii) any increases required by any
agreement or understanding with each of the foregoing; and (iii) to the best of
Seller's knowledge, a description of any informal understanding concerning
employees' rights to continue to receive compensation during any periods during
which such employees are not performing any services for Seller. Except as set
forth in Section 3.1(j), as at the Closing Date there will be no bonuses, profit
sharing, incentives, commissions or other compensation of any kind, including
severance benefits, and accrued vacation time or pay, due to or expected by
present or former employees of Seller which have not been fully paid prior to
such date or are expected to be paid by Seller within fifteen (15) days after
such date.
(k) Licenses and Permitsk) Licenses and Permits. Seller has
obtained, has fully paid for, and has in full force and effect all licenses,
franchises, permits, approvals, certificates, certifications and other
authorizations from all applicable governmental authorities which are necessary
for the conduct of the Business as currently conducted and the ownership, use,
occupancy and operation of the Purchased Assets (the "Licenses and Permits").
Schedule 3.1(k) sets forth a complete and accurate list of all Licenses and
Permits. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in the
revocation, cancellation, suspension, modification, or limitation of any of the
Licenses and Permits and will not give to any Person any right to revoke,
cancel, suspend, modify, or limit any of the Licenses and Permits. Renewal of
each of the Licenses and Permits has been, or will be as of the Closing Date,
timely applied for to the extent required under all Laws, including but not
limited to, all Environmental Laws and to the extent appropriate to protect
renewal rights thereunder. To the best of Seller's knowledge, there is no fact
or event which is likely to prevent the renewal of any of the Licenses and
Permits under existing Law or which, with the passage of time or the giving of
notice or both, is likely to constitute a violation of the terms of any of the
Licenses and Permits or of any applications or agreements made in connection
therewith. No action or proceeding is pending or, to the best of Seller
knowledge, threatened which could result in the revocation, cancellation,
suspension, modification, or limitation of any of the Licenses and Permits. All
Licenses and Permits are transferable to Buyer. Seller does not owe any monies
for the Licenses and Permits which have been granted to it.
(l) Accounts Receivablel) Accounts Receivable. Schedule 3.1(l)
sets forth a complete and accurate schedule including an aging schedule for all
of Seller's Accounts Receivable as of five business days prior to the date
hereof, all of Seller's Accounts Receivable arose from bona fide transactions in
the ordinary course of business of Seller, have not been discounted, and no
counterclaim or right of set-off has been asserted with respect thereto.
(m) Absence of Undisclosed Liabilitiesm) Absence of
Undisclosed Liabilities. Except as set forth in Schedule 3.1(m), Seller does not
have any material liability or obligation of any nature, whether contingent,
accrued, absolute, unasserted or otherwise, other than liabilities or
obligations reflected in the Financial Statements or the Closing Date Financial
Statements.
(n) Compliance With Lawn) Compliance With Law. Except as set
forth in Schedule 3.1(n), Seller has at all times operated in all respects and
is presently in compliance in all material respects with all applicable federal,
state, local, foreign or other laws, rules, regulations, guidelines, orders,
injunctions, building and other codes, ordinances, permits, licenses,
authorizations, judgments, decrees of federal, state, local, foreign or other
authorities, and all orders, writs, decrees and consents of any governmental or
political subdivision or agency thereof, or any court or similar Person
established by any such governmental or political subdivision or agency thereof
(collectively, the "Laws"), including but not limited to all applicable domestic
and foreign Laws, rules and regulations relating to the safe conduct of
business, employment discrimination, wages and hours, employment of illegal
aliens, collective bargaining, the payment of withholding and social security
taxes, product labelling, antitrust, consumer protection, occupational safety
and health, consumer product safety, the importation of goods, product
liability, currency exchange, securities and trading with the enemy matters, and
to the best of Seller's knowledge no event has occurred which would constitute
reasonable grounds for a claim that non-compliance has occurred or is occurring
and any non-compliance will not materially and adversely affect the Purchased
Assets.
(o) Intellectual Property and Intangible Assetso) Intellectual
Property and Intangible Assets. Seller owns or possesses valid and binding
licenses or other rights to use, whether or not registered, all Intellectual
Property and Intangible Assets. Schedule 3.1(o) sets forth a complete and
accurate list of all such Intellectual Property and Intangible Assets
(identifying those owned and those licensed), including all United States, state
and foreign registrations or applications for registration thereof and all
agreements (including, without limitation, agreements pursuant to which Seller
has granted licenses to third parties to use any Intellectual Property or
Intangible Asset) relating thereto. All actions necessary to maintain the
registered Intellectual Property and Intangible Assets have been taken by
Seller. Seller is not required to pay any royalty, license fee or similar
compensation with respect to the Intellectual Property or Intangible Assets in
connection with the current or prior conduct of its business. The use by Seller
of any of the Intellectual Property or Intangible Assets does not violate the
proprietary rights of any other Person and no claims have been asserted by any
Person with respect to the use of the Intellectual Property or Intangible Assets
by Seller. To the best of Seller's knowledge, no Person is infringing upon the
Intellectual Property or Intangible Assets. Seller has taken reasonable security
measures to protect the secrecy, confidentiality and value of the Intellectual
Property. No Person, other than Seller, owns or has any proprietary, financial
or other interest, direct or indirect, in whole or in part, in any Intellectual
Property or Intangible Asset. Except as set forth in Schedule 3.1(o), Seller is
not a party to any confidentiality, secrecy or similar agreements with third
parties.
(p) Pending Litigationp) Pending Litigation. Except as set
forth in Schedule 3.1(p), there are no actions, suits, claims, enforcement
actions, or proceedings pending or threatened against Seller, or any Person by
reason of it or he being a director, shareholder, or officer of Seller, whether
at law or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
which, if adversely determined, would have a material adverse effect on the
business, financial position, or results of operations of Seller, or on Buyer's
title to the Purchased Assets; nor is there outstanding any writ, order, decree,
or injunction applicable to Seller that (i) calls into question Seller authority
or right to enter into this Agreement and consummate the transactions
contemplated hereby, or (ii) would otherwise prevent or delay the transactions
contemplated by this Agreement.
(q) Customer Listq) Customer List. Schedule 3.1(q) sets forth
a complete and accurate copy of Seller's customer list as of the date first
written above. To the best of Seller's knowledge, Seller has not received any
notice, whether written or oral, indicating that any of these customers intend
to cease doing business with Seller, or to materially alter the amount of
business it has previously done or is presently doing with Seller.
(r) Purchased Assets; Ownership of Necessary Assets and
Rightsr) Purchased Assets; Ownership of Necessary Assets and Rights. The assets,
properties and rights included in the Purchased Assets comprise all of the
assets, properties, and rights of every type and description, real, personal and
mixed, tangible and intangible, used by Seller in, and necessary to, the conduct
of the Business as presently conducted. The Purchased Assets and Oil Analyzers
are in good condition and repair and have received proper maintenance in the
ordinary course of business. The Oil Analyzers and Database on the Closing Date
shall be free and clear of all Liens.
(s) Subsidiaries and Other Investmentss) Subsidiaries and
Other Investments. Seller does not own, directly or indirectly, any interest or
investment (whether equity or debt) in any corporation, partnership, limited
liability company, joint venture business, trust, or other entity.
(t) Disclosuret) Disclosure. No statement, representation or
warranty by Seller in this Agreement, including the Schedules hereto, contains
any untrue statement of material fact, or omits to state a material fact,
necessary to make such statements, representations and warranties not
misleading. There is no fact known to Seller which has specific application to
the Business or, so far as Seller can reasonably foresee, materially threatens
in the future, the assets, business, prospects, financial condition or results
of operations of the Business which has not been set forth in this Agreement or
the Schedules hereto.
(u) Financial Statementsu) Financial Statements. Schedule
3.1(u) sets forth the audited financial statements as of September 30, 1995,
which include the balance sheet of Seller as at September 30, 1995, statement of
operations and retained earnings of Seller for the fiscal year ending September
30, 1995, and statements of cash flows and Shareholders' Equity of Seller for
the fiscal year ending September 30, 1995, together with the related notes
thereto (collectively, the "Financial Statements") in each case certified by the
Chief Financial Officer of Seller. On the Closing Date, Seller shall deliver to
the Buyer the unaudited balance sheet of Seller as at September 30, 1996, and an
unaudited statement of operations and retained earnings and an unaudited
statements of cash flows and Shareholders' Equity of Seller for the twelve month
period then ended (collectively, the "Closing Date Financial Statements"). The
Financial Statements and the Closing Date Financial Statements are or will be
complete and correct in all material respects and fairly present the financial
condition of Seller as of the dates thereof and the results of its operations
for the fiscal years and periods ended on such dates. The Financial Statements
and Closing Date Financial Statements have been prepared in accordance with
generally accepted accounting principles consistently applied.
(v) Inventoryv) Inventory. All Inventory of Seller was
acquired and has been maintained in the ordinary course of the Business; is of
good and merchantable quality; and consists substantially of a quality, quantity
and condition usable, leasable or saleable in the ordinary course of business
less reserves. Seller is not under any liability or obligation with respect to
the return of any Inventory in the possession of wholesalers, retailers or other
customers except for prepaid kits and partially prepaid kits.
(w) Suppliersw) Suppliers. Seller has no knowledge
of any supplier's intention to discontinue or substantially reduce the
size or number of transactions it consummates with Seller prior to
Closing or will consummate with Buyer upon the consummation of the transactions
contemplated herein.
(x) No Third Party Optionx) No Third Party Option. There are
no existing agreements, options, commitments or rights with, of or to any Person
to acquire any of Seller's assets, properties or rights included in the
Purchased Assets or any interest therein, except for those contracts entered
into in the ordinary course for the sale of inventory of Seller.
(y) Related Party Transactionsy) Related Party Transactions.
Except as set forth on Schedule 3.1(y), no officer, supervisory employee or
stockholder of the Seller, or their respective spouses or children, (i) owns,
directly or indirectly, on an individual or joint basis, any material interest
in, or serves as an officer or director of, any customer, competitor a supplier
of the Seller or any organization which has a material contract or arrangement
with the Seller or (ii) has any contract or agreement with the Seller, and all
such agreements are on arms-length terms. Schedule 3.1(y) describes any
transaction which would have to be disclosed under Item 404 of Regulation S-K
under the Securities Act of 1933, as amended.
(z) Capital Structure. Parent is the record and beneficial
owner of all the shares of capital stock of Seller listed on Schedule 3.1(z)
free and clear of all rights of third parties. All of said shares have been
validly issued and are fully paid and nonassessable, and Parent holds all of the
voting rights thereunder. Except as reflected on Schedule 3.1(z), no Person
holds any option, warrant, convertible security or other right to acquire
capital stock (or any security or other instrument convertible into capital
stock) of Seller.
3.2 Buyer3.2 Buyer. Buyer hereby represents and warrants to Seller and
Parent, all of which representations and warranties are true, complete, and
correct in all respects as of the date hereof and as of the Closing Date, as
follows:
(a) Organization and Qualificationa) Organization and
Qualification. Buyer is a corporation duly incorporated, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation, and is
duly qualified to do business in each other jurisdiction where the property
owned, leased or used by it or the conduct of its business makes such
qualification necessary.
(b) Authorization; No Restrictions, Consents or Approvalsb)
Authorization; No Restrictions, Consents or Approvals. Buyer has full power and
authority to enter into and perform this Agreement, and has taken all necessary
corporate action to authorize the execution and delivery of this Agreement and
the performance by Buyer of its obligations hereunder. This Agreement has been
duly executed by Buyer and constitutes the legal, valid, binding, and
enforceable obligation of Buyer, enforceable against Buyer in accordance with
its terms. The execution and delivery of this Agreement and the consummation by
Buyer of the transactions contemplated herein or hereby, do not and will not on
the Closing Date (i) conflict with or violate any of the terms of Buyer's
Certificate of Incorporation or Bylaws or any applicable Law relating to the
Buyer, (ii) conflict with, or result in a breach of any of the terms of, or
result in the acceleration of any indebtedness or obligations under, any
agreement, obligation, or instrument by which Buyer is bound or to which any
property of Buyer is subject, or constitute a default thereunder, or (iii)
result in the violation by Buyer of any laws to which Buyer or any assets of
Buyer may be subject which would materially adversely affect the transaction
contemplated herein. Except as set forth in Schedule 3.2(b), no authorization,
consent, or approval of any governmental authority or any other person is
necessary or required in connection with the execution and delivery by Buyer of
this Agreement or the performance by Buyer of Buyer's obligations hereunder.
Section 4. Environmental Matters4. Environmental Matters.
4.1 Definitions4.1 Definitions. As used in this Agreement,
the following terms have the respective meanings set forth below:
"Environmental Compliance Liability" means any and all
liabilities, damages and costs arising under, or related to, compliance with any
Environmental Law applicable to any of the Real Property, or any operations or
assets associated therewith, which may result in claims and/or demands by and/or
liabilities to third parties, including but not limited to, governmental
entities.
"Environmental Conditions" shall mean any and all
circumstances with respect to any real property, any and all circumstances with
respect to any soils, bedrock formations, surface waters, groundwaters, ponds,
wetlands, stream sediments, air and similar environmental media, and any and all
circumstances with respect to any of the structures and any of the building and
construction materials that may require Response Action and/or that may result
in claims and/or demands by and/or liabilities to third parties including, but
not limited to governmental entities, and either that:
(i) are or were previously located at or near
the property owned and/or operated by Seller (the property, environmental
media, structures, and other materials are referred to hereafter as the
"Facilities"); or that
(ii) result or previously resulted from the
Business or from the activities or
events that occur or previously occurred at or near any of the Facilities.
This term shall expressly include, but shall not be limited to, such on-site and
off-site circumstances related to any Environmental Notice or other
investigation or proceeding under the Comprehensive Environmental, Response,
Compensation and Liability Act, 42 U.S.C. ' 9601 et seq. as amended, ("CERCLA")
or analogous state statute.
"Environmental Laws" means any and all federal, state, local
or municipal written and published Laws, rules, orders, regulations, statutes,
ordinances, codes, or requirements of any governmental authority regulating or
imposing standards of liability or standards of conduct (including common laws)
concerning air, water, solid waste, Hazardous Materials, worker and community
right-to-know, hazard communication, noise, radioactive material, resource
protection, subdivision, inland wetlands and watercourses, health protection and
other environmental, health, safety, building, land use, and local government
concerns.
"Environmental Notice" shall mean any summons, citation,
directive, order, claim, pleading, proceeding, judgment, notice of potential
liability, letter or any other written communication from the United States
Environmental Protection Agency ("USEPA"), or from any other federal, state or
local agency or authority, or from any other entity or any individual,
concerning any intentional or unintentional act or omission which has resulted
in or which may result in the Release of any Hazardous Material into the
environment, including but not limited to, soils, bedrock formations, surface
waters, xxxxxxxxxxxx, xxxxx, xxxxxxxx, stream sediments, air or other
environmental media, or concerning any violation or alleged violation of
Environmental Laws, and shall expressly include actions under CERCLA and the
imposition of any lien pursuant to any federal, state or local Environmental
Laws.
"Hazardous Materials" means any petroleum, petroleum products,
fuel oil, waste oil, explosives, reactive materials, ignitable materials,
corrosive materials, hazardous chemicals, hazardous wastes, hazardous
substances, extremely hazardous substances, toxic substances, toxic chemicals,
radioactive materials, medical waste, biomedical waste, infectious materials,
pollutants, toxic pollutants, herbicides, fungicides, rodenticides,
insecticides, contaminant, or pesticides and including, but not limited to, any
other element, compound, mixture, solution or substance which may pose a present
or potential hazard to human health or the environment.
"Release" means releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, ejecting, escaping, leaching,
disposing, seeping, infiltrating, draining or dumping, or as otherwise defined
under Environmental laws. This term shall be interpreted to include both the
noun form and the verb form, present, past and future tense, as appropriate.
"Response Action" means any efforts of any governmental
entity, Seller, Buyer, or other Person, or the contractors, subcontractors or
agents of any governmental entity, Seller, Buyer, or Person, which are made,
designed, initiated, or maintained to address any Environmental Condition or
Environmental Compliance Liability and may include investigation, remedial
design, site monitoring, containment, mitigation, clean-up, transport, removal,
disposal, restoration and other remedial efforts of any kind, including but not
limited to the expenses incurred by any governmental entity in evaluating,
monitoring or overseeing any Response Action.
4.2 Environmental Representations and Warranties by Seller and
Parent4.2 Environmental Representations and Warranties by Seller and Parent.
Seller and Parent, jointly and severally, hereby represent and warrant to Buyer,
all of which representations and warranties are true, complete and correct in
all respects as of the date hereof and as of the Closing Date:
(a) Seller has not received any Environmental Notice
seeking any information or alleging any violation of Environmental Laws.
(b) No representation, warranty or statement of Seller
contained in this Agreement or contained in any exhibit, certificate, schedule
or other document furnished by Seller to Buyer, pursuant hereto or in connection
with a transaction contemplated herein, contains any untrue statement of a fact
or omits disclosing a material fact with regard to environmental matters. The
representations and warranties of Seller set forth herein shall survive the
Closing and continue subject to Section 8.1 below.
(c) Schedule 4.2(c) identifies material safety data sheets
("MSDSs") prepared for all materials used at the Real Property, copies of which
shall be provided to Buyer within ten (10) days of the execution of this
Agreement. The MSDSs specify all Hazardous Materials and other elements,
compounds, mixtures, solutions or substances required to be identified or
memorialized in MSDSs under applicable Environmental Laws in connection with the
Business or the activities conducted on any of the Real Property at any time
prior to the Closing Date. Seller has complied with all applicable filing and
notification requirements in effect as of the Closing Date that are required in
connection with the Business or any activities conducted on any of the Real
Property at any time prior to the Closing Date. Documentation of such compliance
shall be made available to Buyer for Buyer's review.
(d) Except as described in Schedule 4.2(d), neither Seller,
nor to the best of Seller's knowledge any other Person, has caused or permitted
any of the Real Property to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce or process any Hazardous
Materials or solid waste at any time prior to the Closing Date, except in
compliance with all applicable Environmental Laws. Seller has not caused or
permitted, and has no knowledge of, the Release of any Hazardous Materials that
occurred at, affected, or related to the Business, any of the Real Property, or
any of the activities conducted thereon, whether on-site or off-site of the
Facilities, at any time prior to the Closing Date, except for Releases in
compliance with all Environmental Laws. All plants, buildings or structures
owned, leased or used by Seller at any of the Real Property and all machinery
and equipment located at any of the Real Property complies in all material
respects with all applicable federal, state and local Environmental Laws and all
Licenses and Permits. Except as described in Schedule 4.2(d), the Facilities and
the Real Property, do not contain any Hazardous Materials and no such materials
are located on, in, or under any of the Facilities or any of the Real Property
except in compliance with all Environmental Laws. Except as described in
Schedule 4.2(d), the Facilities and Real Property, do not to the best of Seller
and Parent's knowledge, contain any asbestos and no asbestos is located on, in
or under any of the Facilities or any of the Real Property. Any and all
underground and above-ground tanks at any of the Real Property are in compliance
in all material respects with any and all requirements of Environmental Laws and
such requirements do not mandate the removal or retrofitting of such tanks at
any time prior to the fifth anniversary of the Closing Date. Any and all
removals of any tank or any contaminated soil at any of the Real Property has
been carried out in compliance in all material respects with all applicable
Laws, including but not limited to all Environmental Laws and all Licenses and
Permits. No condition, circumstance or set of facts in existence as of the
Closing Date constitutes a significant hazard to health, safety, property or the
environment for which Seller is or may be liable.
(e) Legal Compliance. Except as set forth on Schedule 4.2(e),
the Business, the Real Property, and Seller's historical use thereof and
operation therein were and are, to the best of Seller and Parent's knowledge, in
compliance with all Environmental Laws. There are no environmental proceedings,
either instituted or, to the best of Seller and Parent's knowledge, planned to
be instituted, which would detrimentally affect the Business, the use and
operation of the Real Property for the purposes that Seller presently uses and
operates the Real Property, or the value of the Real Property.
4.3 Seller's and Parent's Obligations4.3 Seller's and Parent's
Obligations.
(a) Seller acknowledges that present, past or future
Environmental Conditions and Environmental Compliance Liability may or will
exist which could require Response Action and/or may result in claims and/or
demands by and/or liabilities to third parties, including, but not limited to,
governmental entities. It is the obligation of Seller, at its sole cost and
expense, to comply or ensure compliance in all material respects with, any and
all matters arising out of any and all Laws, agreements with governments, or
court or administrative orders that: (i) concern or relate to on-site or
off-site Environmental Conditions or Environmental Compliance Liability,
particularly potential future CERCLA liability and that (ii) arise from matters,
circumstances, or requirements in existence prior to or as of the Closing Date.
It is the further joint and several obligation of Seller and Parent, at their
sole cost and expense, to indemnify, defend, and hold the Buyer harmless from,
against, and with respect to all Losses related to said matters, circumstances,
or requirements. Such obligations, and any liability, damage, or cost that
Seller may have for any breach thereof, shall survive the closing. In the event
that Buyer is notified by a third party or governmental entity or discovers the
existence of any Environmental Condition, the result of which may require
Response Action or form the basis for the assertion of a claim by any third
party, including claims of governmental entities, Buyer shall promptly notify
Seller thereof, and Seller and Parent shall, at their sole cost and expense,
proceed with due diligence to take the appropriate action and respond thereto.
In the event that Seller fails to proceed with due diligence, Buyer may, at its
option, proceed to take the appropriate action and shall continue to have all
rights to indemnity and reimbursement as set forth in this Agreement. In such
event, Buyer shall assign to Seller or its assigns all monetary rights and
monetary claims against third parties.
(b) Seller and Parent acknowledge that certain permitting and
regulatory compliance requirements of Environmental Laws that existed prior to
or as of the Closing Date may result in claims and/or demands by and/or
liabilities to third parties, including but not limited to governmental
entities, after the Closing Date. Seller and Parent, jointly and severally,
shall assume all liabilities, damages, costs, duties and responsibilities
imposed by or arising from such permitting and compliance requirements. In such
event, Buyer shall assign to Seller or its assigns all monetary rights and
monetary claims against third parties.
(c) Seller shall, not later than ____ days after the Closing
Date, at Seller and Parent's sole cost and expense, proceed with due diligence
to investigate and resolve, to the reasonable satisfaction of Buyer, the
following identified potential environmental liabilities: ____________. If
Seller or Parent fail to so proceed with due diligence, Buyer may, at Buyer's
option, proceed to take appropriate action without affecting or modifying in any
way whatsoever any of Buyer's rights to indemnity or reimbursement set forth in
this Agreement. Nothing in this Section 4.3(c) shall limit, affect, or modify in
any way whatsoever any of Buyer's rights to indemnity or reimbursement set forth
in this Agreement.
(d) Except as set forth on Schedule 4.3(d), all Licenses and
Permits will be effectively transferred or assigned to Buyer at the Closing.
Copies of the Licenses and Permits shall be provided to Buyer within ten (10)
days after the signing of this Agreement.
Section 5. Covenants Prior to Closing5. Covenants Prior to Closing.
5.1 Seller and Parent's Covenants5.1 Seller and Parent's Covenants.
Seller and Parent covenant that, except as otherwise consented to in writing by
Buyer, from and after the date hereof until the Closing or the earlier
termination of this Agreement:
(a) Except as set forth in Schedule 5.1(a), the Business will
be conducted only in the ordinary course and in the same manner as heretofore
conducted except as required by this Agreement; and Seller will use reasonable
efforts consistent with past practice to preserve the organization of the
Business, the services of the present officers, employees, agents, and
representatives thereof and continuing business relationships with suppliers,
customers, clients and others having business relations with Seller.
(b) Except with the prior written consent of Buyer,
which consent will not be unreasonably withheld or delayed:
(i) No contract, lease, license, obligation,
indebtedness, commitment, purchase or sale will be entered into, assumed or
made by Seller except in the ordinary course of business of the Business;
(ii) Seller will not enter into or assume any
mortgage, pledge, conditional sale or
other title retention agreement, or permit any Lien to be placed upon any of the
Purchased Assets, whether now owned or hereafter acquired (other than Liens
arising by operation of Law in the ordinary course of business); and
(iii) Seller shall not make any commitment for
any capital expenditure whatsoever.
(c) All real property, machinery and equipment and other
operating properties used in the Business will be kept and maintained in good
repair and working order (ordinary wear and tear excepted) on a basis consistent
with past practices of the Business, and Seller will duly observe and conform to
all material terms and conditions upon or under which any of such properties are
held.
(d) Seller will use its best efforts to maintain in full force
and effect in all material respects all insurance coverages for the Business
currently in effect and shall undertake to obtain equivalent replacement
coverage with respect to any policies hereafter canceled or terminated.
(e) Neither Parent, Seller nor any affiliate of Seller or
Parent shall solicit, initiate or encourage any inquiries regarding any
Acquisition Proposal (as hereinafter defined), or participate in any
negotiations concerning, or knowingly provide any information to any person
known to be making or proposing to make (or any other person acting on behalf of
or in conjunction with such person) any Acquisition Proposal; nor shall Seller
or Parent or any affiliate of Seller or Parent enter into any contract,
agreement, arrangement or understanding, or participate in discussions or
negotiations, relating to an Acquisition Proposal. As used herein an
"Acquisition Proposal" shall mean any proposal for the sale, transfer or other
conveyance of all or any part of the capital stock of Seller or of the Purchased
Assets, directly or indirectly, to any person, other than (i) the sale of
inventory in the ordinary course of business of the Business including customary
transfers or dispositions of inventory or fixed assets for scrap, and (ii)
dispositions of surplus or obsolete fixed assets; provided, however, an
Acquisition Proposal shall not include any of the foregoing transactions
involving Buyer or any affiliate of Buyer.
5.2 Access5.2 Access. From and after the date hereof and until the
Closing or the termination of this Agreement, Seller shall, upon reasonable
prior notice, give to Buyer and to Buyer's counsel, accountants, consultants and
other representatives and designees, reasonable access during normal business
hours to the offices, properties, Facilities, agreements, records, and executive
or management personnel of Seller and will furnish to Buyer copies of all
documents and all such information concerning the properties and affairs of the
Seller as Buyer may reasonably request.
5.3 Cooperation5.3 Cooperation. Buyer, Seller and Parent agree (a) to
cooperate with each other in determining whether any filings are required to be
made or consents required to be obtained in any jurisdiction in connection with
the consummation of the transactions contemplated hereby and in making or
causing to be made any such filings promptly and in seeking to obtain in a
timely manner any such consents; and (b) to use all reasonable efforts to obtain
promptly the satisfaction of the conditions to the Closing of the transactions
contemplated herein. Buyer, Seller and Parent shall furnish to each other and to
each other's counsel all such information as may be reasonably required in order
to effectuate the foregoing.
5.4 Environmental Site Assessment5.4 Environmental Site Assessment.
Buyer shall have the right, at any time on or after the date of this Agreement,
and from time to time, to conduct one or more environmental site assessments of
Seller's Facilities and Real Property. The environmental site assessments shall
be made by such competent environmental consulting firms as Buyer may select and
may include without limitation, a visual inspection of the properties of the
Seller, a review of the Seller's records, discussions with the employees of the
Seller, soil, groundwater and other samplings and a review of the Seller's
compliance with OSHA regulations and Environmental Laws. Seller agrees to
provide Buyer and Buyer's representatives with such information concerning past
or present uses of, or conditions pertaining to, the operations of the Seller as
Buyer, or Buyer's representatives, may reasonably request. From and after the
date of this Agreement, Seller agrees to permit Buyer and Buyer's
representatives, access to the premises of the Seller from time to time for the
purpose of conducting such environmental assessments, surveys, examinations, and
inspections, tests and analysis as Buyer shall deem necessary or desirable.
Seller and Parent, jointly and severally, will indemnify and hold harmless Buyer
and Buyer's representatives from and against any claims, liabilities or damages
which they may suffer arising from such environmental site assessments, other
than claims, liabilities or damages caused by the negligence or willful
misconduct of Buyer or Buyer's representatives. If Buyer determines, in its sole
and absolute discretion, that the results of such environmental site assessments
are unsatisfactory, then Buyer shall have the right, exercisable by written
notice to Seller, to terminate its obligations under this Agreement. If Buyer
shall elect to terminate this Agreement in accordance with this Section, such
termination shall be without any liability whatsoever on account of such
termination to Buyer or Seller or Parent, unless there has been a breach of a
representation or warranty under this Agreement by the Seller or Parent.
5.5 Compliance with Bulk Transfer Law5.5 Compliance with
Bulk Transfer Law. Seller, Parent and Buyer hereby waive compliance with
the bulk transfer laws of the State of Georgia.
Section 6. Closing6. Closing.
6.1 Conditions to Buyer's Obligations6.1 Conditions to Buyer's
Obligations. The obligations of Buyer under this Agreement, including, without
limitation, the obligation to consummate and effect the purchase of the
Purchased Assets, shall be subject to satisfaction of the following conditions,
unless waived by Buyer:
(a) Seller and Parent shall have performed in all material
respects all agreements, and satisfied in all material respects all conditions
on their part to be performed or satisfied hereunder at or prior to the Closing
Date.
(b) All representations and warranties of Seller and Parent
herein shall have been true and correct in all material respects when made,
shall have continued to have been true and correct in all material respects at
all times subsequent thereto, and shall be true and correct in all material
respects on and as of the Closing Date as though made on, as of and with
reference to such date.
(c) All consents, approvals, certificates and authorizations
required to be obtained by Seller, Parent and/or Buyer in connection with the
sale of the Purchased Assets, including without limitation, all approvals by and
clearances from all governmental authorities, lenders, and other third parties,
shall have been obtained and no such consent, approval or authorization shall be
subject to any condition which is unduly burdensome; and as of the Closing Date,
no legislation, rule or regulation shall have been enacted or deemed applicable
to the transactions contemplated by this Agreement which would materially
interfere with or restrict the use and operation of the Business after the
Closing or materially detract from the value of the Assets.
(d) Seller shall have obtained written consents to the
assignment to Buyer of each Lease and Contract listed on Schedule 3.1(f) or
Schedule 3.1(g) with respect to which a consent is required in connection with
the consummation of the transactions contemplated by this Agreement.
(e) There shall not have occurred, since September 30, 1995,
except as set forth in Schedule 3.1(c) any material adverse change with respect
to the Business, financial condition, results of operations, prospects, assets
or backlog of the Seller.
(f) Seller shall have afforded Buyer and Buyer's
representatives reasonable access to the Facilities and Real Property, utilized
by the Seller in the conduct of the Business for the purpose of conducting
facility surveys, and the results of such surveys shall have been satisfactory
in all respects to Buyer in its sole and absolute discretion.
(g) The environmental site assessments referred to in Section
5.4, if any, shall have been completed and the results thereof shall have been
satisfactory to Buyer in its sole and absolute discretion.
(h) Seller shall have executed and delivered to Buyer all
documents necessary to convey title to the Purchased Assets to Buyer as
contemplated by this Agreement.
(i) Buyer shall have entered into an Employment
and Non-Competition Agreement (the "Employment Agreement") with each of
Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxxxxxx and Xxxxxx
Xxxxxxx (collectively, the "Employees").
(j) Buyer shall have obtained written consents to assignments
of all Assumed Leases of real property, pursuant to which Seller is a lessee,
executed by the lessors.
(k) The agreements between Seller and certain related parties
set forth on Schedule 6.1(k) shall have been terminated, and Seller and Buyer
shall have been released from all liability or obligation whatsoever therefor.
(l) Buyer and Seller shall have entered into the Escrow
Agreement.
(m) Seller shall have provided to Buyer a complete and
accurate schedule including an aging schedule for all of Seller's Accounts
Receivable as of not more than two business days prior to the Closing Date.
(n) Buyer and Seller shall have entered into Assignment and
Assumption Agreements with respect to all Assumed Leases of real property.
6.2 Conditions to Seller's Obligations6.2 Conditions to
Seller's Obligations. The obligations of Seller under this Agreement,
including, without limitation, the obligation to consummate and effect
the sale of the Purchased Assets shall be subject to satisfaction of the
following conditions, unless waived by Seller:
(a) Buyer shall have performed in all material respects all
agreements, and satisfied in all material respects all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date.
(b) All of the representations and warranties of Buyer herein
shall have been true and correct in all material respects when made, shall have
continued to have been true and correct in all material respects at all times
subsequent thereto, and shall be true and correct in all material respects on
and as of the Closing Date as though made on, as of, and with reference to such
date.
(c) All consents, approvals and authorizations required to be
obtained by Seller in connection with the sale of the Assets, including all
approvals by and clearances from all governmental authorities, have been
obtained.
(d) Buyer shall have entered into the Employment
Agreement with Employees.
(e) Buyer shall have entered into the Support Agreement
with On-Site Analysis, Inc.
(f) Buyer and Seller shall have entered into the Escrow
Agreement.
(g) Buyer and Seller shall have entered into Assignment and
Assumption Agreements with respect to all Assumed Leases of real property.
6.3 Conditions to Seller's and Buyer's Obligations6.3 Conditions to
Seller's and Buyer's Obligations. The obligations of Seller and Buyer to
consummate and effect the sale of the Purchased Assets pursuant to this
Agreement shall be subject to the following additional condition, unless waived
by Seller and Buyer:
(a) No injunction or temporary restraining order shall have
been granted restraining or prohibiting the consummation of the transactions
contemplated by this Agreement, and no action, suit or other proceeding
instituted by any federal, state, or local governmental authority seeking such
an injunction or order shall be pending or threatened.
6.4 Buyer's Closing Documents6.4 Buyer's Closing
Documents. At the Closing, Buyer will deliver to Seller, in form and
substance reasonably satisfactory to Seller and consistent with this Agreement:
(a) An instrument of assumption assuming the Assumed
Obligations, which instrument shall have terms and conditions conforming to this
Agreement.
(b) Copies of consents of the board of directors of Buyer
authorizing the execution and delivery of, and performance of Buyer's
obligations under, this Agreement, certified by the Secretary or an Assistant
Secretary of Buyer.
(c) A Good Standing Certificate for Buyer issued by the
Secretary of State of the jurisdiction of its incorporation and dated not more
than twenty business days prior to the Closing Date.
(d) A certificate of an officer of the Buyer certifying and
warranting that the representations, warranties and agreements of the Buyer
contained in this Agreement are true and accurate in all material respects as of
the Closing Date and that Buyer has satisfied and performed all of its
respective obligations hereunder.
6.5 Seller's Closing Documents6.5 Seller's Closing Documents. At the
Closing, Seller and Parent will deliver to Buyer, in form and substance
reasonably satisfactory to Buyer, all consents required under the Contracts, and
appropriate documents to effect or evidence the sale, conveyance, assignment and
transfer to Buyer of the Purchased Assets as contemplated hereby and necessary
to place Buyer, its officers, agents and employees in full possession and
enjoyment of all Purchased Assets as contemplated hereby, including the
following:
(a) A Xxxx of Sale and Assignment, containing such covenants
and warranties of title as are consistent with Seller's representations and
warranties under this Agreement and providing for full substitution and
subrogation of Buyer in and to all covenants and warranties by others
theretofore given or made in respect of such assets, and such other instruments
of assignment or transfer as shall be necessary or reasonably desirable to vest
in Buyer all of Seller's right, title and interest in and to all Contracts,
Intellectual Property, Intangible Assets, Personal Property, Assumed Leases and
other intangible property of Seller to be sold or transferred to Buyer under
this Agreement.
(b) Copies of resolutions adopted by the board of directors of
Seller and Parent authorizing the execution and delivery of, and performance of
Seller and Parent's obligations under, this Agreement, certified by the
Secretary or an Assistant Secretary of Seller and Parent.
(c) A Good Standing Certificate for Seller and Parent issued
by the Secretary of State of the jurisdiction of their respective incorporation
and dated not more than twenty business days prior to the Closing Date.
(d) A certificate of the President of Seller and Parent,
certifying and warranting that the representations, warranties and agreements of
Seller and Parent contained in this Agreement are true and accurate in all
material respects as of the Closing Date and that Seller and Parent have
satisfied and performed all of their respective obligations hereunder.
(e) An opinion, addressed to Buyer and dated the Closing Date,
of Xxxxx, Chernay, Norris, Xxxxxxxxxx & Xxxxxx, counsel to Seller and Parent.
(f) Evidence of any authorization, consent, approval or filing
with any public body or governmental authority or any other Person necessary in
connection with this Agreement.
(g) The Closing Date Financial Statements.
(h) Such other documents as Buyer shall reasonably
request.
6.6 Closing Apportionments6.6 Closing Apportionments.
(a) The following items shall be apportioned as of the close
of business on the day immediately prior to the Closing Date (with such meter
readings as shall be appropriate) and paid by Seller or Buyer to the other, as
the case may be, or credited against the Purchase Price, in respect of all
periods prior to the Closing Date;
(i) All water, utility and other similar
charges, and sewer rent and assessments, affecting the portion of Seller's
real property which constitutes part of the Purchased Assets;
(ii) All lease and other payments required to be
paid under the Assumed Obligations;
(iii) Excluding Transfer Taxes, all real,
intangible, use and personal property or similar taxes levied on property of
Seller used in connection with the Business;
(iv) All payroll and related payroll taxes and
benefits of Seller with respect to employees of Seller hired by Buyer.
Buyer shall pay all taxes and assessments after the Closing
Date, and Seller or Parent shall immediately upon receipt of a xxxx therefor,
including satisfactory documentation of the amounts so invoiced, pay to Buyer,
Seller's pro rata portion thereof attributable to all periods prior to the
Closing Date.
(b) The above-described adjustments (i) shall be determined in
accordance with generally accepted accounting principles, consistently applied
or, with respect to Real Property taxes, assessments and utility charges, in
accordance with the custom of the Bar Association for the county in which such
Real Property is located; and (ii) shall, to the extent practicable, be paid by
Seller and Parent to Buyer or by Buyer to Seller, as the case may be, at the
Closing, by wire transfer, subject to verification, or an adjustment may be made
in the Purchase Price therefor. In no event shall Buyer make any payment to
Seller under this Section 6.6 for any item which is included in the Purchased
Assets.
(c) The provisions of this Section 6.6 shall survive the
Closing. Any errors or omissions in computing apportionments at the Closing, or
any recomputations required as a result of facts that become known after the
Closing shall be corrected as soon as practicable thereafter.
Section 7. Additional Covenants7. Additional Covenants. If Closing
occurs hereunder, then from and after the Closing Date, the parties hereto
shall be bound by the following covenants:
7.1 Post-Closing Access7.1 Post-Closing Access. Buyer shall, following
the Closing, give to Seller and its respective authorized representatives such
reasonable access, at Seller's cost and expense, during normal business hours
and upon prior notice, to books and records constituting part of the Purchased
Assets (including without limitation all such accounting books and tax records)
as Seller may reasonably require in connection with the preparation and filing
of tax returns, collection by Buyer of the Accounts Receivable, audits or any
claim made by any party with respect to a liability or obligation that is not an
Assumed Obligation.
7.2 Covenant Not to Compete7.2Covenant Not to Compete.
(a) Seller and Parent hereby covenant and agree that for the
period commencing with the Closing Date and ending five (5) years from such
date, Seller and Parent shall not, within any geographic area in which Seller
has done business (the "Area") directly or indirectly own, manage, operate,
finance, join, control, or participate in the ownership, management, operation,
finance or control of, or be connected with, in any manner, any entity, business
enterprise or operation engaged in the design, manufacture, marketing, sale,
licensing or research and development relating to the Business, related
technologies, developments, inventions, improvements, or technical information
or the commercial laboratory oil analysis business.
(b) In addition to the restrictions imposed by Section 7.2(a),
Seller and Parent hereby covenant and agree that for the period commencing with
the Closing Date and ending five (5) years from such date, Seller and Parent
shall not, directly or indirectly, within the Area: (i) solicit or accept
business from any Person which was a customer of Seller at or anytime prior to
the date hereof, including actively sought prospective customers, for the
purposes of providing products or services customarily offered by or relating to
the Business; (ii) induce or attempt to induce or influence any employee of
Buyer to terminate his or her employment with Buyer, (iii) engage in any
business which is in competition with any business of Seller which is involved
in the Business or in which Seller now engages or at this time contemplates
becoming involved in including, without limitation, any related product lines of
the Business, or (iv) solicit or accept business from Penske Truck Leasing, Inc.
for any matters whether or not relating to the Business for a period commencing
with the Closing Date and ending one year from such date.
(c) Seller and Parent shall not, and shall not permit any of
their subsidiaries or affiliates, to own, manage, operate, join, control or
participate in the ownership, management, operation or control of or be
connected in any manner with, directly or indirectly, any business conducted
under the name United Testing Group, Spectro Metrics, PSI or Pro-Tech or any
name similar to the names United Testing Group, Spectro Metrics, PSI or Pro-Tech
or any derivatives thereof without the prior written consent of Buyer.
(d) Seller and Parent shall, and shall cause their respective
subsidiaries and affiliates, to hold in confidence and refrain from disclosing,
publishing or making use of all knowledge and information of a confidential
nature relating to the Business prior to the Closing Date, except knowledge and
information which (i) is or becomes generally available to the public other than
as a result of a disclosure prohibited hereby, (ii) is required to be disclosed
by Law, or (iii) is used in On-Site Analysis, Inc. in the business of On-Site
Analysis, Inc. and not in contravention of any other provisions of this
Agreement.
(e) For the purposes of this Agreement, the words "directly or
indirectly" as used in Section 7.2 herein shall include, but not be limited to,
(i) acting as an agent, officer, director, representative, consultant,
independent contractor, or employee of any entity or enterprise, and (ii)
participating in any such competing entity or enterprise as an owner, partner,
limited partner, member, joint venturer, material creditor or stockholder
(except as a stockholder holding less than five percent (5%) interest in a
corporation whose shares are traded on a national securities exchange or in the
over-the-counter market unless the Seller controls such corporation, either
alone or with others).
(f) Seller and Parent acknowledge that their expertise in the
Business is of a special, unique, unusual, extraordinary and intellectual
character, which gives said expertise a peculiar value, and that a breach by
Seller or Parent of the provisions of this Agreement cannot reasonably or
adequately be compensated in damages in an action at law; and such a breach of
any of the provisions contained in this Agreement will cause Buyer irreparable
injury and damage. Seller and Parent further acknowledge that they possess
unique skills, knowledge and ability and that competition by them, in violation
of this Agreement or any other breach of the provisions of this Agreement would
be extremely detrimental to Buyer. By reason thereof, Seller and Parent agree
that Buyer shall be entitled, in addition to any other remedies it may have
under this Agreement or otherwise, to preliminary and permanent injunctive and
other equitable relief to prevent a breach or curtail any breach or threatened
breach of this Agreement by Seller or Parent; provided, however, that no
specification in this Agreement of a specific legal or equitable remedy shall be
construed as a waiver or prohibition against the pursuing of other legal or
equitable remedies in the event of such a breach.
(g) Notwithstanding the foregoing, the Seller and Parent shall
be permitted to compete by operating an on-site oil analyzer business and acting
as franchisor or otherwise in connection with mini-lab franchises except that
the Seller and Parent shall remain bound by the terms of Section 7.2(b)(iv).
7.3 Nondisclosure7.3 Nondisclosure. If this Agreement and the
transactions provided for herein shall be terminated or abandoned for any reason
whatsoever, each party shall return to the other parties any and all
proprietary, confidential and secret information and data furnished to such
party in connection herewith and hold in confidence its knowledge of any and all
such proprietary, confidential and secret information or data and not disclose
or publish the same directly or indirectly (a) without the prior written consent
of such other party or (b) until the same has been theretofore publicly
disclosed by such other party or otherwise ceased to be secret or confidential
as evidenced by general public knowledge; provided, however, that each party
shall have the right to disclose such information, without consent but with
prior notice to the other party to the extent that (x) such party is required by
Law to do so, or (y) such disclosure is required in connection with litigation
pertinent to such information. The foregoing provisions are intended to
supplement and not supersede any existing confidentiality agreement between the
parties.
7.4 Cooperation in Third-Party Litigation
(a) After the Closing, Seller and Parent shall provide such
cooperation as Buyer or its counsel may reasonably request in connection with
(i) any proceedings related to the Business other than the Excluded Assets or
the Excluded Obligations; (ii) Seller's conduct of the Business prior to the
Closing which are hereafter pending or threatened and to which Buyer is a party,
(iii) any proceedings for which Seller is entitled to indemnification from Buyer
under Section 8.3. Such cooperation shall include, but not be limited to, making
employees of Seller and Parent available upon the reasonable request and at the
expense of Buyer or its counsel to consult with and assist Buyer and its counsel
in connection with any such proceedings and to prepare for and testify in any
such proceedings, including depositions, trials and arbitration proceedings.
(b) Buyer agrees that after the Closing, Buyer shall provide
such cooperation as Seller and Parent or their counsel may reasonably request in
connection with (i) pending or threatened proceedings set forth in Schedule
3.1(p); (ii) any proceedings relating to the Business which are hereafter
pending or threatened and to which Seller is a party; and (iii) any proceedings
for which Buyer is entitled to indemnification from Seller or Parent under
Section 8.2 hereof. Such cooperation shall include, but not be limited to,
making employees of Buyer available upon the reasonable request and at the
expense of Seller or Parent or their counsel to consult with and assist Seller
or Parent and their counsel regarding any such proceedings and to prepare for
and testify in connection with any such proceedings, including depositions,
trials and arbitration proceedings.
(c) The provisions of this Section 7.4 are not intended to
conflict with, and shall not override the provisions of Section 8 hereof.
7.5 Discharge of Business Obligations7.5 Discharge of Business
Obligations. From and after the Closing Date, Seller and Parent shall pay and
discharge when due all obligations and liabilities of Seller incurred prior to
the Closing Date (except for the Assumed Obligations), and in furtherance of the
foregoing shall discharge on a timely basis all such liabilities or obligations
to employees, trade creditors, suppliers and customers.
7.6 Change of Business Name7.6Change of Business Name. As of the
Closing Date, (a) Seller and any affiliate of Seller whose name includes "United
Testing Group" shall change its name to a name which does not include "United
Testing Group" and is reasonably acceptable to Buyer and (b) Seller, and
Seller's affiliates shall cease using the name "United Testing Group," or any
confusingly similar name, on any stationery or for any other on-going business
purposes.
7.7 Further Assurances7.7 Further Assurances. Seller and Parent from
time to time after the Closing, at Buyer's request, will execute, acknowledge
and deliver to Buyer such other instruments of conveyance and transfer and will
take such other actions and execute and deliver such other documents,
certifications and further assurances as Buyer may reasonably require in order
to vest more effectively in Buyer, or to put Buyer more fully in possession of,
any of the Purchased Assets. Each of the parties hereto will cooperate with the
other and execute and deliver to the other parties hereto such other instruments
and documents and take such other actions as may be reasonably requested from
time to time by any other party hereto as necessary to carry out, evidence and
confirm the intended purposes of this Agreement.
7.8 Accounts Receivable
(a) Commencing on the Closing Date, Buyer shall collect Seller's
Accounts Receivable existing as of the Closing Date. Buyer shall collect the
Accounts Receivable using the same standards of collection that Buyer uses in
collecting Buyer's own accounts receivable. Every thirty (30) days after the
Closing Date, Buyer shall remit to Seller the amount of Accounts Receivable
collected by Buyer during the immediately preceding thirty (30) day period.
Buyer's obligations under this Section 7.8 shall terminate with respect to any
Accounts Receivable remaining unpaid one hundred eighty (180) days after the
Closing Date. At that time, Buyer shall forward to Seller copies of all the
documentation concerning the unpaid Accounts Receivable and Seller shall be
responsible for all collection efforts relating thereto. For the purpose of this
Section 7.8, "Accounts Receivable" shall mean all invoices for services rendered
and completed by Seller prior to the Closing Date and which have been mailed to
customers prior to the Closing Date for which payment has not yet been received
by Seller.
(b) Buyer and Seller agree that Buyer shall reduce from the payments
required under subsection (a) above, any reasonable amounts paid by Buyer for
invoices or other costs relating to the collection of Accounts Receivable.
7.9 Management Fee7.9 Management Fee. Parent shall pay to Buyer a
management fee of One Hundred Twenty Thousand Dollars ($120,000) (the
"Management Fee") for the use of Xxxxxx X. Xxxxxxxx'x consulting services for
the period commencing on the Closing Date and ending one year from such date
(the "Consulting Term"). The Management Fee shall be payable to Buyer by Parent
in two lump sum payments of Sixty Thousand Dollars ($60,000), the first to be
paid to Buyer on the Closing Date by a credit to the Purchase Price as set forth
on Schedule 2.4, and the second to be paid to Buyer on the six month anniversary
of the Closing Date by wire transfer to the account indicated by Buyer. Parent
shall promptly reimburse Buyer for those travel and entertainment related
expenses incurred by Xxxxxx X. Xxxxxxxx as a result of the services performed by
him on behalf of, or at the request of, Parent. Buyer shall have the immediate
right, exercisable with reasonable notice to the extent possible to Parent or
Seller, to offset the Management Fee and any reimbursement of travel and
entertainment expenses as noted in the previous sentence due Buyer hereunder on
the sixth month anniversary of the Closing Date against amounts then owing or to
become owing by Buyer to Seller pursuant to Section 7.8 hereof. In exchange for
the Management Fee, Xxxxxx X. Xxxxxxxx shall be available to Parent on an
as-needed basis up to a maximum of 8 hours per week of the Consulting Term. If
Xxxxxx X. Xxxxxxxx'x employment with Buyer is terminated prior to the end of the
Consulting Term, Parent shall be entitled to a refund of the Management Fee paid
as it relates to the unexpired portion of the Consulting Term.
7.10 Database7.10 Database. The database and related source code
information used in connection with the operation of the oil analysis laboratory
of the Business (the "Database") shall be leased to Buyer by Seller for the
period commencing with the Closing Date and ending ten (10) years from such date
for the aggregate lease amount of One Hundred Thousand Dollars ($100,000) (the
"Database Rental"). The Database Rental shall be payable to Seller by an
increase to the Purchase Price as set forth on Schedule 2.4. At the expiration
of the Database lease term hereunder, the ownership of the Database shall
automatically revert to the Buyer and shall be free and clear of all Liens and
become the sole property of the Buyer. Seller shall provide such documentation
as is reasonably necessary or required by Buyer to transfer and convey the
Database to Buyer, such transfer to be free and clear of all Liens.
7.11 Oil Analyzers7.11 Oil Analyzers. Two new on-site oil analyzer
units ("Oil Analyzers") shall be leased to Buyer by Seller for the period
commencing with the Closing Date and ending three (3) years from such date (the
"Analyzer Term") for the aggregate lease amount of One Hundred Thousand Dollars
($100,000) (the "Analyzer Amount"). The Analyzer Amount shall be payable to
Seller by Buyer by an increase to the Purchase Price as set forth on Schedule
2.4. At the expiration of the Analyzer Term, the ownership of the Oil Analyzers
shall automatically revert to the Buyer and shall be free and clear of all Liens
and become the sole property of Buyer. Seller shall provide such documentation
as is reasonably necessary or required by Buyer to transfer and convey title to
the Oil Analyzers to Buyer, such transfer to be free and clear of all Liens.
The Oil Analyzers shall be shipped to the Buyer at the Seller's sole
cost and expense to those locations identified by the Buyer in the United States
on the Closing Date for receipt by the Buyer within thirty (30) days of the
Closing Date.
Seller, at its sole cost and expense, shall maintain and repair the Oil
Analyzers during the Analyzer Term.
7.12 Health Benefits7.12 Health Benefits. The Seller agrees, for the
period commencing with the Closing Date and ending at midnight on December 31,
1996 (the "Health Period"), at its sole cost and expense, to provide the
employees set forth on Schedule 7.12 with group health benefits, medical and
dental benefits, short-term disability insurance benefits as were similarly
provided to such employees by Seller and/or Parent immediately prior to the
Closing Date. Buyer shall withhold amounts as are required from such employees
paychecks during the Health Period for each employee's contribution and forward
such withholding to Seller. Buyer shall promptly reimburse Seller for all
short-term disability claims paid by Seller to the employees set forth on
Schedule 7.12 for short-term disability claims incurred during the Health
Period. Buyer agrees to notify the employees set forth on Schedule 7.12 in
accordance with applicable law of the changes to the group health benefits,
medical and dental benefits, and short-term disability insurance benefits to be
received by said employees upon the expiration of the Health Period.
7.13 Prepaid Kits7.13 Prepaid Kits. Seller and/or Parent shall promptly
reimburse Buyer for all costs and expenses, net of restocking charges, incurred
with respect to Prepaid Kits returned to Buyer by customers that demonstrate
that they paid for the Prepaid Kits prior to the Closing Date for the period
commencing on the Closing Date and ending six months from such date
(collectively, the "Prepaid Returns"). Buyer shall have the immediate rights,
exercisable with reasonable notice to the extent possible to Parent or Seller,
to offset the Prepaid Returns due Buyer against amounts then owing or to become
owing by Buyer to Seller pursuant to Section 7.8.
7.14 Support Agreement7.14 Support Agreement. Subsequent to the Closing
Date and with respect to the matters set forth on Schedule 7.14, Buyer and
Parent shall enter into a Support Agreement with respect to those matters set
forth on Schedule 7.14.
7.15 Terminated Employees7.15 Terminated Employees. Without limiting
the Excluded Obligations, four employees of the Seller, including Xxxxxxx Xxxxx,
Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxxx, will not be hired by the Buyer
subsequent to the Closing and the employment of said employees will be
terminated by the Seller as of the Closing Date. Seller shall be solely
responsible for all severance and termination related benefits for said
employees.
Section 8. Survival of Representations and Warranties; Indemnificationon.
8.1 Survival of Representations and Warranties and Covenants8.1
Survival of Representations and Warranties and Covenants. The representations,
warranties, covenants, and obligations of Buyer, Seller and Parent set forth in
this Agreement and in any certificate, agreement, or instrument delivered in
connection with the transactions contemplated hereby, shall survive the Closing
for the following periods:
(a) with respect to representations, warranties, covenants,
and obligations arising under Section 3.1(d), Section 3.1(e), Section 3.1(z),
Section 4 and Section 10.1 of this Agreement, for an indefinite period of time;
and
(b) for all other matters a period equal to the greater of (i)
the applicable statute of limitations or (ii) a period of three (3) years.
8.2 Indemnification by Seller and Parent8.2 Indemnification by Seller
and Parent. In addition to and not in limitation of Seller and Parent's
indemnification obligations set forth elsewhere in this Agreement, Seller and
Parent shall, jointly and severally, defend, indemnify, and hold harmless Buyer
and its affiliates and their respective officers, directors, shareholders,
agents and employees (individually, a "Buyer Indemnitee" and collectively the
"Buyer Indemnitees"), from and against any and all claims, losses, deficiencies,
liabilities, obligations, damages, penalties, punitive damages, costs, and
expenses (including, without limitation, reasonable legal, accounting and
consulting fees), whether or not resulting from third party claims
(collectively, "Losses"), suffered by a Buyer Indemnitee, which arise out of or
result from:
(a) any inaccuracy or misrepresentation in or breach of any of
the representations, warranties, covenants or agreements made by Seller or
Parent in this Agreement or in any document, certificate or affidavit delivered
by Seller or Parent pursuant to the provisions of this Agreement;
(b) any Environmental Condition or Environmental Compliance
Liability, as those terms are defined in this Agreement, including the exposure
of any Person or property or facility to any Environmental Condition, regardless
of whether any Environmental Condition, the exposure thereto or any
Environmental Compliance Liability resulted from activities of Seller or
Seller's predecessor in interest;
(c) CERCLA or similar state law, for materials handled by or
on the premises on which Seller conducts its business or for the conduct of
Seller or Seller's business whether on-site or elsewhere, on or prior to the
Closing;
(d) any obligation, liability, debt or commitment
of Seller which is not an Assumed Obligation (or is an Excluded Obligation),
whether or not paid by Buyer; and
(e) any claims by any Person arising out of or due to the
failure to comply with the bulk transfers laws, fraudulent conveyance or other
laws for the protection of creditors of the State of Georgia, including, without
limitation, any claims by any Person against all or any part of the Purchased
Assets.
(f) any other matter related to the conduct of the Business by
Seller or any predecessor or the use or ownership of the Purchased Assets prior
to the Closing (including, but not limited to, all acts, omissions and
conditions existing or occurring prior to the Closing for which any of the Buyer
Indemnitees is alleged to be liable pursuant to any successor or similar theory
of liability).
8.3 Indemnification by Buyer8.3 Indemnification by Buyer. Buyer shall
defend, indemnify and hold harmless, Seller and Parent and Parent and Seller's
respective officers, directors, agents and employees (individually, a "Seller
Indemnitee" and collectively the "Seller Indemnitees") from and against any and
all Losses, suffered by a Seller Indemnitee, which arise out of or result from
(a) any inaccuracy or misrepresentation in or breach of any of the
representations, warranties, covenants or agreements made by Buyer in this
Agreement or in any document, certificate or affidavit delivered by Buyer
pursuant to the provisions of this Agreement; (b) any Taxes arising from the
operation by Buyer after the Closing Date of the Business purchased by Buyer; or
(c) any of the Assumed Obligations.
8.4 Indemnification Payments. Subject to Section 8.6, all
indemnity payments, whether by Buyer, Seller or Parent, to be made
under this Agreement shall be made in immediately available funds.
8.5 Procedure for Third Party Claims
(a) Notice to the indemnifying party shall be given promptly
after receipt by any Seller Indemnitee or Buyer Indemnitee of actual knowledge
of the commencement of any action or the assertion of any claim that will likely
result in a claim by it for indemnity pursuant to this Agreement. Such notice
shall set forth in reasonable detail the nature of such action or claim to the
extent known, and include copies of any written correspondence or pleadings from
the party asserting such claim or initiating such action. The indemnifying party
shall be entitled, at its own expense, to assume or participate in the defense
of such action or claim. In the event that the indemnifying party assumes the
defense of such action or claim, it shall be conducted by counsel chosen by such
party and approved by the party seeking indemnification, which approval shall
not be unreasonably withheld.
(b) With respect to actions as to which the indemnifying party
does not exercise its right to assume the defense, the party seeking
indemnification shall assume and control the defense of and contest such action
with counsel chosen by it and approved by the indemnifying party, which approval
shall not be unreasonably withheld. The indemnifying party shall be entitled to
participate in the defense of such action, the cost of such participation to be
at its own expense. The indemnifying party shall be obligated to pay the
reasonable attorneys' fees and expenses of the party seeking indemnification to
the extent that such fees and expenses related to claims as to which
indemnification is payable under Sections 8.2 or 8.3, as such expenses are
incurred.
(c) Both the indemnifying party and the indemnified party
shall cooperate fully with one another in connection with the defense,
compromise, or settlement of any such claim or action, including, without
limitation, by making available to the other all pertinent information and
witnesses within its control.
8.6 Set-Off8.6 Set-Off. In the event Buyer becomes entitled to
indemnification pursuant to Section 8, Buyer shall have the immediate right,
exercisable with reasonable notice to the extent possible to Seller and Parent,
to offset the amount of any such indemnity claim against amounts then owing or
to become owing by Buyer to Seller or Parent under this Agreement, or the
Support Agreement, or the Escrow Agreement or otherwise. The rights of Buyer
under this Section 8.6 shall be in addition to, and not in limitation of, any
other rights which it may have.
8.7 Remedies Cumulative8.7 Remedies Cumulative. The remedies provided
for herein shall be cumulative and shall not preclude assertion by any party of
any other rights or the seeking of any other remedies against any other party.
Nothing contained in Section 8 shall be construed in any way to limit, impair or
modify any provisions of this Agreement or to otherwise impose any additional
liability or obligation on Buyer at any time for any liability or obligation of
Seller or Parent other than Buyer's obligation to indemnify Seller or Parent
hereunder.
8.8 Successors8.8 Successors. The merger, consolidation, liquidation,
dissolution or winding up of, or any similar transaction with respect to, the
parties hereto shall not affect in any manner the obligations of the parties
pursuant to Section 8 or any other term or provision of this Agreement, and the
parties covenant and agree to make adequate provision for their liabilities and
obligations hereunder in the event of any such transaction.
8.9 Limits on Indemnification8.9 Limits on Indemnification.
Notwithstanding the provisions of Sections 8.2 and 8.3 above, neither the Buyer
Indemnitees nor the Seller Indemnitees shall be entitled to receive
indemnification under this Agreement for a claim relating to a breach of a
representation or warranty contained herein until the aggregate amount of
indemnification claims they shall have asserted hereunder shall exceed Five
Thousand Dollars ($5,000); provided that if the Buyer Indemnitees or the Seller
Indemnitees shall successfully assert claims for indemnification hereunder in
excess of Five Thousand Dollars ($5,000) in the aggregate they shall be entitled
to receive indemnification for the full amount of the indemnity claims without
regard to the Five Thousand Dollar ($5,000) "threshold".
Section 9. Brokerage9. Brokerage.
9.1 Finders and Brokers Fees9.1 Finders and Brokers Fees. Each of the
parties represents that it has dealt with no broker or finder in connection with
any of the transactions contemplated by this Agreement, and, insofar as it
knows, no broker or other person is entitled to any compensation including,
without limitation, a commission or finder's fee, in connection with any of
these transactions. The parties each agree to indemnify and hold harmless one
another against any loss, liability, damage, cost, claim, or expense incurred by
reason of any compensation, including, without limitation, brokerage,
commission, or finder's fee, alleged to be payable because of any act, omission,
or statement or the indemnifying party.
Section 10. General Provisions10. General Provisions.
10.1 Sales and Transfer Taxes10.1 Sales and Transfer Taxes. Seller
and/or Parent shall pay any and all taxes, federal, state, or local, in the
nature of income, sales, use, transfer gains, conveyance, recording, ad valorem,
stamp, transfer and any similar tax, fee or duty required to be paid in respect
of the conveyance, assignment, or transfer to Buyer of the Purchased Assets and
the filing and recording thereof (collectively, the "Transfer Taxes").
10.2 No Third Party Beneficiaries10.2 No Third Party Beneficiaries.
Nothing in this Agreement is intended, nor shall it be construed, to confer any
rights or benefits upon any Person (including, but not limited to, any employee
or former employee of Seller) other than the parties hereto, and solely to the
extent provided in Section 8, the other Seller Indemnitees and Buyer
Indemnitees, and no other Person shall have any rights or remedies hereunder.
10.3 Expenses of the Parties; Certain Litigation10.3 Expenses of the
Parties; Certain Litigation. All expenses involved in the preparation,
authorization, and consummation of this Agreement, incurred up to and including
the Closing, including, without limitation, all fees and expenses of agents,
representatives, counsel, and accountants in connection therewith, shall be
borne solely by the party who shall have incurred the same, and the other
parties shall have no liability in respect thereof; provided, however, that
nothing herein shall be construed to release or impair any claim for damages by
any party.
10.4 Amendment and Waiver10.4 Amendment and Waiver. This Agreement may
not be changed or terminated orally. No waiver of compliance with any provision
or condition hereof, and no consent provided for herein shall be effective
unless evidenced by an instrument in writing duly executed by the party hereto
sought to be charged with such waiver or consent.
10.5 Miscellaneous10.5 Miscellaneous. The Section headings of this
Agreement are for convenience of reference only and do not form a part hereof
and do not in any way modify, interpret, or construe the intentions of the
parties. This Agreement may be executed in one or more counterparts and all such
counterparts shall constitute one and the same instrument. This Agreement shall
be governed by and construed in accordance with the Laws of the State of
Delaware; without giving effect to the conflict of laws principles thereof.
10.6 Binding Effect. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective
administrators, legal representatives, successors and permitted assigns.
10.7 Publicity10.7 Publicity. No party hereto or its representatives
will, without the prior written consent of the other parties, disclose to any
other person any information that has been made available in connection with
this Agreement (other than information which has been published or made publicly
available other than by unauthorized disclosure of a party), make any public
announcement concerning the transactions contemplated hereby or disclose any of
the terms, conditions, or other facts with respect to this Agreement, except as
required by Law. If circumstances make it impossible to give such prior written
notice, then any disclosure made shall be no more extensive than is necessary to
meet the minimum requirement imposed on the party making such disclosure.
10.8 Complete Agreement10.8 Complete Agreement. This Agreement and
Schedules and other documents referred to herein contain the entire agreement
between the parties hereto with respect to the transactions contemplated herein
and supersede all previous negotiations, commitments, and writings.
10.9 Notices10.9 Notices. Any notice, report, demand, waiver, consent
or other communication given by a party under this Agreement (each a "notice")
shall be in writing, may be given by a party or its legal counsel, and shall
deemed to be duly given (i) when personally delivered, or (ii) upon delivery by
United States Express Mail or similar overnight courier service which provides
evidence of delivery, or (iii) when five (5) days have elapsed after its
transmittal by registered or certified mail, postage prepaid, return receipt
requested, addressed to the party to whom directed at that party's address as it
appears below or another address of which that party has given notice, or (iv)
when transmitted by telex (or equivalent service), the sender having received
the answerback of the addressee, or (v) when delivered by facsimile transmission
if a copy thereof is also delivered in person or by overnight courier. Notices
of address change shall be effective only upon receipt notwithstanding the
provisions of the foregoing sentence.
Notice to Buyer shall be sufficient if given to:
Conam Inspection, Inc.
0000 X. Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
ATTN: Xxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
ATTN: Xxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
Notice to Seller shall be sufficient if given to:
Top Source Technologies, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxx Xxxxxxx, XX 00000
ATTN: Xx. Xxxxxx Xxxxxx, Chairman
Fax: (000) 000-0000
with a copy to:
Xxxxx, Chernay, Norris, Xxxxxxxxxx & Xxxxxx
000 X.X. Xxxxxxx 0
Xxxxx 000
X.X. Xxx 00000
Xxxxx Xxxx Xxxxx, XX 00000
ATTN: Xxxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
10.10 Assignment10.10 Assignment. Except as expressly provided herein,
this Agreement and any rights pursuant hereto shall not be assignable by Seller
without the prior written consent of Buyer. Buyer has the right to assign its
rights and obligations under this Agreement to a wholly-owned subsidiary of
Buyer which shall assume all of Buyer's obligations hereunder. In the event of
such assignment, (i) the term "Buyer" as used in this Agreement shall refer to
the wholly-owned subsidiary of Conam Inspection, Inc; and (ii) Conam Inspection,
Inc. shall hereby guarantee all obligations of its wholly-owned subsidiary to
Seller under this Agreement which are thereby assumed by the wholly-owned
subsidiary.
10.11 Severability10.11 Severability. If any term or provision of this
Agreement shall be held to be invalid or unenforceable for any reason, such term
or provision shall be ineffective to the extent of such invalidity or
unenforceability without invalidating the remaining terms and provisions hereof,
and this Agreement shall be construed as if such invalid or unenforceable term
or provisions had not been contained herein.
10.12 Effect of Investigation10.12 Effect of Investigation. Any
inspection, preparation or compilation of information or schedules, or audit of
the inventories, properties, financial condition or other matters relating to
Seller conducted by or on behalf of Buyer pursuant to this Agreement shall in no
way limit, affect or impair the ability of Buyer to rely upon the
representations, warranties, covenants and agreements of Seller set forth
herein.
10.13 Termination10.13 Termination.
(a) This Agreement may be terminated at any time
prior to the Closing by mutual written consent of Seller and Buyer.
(b) This Agreement may be terminated by Buyer in
accordance with Section 5.4 and other applicable provisions.
(c) If this Agreement is terminated as provided herein: (i)
each party will redeliver all documents, work papers and other material of the
other party or parties relating to the transactions contemplated hereby, whether
so obtained before or after the execution hereof, to the party furnishing the
same; (ii) no information received by any party hereto with respect to the
business of the other party or their affiliated companies (other than
information which is a matter of public knowledge or which has heretofore been
or is hereafter published in any publication for public distribution or filed or
available as public information with any governmental authority) shall at any
time be used for the advantage of, or disclosed to third parties, by such party
for any reason whatsoever; and (iii) no party shall have any liability or
further obligation to any other party to this Agreement except as provided by
this Section 10.13, except to the extent such claim or obligation has accrued
prior to such termination of this Agreement.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed under seal as of the date first above written.
CONAM INSPECTION, INC.
[corporate seal] By:__________________________________
Name: Xxxxx X. X'Xxxxxx
Attest: Title: Chief Financial Officer
By:____________________________
Name:
Title:
TOP SOURCE TECHNOLOGIES, INC.
[corporate seal] By:________________________________
Name: Xxxxx Xxxxx
Attest: Title: Vice President of Finance
By:____________________________
Name: Xxxxxxxx Xxxxx
Title: Secretary
UNITED TESTING GROUP, INC.
[corporate seal] By:________________________________
Name: Xxxxx Xxxxx
Attest: Title: Vice-President of Finance
By:____________________________
Name: Xxxxxxxx Xxxxx
Title: Assistant Secretary
Schedule 1.1(a) [Schedule 1.1(a)]
to the
Asset Purchase Agreement
Pre-Paid Assets
1. Deposits - See attachment #1.1(a)1
Pre-paid monthly rent
Schedule 1.1(b) [Schedule 1.1(b)]
to the
Asset Purchase Agreement
Personal Property
1. Automobiles*:
1992 Chevrolet Cavalier Coupe
Illinois VIN # 1G1OC1444N7228752
United Testing Group, Inc.
0000X Xxxxxxxx Xx.
Xxxxxxx, Xx 00000-0000
1989 Chevrolet Pickup
Georgia VIN # 0XXXX00X0X0000000
United Testing Group, Inc.
0000 Xxxxxxxxxxxx Xx.
Xxxxxxx, XX 00000
1992 Chevrolet Automobile
California VIN # 0X0XX0000X0000000
United Testing Group, Inc.
000 Xxxx Xxxx Xxx.
Xxxxxxxxx, XX 00000
* Seller will transfer titles at or promptly after
the closing.
2. Fixed Assets/Property Detail List - See attachment #1.1(b)1.
Schedule 1.2 [Schedule 1.2]
to the
Asset Purchase Agreement
Excluded Assets
1. All cash and cash equivalents in hand, in banks or in transit for the
account of Seller.
2. The corporate seal, certificate of incorporation, minute books, stock
books, tax returns, books of account or other records having to do with
the corporate organization of Seller.
3. All Accounts Receivable and notes receivable due from
employees of Seller.
4. Prepaid taxes and any rights of Seller to any federal, state, local or
foreign tax refunds or carrybacks or any payment under any tax
sharing, tax allocation, or similar agreement.
5. All contracts, agreements, leases, purchase orders and
commitments, and sales orders and commitments not set
forth on Schedule 3.1(g) [Schedule 3.1(g).
6. All Employee Benefit Plans.
7. All Real Property of Seller.
8. Database leased to Buyer.
9. Oil Analyzers.
10. Insurance premium refunds except health and disability insurance.
11. All outstanding Bankruptcy Proofs of Claim as set forth
on Attachment 1.2 (1).
12. Sale in Bulk of Debtor, Xxxx Xxxxxx Oil Co.; amount owed
to United Testing Group, Inc. = $4,099.00 (not included
in receivables);
Attachment 1.2 (1)
Bankruptcy Proofs of Claim:
Debtor Amount of Claim
Post Oil & Construction, Inc. $ 320.00
New-Xxxx Storage Corporation $ 127.50
Appian Corporation $ 239.50
--------
$ 687.00
Schedule 1.3(b) [Schedule 1.3(b)]
to the
Asset Purchase Agreement
Liens
1. Cascade Leasing Co. financing statement #960000120105 filed
June 11, 1996 for the aggregate amount of $55,134.22.
Schedule 1.4(a) [Schedule 1.4(a)]
to the
Asset Purchase Agreement
Assumed Contracts, Commitments, Etc.
1. Liability to process and issue reports on all pre-paid and partial
paid kits through the closing date; See attachment #1.4(a)1.
2. $9,259.72 property tax liability due November 1, 1996.
3. Equipment leases:
a. Nevada - Nationscredit/Cascade Leasing
Baird MOA Spectrometer;
b. Georgia - Pitney Xxxxx - Mailing Machine;
c. Georgia - Tokai Financial Services - Xxxxxx Copy
Machine;
d. Georgia - Advanta Leasing Corporation - Xxxxxx
Raid Chassis;
4. Property leases*:
x. Xxxxxxxx Realty, Ltd.
0000 Xxxxxxxxxxxx Xx., Xxx. 000
Xxxxxxx, XX 00000
b. Cortland Court Partnership
ASG Asset Management
0000X Xxxxxxxx Xx.
Xxxxxxx, Xx 00000
c. The Ribeiro Corporation
0000 Xxxxxx Xxxx
Xxxxxx, XX 00000
* The leases are subject to restrictions of record and zoning
regulations which will not impair the ability of the Buyer
to conduct business at the respective leased premises in a
manner consistent with the nature of the business being
conducted by the Seller as of the date hereof.
Schedule 1.4(b) [Schedule 1.4(b)]
to the
Asset Purchase Agreement
Business Licenses:
1. Location - 0000 Xxxxxx Xxxx #0
Xxxxxx, XX 00000
State City License No. Effective Date
NV Sparks 033987 Jan. 31, 1996
2. Location - 0000X Xxxxxxxx Xx.
Xxxxxxx, XX 00000
State City License No. Effective Date
----- ---- ----------- --------------
IL Addison 905 May 1, 1996
3. Location - 0000 Xxxxxxxxxxxx Xx.
Xxxxxxx, XX 00000
State City License No. Effective Date
GA Atlanta 00094722 Mar. 7, 1996
DeKalb County
4. Location - c/o C.T. Corporation System*
000 X. Xxxxx Xx., Xxx. 000
Xxxxxx, Xxxxxx 00000
State City License No. Effective Date
----- ---- ----------- --------------
Alaska Xxxxxx XX 213939 Jan. 1, 1995 thru 1996
* Office of Corporation Trust; United Testing Group, Inc. had no
physical location in Alaska.
Schedule 2.3 [Schedule 2.3]
to the
Asset Purchase Agreement
Allocation
Conam Inspection, Inc. to supply.
Schedule 2.4 [Schedule 2.4]
to the
Asset Purchase Agreement
Adjustments
Purchase Price $3,500,000
Prepaid rent for database rental for
ten-year period per Section 7.10 100,000
Prepaid rent for two OSA machines for
a three-year period per Section 7.11 100,000
Less: Escrow - one year per Section 2.2 (200,000)
Less: Xxxxxxxx adjustment per Section 7.9 (60,000)
Less: Severance adjustment per Section 2.4 (13,000)
Less: Unpaid vacation accrual for all UTG
employees at 10.30/96 per Section 1.7 (22,958)
Less: Balance due on Cascade Leasing Co. (55,134)
Net Cash due at Closing $3,348,908
Schedule 3.1(b) [Schedule 3.1(b)]
to the
Asset Purchase Agreement
Events Permitting Termination of Any Agreement
None
Necessary Authorizations, Consents, Etc.
Parent is required to file a Form 8-K within 15 days of closing.
Seller makes no representations, etc. concerning consents of any state or
federal government body, etc. which regulates anti-trust laws or similar laws
insofar as such consents apply to Buyer's right to consummate the transaction or
use the Purchased Assets.
The leases are subject to restrictions of record and zoning regulations which
will not impair the ability of the Buyer to conduct business at the respective
leased premises in a manner consistent with the nature of the business being
conducted by the Seller as of the date hereof.
Schedule 3.1(c) [Schedule 3.1(c)]
to the
Asset Purchase Agreement
Disclosure of Certain Changes
1. On-Site Analysis, Inc. has developed its on-site oil analyzer and made
changes to it which make it a potential competitor to the Business.
Schedule 3.1(d) [Schedule 3.1(d)]
to the
Asset Purchase Agreement
Taxes Not Timely Filed
None
Schedule 3.1(e) [Schedule 3.1(e)]
to the
Asset Purchase Agreement
Real Property
Property leases*:
x. Xxxxxxxx Realty, Ltd.
0000 Xxxxxxxxxxxx Xx., Xxx. 000
Xxxxxxx, XX 00000
b. Cortland Court Partnership
ASG Asset Management
0000X Xxxxxxxx Xx.
Xxxxxxx, Xx 00000
c. The Ribeiro Corporation
0000 Xxxxxx Xxxx
Xxxxxx, XX 00000
* The leases are subject to restrictions of record and zoning
regulations which will not impair the ability of the Buyer to conduct
business at the respective leased premises in a manner consistent
with the nature of the business being conducted by the Seller as of
the date hereof.
Schedule 3.1(f) [Schedule 3.1(f)]
to the
Asset Purchase Agreement
Leases
1. Property leases*:
x. Xxxxxxxx Realty, Ltd.
0000 Xxxxxxxxxxxx Xx., Xxx. 000
Xxxxxxx, XX 00000
b. Cortland Court Partnership
ASG Asset Management
0000X Xxxxxxxx Xx.
Xxxxxxx, Xx 00000
c. The Ribeiro Corporation
0000 Xxxxxx Xxxx
Xxxxxx, XX 00000
* The leases are subject to restrictions of record and zoning
regulations which will not impair the ability of the Buyer to conduct
business at the respective leased premises in a manner consistent
with the nature of the business being conducted by the Seller as of
the date hereof.
2. Equipment leases:
a. Nevada - Nationscredit/Cascade Leasing
Baird MOA Spectrometer;
b. Georgia - Pitney Xxxxx - Mailing Machine;
c. Georgia - Tokai Financial Services - Xxxxxx Copy Machine;
d. Georgia - Advanta Leasing Corporation - ConnerRaid Chassis;
3. UCC-1 on Nationscredit/Cascade Leasing
Schedule 3.1(g) [Schedule 3.1(g)]
to the
Asset Purchase Agreement
Contracts and Other Documents
1. Severance Agreements:
x. Xxxxxxxxx, Xxxxxx
x. Xxxxxxxxx, Xxxxx
x. Xxxxxxxx, Xxxxx
x. Xxxxxxxx, Xxxxxx
2. Consulting Agreements:
a. Xxxxx, Xx - C. & J Consulting
x. Xxxxxxxx, Xxxx
x. Xxxx, Xxxxx
3. Pre-paid and partial pre-paid kits;
Work-in process - backlog on orders received but
not filled (under $2500.00)*;
* Generally, but not always, backlog and work-in process does not
individually relate to individual agreements in excess of $2,500.00.
Schedule 3.1(h) [Schedule 3.1(h)]
to the
Asset Purchase Agreement
Labor Difficulties
None
Schedule 3.1 (i) [Schedule 3.1(i)]
to the
Asset Purchase Agreement
Employee Benefit Plans
1) Top Source Technologies, Inc. Retirement Salary Savings Plan
Minnesota Mutual Contract #61142
000 Xxxxxx Xx. Xxxxx
Xx. Xxxx, XX 00000
2) Refer to attachment 3.1(i) 2
3) N/A
4) Cigna Healthcare of Georgia - HMO Policy #4555
Cigna Healthcare of Illinois - HMO Policy #0615
Cigna Healthcare - PPO Policy #2167379
Guardian Dental - Policy #308902
5) Fortis Short Term Disability - Policy #1000041
6) N/A
7) N/A
8) Refer to attachment 3.1(i) 8
9) N/A
10) N/A
Refer to attachment 3.1(j)
ATTACMENT 3.1(i) 2
NAME MONTHS BENEFITS TOTAL $ COMMENTS
XXXX XXXXXX 1 YES $ 5,520.00
XXX XXXXXX 1 YES $ 5,680.00
XXXX XXXXXXXX 1 YES $ 4,465.00
XXX XXXXXXX 6 YES $17,065.00 (AT HALF SALARY)
XXXX XXXXXXXXX 1 YES $ 4,020.00
XXX XXXXXXXX 6 NO $42,500.00 (LUMP SUM)
TOTAL $79,250.00
ATTACHMENT 3.1(i) 8
FY '96
FY '96 Vac. Vacation Outstanding FY '97
File To Be Used Used $ Vacation 1/12th
Employee No. DOH By 12/31/96 Thru Oct 30 Balance Total 10/1/96-9/30/97 (October)
DRV:
Xxxxx, Xxxxxxx X. 196 11-07-88 2.00 2. Terminated 0.00 0.00
Xxxxxxxxx, Xxxxxx X. 327 10-01-78 18.00 10.00 8.00 $1,415.36 20.00 294.87
Xxxxxxxxx, Xxxxx X. 328 10-01-78 15.00 6.00 9.00 $1,730.79 20.00 320.52
Xxxxxxxx, Xxxx X. 244 6-01-83 1.00 1.00 0.00 20.00 274.67
Xxxxxxxx, Xxxxx X. 163 4-15-96 0.00 0.00 10.00 256.41
Xxxxxxx, Xxxxx 272 3-09-92 0.00 0.00 10.00 70.68
Xxxxxxx, Xxxxxx X. 227 1-16-85 3.50 3.50 $ 735.00 20.00 350.00
Xxxxxxxx, Xxxxxxx X. 228 12-15-85 -0.50 -0.50 19.50 199.00
Xxxxx, Xxxx X. 245 8-13-92 0.00 0.00 10.00 83.33
Xxxxxx, Xxx 8568 12-02-85 1.00 1.00 0.00 20.00 349.37
Xxxxxx, Xxxxxx X. 216 1-16-91 0.00 0.00 15.00 132.46
Xxxxxxx, Xxxxxx Xxx 165 7-08-96 0.00 Terminated 0.00 0.00
Xxxxxxxxx, Xxxx X. 199 8-27-90 1.50 1.50 $ 221.57 15.00 184.64
Xxxxxxx, Xxxxxx X. 256 9-12-88 14.00 14.00 $2,722.30 15.00 243.06
Xxxx, Xxxxxxx X. 217 11-25-90 6.50 6.50 $ 949.98 15.00 182.69
Xxxx, Xxxxx X. 203 4-18-94 4.00 4.00 $ 307.68 10.00 64.10
Xxxxxx, Xxxxxxx 182 4-17-95 0.00 0.00 10.00 110.77
XxXxxxx, Xxxxx X. 289 8-31-93 0.50 0.50 $ 47.12 10.00 78.53
Xxxxxx, Xxxx X. 189 9-16-88 7.00 5.50 1.50 $ 305.76 15.00 254.81
Xxxxxxxxxx, Terlawrence 274 8-10-93 0.00 0.00 10.00 75.32
Xxxxxxxxx, Xxxxxxxx 296 1-08-96 -6.25 -6.25 * 3.75 33.35
Xxxxxxxx, Xxxxxxx X. 283 2-21-83 20.00 20.00 $2,712.80 20.00 226.05
Xxxxxxxx, Xxxxxx X. 239 7-01-81 13.00 13.00 $4,249.96 20.00 544.87
Xxxx, Xxxxxxxx X. 166 2-28-94 0.00 0.00 10.00 88.14
Xxxxx, Xxxxxx X. 204 10-28-92 6.00 6.00 0.00 10.00 112.18
Xxxxxxx, Xxxxxx X. 321 3-01-92 3.00 3.00 $ 243.45 10.00 67.63
Hourly - Non-Exempt
Abioye, Xxxxxxx Xxxxx 168 7-01-96 * 5.00 32.50
Abu-Elniaj, Tawfik 164 3-06-89 15.00 108.20
Xxxxx, Xxxxx X. 190 12-03-86 20.00 142.00
Au-Xxxxx, Xxx Xxxx 197 7-16-90 15.00 76.00
Xxxxxxxxx, Xxxxxx X. 323 1-01-87 20.00 133.33
Xxxxxxx, Xxxxxx X. 159 5-28-96 * 5.00 30.00
Xxxxxx, Xxxxxxx 717 3-04-94 10.00 77.73
Xxxxxxxxx, Xxxxx X. 316 12-14-93 10.00 59.47
Xxxxxxxx, Xxxxx 249 10-30-95 10.00 57.60
Xxxxxxx, Xxxxxx 178 7-05-88 15.00 85.40
Xxxxxxx, Xxxx X. 163 9-03-96 * 5.00 23.33
Xxxxxx, Xxxxx X. 172 3-10-93 10.00 70.00
Dew Jr., Xxxxxx X. 246 8-27-91 10.00 63.87
Xxxxxxx, Xxxxxxxx 213 7-31-95 10.00 60.27
Xxxxxx, Xxxxx 000 0-00-00 00.00 00.00
Xxxxxxx, Xxxxxxx 220 8-21-95 10.00 57.67
Xxxxxxxxxxx, Xxxx X. 266 9-11-91 15.00 87.50
Xxxxxx, Xxxxx 234 9-12-95 Terminated 0.00 0.00
Xxxxxxx, Xxxxx 336 1-09-95 Terminated 0.00 0.00
Xxxxxxx, Rickoe F. 194 6-20-90 15.00 108.80
Xxxxxxxxx, Xxxx 278 12-21-95 * 5.00 25.00
Xxxxxxx, Xxxxxx 187 4-12-94 Resigned 0.00 0.00
Xxxx, Xxxx X. 308 11-15-93 10.00 55.33
Xxxxxxxx, Xxxxxx 214 7-31-95 10.00 66.67
Xxx, Xxx X. 280 8-09-93 10.00 44.53
Xxxxx, Xxxxxxx X. 202 1-16-89 9.00 68.46
XxXxxxx, Xxxxx X. 215 5-06-91 10.00 69.87
Xxxxxx, Xxxx Xxxxx 207 7-24-95 10.00 66.67
Xxxxxxxxxx, Xxxxxxx 300 10-18-93 10.00 51.67
Xxxxx, Xxxxx 273 12-18-95 * 5.00 33.33
Naolu, Lyanou 235 9-19-95 10.00 68.33
Xxxxx, Xxxx X. 231 8-26-91 15.00 91.80
Xxxxx, Xxxxxxxx X. 169 3-25-94 10.00 49.60
Xxxxx, Xxxxxxx ("Xxxx") 251 7-27-94 10.00 49.87
Xxxxxxxxx, Xxxxxxx X. 195 10-23-92 10.00 56.73
Xxxxxxx, Xxxx 291 12-27-95 * 5.00 28.33
Xxxxxxxx, Xxxxxx X. 261 10-25-93 10.00 80.00
Sengchanh, Xxxxxxxx 193 10-03-88 15.00 125.10
Xxxxxxxx, Xxxx 238 11-29-88 15.00 88.40
Xxxxxxx, Xxxxxxxx 247 10-12-95 FMLA 0.00 0.00
Xxxxxx, Xxxxxxxx X. 162 5-28-96 Terminated * 0.00 0.00
Xxxxxxx, Xxxxxx X. 160 11-15-89 15.00 89.50
Xxxxxx, Xxxxxx X. 170 8-07-96 * 5.00 32.50
Xxxxxx, Xxxxxx 240 9-25-95 10.00 66.67
Xxxxxx, Xxxxxxxx X. 165 9-09-96 * 5.00 23.33
Totals $ 15,641.77 7,253.18
Combined Total $ 22,894.95
Schedule 3.1(j) [Schedule 3.1(j)]
to the
Asset Purchase Agreement
Employees
ATTACHMENT 3.1 (j)
UNITED TESTING GROUP, INC
.
EMPLOYEE LIST BY DIVISION
EMPLOYEE NAME SALARY TITLE DIVISION-DEPT.
Xxxx, Xxxxxxxx, M. 27,500.16 Customer Service UTGAT - Admin
Xxxxxxxxx, Xxxx X. 38405 Materials Manager UTGAT - Admin
Xxxxxxx, Xxxxxx R 54600 Programmer Analys UTGAT-Admin
Xxxxxxxx, Xxxxx X 79999.92 Director Of Opera UTGAT- Admin
Xxxxxxxxxx, Terlawrence 23428.08 Customer Service UTGAT-Admin
Xxxxxxxxx, Xxxxxxxx 27750 Customer Service UTGAT-Admin
Xxxxxxx, Xxxxxx X. 18720 Admin. Assistnt UTGAT-Admin
Xxxxx, Xxxxx X. 22152 Data Entry UTGAT-Admin
Xxxxxxx, Xxxxxxxx 18805.37 Billing Clerk UTGAT-Admin
XxXxxxx, Xxxxx L 21798.40 Data Entry Clerk UTGAT-Admin
Xxxxx, Xxxx M 19094.40 Data Entry Clerk UTGAT-Admin
Xxxxxxxx, Xxxxx 17971.20 Data Entry Clerk UTGAT-Admin
Xxxxxxxxx, Xxxxx X. 18553.60 Printer UTGAT-Admin
Xxxxxx, Xxx 54500.16 National Cust. Svc. UTGAT-Admin
Xxxxxx, Xxxx X. 53000.16 Programmer/Analys UTGAT-Admin
Xxxxxx, Xxxxxxx 34560 Customer Service UTGAT-Admin
Xxxxx, Xxxxxx X. 35000.16 Junior Analyst/Pr UTGAT-Admin
Xxxxxx, Xxxxxxx 20592 Printer UTGAT-Admin
Xxxxxxxx, Xxxxxxx 31840.08 Lead Evaluator UTGAT-Lab
Xxxxx, Xxxx 26000.16 Mtc/Saftey UTGAT-Lab
Xxxxxxx, Xxxxx 22050 Shipping Supervisor UTGAT-Lab
Xxxxxxxx, Xxxxxxx 35265.84 Lab Supervisor UTGAT-Lab
Xxxxxxx, Xxxxxx 18616 3 Yrs. Exp. Tech UTGAT-Lab
Xxxxxxx, Xxxx 14560 Entry Level Lab T UTGAT-Lab
Abu-Elniaj, Tawfik 22505.60 3 yrs. Exp. Tech UTGAT-Lab
Xxxxxx, Xxxxxxxx A 14560 Entry Level Lab T UTGAT-Lab
Abioye, Xxxxxxx Xxxxx 20280 Entry Level Lab T UTGAT-Lab
Noble, Mercedes 15475.20 Entry Level Lab T UTGAT-Lab
Xxxxxx, Xxxxx G 21840 Evaluator UTGAT-Lab
Xxxxxx, Xxxxx 15724.80 Entry Level Lab T UTGAT-Lab
Xxxxxxx, Xxxxxx 17763.20 Shipping Clerk UTGAT-Lab
Sengchanh, Xxxxxxxx 26020.80 3 Yrs. Exp. Tech UTGAT-Lab
Xxxxxxx, Rickoe F. 22630.40 3 Yrs. Exp. Tech UTGAT-Lab
Xxxxxxxxx, Xxxxxxx C 17700.80 3 Yrs. Exp. Tech UTGAT-Lab
Au-Xxxxx, Xxx Xxxx 15808 Shipping Clerk UTGAT-Lab
Xxxxx, Xxxxxxx 23732.80 3 Yrs. Exp. Tech UTGAT-Lab
Naolu, Lyanou 21320 3 Yrs. Exp. Tech UTGAT-Lab
Xxxxxxxx, Xxxx 18387.20 Shipping Clerk UTGAT-Lab
Xxxxxx, Xxxxxx 208000 Entry Level Lab T UTGAT-Lab
Dew Jr., Xxxxxx T 19926.40 3 Yrs. Exp. Tech UTGAT-Lab
Xxxxx, Xxxxxxx 15558.40 Entry Level lab T UTGAT-Lab
Xxxxx, Xxxxx 20800 3 Yrs. Exp. Tech UTGAT-Lab
Xxx, Waik 13894.40 Shipping Clerk UTGAT-Lab
XxXxxxx, Xxxxx Xxxxxx 24500 Lab Supervisor UTGAT-Lab
Xxxxxxx, Xxxx 17680 Entry Levellab T UTGAT-Lab
Xxxxxxxxxx, Xxxxxxx 16120 3 Yrs. Exp. Tech UTGAT-Lab
Xxxx, Xxxx X. 17264 Shipping Clerk UTGAT-Lab
Xxxxxx, Xxxxxx X. 27500 Sr. Evaluator UTGAT-Lab
Xxxxxx, Xxxxxx 20280 Data Entry Clerk UTGAT-Lab
Xxxx, Xxxxxxx 38000 Sales Rep UTGAT-Marketing
Xxxxxxxx, Xxxx 42848.16 Technical Support UTGAT-Marketing
Xxxxxxxx, Xxxxxx X. 85000 Sales Mgr. UTGAT-Marketing
Xxxxxx, Xxxx Xxxxx 20800 Data Entry Clerk UTGILL-Admin
Xxxxxxx, Xxxxx D 16598.4 Data Entry Clerk UTGILL-Admin
Xxxxxxxx, Xxxxxx 20800 Entry Level lab T UTGILL-Lab
Xxxxxxx, Xxxxxxx 17992 Entry Level lab T UTGILL-Lab
Xxxxxxxxx, Xxxx 15600 Entry Level Lab T UTGILL-Lab
Xxxxxxxx, Xxxxxx A 24960 Admin. Assist. UTGILL-Marketing
Xxxxxxx, Xxxxxx L 50557.20 Reg. Sales Rep. S UTGILL-Marketing
Xxxxxxx, Xxxxxx L 21100.08 Customer Service UTGNEV-Admin
Xxxx, Xxxxx 19999.92 Lab Superviosr UTGNEV-Lab
Xxxxxxxxx, Xxxxxx X. 20800 Entry Level Lab T UTGNEV-Lab
Xxxxxxxxx, Xxxxxx X. 46000.08 Director Of Opera UTGNEV-Lab
Xxxxxxxxxx, Xxxxx E 19760 Entry Level lab T UTGNEV-Lab
Xxxxxxxxx, Xxxxx X. 50000.16 Reg. Sales Rep. S UTGNEV-Marketing
Xxxxxxxxxxx, Xxxx L 18200 Courier UTGNEV-Marketing
Total Employees - 70
Schedule 3.1(k) [Schedule 3.1(k)]
to the
Asset Purchase Agreement
Licenses and Permits
Business Licenses:
1. Location - 0000 Xxxxxx Xxxx #0
Xxxxxx, XX 00000
State City License No. Effective Date
NV Sparks 033987 Jan. 31, 1996
2. Location - 0000X Xxxxxxxx Xx.
Xxxxxxx, XX 00000
State City License No. Effective Date
----- ---- ----------- --------------
IL Addison 905 May 1, 1996
3. Location - 0000 Xxxxxxxxxxxx Xx.
Xxxxxxx, XX 00000
State City License No. Effective Date
GA Atlanta 00094722 Mar. 7, 1996
DeKalb County
4. Location - c/o C.T. Corporation System*
000 X. Xxxxx Xx., Xxx. 000
Xxxxxx, Xxxxxx 00000
State City License No. Effective Date
----- ---- ----------- --------------
Alaska Xxxxxx XX 213939 Jan. 1, 1995 thru 1996
* Office of Corporation Trust; United Testing Group, Inc. had no hysical
location in Alaska.
Schedule 3.1(l) [Schedule 3.1(l)]
to the
Asset Purchase Agreement
Accounts Receivable
1. Accounts Receivable List dated October 23, 1996;
See Attachment 3.1(l)1.
Schedule 3.1(m) [Schedule 3.1(m)]
to the
Asset Purchase Agreement
Disclosures of Liabilities and Obligations
1. Liabilities arising from ordinary course of business since
September 30, 1996.
2. Liability to process oil samples from pre-paid and partially
paid kits as set forth on Schedule 1.4(a) and Attachment
1.4(a)1.
3. Liabilities arising from leases listed on Schedule 1.4(a) as
part of this agreement.
4. Payroll due October 31, 1996.
Schedule 3.1(n) [Schedule 3.1(n)]
to the
Asset Purchase Agreement
Compliance with Law
None
Schedule 3.1(o) [Schedule 3.1(o)]
to the
Asset Purchase Agreement
Intellectual Property and Intangible Assets
TRADEMARKS:
NAME REGIST. DTE. REGIST. NO. TRADEMARK USE
United Testing 12/20/94 1,868,638 Stationary,
Group (Name and brochures, oil
Design) kits, marketing
material
NAME FILING DATE AMNDMT.FILED TRADEMARK USE
UTG LINK Sept. 1995 Sept. 1996 Diskettes,
(Software instruction
Program) manuals,
brochures
Trades secrets and customer lists, as reference in Schedule 3.1(q),
in connection with Seller's business.
Seller has from time to time, entered into Confidentiality Agreements with
others; in connection with these confidentiality agreements, there is no
obligation involved on the Seller's part.
Schedule 3.1(p) [Schedule 3.1(p)]
to the
Asset Purchase Agreement
Pending Litigation
None
Schedule 3.1(q) [Schedule 3.1(q)]
to the
Asset Purchase Agreement
Customer List
1. Entire customer list, by lab, to be provided on tape.
See attachment 3.1(q)1.
Schedule 3.1(u) [Schedule 3.1(u)]
to the
Asset Purchase Agreement
Financial Statements
1. Preliminary Financial Statements with summary and detail as of
September 30, 1996.
See Attachment 3.1(u)1.
Schedule 3.1(y) [Schedule 3.1(y)]
to the
Asset Purchase Agreement
Related Party Transactions
1. Parent owns 100% of the stock of On-Site Analysis, Inc.
which uses the Seller's laboratory in the ordinary
course of business.
Schedule 3.1(z) [Schedule 3.1(z)]
to the
Asset Purchase Agreement
Capital Structure
All 127,019 shares of common stock, issued to Top Source, Inc., now known as
Top Source Technologies, Inc., on July 14, 1993. Stock Certificate Number 1.
Schedule 4.2(c) [Schedule 4.2(c)]
to the
Asset Purchase Agreement
Material Data Safety Sheets
None
Schedule 4.2(d) [Schedule 4.2(d)]
to the
Asset Purchase Agreement
Hazardous Material or Solid Waste
None
Schedule 4.2(e) [Schedule 4.2(e)]
to the
Asset Purchase Agreement
Legal Compliance
None
Schedule 4.3(d) [Schedule 4.3(d)]
to the
Asset Purchase Agreement
Licenses and Permits
None
Schedule 5.1(a) [Schedule 5.1(a)]
to the
Asset Purchase Agreement
Conduct of the Business
None
Schedule 6.1(1) [Schedule 6.1(1)]
to the
Asset Purchase Agreement
Agreement with Related Parties
None
