Exhibit 2.1
Stock Purchase Agreement
This Stock Purchase Agreement ("Agreement") is made as of August
27, 1999, by United Xxxxxxx Corporation, a Colorado corporation
("Buyer"), and Xxxxx X. Xxxxxxxx ("HAK"), Xxxxxxx X. Xxxxxxxx
("BJK"), The Xxxxx X. Xxxxxxxx Revocable Trust, Xxxxx X. Xxxxxxxx
and Xxxxxxx X. Xxxxxxxx, Trustees, dated February 6, 1996,("HAK
Trust"), The Xxxxxxx X. Xxxxxxxx Revocable Trust, Xxxxxxx X.
Xxxxxxxx and Xxxxx X. Xxxxxxxx, Trustees, dated February 6, 1996,
("BJK Trust") and the Xxxxxxxx Family Nominee Trust, Xxxxx X.
Xxxxxxxx and Xxxxxxx X. Xxxxxxxx, Trustees, under Declaration of
Trust dated February 6, 1996 and recorded with the Berkshire
County (Middle District) Registry of Deeds in Book 910, Page 800
("Family Trust") (HAK, BJK, the HAK Trust, the BJK Trust and the
Family Trust, referred to collectively as "Sellers").
RECITALS
Sellers desire to sell, and Buyer desires to purchase, all of the
issued and outstanding shares (the "Shares") of capital stock of
Pittsfield Mold & Tool, Inc., a Massachusetts corporation (the
"Company"), for the consideration and on the terms set forth in
this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1:
"Acquired Companies"--the Company and its Subsidiaries,
collectively.
"Applicable Contract"--any Contract (a) under which any Acquired
Company has or may acquire any rights, (b) under which any
Acquired Company has or may become subject to any obligation or
liability, or (c) by which any Acquired Company or any of the
assets owned or used by it is or may become bound.
"Balance Sheet"--as defined in Section 3.4.
"Best Efforts"--the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure
that such result is achieved as expeditiously as possible;
provided, however, that an obligation to use Best Efforts under
this Agreement does not require the Person subject to that
obligation to take actions that would result in a materially
adverse change in the benefits to such Person of this Agreement
and the Contemplated Transactions.
"Breach"--a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument
delivered pursuant to this Agreement will be deemed to have
occurred if there is or has been (a) any inaccuracy in or breach
of, or any failure to perform or comply with, such representation,
warranty, covenant, obligation, or other provision, or (b) any
claim (by any Person) or other occurrence or circumstance that is
or was inconsistent with such representation, warranty, covenant,
obligation, or other provision, and the term "Breach" means any
such inaccuracy, breach, failure, claim, occurrence, or
circumstance.
"Buyer"--as defined in the first paragraph of this Agreement.
"Closing"--as defined in Section 2.3.
"Closing Date"--the date and time as of which the Closing actually
takes place.
"Company"--as defined in the Recitals of this Agreement.
"Consent"--any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions"--all of the transactions contemplated
by this Agreement, including:
(a) the sale of the Shares by Sellers to Buyer;
(b) the execution, delivery, and performance of the Promissory
Note, the Employment Agreement, the Noncompetition Agreements, and
the Sellers' Releases.
(c) the performance by Buyer and Sellers of their respective
covenants and obligations under this Agreement; and
(d) Buyer's acquisition and ownership of the Shares and exercise
of control over the Acquired Companies.
"Contract"--any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or
implied) that is legally binding.
"Damages"--as defined in Section 10.2.
"Disclosure Letter"--the disclosure letter delivered by Sellers to
Buyer concurrently with the execution and delivery of this
Agreement.
"Employment Agreement"--as defined in Section 2.4.
"Encumbrance"--any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security
interest, right of first refusal, or restriction of any kind,
including any restriction on use, voting, transfer, receipt of
income, or exercise of any other attribute of ownership.
"Environment"--soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds,
drainage basins, and wetlands), groundwaters, drinking water
supply, stream sediments, ambient air (including indoor air),
plant and animal life, and any other environmental medium or
natural resource.
"Environmental, Health, and Safety Liabilities"--any cost,
damages, expense, liability, obligation, or other responsibility
arising from or under Environmental Law or Occupational Safety and
Health Law and consisting of or relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety
and health, and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and
response, investigative, remedial, or inspection costs and
expenses arising under Environmental Law or Occupational Safety
and Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective
action, including any investigation, cleanup, removal,
containment, or other remediation or response actions ("Cleanup")
required by applicable Environmental Law or Occupational Safety
and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for
any natural resource damages; or
(d) any other compliance, corrective, investigative, or remedial
measures required under Environmental Law or Occupational Safety
and Health Law.
The terms "removal," "remedial," and "response action," include
the types of activities covered by the United States Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C.
Section 9601 et seq., as amended ("CERCLA").
"Environmental Law"--any Legal Requirement that requires or
relates to:
(a) advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous substances
or materials, violations of discharge limits, or other
prohibitions and of the commencements of activities, such as
resource extraction or construction, that could have significant
impact on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the
Environment;
(c) reducing the quantities, preventing the release, or minimizing
the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged, and
used so that they do not present unreasonable risks to human
health or the Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other
potentially harmful substances;
(g) cleaning up pollutants that have been released, preventing the
threat of release, or paying the costs of such clean up or
prevention; or
(h) making responsible parties pay private parties, or groups of
them, for damages done to their health or the Environment, or
permitting self-appointed representatives of the public interest
to recover for injuries done to public assets.
"ERISA"--the Employee Retirement Income Security Act of 1974 or
any successor law, and regulations and rules issued pursuant to
that Act or any successor law.
"Facilities"--any real property, leaseholds, or other interests
currently or formerly owned or operated by any Acquired Company
and any buildings, plants, structures, or equipment (including
motor vehicles, tank cars, and rolling stock) currently or
formerly owned or operated by any Acquired Company.
"GAAP"--generally accepted United States accounting principles,
applied on a basis consistent with the basis on which the Balance
Sheet and the other financial statements referred to in Section
3.4(b) were prepared.
"Governmental Authorization"--any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or
otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
"Governmental Body"--any:
(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official,
or entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"Hazardous Activity"--the distribution, generation, handling,
importing, management, manufacturing, processing, production,
refinement, Release, storage, transfer, transportation, treatment,
or use (including any withdrawal or other use of groundwater) of
Hazardous Materials in, on, under, about, or from the Facilities
or any part thereof into the Environment, and any other act,
business, operation, or thing that increases the danger, or risk
of danger, or poses an unreasonable risk of harm to persons or
property on or off the Facilities, or that may affect the value of
the Facilities or the Acquired Companies.
"Hazardous Materials"--any waste or other substance that is
listed, defined, designated, or classified as, or otherwise
determined to be, hazardous, radioactive, or toxic or a pollutant
or a contaminant under or pursuant to any Environmental Law,
including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos-containing
materials.
"Intellectual Property Assets" --as defined in Section 3.22.
"Interim Balance Sheet"--as defined in Section 3.4.
"IRC"--the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue
Code or any successor law.
"IRS"--the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department
of the Treasury.
"Knowledge"--an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course
of conducting a reasonably comprehensive investigation concerning
the existence of such fact or other matter.
A Person (other than an individual) will be deemed to have
"Knowledge" of a particular fact or other matter if any individual
who is serving, or who has at any time served, as a director,
officer, partner, executor, or trustee of such Person (or in any
similar capacity) has, or at any time had, Knowledge of such fact
or other matter.
"Legal Requirement"--any federal, state, local, municipal,
foreign, international, multinational, or other administrative
order, constitution, law, ordinance, principle of common law,
regulation, statute, or treaty.
"Net Sales"--gross sales prices of the Company's products and
services less discounts, allowances, returns, and other sales
price adjustments which may be provided from time-to-time in
conjunction with the Company's normal business practices, all of
which shall be determined in accordance with GAAP.
"Noncompetition Agreements"--as defined in Section 2.4.
"Occupational Safety and Health Law"--any Legal Requirement
designed to provide safe and healthful working conditions and to
reduce occupational safety and health hazards, and any program,
whether governmental or private (including those promulgated or
sponsored by industry associations and insurance companies),
designed to provide safe and healthful working conditions.
"Order"--any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any
court, administrative agency, or other Governmental Body or by any
arbitrator.
"Ordinary Course of Business"--an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business"
only if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-
day operations of such Person;
(b) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons
exercising similar authority) and is not required to be
specifically authorized by the parent company (if any) of such
Person; and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of
directors (or by any Person or group of Persons exercising similar
authority), in the ordinary course of the normal day-to-day
operations of other Persons that are in the same line of business
as such Person.
"Organizational Documents"--(a) the articles or certificate of
incorporation and the bylaws or code of regulations of a
corporation; (b) the partnership agreement and any statement of
partnership of a general partnership; (c) the limited partnership
agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed
in connection with the creation, formation, or organization of a
Person; and (e) any amendment to any of the foregoing.
"Person"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization,
labor union, or other entity or Governmental Body.
"Plan"--as defined in Section 3.13.
"Proceeding"--any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any
Governmental Body or arbitrator.
"Promissory Note"--as defined in Section 2.4.
"Related Person"--with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a
Material Interest; and
(d) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director,
officer, partner, executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly
or indirectly controlled by, or is directly or indirectly under
common control with such specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar
capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person serves
as a general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause (b)
or (c).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse and
former spouses, (iii) any other natural person who is related to
the individual or the individual's spouse within the second
degree, and (iv) any other natural person who resides with such
individual, and (b) "Material Interest" means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of voting securities or other
voting interests representing at least 10% of the outstanding
voting power of a Person or equity securities or other equity
interests representing at least 10% of the outstanding equity
securities or equity interests in a Person.
"Release"--any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing into
the Environment, whether intentional or unintentional.
"Representative"--with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other
representative of such Person, including legal counsel,
accountants, and financial advisors.
"Sellers"--as defined in the first paragraph of this Agreement.
"Sellers' Releases"--as defined in Section 2.4.
"Shares"--as defined in the Recitals of this Agreement.
"Subsidiary"--with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests
having the power to elect a majority of that corporation's or
other Person's board of directors or similar governing body, or
otherwise having the power to direct the business and policies of
that corporation or other Person (other than securities or other
interests having such power only upon the happening of a
contingency that has not occurred) are held by the Owner or one or
more of its Subsidiaries; when used without reference to a
particular Person, "Subsidiary" means a Subsidiary of the Company.
"Tax"--any tax (including any income tax, capital gains tax,
value-added tax, sales tax, property tax, gift tax, or estate
tax), levy, assessment, tariff, duty (including any customs duty),
deficiency, or other fee, and any related charge or amount
(including any fine, penalty, interest, or addition to tax),
imposed, assessed, or collected by or under the authority of any
Governmental Body or payable pursuant to any tax-sharing agreement
or any other Contract relating to the sharing or payment of any
such tax, levy, assessment, tariff, duty, deficiency, or fee.
"Tax Return"--any return (including any information return),
report, statement, schedule, notice, form, or other document or
information filed with or submitted to, or required to be filed
with or submitted to, any Governmental Body in connection with the
determination, assessment, collection, or payment of any Tax or in
connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
"Threat of Release"--a substantial likelihood of a Release that
may require action in order to prevent or mitigate damage to the
Environment that may result from such Release.
"Threatened"--a claim, Proceeding, dispute, action, or other
matter will be deemed to have been "Threatened" if any demand or
statement has been made (orally or in writing) or any notice has
been given (orally or in writing), or if any other event has
occurred or any other circumstances exist, that would lead a
prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced,
taken, or otherwise pursued in the future.
2. SALE AND TRANSFER OF SHARES; CLOSING
2.1 SHARES
Subject to the terms and conditions of this Agreement, at the
Closing, Sellers will sell and transfer the Shares to Buyer, and
Buyer will purchase the Shares from Sellers.
2.2 PURCHASE PRICE
As the purchase price (the "Purchase Price") for the Shares:
(a) at the Closing, Buyer will deliver the following to Sellers as
provided in Section 2.4: (i) $3,900,000.00, less any amount paid
to Xxxxxx & Xxxxxxxx pursuant to Section 11.1, in cash; and (ii)
the Promissory Note with an aggregate principal amount of
$1,750,000.00 subject to the provisions of Section 10.8; and
(b) after the Closing, Buyer will make payments to Sellers as
provided in Section 2.6.
2.3 CLOSING
The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of Xxxxxx & Xxxxxxxx,
LLP, 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
_____________, 1999, or at such other time and place as the
parties may agree. Subject to the provisions of Section 9, failure
to consummate the purchase and sale provided for in this Agreement
on the date and time and at the place determined pursuant to this
Section 2.3 will not result in the termination of this Agreement
and will not relieve any party of any obligation under this
Agreement.
2.4 CLOSING OBLIGATIONS
At the Closing:
(a) Sellers will deliver to Buyer:
(i) certificates representing the Shares, duly endorsed (or
accompanied by duly executed stock powers) for transfer to Buyer;
(ii) releases in a form mutually acceptable to the parties hereto,
executed by Sellers (collectively, "Sellers' Releases");
(iii) employment agreement in a form mutually acceptable to USC
and Xxxxxx X. Xxxxxxxx, executed by Xxxxxx X. Xxxxxxxx
("Employment Agreement");
(iv) noncompetition agreements in a form mutually acceptable to
the parties hereto, executed by Sellers (collectively, the
"Noncompetition Agreements");and
(v) a certificate executed by Sellers representing and warranting
to Buyer that each of Sellers' representations and warranties in
this Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date
as if made on the Closing Date (giving full effect to any
supplements to the Disclosure Letter that were delivered by
Sellers to Buyer prior to the Closing Date in accordance with
Section 5.5).
(b) Buyer will deliver to Sellers:
(i) the following amounts by bank cashier's check payable to the
order of the BJK Trust and the HAK Trust: $___________ and
$______________ to the BJK Trust;
(ii) a promissory note payable to the Family Trust in the
principal amount of $1,750,000 in a form mutually acceptable to
the parties hereto (the "Promissory Note").
(iii) a certificate executed by Buyer to the effect that, except
as otherwise stated in such certificate, each of Buyer's
representations and warranties in this Agreement was accurate in
all respects as of the date of this Agreement and is accurate in
all respects as of the Closing Date as if made on the Closing
Date; and
(iv) the Employment Agreement, executed by the Company.
2.5 PURCHASE OF REAL ESTATE
Simultaneously with the execution of this Agreement, the Company
and Sellers are executing a Real Estate Purchase Agreement in in a
form mutually acceptable to the parties hereto under which Sellers
will sell, transfer and convey to the Company, and the Company
will purchase from Sellers, the real property and improvements
located at 00 XXXXX Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx
for a purchase price of $3,125,000. Sellers and Buyer agree that
the Closing of such transaction will occur simultaneously with the
Closing under this Agreement.
2.6 EARN OUT PAYMENTS
In addition to all other amounts payable by Buyer to Sellers
hereunder, Buyer shall also pay Sellers an amount equal to 5% of
the annual Net Sales of the Company in excess of $10,000,000 each
year for a period of six years beginning as of the Closing Date,
payable each year not later than 90 days after the end of the
previous year, pro-rated for any partial years.
2.7 STOCK OPTIONS
Simultaneously with the execution of this agreement, the Buyer and
HAK are executing a Stock Option Agreement in the form of Exhibit
2.7 under which Buyer will xxxxx XXX options to purchase 250,000
shares of Buyer's common stock, at an exercise price of $1.00 per
share, 20% of which shall be vested immediately upon issuance with
20% vesting on the first day of each year thereafter until vested
in full.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represent and warrant to Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING
(a) Part 3.1 of the Disclosure Letter contains a complete and
accurate list for each Acquired Company of its name, its
jurisdiction of incorporation, other jurisdictions in which it is
authorized to do business, and its capitalization (including the
identity of each stockholder and the number of shares held by
each). Each Acquired Company is a corporation duly organized,
validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and
authority to conduct its business as it is now being conducted, to
own or use the properties and assets that it purports to own or
use, and to perform all its obligations under Applicable
Contracts. Each Acquired Company is duly qualified to do business
as a foreign corporation and is in good standing under the laws of
each state or other jurisdiction in which either the ownership or
use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification.
(b) Sellers have delivered to Buyer copies of the Organizational
Documents of each Acquired Company, as currently in effect.
3.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding
obligation of Sellers, enforceable against Sellers in accordance
with its terms. Upon the execution and delivery by Sellers of the
Employment Agreement, the Sellers' Releases, and the
Noncompetition Agreements (collectively, the "Sellers' Closing
Documents"), the Sellers' Closing Documents will constitute the
legal, valid, and binding obligations of Sellers, enforceable
against Sellers in accordance with their respective terms. Sellers
have the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement and the Sellers'
Closing Documents and to perform their obligations under this
Agreement and the Sellers' Closing Documents.
(b) Except as set forth in Part 3.2 of the Disclosure Letter,
neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice
or lapse of time):
(i) contravene, conflict with, or result in a violation of (A) any
provision of the Organizational Documents of the Acquired
Companies, or (B) any resolution adopted by the board of directors
or the shareholders of any Acquired Company;
(ii) contravene, conflict with, or result in a violation of, or
give any Governmental Body or other Person the right to challenge
any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to
which any Acquired Company or either Seller, or any of the assets
owned or used by any Acquired Company, may be subject;
(iii) contravene, conflict with, or result in a violation of any
of the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate, or modify,
any Governmental Authorization that is held by any Acquired
Company or that otherwise relates to the business of, or any of
the assets owned or used by, any Acquired Company;
(iv) cause Buyer or any Acquired Company to become subject to, or
to become liable for the payment of, any Tax;
(v) cause any of the assets owned by any Acquired Company to be
reassessed or revalued by any taxing authority or other
Governmental Body;
(vi) contravene, conflict with, or result in a violation or breach
of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify,
any Applicable Contract; or
(vii) result in the imposition or creation of any Encumbrance upon
or with respect to any of the assets owned or used by any Acquired
Company.
Except as set forth in Part 3.2 of the Disclosure Letter, no
Seller or Acquired Company is or will be required to give any
notice to or obtain any Consent from any Person in connection with
the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
3.3 CAPITALIZATION
The authorized equity securities of the Company consist of 1,000
shares of no-par common stock, of which 1,000 shares are issued
and outstanding and constitute the Shares. Sellers are and will be
on the Closing Date the record and beneficial owners and holders
of the Shares, free and clear of all Encumbrances. The HAK Trust
owns 600 of the Shares, and the BJK Trust owns 400 of the Shares.
With the exception of the Shares (which are owned by Sellers), all
of the outstanding equity securities and other securities of each
Acquired Company are owned of record and beneficially by one or
more of the Acquired Companies, free and clear of all
Encumbrances. No legend or other reference to any purported
Encumbrance appears upon any certificate representing equity
securities of any Acquired Company. All of the outstanding equity
securities of each Acquired Company have been duly authorized and
validly issued and are fully paid and nonassessable. There are no
Contracts relating to the issuance, sale, or transfer of any
equity securities or other securities of any Acquired Company.
None of the outstanding equity securities or other securities of
any Acquired Company was issued in violation of the Securities Act
of 1933, as amended, or any other Legal Requirement. No Acquired
Company owns, or has any Contract to acquire, any equity
securities or other securities of any Person (other than Acquired
Companies) or any direct or indirect equity or ownership interest
in any other business.
3.4 FINANCIAL STATEMENTS
Sellers have delivered to Buyer: (a) unaudited balance sheets of
the Acquired Companies as at December 31, in each of the years
1993 through 1995 and 1998, and the related unaudited consolidated
statements of income and retained earnings, and cash flow for each
of the fiscal years then ended, (b) audited balance sheets of the
Acquired Companies as of December 31, 1997 and 1996 (including the
notes thereto, the "Balance Sheet"), and the related statements of
earnings and retained earnings, and cash flow for the fiscal year
then ended, together with the report thereon of Xxxxx Xxxxxxxx
LLP, independent certified public accountants, and (c) an
unaudited balance sheet of the Acquired Companies as at May 31,
1999 (the "Interim Balance Sheet") and the related unaudited
statements of income, and cash flow for the five months then
ended. Such financial statements and notes fairly present the
financial condition and the results of operations, and cash flow
of the Acquired Companies as at the respective dates of and for
the periods referred to in such financial statements, all in
accordance with GAAP, subject, in the case of interim financial
statements, to normal recurring year-end adjustments (the effect
of which will not, individually or in the aggregate, be materially
adverse) and the absence of notes (that, if presented, would not
differ materially from those included in the Balance Sheet); the
financial statements referred to in this Section 3.4 reflect the
consistent application of such accounting principles throughout
the periods involved, except as may be disclosed in the notes to
such financial statements. No financial statements of any Person
other than the Acquired Companies are required by GAAP to be
included in the financial statements of the Company.
3.5 BOOKS AND RECORDS
The books of account, minute books, stock record books, and other
records of the Acquired Companies, all of which have been made
available to Buyer, are complete and correct and have been
maintained in accordance with sound business practices including
the maintenance of an adequate system of internal controls. The
minute books of the Acquired Companies contain accurate and
complete records of all meetings held of, and corporate action
taken by, the shareholders, the Boards of Directors, and
committees of the Boards of Directors of the Acquired Companies,
and no meeting of any such shareholders, Board of Directors, or
committee has been held for which minutes have not been prepared
and are not contained in such minute books. At the Closing, all
of those books and records will be in the possession of the
Acquired Companies.
3.6 TITLE TO PROPERTIES; ENCUMBRANCES
Part 3.6 of the Disclosure Letter contains a complete and accurate
list of all real property, leaseholds, or other interests therein
owned by any Acquired Company. Sellers have delivered or made
available to Buyer copies of the deeds and other instruments (as
recorded) by which the Acquired Companies acquired such real
property and interests, and copies of all title insurance
policies, opinions, abstracts, and surveys in the possession of
Sellers or the Acquired Companies and relating to such property or
interests. Part 3.6 of the Disclosure Letter also contains a
complete and accurate list of all vehicles owned or leased by any
Acquired Company and the fixed assets used in the business of any
Acquired Company and carried on its books for tax purposes. The
Acquired Companies own (with good and marketable title in the case
of real property, subject only to the matters permitted by the
following sentence) all the properties and assets (whether real,
personal, or mixed and whether tangible or intangible) that they
purport to own located in the facilities owned or operated by the
Acquired Companies or reflected as owned in the books and records
of the Acquired Companies, including all of the properties and
assets reflected in the Balance Sheet and the Interim Balance
Sheet (except for assets held under capitalized leases disclosed
or not required to be disclosed in Part 3.6 of the Disclosure
Letter and personal property sold since the date of the Balance
Sheet and the Interim Balance Sheet, as the case may be, in the
Ordinary Course of Business), and all of the properties and assets
purchased or otherwise acquired by the Acquired Companies since
the date of the Balance Sheet (except for personal property
acquired and sold since the date of the Balance Sheet in the
Ordinary Course of Business and consistent with past practice),
which subsequently purchased or acquired properties and assets
(other than inventory and short-term investments) are listed in
Part 3.6 of the Disclosure Letter. All material properties and
assets reflected in the Balance Sheet and the Interim Balance
Sheet are free and clear of all Encumbrances and are not, in the
case of real property, subject to any rights of way, building use
restrictions, exceptions, variances, reservations, or limitations
of any nature except, with respect to all such properties and
assets, (a) mortgages or security interests shown on the Balance
Sheet or the Interim Balance Sheet as securing specified
liabilities or obligations, with respect to which no default (or
event that, with notice or lapse of time or both, would constitute
a default) exists, (b) mortgages or security interests incurred in
connection with the purchase of property or assets after the date
of the Interim Balance Sheet (such mortgages and security
interests being limited to the property or assets so acquired),
with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists,
(c) liens for current taxes not yet due, and (d) with respect to
real property, (i) minor imperfections of title, if any, none of
which is substantial in amount, materially detracts from the value
or impairs the use of the property subject thereto, or impairs the
operations of any Acquired Company, and (ii) zoning laws and other
land use restrictions that do not impair the present or
anticipated use of the property subject thereto. All buildings,
plants, and structures owned by the Acquired Companies lie wholly
within the boundaries of the real property owned by the Acquired
Companies and do not encroach upon the property of, or otherwise
conflict with the property rights of, any other Person.
3.7 CONDITION AND SUFFICIENCY OF ASSETS
The buildings, plants, structures, and equipment of the Acquired
Companies are structurally sound, are in good operating condition
and repair, and are adequate for the uses to which they are being
put, and none of such buildings, plants, structures, or equipment
is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost.
The building, plants, structures, and equipment of the Acquired
Companies are sufficient for the continued conduct of the Acquired
Companies' businesses after the Closing in substantially the same
manner as conducted prior to the Closing.
3.8 ACCOUNTS RECEIVABLE
All accounts receivable of the Acquired Companies that are
reflected on the Balance Sheet or the Interim Balance Sheet or on
the accounting records of the Acquired Companies as of the Closing
Date (collectively, the "Accounts Receivable") represent or will
represent valid obligations arising from sales actually made or
services actually performed in the Ordinary Course of Business.
Unless paid prior to the Closing Date, the Accounts Receivable are
or will be as of the Closing Date current and collectible net of
the respective reserves shown on the Balance Sheet or the Interim
Balance Sheet or on the accounting records of the Acquired
Companies as of the Closing Date (which reserves are adequate and
calculated consistent with past practice and, in the case of the
reserve as of the Closing Date, will not represent a greater
percentage of the Accounts Receivable as of the Closing Date than
the reserve reflected in the Interim Balance Sheet represented of
the Accounts Receivable reflected therein and will not represent a
material adverse change in the composition of such Accounts
Receivable in terms of aging). Subject to such reserves, each of
the Accounts Receivable either has been or, to the knowledge of
Sellers after due inquiry, will be collected in full, without any
set-off, within ninety days after the day on which it first
becomes due and payable. There is no contest, claim, or right of
set-off, other than returns in the Ordinary Course of Business,
under any Contract with any obligor of an Accounts Receivable
relating to the amount or validity of such Accounts Receivable.
Part 3.8 of the Disclosure Letter contains a complete and accurate
list of all Accounts Receivable as of the date of the Interim
Balance Sheet, which list sets forth the aging of such Accounts
Receivable.
3.9 INVENTORY
All inventory of the Acquired Companies, whether or not reflected
in the Balance Sheet or the Interim Balance Sheet, consists of a
quality and quantity usable and salable in the Ordinary Course of
Business, except for obsolete items and items of below-standard
quality, all of which have been written off or written down to net
realizable value in the Balance Sheet or the Interim Balance Sheet
or on the accounting records of the Acquired Companies as of the
Closing Date, as the case may be. All inventories not written off
have been priced at the lower of cost or market on a first in,
first out basis. The quantities of each item of inventory
(whether raw materials, work-in-process, or finished goods) are
not excessive, but are reasonable in the present circumstances of
the Acquired Companies.
3.10 NO UNDISCLOSED LIABILITIES
Except as set forth in Part 3.10 of the Disclosure Letter, the
Acquired Companies have no liabilities or obligations of any
nature (whether known or unknown and whether absolute, accrued,
contingent, or otherwise) except for liabilities or obligations
reflected or reserved against in the Balance Sheet or the Interim
Balance Sheet and current liabilities incurred in the Ordinary
Course of Business since the respective dates thereof.
3.11 TAXES
(a) The Acquired Companies have filed or caused to be filed on a
timely basis all Tax Returns that are or were required to be filed
by or with respect to any of them, either separately or as a
member of a group of corporations, pursuant to applicable Legal
Requirements. Sellers have delivered to Buyer copies of, and
Part 3.11 of the Disclosure Letter contains a complete and
accurate list of, all such Tax Returns relating to income,
franchise or property taxes filed during the current fiscal year
or the last three completed fiscal years of the Acquired
Companies. The Acquired Companies have paid, or made provision
for the payment of, all Taxes that have or may have become due
pursuant to those Tax Returns or otherwise, or pursuant to any
assessment received by Sellers or any Acquired Company, except
such Taxes, if any, as are listed in Part 3.11 of the Disclosure
Letter and are being contested in good faith and as to which
adequate reserves (determined in accordance with GAAP) have been
provided in the Balance Sheet and the Interim Balance Sheet.
(b) The state Tax Returns of each Acquired Company subject to such
Taxes have been audited by the relevant state tax authorities or
are closed by the applicable statute of limitations for all
taxable years through the year five years prior to the current
year. Part 3.11 of the Disclosure Letter contains a complete and
accurate list of all audits of all such Tax Returns, including a
reasonably detailed description of the nature and outcome of each
audit. All deficiencies proposed as a result of such audits have
been paid, reserved against, settled, or, as described in
Part 3.11 of the Disclosure Letter, are being contested in good
faith by appropriate proceedings. Except as described in
Part 3.11 of the Disclosure Letter, no Seller or Acquired Company
has given or been requested to give waivers or extensions (or is
or would be subject to a waiver or extension given by any other
Person) of any statute of limitations relating to the payment of
Taxes of any Acquired Company or for which any Acquired Company
may be liable.
(c) The charges, accruals, and reserves with respect to Taxes on
the respective books of each Acquired Company are adequate
(determined in accordance with GAAP) and are at least equal to
that Acquired Company's liability for Taxes. There exists no
proposed tax assessment against any Acquired Company except as
disclosed in the Balance Sheet or in Part 3.11 of the Disclosure
Letter. No consent to the application of Section 341(f)(2) of the
IRC has been filed with respect to any property or assets held,
acquired, or to be acquired by any Acquired Company. All Taxes
that any Acquired Company is or was required by Legal Requirements
to withhold or collect have been duly withheld or collected and,
to the extent required, have been paid to the proper Governmental
Body or other Person.
(d) All Tax Returns filed by (or that include on a consolidated
basis) any Acquired Company are true, correct, and complete. There
is no tax sharing agreement that will require any payment by any
Acquired Company after the date of this Agreement. During the
consistency period (as defined in Section 338(h)(4) of the IRC
with respect to the sale of the Shares to Buyer), no Acquired
Company or target affiliate (as defined in Section 338(h)(6) of
the IRC with respect to the sale of the Shares to Buyer) has sold
or will sell any property or assets to Buyer or to any member of
the affiliated group (as defined in Section 338(h)(5) of the IRC)
that includes Buyer. Part 3.11 of the Disclosure Letter lists all
such target affiliates.
3.12 NO MATERIAL ADVERSE CHANGE
Since the date of the Balance Sheet and Interim Balance Sheet,
there has not been any material adverse change in the business,
operations, properties, prospects, assets, or condition of any
Acquired Company, and no event has occurred or circumstance exists
that may result in such a material adverse change.
3.13 EMPLOYEE BENEFITS
(a) As used in this Section 3.13, the following terms have the
meanings set forth below.
"Company Other Benefit Obligation" means an Other Benefit
Obligation owed, adopted, or followed by an Acquired Company or an
ERISA Affiliate of an Acquired Company.
"Company Plan" means all Plans of which an Acquired Company or an
ERISA Affiliate of an Acquired Company is or was a Plan Sponsor,
or to which an Acquired Company or an ERISA Affiliate of an
Acquired Company otherwise contributes or has contributed, or in
which an Acquired Company or an ERISA Affiliate of an Acquired
Company otherwise participates or has participated. All references
to Plans are to Company Plans unless the context requires
otherwise.
"Company VEBA" means a VEBA whose members include employees of any
Acquired Company or any ERISA Affiliate of an Acquired Company.
"ERISA Affiliate" means, with respect to an Acquired Company, any
other person that, together with the Company, would be treated as
a single employer under IRC Section 414.
"Multi-Employer Plan" has the meaning given in ERISA Section
3(37)(A).
"Other Benefit Obligations" means all obligations, arrangements,
or customary practices, whether or not legally enforceable, to
provide benefits, other than salary, as compensation for services
rendered, to present or former directors, employees, or agents,
other than obligations, arrangements, and practices that are
Plans. Other Benefit Obligations include consulting agreements
under which the compensation paid does not depend upon the amount
of service rendered, sabbatical policies, severance payment
policies, and fringe benefits within the meaning of IRC Section
132.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" has the meaning given in ERISA Section 3(2)(A).
"Plan" has the meaning given in ERISA Section 3(3).
"Plan Sponsor" has the meaning given in ERISA Section 3(16)(B).
"Qualified Plan" means any Plan that meets or purports to meet the
requirements of IRC Section 401(a).
"Title IV Plans" means all Pension Plans that are subject to Title
IV of ERISA, 29 U.S.C. Section 1301 et seq., other than Multi-
Employer Plans.
"VEBA" means a voluntary employees' beneficiary association under
IRC Section 501(c)(9).
"Welfare Plan" has the meaning given in ERISA Section 3(1).
(b) (i) Part 3.13(i) of the Disclosure Letter contains a complete
and accurate list of all Company Plans, Company Other Benefit
Obligations, and Company VEBAs, and identifies as such all Company
Plans that are (A) defined benefit Pension Plans, (B) Qualified
Plans, (C) Title IV Plans, or (D) Multi-Employer Plans.
(ii) Part 3.13(ii) of the Disclosure Letter contains a complete
and accurate list of (A) all ERISA Affiliates of each Acquired
Company, and (B) all Plans of which any such ERISA Affiliate is or
was a Plan Sponsor, in which any such ERISA Affiliate participates
or has participated, or to which any such ERISA Affiliate
contributes or has contributed.
(iii) Part 3.13(iii) of the Disclosure Letter sets forth, for each
Multi-Employer Plan, as of its last valuation date, the amount of
potential withdrawal liability of the Acquired Companies and the
Acquired Companies' other ERISA Affiliates, calculated according
to information made available pursuant to ERISA Section 4221(e).
(iv) Part 3.13(iv) of the Disclosure Letter sets forth a
calculation of the liability of the Acquired Companies for post-
retirement benefits other than pensions, made in accordance with
Financial Accounting Statement 106 of the Financial Accounting
Standards Board, regardless of whether any Acquired Company is
required by this Statement to disclose such information.
(v) Part 3.13(v) of the Disclosure Letter sets forth the financial
cost of all obligations owed under any Company Plan or Company
Other Benefit Obligation that is not subject to the disclosure and
reporting requirements of ERISA.
(c) Sellers have delivered to Buyer, or will deliver to Buyer
within ten days of the date of this Agreement:
(i) all documents that set forth the terms of each Company Plan,
Company Other Benefit Obligation, or Company VEBA and of any
related trust, including (A) all plan descriptions and summary
plan descriptions of Company Plans for which Sellers or the
Acquired Companies are required to prepare, file, and distribute
plan descriptions and summary plan descriptions, and (B) all
summaries and descriptions furnished to participants and
beneficiaries regarding Company Plans, Company Other Benefit
Obligations, and Company VEBAs for which a plan description or
summary plan description is not required;
(ii) all personnel, payroll, and employment manuals and policies;
(iii) all collective bargaining agreements pursuant to which
contributions have been made or obligations incurred (including
both pension and welfare benefits) by the Acquired Companies and
the ERISA Affiliates of the Acquired Companies, and all collective
bargaining agreements pursuant to which contributions are being
made or obligations are owed by such entities;
(iv) a written description of any Company Plan or Company Other
Benefit Obligation that is not otherwise in writing;
(v) all registration statements filed with respect to any Company
Plan;
(vi) all insurance policies purchased by or to provide benefits
under any Company Plan;
(vii) all contracts with third party administrators, actuaries,
investment managers, consultants, and other independent
contractors that relate to any Company Plan, Company Other Benefit
Obligation, or Company VEBA;
(viii) all reports submitted within the four years preceding the
date of this Agreement by third party administrators, actuaries,
investment managers, consultants, or other independent contractors
with respect to any Company Plan, Company Other Benefit
Obligation, or Company VEBA;
(ix) all notifications to employees of their rights under ERISA
Section 601 et seq. and IRC Section 4980B;
(x) the Form 5500 filed in each of the most recent three plan
years with respect to each Company Plan, including all schedules
thereto and the opinions of independent accountants;
(xi) all notices that were given by any Acquired Company or any
ERISA Affiliate of an Acquired Company or any Company Plan to the
IRS, the PBGC, or any participant or beneficiary, pursuant to
statute, within the four years preceding the date of this
Agreement, including notices that are expressly mentioned
elsewhere in this Section 3.13;
(xii) all notices that were given by the IRS, the PBGC, or the
Department of Labor to any Acquired Company, any ERISA Affiliate
of an Acquired Company, or any Company Plan within the four years
preceding the date of this Agreement;
(xiii) with respect to Qualified Plans and VEBAs, the most recent
determination letter for each Plan of the Acquired Companies that
is a Qualified Plan; and
(xiv) with respect to Title IV Plans, the Form PBGC-1 filed for
each of the three most recent plan years.
(d) Except as set forth in Part 3.13(vi) of the Disclosure Letter:
(i) The Acquired Companies have performed all of their respective
obligations under all Company Plans, Company Other Benefit
Obligations, and Company VEBAs. The Acquired Companies have made
appropriate entries in their financial records and statements for
all obligations and liabilities under such Plans, VEBAs, and
Obligations that have accrued but are not due.
(ii) No statement, either written or oral, has been made by any
Acquired Company to any Person with regard to any Plan or Other
Benefit Obligation that was not in accordance with the Plan or
Other Benefit Obligation and that could have an adverse economic
consequence to any Acquired Company or to Buyer.
(iii) The Acquired Companies, with respect to all Company Plans,
Company Other Benefits Obligations, and Company VEBAs, are, and
each Company Plan, Company Other Benefit Obligation, and Company
VEBA is, in full compliance with ERISA, the IRC, and other
applicable Laws including the provisions of such Laws expressly
mentioned in this Section 3.13, and with any applicable collective
bargaining agreement.
(A) No transaction prohibited by ERISA Section 406 and no
"prohibited transaction" under IRC Section 4975(c) have occurred
with respect to any Company Plan.
(B) No Seller or Acquired Company has any liability to the IRS
with respect to any Plan, including any liability imposed by
Chapter 43 of the IRC.
(C) No Seller or Acquired Company has any liability to the PBGC
with respect to any Plan or has any liability under ERISA Section
502 or Section 4071.
(D) All filings required by ERISA and the IRC as to each Plan have
been timely filed, and all notices and disclosures to participants
required by either ERISA or the IRC have been timely provided.
(E) All contributions and payments made or accrued with respect to
all Company Plans, Company Other Benefit Obligations, and Company
VEBAs are deductible under IRC Section 162 or Section 404. No
amount, or any asset of any Company Plan or Company VEBA, is
subject to tax as unrelated business taxable income.
(iv) Each Company Plan can be terminated within thirty days,
without payment of any additional contribution or amount and
without the vesting or acceleration of any benefits promised by
such Plan.
(v) Since the first day of the last completed fiscal year of the
Acquired Companies, there has been no establishment or amendment
of any Company Plan, Company VEBA, or Company Other Benefit
Obligation.
(vi) No event has occurred or circumstance exists that could
result in a material increase in premium costs of Company Plans
and Company Other Benefit Obligations that are insured, or a
material increase in benefit costs of such Plans and Obligations
that are self-insured.
(vii) Other than claims for benefits submitted by participants or
beneficiaries, no claim against, or legal proceeding involving,
any Company Plan, Company Other Benefit Obligation, or Company
VEBA is pending or, to Sellers' Knowledge, is Threatened.
(viii) No Company Plan is a stock bonus, pension, or profit-
sharing plan within the meaning of IRC Section 401(a).
(ix) Each Qualified Plan of each Acquired Company is qualified in
form and operation under IRC Section 401(a); each trust for each
such Plan is exempt from federal income tax under IRC Section
501(a). Each Company VEBA is exempt from federal income tax. No
event has occurred or circumstance exists that will or could give
rise to disqualification or loss of tax-exempt status of any such
Plan or trust.
(x) Each Acquired Company and each ERISA Affiliate of an Acquired
Company has met the minimum funding standard, and has made all
contributions required, under ERISA Section 302 and IRC Section
402.
(xi) No Company Plan is subject to Title IV of ERISA.
(xii) The Acquired Companies have paid all amounts due to the PBGC
pursuant to ERISA Section 4007.
(xiii) No Acquired Company or any ERISA Affiliate of an Acquired
Company has ceased operations at any facility or has withdrawn
from any Title IV Plan in a manner that would subject to any
entity or Sellers to liability under ERISA Section 4062(e),
Section 4063, or Section 4064.
(xiv) No Acquired Company or any ERISA Affiliate of an Acquired
Company has filed a notice of intent to terminate any Plan or has
adopted any amendment to treat a Plan as terminated. The PBGC has
not instituted proceedings to treat any Company Plan as
terminated. No event has occurred or circumstance exists that may
constitute grounds under ERISA Section 4042 for the termination
of, or the appointment of a trustee to administer, any Company
Plan.
(xv) No amendment has been made, or is reasonably expected to be
made, to any Plan that has required or could require the provision
of security under ERISA Section 307 or IRC Section 401(a)(29).
(xvi) No accumulated funding deficiency, whether or not waived,
exists with respect to any Company Plan; no event has occurred or
circumstance exists that may result in an accumulated funding
deficiency as of the last day of the current plan year of any such
Plan.
(xvii) The actuarial report for each Pension Plan of each Acquired
Company and each ERISA Affiliate of each Acquired Company fairly
presents the financial condition and the results of operations of
each such Plan in accordance with GAAP.
(xviii) Since the last valuation date for each Pension Plan of
each Acquired Company and each ERISA Affiliate of an Acquired
Company, no event has occurred or circumstance exists that would
increase the amount of benefits under any such Plan or that would
cause the excess of Plan assets over benefit liabilities (as
defined in ERISA Section 4001) to decrease, or the amount by which
benefit liabilities exceed assets to increase.
(xiv) No reportable event (as defined in ERISA Section 4043 and in
regulations issued thereunder) has occurred.
(xx) No Seller or Acquired Company has Knowledge of any facts or
circumstances that may give rise to any liability of any Seller,
any Acquired Company, or Buyer to the PBGC under Title IV of
ERISA.
(xxi) No Acquired Company or any ERISA Affiliate of an Acquired
Company has ever established, maintained, or contributed to or
otherwise participated in, or had an obligation to maintain,
contribute to, or otherwise participate in, any Multi-Employer
Plan.
(xxii) No Acquired Company or any ERISA Affiliate of an Acquired
Company has withdrawn from any Multi-Employer Plan with respect to
which there is any outstanding liability as of the date of this
Agreement. No event has occurred or circumstance exists that
presents a risk of the occurrence of any withdrawal from, or the
participation, termination, reorganization, or insolvency of, any
Multi-Employer Plan that could result in any liability of either
any Acquired Company or Buyer to a Multi-Employer Plan.
(xxiii) No Acquired Company or any ERISA Affiliate of an Acquired
Company has received notice from any Multi-Employer Plan that it
is in reorganization or is insolvent, that increased contributions
may be required to avoid a reduction in plan benefits or the
imposition of any excise tax, or that such Plan intends to
terminate or has terminated.
(xxiv) No Multi-Employer Plan to which any Acquired Company or any
ERISA Affiliate of an Acquired Company contributes or has
contributed is a party to any pending merger or asset or liability
transfer or is subject to any proceeding brought by the PBGC.
(xxv) Except to the extent required under ERISA Section 601 et
seq. and IRC Section 4980B, no Acquired Company provides health or
welfare benefits for any retired or former employee or is
obligated to provide health or welfare benefits to any active
employee following such employee's retirement or other termination
of service.
(xxvi) Each Acquired Company has the right to modify and terminate
benefits to retirees (other than pensions) with respect to both
retired and active employees.
(xxii) Sellers and all Acquired Companies have complied with the
provisions of ERISA Section 601 et seq. and IRC Section 4980B.
(xxviii) No payment that is owed or may become due to any
director, officer, employee, or agent of any Acquired Company will
be non-deductible to the Acquired Companies or subject to tax
under IRC Section 280G or Section 4999; nor will any Acquired
Company be required to "gross up" or otherwise compensate any such
person because of the imposition of any excise tax on a payment to
such person.
(xxiv) The consummation of the Contemplated Transactions will not
result in the payment, vesting, or acceleration of any benefit.
3.14 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS
(a) Except as set forth in Part 3.14 of the Disclosure Letter:
(i) each Acquired Company is, and at all times has been, in full
compliance with each Legal Requirement that is or was applicable
to it or to the conduct or operation of its business or the
ownership or use of any of its assets;
(ii) no event has occurred or circumstance exists that (with or
without notice or lapse of time) (A) may constitute or result in
a violation by any Acquired Company of, or a failure on the part
of any Acquired Company to comply with, any Legal Requirement, or
(B) may give rise to any obligation on the part of any Acquired
Company to undertake, or to bear all or any portion of the cost
of, any remedial action of any nature; and
(iii) no Acquired Company has received, at any time since the
first day of the next to last completed fiscal year of the
Acquired Companies, any notice or other communication (whether
oral or written) from any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or potential
violation of, or failure to comply with, any Legal Requirement, or
(B) any actual, alleged, possible, or potential obligation on the
part of any Acquired Company to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature.
(b) Part 3.14 of the Disclosure Letter contains a complete and
accurate list of each Governmental Authorization that is held by
any Acquired Company or that otherwise relates to the business of,
or to any of the assets owned or used by, any Acquired Company.
Each Governmental Authorization listed or required to be listed in
Part 3.14 of the Disclosure Letter is valid and in full force and
effect. Except as set forth in Part 3.14 of the Disclosure Letter:
(i) each Acquired Company is, and at all times has been, in full
compliance with all of the terms and requirements of each
Governmental Authorization identified or required to be identified
in Part 3.14 of the Disclosure Letter;
(ii) no event has occurred or circumstance exists that may (with
or without notice or lapse of time) (A) constitute or result
directly or indirectly in a violation of or a failure to comply
with any term or requirement of any Governmental Authorization
listed or required to be listed in Part 3.14 of the Disclosure
Letter, or (B) result directly or indirectly in the revocation,
withdrawal, suspension, cancellation, or termination of, or any
modification to, any Governmental Authorization listed or required
to be listed in Part 3.14 of the Disclosure Letter;
(iii) no Acquired Company has received, at any time since the
first day of the next to last completed fiscal year of the
Acquired Companies, any notice or other communication (whether
oral or written) from any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or potential
violation of or failure to comply with any term or requirement of
any Governmental Authorization, or (B) any actual, proposed,
possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any Governmental
Authorization; and
(iv) all applications required to have been filed for the renewal
of the Governmental Authorizations listed or required to be listed
in Part 3.14 of the Disclosure Letter have been duly filed on a
timely basis with the appropriate Governmental Bodies, and all
other filings required to have been made with respect to such
Governmental Authorizations have been duly made on a timely basis
with the appropriate Governmental Bodies.
The Governmental Authorizations listed in Part 3.14 of the
Disclosure Letter collectively constitute all of the Governmental
Authorizations necessary to permit the Acquired Companies to
lawfully conduct and operate their businesses in the manner they
currently conduct and operate such businesses and to permit the
Acquired Companies to own and use their assets in the manner in
which they currently own and use such assets.
3.15 LEGAL PROCEEDINGS; ORDERS
(a) Except as set forth in Part 3.15 of the Disclosure Letter,
there is no pending Proceeding:
(i) that has been commenced by or against any Acquired Company or
that otherwise relates to or may affect the business of, or any of
the assets owned or used by, any Acquired Company; or
(ii) that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of
the Contemplated Transactions.
To the Knowledge of Sellers and the Acquired Companies, (1) no
such Proceeding has been Threatened, and (2) no event has occurred
or circumstance exists that may give rise to or serve as a basis
for the commencement of any such Proceeding. Sellers have
delivered to Buyer copies of all pleadings, correspondence, and
other documents relating to each Proceeding listed in Part 3.15 of
the Disclosure Letter. The Proceedings listed in Part 3.15 of the
Disclosure Letter will not have a material adverse effect on the
business, operations, assets, condition, or prospects of any
Acquired Company.
(b) Except as set forth in Part 3.15 of the Disclosure Letter:
(i) there is no Order to which any of the Acquired Companies, or
any of the assets owned or used by any Acquired Company, is
subject;
(ii) no Seller is subject to any Order that relates to the
business of, or any of the assets owned or used by, any Acquired
Company; and
(iii) to the Knowledge of Sellers and the Acquired Companies, no
officer, director, agent, or employee of any Acquired Company is
subject to any Order that prohibits such officer, director, agent,
or employee from engaging in or continuing any conduct, activity,
or practice relating to the business of any Acquired Company.
(c) Except as set forth in Part 3.15 of the Disclosure Letter:
(i) each Acquired Company is, and at all times has been, in full
compliance with all of the terms and requirements of each Order to
which it, or any of the assets owned or used by it, is or has been
subject;
(ii) no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of time)
a violation of or failure to comply with any term or requirement
of any Order to which any Acquired Company, or any of the assets
owned or used by any Acquired Company, is subject; and
(iii) no Acquired Company has received, at any time since the
first day of the next to last completed fiscal year of the
Acquired Companies, any notice or other communication (whether
oral or written) from any Governmental Body or any other Person
regarding any actual, alleged, possible, or potential violation
of, or failure to comply with, any term or requirement of any
Order to which any Acquired Company, or any of the assets owned or
used by any Acquired Company, is or has been subject.
3.16 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth in Part 3.16 of the Disclosure Letter, since
the date of the Balance Sheet and the Interim Balance Sheet, the
Acquired Companies have conducted their businesses only in the
Ordinary Course of Business and there has not been any:
(a) change in any Acquired Company's authorized or issued capital
stock; grant of any stock option or right to purchase shares of
capital stock of any Acquired Company; issuance of any security
convertible into such capital stock; grant of any registration
rights; purchase, redemption, retirement, or other acquisition by
any Acquired Company of any shares of any such capital stock; or
declaration or payment of any dividend or other distribution or
payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of any Acquired
Company;
(c) payment or increase by any Acquired Company of any bonuses,
salaries, or other compensation to any stockholder, director,
officer, or (except in the Ordinary Course of Business) employee
or entry into any employment, severance, or similar Contract with
any director, officer, or employee, except the disbursement to
Sellers of cash of the Company in excess of $500,000 as of the
Closing Date, subject in all respects to the conditions set forth
in Sections 7.11 and 8.5;
(d) adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for
or with any employees of any Acquired Company;
(e) damage to or destruction or loss of any asset or property of
any Acquired Company, whether or not covered by insurance,
materially and adversely affecting the properties, assets,
business, financial condition, or prospects of the Acquired
Companies, taken as a whole;
(f) entry into, termination of, or receipt of notice of
termination of (i) any license, distributorship, dealer, sales
representative, joint venture, credit, or similar agreement, or
(ii) any Contract or transaction involving a total remaining
commitment by or to any Acquired Company of at least $5,000;
(g) sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of
any Acquired Company or mortgage, pledge, or imposition of any
lien or other encumbrance on any material asset or property of any
Acquired Company, including the sale, lease, or other disposition
of any of the Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights with a value to
any Acquired Company in excess of $5,000;
(i) material change in the accounting methods used by any Acquired
Company; or
(j) agreement, whether oral or written, by any Acquired Company to
do any of the foregoing.
3.17 CONTRACTS; NO DEFAULTS
(a) Part 3.17(a) of the Disclosure Letter contains a complete and
accurate list, and Sellers have delivered to Buyer true and
complete copies, of:
(i) each Applicable Contract that involves performance of services
or delivery of goods or materials by one or more Acquired
Companies of an amount or value in excess of $25,000;
(ii) each Applicable Contract that involves performance of
services or delivery of goods or materials to one or more Acquired
Companies of an amount or value in excess of $25,000;
(iii) each Applicable Contract that was not entered into in the
Ordinary Course of Business and that involves expenditures or
receipts of one or more Acquired Companies in excess of $5,000;
(iv) each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other Applicable
Contract affecting the ownership of, leasing of, title to, use of,
or any leasehold or other interest in, any real or personal
property (except personal property leases and installment and
conditional sales agreements having a value per item or aggregate
payments of less than $5,000 and with terms of less than one
year);
(v) each licensing agreement or other Applicable Contract with
respect to patents, trademarks, copyrights, or other intellectual
property, including agreements with current or former employees,
consultants, or contractors regarding the appropriation or the
non-disclosure of any of the Intellectual Property Assets;
(vi) each collective bargaining agreement and other Applicable
Contract to or with any labor union or other employee
representative of a group of employees;
(vii) each joint venture, partnership, and other Applicable
Contract (however named) involving a sharing of profits, losses,
costs, or liabilities by any Acquired Company with any other
Person;
(viii) each Applicable Contract containing covenants that in any
way purport to restrict the business activity of any Acquired
Company or any Affiliate of an Acquired Company or limit the
freedom of any Acquired Company or any Affiliate of an Acquired
Company to engage in any line of business or to compete with any
Person;
(ix) each Applicable Contract providing for payments to or by any
Person based on sales, purchases, or profits, other than direct
payments for goods;
(x) each power of attorney that is currently effective and
outstanding;
(xi) each Applicable Contract entered into other than in the
Ordinary Course of Business that contains or provides for an
express undertaking by any Acquired Company to be responsible for
consequential damages;
(xii) each Applicable Contract for capital expenditures in excess
of $10,000;
(xiii) each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended by
any Acquired Company other than in the Ordinary Course of
Business; and
(xiv) each amendment, supplement, and modification (whether oral
or written) in respect of any of the foregoing.
Part 3.17(a) of the Disclosure Letter sets forth reasonably
complete details concerning such Contracts, including the parties
to the Contracts and the amount of the remaining commitment of the
Acquired Companies under the Contracts.
(b) Except as set forth in Part 3.17(b) of the Disclosure Letter:
(i) neither Seller (and no Related Person of either Seller) has or
may acquire any rights under, and neither Seller has or may become
subject to any obligation or liability under, any Contract that
relates to the business of, or any of the assets owned or used by,
any Acquired Company; and
(ii) to the Knowledge of Sellers and the Acquired Companies, no
officer, director, agent, employee, consultant, or contractor of
any Acquired Company is bound by any Contract that purports to
limit the ability of such officer, director, agent, employee,
consultant, or contractor to (A) engage in or continue any
conduct, activity, or practice relating to the business of any
Acquired Company, or (B) assign to any Acquired Company or to any
other Person any rights to any invention, improvement, or
discovery.
(c) Except as set forth in Part 3.17(c) of the Disclosure Letter,
each Contract identified or required to be identified in Part
3.17(a) of the Disclosure Letter is in full force and effect and
is valid and enforceable in accordance with its terms.
(d) Except as set forth in Part 3.17(d) of the Disclosure Letter:
(i) each Acquired Company is, and at all times since the first day
of the last completed fiscal year of the Acquired Companies has
been, in full compliance with all applicable terms and
requirements of each Contract under which such Acquired Company
has or had any obligation or liability or by which such Acquired
Company or any of the assets owned or used by such Acquired
Company is or was bound;
(ii) each other Person that has or had any obligation or liability
under any Contract under which an Acquired Company has or had any
rights is, and at all times since the first day of the last
completed fiscal year of the Acquired Companies has been, in full
compliance with all applicable terms and requirements of such
Contract;
(iii) no event has occurred or circumstance exists that (with or
without notice or lapse of time) may contravene, conflict with, or
result in a violation or breach of, or give any Acquired Company
or other Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Applicable Contract; and
(iv) no Acquired Company has given to or received from any other
Person, at any time since the first day of the last completed
fiscal year of the Acquired Companies, any notice or other
communication (whether oral or written) regarding any actual,
alleged, possible, or potential violation or breach of, or default
under, any Contract.
(e) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or
payable to any Acquired Company under current or completed
Contracts with any Person and, to the Knowledge of Sellers and the
Acquired Companies, no such Person has made written demand for
such renegotiation.
(f) The Contracts relating to the sale, design, manufacture, or
provision of products or services by the Acquired Companies have
been entered into in the Ordinary Course of Business and have been
entered into without the commission of any act alone or in concert
with any other Person, or any consideration having been paid or
promised, that is or would be in violation of any Legal
Requirement.
3.18 INSURANCE
(a) Sellers have delivered to Buyer:
(i) true and complete copies of all policies of insurance to which
any Acquired Company is a party or under which any Acquired
Company, or any director of any Acquired Company, is or has been
covered at any time within the two years preceding the date of
this Agreement;
(ii) true and complete copies of all pending applications for
policies of insurance; and
(iii) any statement by the auditor of any Acquired Company's
financial statements, or the accountant compiling such financial
statements, with regard to the adequacy of such entity's coverage
or of the reserves for claims.
(b) Part 3.18(b) of the Disclosure Letter describes:
(i) any self-insurance arrangement by or affecting any Acquired
Company, including any reserves established thereunder;
(ii) any contract or arrangement, other than a policy of
insurance, for the transfer or sharing of any risk by any Acquired
Company; and
(iii) all obligations of the Acquired Companies to third parties
with respect to insurance (including such obligations under leases
and service agreements) and identifies the policy under which such
coverage is provided.
(c) Part 3.18(c) of the Disclosure Letter sets forth, by year, for
the current policy year and each of the two preceding policy
years:
(i) a summary of the loss experience under each policy;
(ii) a statement describing each claim under an insurance policy
for an amount in excess of $10,000, which sets forth:
(A) the name of the claimant;
(B) a description of the policy by insurer, type of insurance, and
period of coverage; and
(C) the amount and a brief description of the claim; and
(iii) a statement describing the loss experience for all claims
that were self-insured, including the number and aggregate cost of
such claims.
(d) Except as set forth in Part 3.18(d) of the Disclosure Letter:
(i) All policies to which any Acquired Company is a party or that
provide coverage to either Seller, any Acquired Company, or any
director or officer of an Acquired Company:
(A) are valid, outstanding, and enforceable;
(B) are issued by an insurer that is financially sound and
reputable;
(C) taken together, provide adequate insurance coverage for the
assets and the operations of the Acquired Companies for all risks
normally insured against by a Person carrying on the same business
or businesses as the Acquired Companies;
(D) are sufficient for compliance with all Legal Requirements and
Contracts to which any Acquired Company is a party or by which any
of them is bound;
(E) will continue in full force and effect following the
consummation of the Contemplated Transactions; and
(F) do not provide for any retrospective premium adjustment or
other experienced-based liability on the part of any Acquired
Company.
(ii) No Seller or Acquired Company has received (A) any refusal of
coverage or any notice that a defense will be afforded with
reservation of rights, or (B) any notice of cancellation or any
other indication that any insurance policy is no longer in full
force or effect or will not be renewed or that the issuer of any
policy is not willing or able to perform its obligations
thereunder.
(iii) The Acquired Companies have paid all premiums due, and have
otherwise performed all of their respective obligations, under
each policy to which any Acquired Company is a party or that
provides coverage to any Acquired Company or director thereof.
(iv) The Acquired Companies have given notice to the insurer of
all claims that may be insured thereby.
3.19 ENVIRONMENTAL MATTERS
Except as set forth in part 3.19 of the Disclosure Letter:
(a) Each Acquired Company is, and at all times has been, in full
compliance with, and has not been and is not in violation of or
liable under, any Environmental Law. No Seller or Acquired Company
has any basis to expect, nor has any of them or any other Person
for whose conduct they are or may be held to be responsible
received, any actual or Threatened order, notice, or other
communication from (i) any Governmental Body or private citizen
acting in the public interest, or (ii) the current or prior owner
or operator of any Facilities, of any actual or potential
violation or failure to comply with any Environmental Law, or of
any actual or Threatened obligation to undertake or bear the cost
of any Environmental, Health, and Safety Liabilities with respect
to any of the Facilities or any other properties or assets
(whether real, personal, or mixed) in which Sellers or any
Acquired Company has had an interest, or with respect to any
property or Facility at or to which Hazardous Materials were
generated, manufactured, refined, transferred, imported, used, or
processed by Sellers, any Acquired Company, or any other Person
for whose conduct they are or may be held responsible, or from
which Hazardous Materials have been transported, treated, stored,
handled, transferred, disposed, recycled, or received.
(b) There are no pending or, to the Knowledge of Sellers and the
Acquired Companies, Threatened claims, Encumbrances, or other
restrictions of any nature, resulting from any Environmental,
Health, and Safety Liabilities or arising under or pursuant to any
Environmental Law, with respect to or affecting any of the
Facilities or any other properties and assets (whether real,
personal, or mixed) in which Sellers or any Acquired Company has
or had an interest.
(c) No Seller or Acquired Company has Knowledge of any basis to
expect, nor has any of them or any other Person for whose conduct
they are or may be held responsible, received, any citation,
directive, inquiry, notice, Order, summons, warning, or other
communication that relates to Hazardous Activity, Hazardous
Materials, or any alleged, actual, or potential violation or
failure to comply with any Environmental Law, or of any alleged,
actual, or potential obligation to undertake or bear the cost of
any Environmental, Health, and Safety Liabilities with respect to
any of the Facilities or any other properties or assets (whether
real, personal, or mixed) in which Sellers or any Acquired Company
had an interest, or with respect to any property or facility to
which Hazardous Materials generated, manufactured, refined,
transferred, imported, used, or processed by Sellers, any Acquired
Company, or any other Person for whose conduct they are or may be
held responsible, have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.
(d) No Seller or Acquired Company, or any other Person for whose
conduct they are or may be held responsible, has any
Environmental, Health, and Safety Liabilities with respect to the
Facilities or with respect to any other properties and assets
(whether real, personal, or mixed) in which Sellers or any
Acquired Company (or any predecessor), has or had an interest, or
at any property geologically or hydrologically adjoining the
Facilities or any such other property or assets.
(e) There are no Hazardous Materials present on or in the
Environment at the Facilities or at any geologically or
hydrologically adjoining property, including any Hazardous
Materials contained in barrels, above or underground storage
tanks, landfills, land deposits, dumps, equipment (whether
moveable or fixed) or other containers, either temporary or
permanent, and deposited or located in land, water, sumps, or any
other part of the Facilities or such adjoining property, or
incorporated into any structure therein or thereon. No Seller,
Acquired Company, any other Person for whose conduct they are or
may be held responsible, or to the Knowledge of Sellers and the
Acquired Companies, any other Person, has permitted or conducted,
or is aware of, any Hazardous Activity conducted with respect to
the Facilities or any other properties or assets (whether real,
personal, or mixed) in which Sellers or any Acquired Company has
or had an interest except in full compliance with all applicable
Environmental Laws.
(f) There has been no Release or, to the Knowledge of Sellers and
the Acquired Companies, Threat of Release, of any Hazardous
Materials at or from the Facilities or at any other locations
where any Hazardous Materials were generated, manufactured,
refined, transferred, produced, imported, used, or processed from
or by the Facilities, or from or by any other properties and
assets (whether real, personal, or mixed) in which Sellers or any
Acquired Company has or had an interest, or to the Knowledge of
Sellers and the Acquired Companies any geologically or
hydrologically adjoining property, whether by Sellers, any
Acquired Company, or any other Person.
(g) Sellers have delivered to Buyer true and complete copies and
results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by Sellers or any Acquired Company
pertaining to Hazardous Materials or Hazardous Activities in, on,
or under the Facilities, or concerning compliance by Sellers, any
Acquired Company, or any other Person for whose conduct they are
or may be held responsible, with Environmental Laws.
3.20 EMPLOYEES
(a) Part 3.20 of the Disclosure Letter contains a complete and
accurate list of the following information for each employee or
director of the Acquired Companies, including each employee on
leave of absence or layoff status: employer; name; job title;
current compensation paid or payable and any change in
compensation since the first day of the last completed fiscal year
of the Acquired Companies; vacation accrued; and service credited
for purposes of vesting and eligibility to participate under any
Acquired Company's pension, retirement, profit-sharing, thrift-
savings, deferred compensation, stock bonus, stock option, cash
bonus, employee stock ownership (including investment credit or
payroll stock ownership), severance pay, insurance, medical,
welfare, or vacation plan, other Employee Pension Benefit Plan or
Employee Welfare Benefit Plan, or any other employee benefit plan
or any Director Plan.
(b) No employee or director of any Acquired Company is a party to,
or is otherwise bound by, any agreement or arrangement, including
any confidentiality, noncompetition, or proprietary rights
agreement, between such employee or director and any other Person
("Proprietary Rights Agreement") that in any way adversely affects
or will affect (i) the performance of his duties as an employee or
director of the Acquired Companies, or (ii) the ability of any
Acquired Company to conduct its business, including any
Proprietary Rights Agreement with Sellers or the Acquired
Companies by any such employee or director. To Sellers'
Knowledge, except as disclosed in part 3.20 of the Disclosure
Letter, no director, officer, or other key employee of any
Acquired Company intends to terminate his employment with such
Acquired Company.
(c) Part 3.20 of the Disclosure Letter also contains a complete
and accurate list of the following information for each retired
employee or director of the Acquired Companies, or their
dependents, receiving benefits or scheduled to receive benefits in
the future: name, pension benefit, pension option election,
retiree medical insurance coverage, retiree life insurance
coverage, and other benefits.
3.21 LABOR RELATIONS; COMPLIANCE
Since the first day of the last completed fiscal year of the
Acquired Companies, no Acquired Company has been or is a party to
any collective bargaining or other labor Contract. Since the first
day of the last completed fiscal year of the Acquired Companies,
there has not been, there is not presently pending or existing,
and to Sellers' Knowledge there is not Threatened, (a) any strike,
slowdown, picketing, work stoppage, or employee grievance process,
(b) any Proceeding against or affecting any Acquired Company
relating to the alleged violation of any Legal Requirement
pertaining to labor relations or employment matters, including any
charge or complaint filed by an employee or union with the
National Labor Relations Board, the Equal Employment Opportunity
Commission, or any comparable Governmental Body, organizational
activity, or other labor or employment dispute against or
affecting any of the Acquired Companies or their premises, or (c)
any application for certification of a collective bargaining
agent. To Sellers' Knowledge no event has occurred or circumstance
exists that could provide the basis for any work stoppage or other
labor dispute. There is no lockout of any employees by any
Acquired Company, and no such action is contemplated by any
Acquired Company. Each Acquired Company has complied in all
respects with all Legal Requirements relating to employment, equal
employment opportunity, nondiscrimination, immigration, wages,
hours, benefits, collective bargaining, the payment of social
security and similar taxes, occupational safety and health, and
plant closing. No Acquired Company is liable for the payment of
any compensation, damages, taxes, fines, penalties, or other
amounts, however designated, for failure to comply with any of the
foregoing Legal Requirements.
3.22 INTELLECTUAL PROPERTY
(a) Intellectual Property Assets--The term "Intellectual Property
Assets" includes:
(i) the name Pittsfield Mold & Tool, Inc., all fictional business
names, trade names, registered and unregistered trademarks,
service marks, and applications (collectively, "Marks");
(ii) all patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "Patents");
(iii) all copyrights in both published works and unpublished works
(collectively, "Copyrights");
(iv) all rights in mask works (collectively, "Rights in Mask
Works"); and
(v) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process
technology, plans, drawings, and blue prints (collectively, "Trade
Secrets"); owned, used, or licensed by any Acquired Company as
licensee or licensor.
(b) Agreements--Part 3.22(b) of the Disclosure Letter contains a
complete and accurate list and summary description, including any
royalties paid or received by the Acquired Companies, of all
Contracts relating to the Intellectual Property Assets to which
any Acquired Company is a party or by which any Acquired Company
is bound, except for any license implied by the sale of a product
and perpetual, paid-up licenses for commonly available software
programs with a value of less than $5,000 under which an Acquired
Company is the licensee. There are no outstanding and, to Sellers'
Knowledge, no Threatened disputes or disagreements with respect to
any such agreement.
(c) Know-How Necessary for the Business
(i) The Intellectual Property Assets are all those necessary for
the operation of the Acquired Companies' businesses as they are
currently conducted. One or more of the Acquired Companies is the
owner of all right, title, and interest in and to each of the
Intellectual Property Assets, free and clear of all liens,
security interests, charges, encumbrances, equities, and other
adverse claims, and has the right to use without payment to a
third party all of the Intellectual Property Assets.
(ii) Except as set forth in Part 3.22(c) of the Disclosure Letter,
all former and current employees of each Acquired Company have
executed written Contracts with one or more of the Acquired
Companies that assign to one or more of the Acquired Companies all
rights to any inventions, improvements, discoveries, or
information relating to the business of any Acquired Company. No
employee of any Acquired Company has entered into any Contract
that restricts or limits in any way the scope or type of work in
which the employee may be engaged or requires the employee to
transfer, assign, or disclose information concerning his work to
anyone other than one or more of the Acquired Companies.
(d) Patents
(i) Part 3.22(d) of the Disclosure Letter contains a complete and
accurate list and summary description of all Patents. One or more
of the Acquired Companies is the owner of all right, title, and
interest in and to each of the Patents, free and clear of all
liens, security interests, charges, encumbrances, equities, and
other adverse claims.
(ii) All of the issued Patents are currently in compliance with
formal legal requirements (including payment of filing,
examination, and maintenance fees and proofs of working or use),
are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the
Closing Date.
(iii) No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To Sellers'
Knowledge, there is no potentially interfering patent or patent
application of any third party.
(iv) No Patent is infringed or, to Sellers' Knowledge, has been
challenged or threatened in any way. None of the products
manufactured and sold, nor any process or know-how used, by any
Acquired Company infringes or is alleged to infringe any patent or
other proprietary right of any other Person.
(v) All products made, used, or sold under the Patents have been
marked with the proper patent notice.
(e) Trademarks
(i) Part 3.22(e) of Disclosure Letter contains a complete and
accurate list and summary description of all Marks. One or more of
the Acquired Companies is the owner of all right, title, and
interest in and to each of the Marks, free and clear of all liens,
security interests, charges, encumbrances, equities, and other
adverse claims.
(ii) All Marks that have been registered with the United States
Patent and Trademark Office are currently in compliance with all
formal legal requirements (including the timely post-registration
filing of affidavits of use and incontestability and renewal
applications), are valid and enforceable, and are not subject to
any maintenance fees or taxes or actions falling due within ninety
days after the Closing Date.
(iii) No Xxxx has been or is now involved in any opposition,
invalidation, or cancellation and, to Sellers' Knowledge, no such
action is Threatened with the respect to any of the Marks.
(iv) To Sellers' Knowledge, there is no potentially interfering
trademark or trademark application of any third party.
(v) No Xxxx is infringed or, to Sellers' Knowledge, has been
challenged or threatened in any way. None of the Marks used by any
Acquired Company infringes or is alleged to infringe any trade
name, trademark, or service xxxx of any third party.
(vi) All products and materials containing a Xxxx xxxx the proper
federal registration notice where permitted by law.
(f) Copyrights
(i) Part 3.22(f) of the Disclosure Letter contains a complete and
accurate list and summary description of all Copyrights. One or
more of the Acquired Companies is the owner of all right, title,
and interest in and to each of the Copyrights, free and clear of
all liens, security interests, charges, encumbrances, equities,
and other adverse claims.
(ii) All the Copyrights have been registered and are currently in
compliance with formal legal requirements, are valid and
enforceable, and are not subject to any maintenance fees or taxes
or actions falling due within ninety days after the date of
Closing.
(iii) No Copyright is infringed or, to Sellers' Knowledge, has
been challenged or threatened in any way. None of the subject
matter of any of the Copyrights infringes or is alleged to
infringe any copyright of any third party or is a derivative work
based on the work of a third party.
(iv) All works encompassed by the Copyrights have been marked with
the proper copyright notice.
(g) Trade Secrets
(i) With respect to each Trade Secret, the documentation relating
to such Trade Secret is current, accurate, and sufficient in
detail and content to identify and explain it and to allow its
full and proper use without reliance on the knowledge or memory of
any individual.
(ii) Sellers and the Acquired Companies have taken all reasonable
precautions to protect the secrecy, confidentiality, and value of
their Trade Secrets.
(iii) One or more of the Acquired Companies has good title and an
absolute (but not necessarily exclusive) right to use the Trade
Secrets. The Trade Secrets are not part of the public knowledge or
literature, and, to Sellers' Knowledge, have not been used,
divulged, or appropriated either for the benefit of any Person
(other than one or more of the Acquired Companies) or to the
detriment of the Acquired Companies. No Trade Secret is subject to
any adverse claim or has been challenged or threatened in any way.
3.23 CERTAIN PAYMENTS
Since during the current fiscal year and the last three completed
fiscal years of the Acquired Companies, no Acquired Company or
director, officer, agent, or employee of any Acquired Company, or
to Sellers' Knowledge any other Person associated with or acting
for or on behalf of any Acquired Company, has directly or
indirectly (a) made any contribution, gift, bribe, rebate, payoff,
influence payment, kickback, or other payment to any Person,
private or public, regardless of form, whether in money, property,
or services (i) to obtain favorable treatment in securing
business, (ii) to pay for favorable treatment for business
secured, (iii) to obtain special concessions or for special
concessions already obtained, for or in respect of any Acquired
Company or any Affiliate of an Acquired Company, or (iv) in
violation of any Legal Requirement, (b) established or maintained
any fund or asset that has not been recorded in the books and
records of the Acquired Companies.
3.24 DISCLOSURE
(a) No representation or warranty of Sellers in this Agreement and
no statement in the Disclosure Letter omits to state a material
fact necessary to make the statements herein or therein, in light
of the circumstances in which they were made, not misleading.
(b) No notice given pursuant to Section 5.5 will contain any
untrue statement or omit to state a material fact necessary to
make the statements therein or in this Agreement, in light of the
circumstances in which they were made, not misleading.
(c) There is no fact known to either Seller that has specific
application to either Seller or any Acquired Company (other than
general economic or industry conditions) and that materially
adversely affects or, as far as either Seller can reasonably
foresee, materially threatens, the assets, business, prospects,
financial condition, or results of operations of the Acquired
Companies (on a consolidated basis) that has not been set forth in
this Agreement or the Disclosure Letter.
3.25 RELATIONSHIPS WITH RELATED PERSONS
No Seller or any Related Person of Sellers or of any Acquired
Company has, or since the first day of the next to last completed
fiscal year of the Acquired Companies has had, any interest in any
property (whether real, personal, or mixed and whether tangible or
intangible), used in or pertaining to the Acquired Companies'
businesses. No Seller or any Related Person of Sellers or of any
Acquired Company is, or since the first day of the next to last
completed fiscal year of the Acquired Companies has owned (of
record or as a beneficial owner) an equity interest or any other
financial or profit interest in, a Person that has (i) had
business dealings or a material financial interest in any
transaction with any Acquired Company other than business dealings
or transactions conducted in the Ordinary Course of Business with
the Acquired Companies at substantially prevailing market prices
and on substantially prevailing market terms, or (ii) engaged in
competition with any Acquired Company with respect to any line of
the products or services of such Acquired Company (a "Competing
Business") in any market presently served by such Acquired Company
except for less than one percent of the outstanding capital stock
of any Competing Business that is publicly traded on any
recognized exchange or in the over-the-counter market. Except as
set forth in Part 3.25 of the Disclosure Letter, no Seller or any
Related Person of Sellers or of any Acquired Company is a party to
any Contract with, or has any claim or right against, any Acquired
Company.
3.26 BROKERS OR FINDERS
Sellers and their agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this
Agreement except for payments to Xxxxxx X. Xxxxxx, Inc.
3.27 DEPOSIT ACCOUNTS
Part 3.27 of the Disclosure Letter contains a complete and
accurate list of (a) the name of each financial institution in
which any Acquired Company has an account or safe deposit box, (b)
the names in which each account or box is held, (c) the type
account, and (d) the name of each person authorized to draw on or
have access to each account or box.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Colorado.
4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with
its terms. Upon the execution and delivery by Buyer of the
Promissory Note and the Noncompetition Agreements (collectively,
the "Buyer's Closing Documents"), the Buyer's Closing Documents
will constitute the legal, valid, and binding obligations of
Buyer, enforceable against Buyer in accordance with their
respective terms. Buyer has the absolute and unrestricted right,
power, and authority to execute and deliver this Agreement and the
Buyer's Closing Documents and to perform its obligations under
this Agreement and the Buyer's Closing Documents.
(b) Neither the execution and delivery of this Agreement by Buyer
nor the consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent,
delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to:
(i) any provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
shareholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer may be
subject; or
(iv) any Contract to which Buyer is a party or by which Buyer may
be bound.
Except as set forth in this Section 4.2(b), Buyer is not and will
not be required to obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or
the consummation or performance of any of the Contemplated
Transactions.
4.3 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced against
Buyer and that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of
the Contemplated Transactions. To Buyer's Knowledge, no such
Proceeding has been Threatened.
4.4 BROKERS OR FINDERS
Buyer and its officers and agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with
this Agreement, except for amounts, if any, due Stopel Business
Services, Xxxxx X. XxXxxxx, Esq. Buyer will indemnify and hold
Sellers harmless from any such payment alleged to be due by or
through Buyer as a result of the action of Buyer or its officers
or agents.
5. COVENANTS OF SELLERS PRIOR TO CLOSING DATE
5.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date, Sellers
will, and will cause each Acquired Company and its Representatives
to, (a) afford Buyer and its Representatives and prospective
lenders and their Representatives (collectively, "Buyer's
Advisors") full and free access to each Acquired Company's
personnel, properties (including subsurface testing), contracts,
books and records, and other documents and data, (b) furnish Buyer
and Buyer's Advisors with copies of all such contracts, books and
records, and other existing documents and data as Buyer may
reasonably request, and (c) furnish Buyer and Buyer's Advisors
with such additional financial, operating, and other data and
information as Buyer may reasonably request.
5.2 OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES
Between the date of this Agreement and the Closing Date, Sellers
will, and will cause each Acquired Company to:
(a) conduct the business of such Acquired Company only in the
Ordinary Course of Business;
(b) use their Best Efforts to preserve intact the current business
organization of such Acquired Company, keep available the services
of the current officers, employees, and agents of such Acquired
Company, and maintain the relations and good will with suppliers,
customers, landlords, creditors, employees, agents, and others
having business relationships with such Acquired Company;
(c) confer with Buyer concerning operational matters of a material
nature; and
(d) otherwise report periodically to Buyer concerning the status
of the business, operations, and finances of such Acquired
Company.
5.3 NEGATIVE COVENANT
Except as otherwise expressly permitted by this Agreement, between
the date of this Agreement and the Closing Date, Sellers will not,
and will cause each Acquired Company not to, without the prior
consent of Buyer, take any affirmative action, or fail to take any
reasonable action within their or its control, as a result of
which any of the changes or events listed in Section 3.16 is
likely to occur.
5.4 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement,
Sellers will, and will cause each Acquired Company to, make all
filings required by Legal Requirements to be made by them in order
to consummate the Contemplated Transactions. Between the date of
this Agreement and the Closing Date, Sellers will, and will cause
each Acquired Company to, (a) cooperate with Buyer with respect to
all filings that Buyer elects to make or is required by Legal
Requirements to make in connection with the Contemplated
Transactions, and (b) cooperate with Buyer in obtaining all
consents identified in Schedule 4.2.
5.5 NOTIFICATION
Between the date of this Agreement and the Closing Date, each
Seller will promptly notify Buyer in writing if such Seller or any
Acquired Company becomes aware of any fact or condition that
causes or constitutes a Breach of any of Sellers' representations
and warranties as of the date of this Agreement, or if such Seller
or any Acquired Company becomes aware of the occurrence after the
date of this Agreement of any fact or condition that would (except
as expressly contemplated by this Agreement) cause or constitute a
Breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence
or discovery of such fact or condition. Should any such fact or
condition require any change in the Disclosure Letter if the
Disclosure Letter were dated the date of the occurrence or
discovery of any such fact or condition, Sellers will promptly
deliver to Buyer a supplement to the Disclosure Letter specifying
such change. During the same period, each Seller will promptly
notify Buyer of the occurrence of any Breach of any covenant of
Sellers in this Section 5 or of the occurrence of any event that
may make the satisfaction of the conditions in Section 7
impossible or unlikely.
5.6 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS
Except as expressly provided in this Agreement, Sellers will cause
all indebtedness owed to an Acquired Company by any Seller or any
Related Person of any Seller (other than an Acquired Company) to
be paid in full prior to Closing.
5.7 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant
to Section 9, Sellers will not, and will cause each Acquired
Company and each of their Representatives not to, directly or
indirectly solicit, initiate, or encourage any inquiries or
proposals from, discuss or negotiate with, provide any non-public
information to, or consider the merits of any unsolicited
inquiries or proposals from, any Person (other than Buyer)
relating to any transaction involving the sale of the business or
assets (other than in the Ordinary Course of Business) of any
Acquired Company, or any of the capital stock of any Acquired
Company, or any merger, consolidation, business combination, or
similar transaction involving any Acquired Company.
5.8 BEST EFFORTS
Between the date of this Agreement and the Closing Date, Sellers
will use their Best Efforts to cause the conditions in Sections 7
and 8 to be satisfied.
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE
6.1 APPROVALS OF GOVERNMENTAL BODIES
As promptly as practicable after the date of this Agreement, Buyer
will, and will cause each of its Related Persons to, make all
filings required by Legal Requirements to be made by them, if any,
to consummate the Contemplated Transactions. Between the date of
this Agreement and the Closing Date, Buyer will, and will cause
each Related Person to, cooperate with Sellers with respect to all
filings that Sellers are required by Legal Requirements to make in
connection with the Contemplated Transactions, if any, and (ii)
cooperate with Sellers in obtaining all consents identified in
Part 3.2 of the Disclosure Letter; provided that this Agreement
will not require Buyer to dispose of or make any change in any
portion of its business or to incur any other burden to obtain a
Governmental Authorization.
6.2 BEST EFFORTS
Except as set forth in the proviso to Section 6.1, between the
date of this Agreement and the Closing Date, Buyer will use its
Best Efforts to cause the conditions in Sections 7 and 8 to be
satisfied.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to
the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Buyer, in
whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
(a) All of Sellers' representations and warranties in this
Agreement (considered collectively), and each of these
representations and warranties (considered individually), must
have been accurate in all material respects as of the date of this
Agreement, and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date, without giving effect
to any supplement to the Disclosure Letter.
(b) Each of Sellers' representations and warranties in Sections
3.3, 3.4, 3.12, and 3.24 must have been accurate in all respects
as of the date of this Agreement, and must be accurate in all
respects as of the Closing Date as if made on the Closing Date,
without giving effect to any supplement to the Disclosure Letter.
7.2 SELLERS' PERFORMANCE
(a) All of the covenants and obligations that Sellers are required
to perform or to comply with pursuant to this Agreement at or
prior to the Closing (considered collectively), and each of these
covenants and obligations (considered individually), must have
been duly performed and complied with in all material respects.
(b) Each document required to be delivered pursuant to
Sections 2.4 through 2.7 must have been delivered, and each of the
other covenants and obligations in Sections 5.4 and 5.8 must have
been performed and complied with in all respects.
7.3 CONSENTS
Each of the Consents, if any, identified in Part 3.2 of the
Disclosure Letter, and the consent referred to in Section 4.2(b),
must have been obtained and must be in full force and effect.
7.4 ADDITIONAL DOCUMENTS
Each of the following documents must have been delivered to Buyer:
(a) an opinion of Xxxxxx & Xxxxxxxx, LLP, counsel to Sellers and
the Company, dated the Closing Date, in a form mutually acceptable
to the parties hereto;
(b) such other documents as Buyer may reasonably request for the
purpose of (i) enabling its counsel to provide the opinion
referred to in Section 8.4(a), (ii) evidencing the accuracy of any
of Sellers' representations and warranties, (iii) evidencing the
performance by either Seller of, or the compliance by either
Seller with, any covenant or obligation required to be performed
or complied with by such Seller, (iv) evidencing the satisfaction
of any condition referred to in this Section 7, or (v) otherwise
facilitating the consummation or performance of any of the
Contemplated Transactions.
7.5 NO PROCEEDINGS
Since the date of this Agreement, there must not have been
commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any challenge
to, or seeking damages or other relief in connection with, any of
the Contemplated Transactions, or (b) that may have the effect of
preventing, delaying, making illegal, or otherwise interfering
with any of the Contemplated Transactions.
7.6 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or Threatened by any Person any
claim asserting that such Person (a) is the holder or the
beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any stock of, or any other voting,
equity, or ownership interest in, any of the Acquired Companies,
or (b) is entitled to all or any portion of the Purchase Price
payable for the Shares.
7.7 NO PROHIBITION
Neither the consummation nor the performance of any of the
Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time), materially contravene, or
conflict with, or result in a material violation of, or cause
Buyer or any Person affiliated with Buyer to suffer any material
adverse consequence under, (a) any applicable Legal Requirement or
Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before
any Governmental Body.
7.8 DUE DILIGENCE.
Buyer must have completed its review of the business, operations,
assets, prospects and condition (financial and otherwise) of each
Acquired Company, and the results of that review must be
satisfactory to Buyer.
7.9 FINANCING.
Buyer must have obtained additional bank financing in an amount
that Buyer, in its sole discretion, deems necessary to enable
Buyer to finance the Contemplated Transactions and the working
capital requirements of the Acquired Companies after the Closing.
7.10 PURCHASE OF REAL ESTATE
The closing of the purchase by the Company from Sellers of certain
real estate and improvements as specified in the Real Estate
Purchase Agreement referred to in Section 2.5 must occur
simultaneously with the Closing under this Agreement.
7.11 FINANCIAL BENCHMARKS
As of the Closing, the Company must have at least $500,000 in cash
balances and accounts receivable minus accounts payable shall be
not less than $1,220,000, subject in all respects to the
provisions of Section 5.2.
8. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Sellers' obligation to sell the Shares and to take the other
actions required to be taken by Sellers at the Closing is subject
to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Sellers, in
whole or in part):
8.1 ACCURACY OF REPRESENTATIONS
All of Buyer's representations and warranties in this Agreement
(considered collectively), and each of these representations and
warranties (considered individually), must have been accurate in
all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if
made on the Closing Date.
8.2 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior
to the Closing (considered collectively), and each of these
covenants and obligations (considered individually), must have
been performed and complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Sections 2.4 through 2.7 and must
have made the cash payments required to be made by Buyer pursuant
to Section 2.2.
8.3 Each of the Consents, if any, identified in Part 3.2 of the
Disclosure Letter, must have been obtained and must be in full
force and effect.
8.4 ADDITIONAL DOCUMENTS
Buyer must have caused the following documents to be delivered to
Sellers:
(a) an opinion of Xxxxxxxx & Shohl LLP, counsel to Buyer, dated
the Closing Date,in a form mutually acceptable to the parties
hereto; and
(b) such other documents as Sellers may reasonably request for the
purpose of (i) enabling their counsel to provide the opinion
referred to in Section 7.4(a), (ii) evidencing the accuracy of any
representation or warranty of Buyer, (iii) evidencing the
performance by Buyer of, or the compliance by Buyer with, any
covenant or obligation required to be performed or complied with
by Buyer, (ii) evidencing the satisfaction of any condition
referred to in this Section 8, or (v) otherwise facilitating the
consummation of any of the Contemplated Transactions.
8.5 FINANCIAL BENCHMARKS
As of the Closing, the Company must have at least $500,000 in cash
balances and accounts receivable minus accounts payable shall be
not less than $1,220,000, subject in all respects to the
provisions of Section 5.2.
8.6 NO INJUNCTION
There must not be in effect any Legal Requirement or any
injunction or other Order that (a) prohibits the sale of the
Shares by Sellers to Buyer, and (b) has been adopted or issued, or
has otherwise become effective, since the date of this Agreement.
8.7 BUYER'S FINANCIAL CONDITION
The Sellers shall have completed their review of Buyer's financial
statements, books, records, accounts receivable, inventory and
actual and potential liabilities, and determined, in their
reasonable discretion, that Buyer has the financial to repay the
Promissory Note and otherwise perform its obligations hereunder in
all material respects.
8.8 SECURITY FOR FUTURE PAYMENTS
Buyer shall deliver at the Closing, as security for payment by
Buyer of all amounts owing Sellers under the Promissory Note in
accordance with the terms and conditions thereof, each of the
following in form and substance reasonably satisfactory to
Sellers: (i) a letter of credit in the amount of $250,000, (ii)a
lien on all assets of the Company, subordinate only to the
Company's primary lender, holders of purchase money security
interests, holders of statutory liens or liens to which the assets
of the Company were subject prior to the Closing which are not to
be released as a condition to Buyer's obligation to close
hereunder, and (iii) a pledge to Xxxxx X. Xxxxxxxx of 400 shares
of common stock of the Company, subject to anti-dilution
protection to ensure a pledge at all times of 40% of the
outstanding common stock of the Company, which shares shall be
placed in escrow under an escrow agreement in a form mutually
acceptable to the parties hereto with a third party mutually
acceptable to Xxxxx X. Xxxxxxxx and Buyer, which shares shall be
released to Buyer as the Promissory Note is paid down by Buyer.
9. TERMINATION
9.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by either Buyer or Sellers if a material Breach of any
provision of this Agreement has been committed by the other party
and such Breach has not been waived;
(b) (i) by Buyer if any of the conditions in Section 7 has not
been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure
of Buyer to comply with its obligations under this Agreement) and
Buyer has not waived such condition on or before the Closing Date;
or (ii) by Sellers, if any of the conditions in Section 8 has not
been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure
of Sellers to comply with their obligations under this Agreement)
and Sellers have not waived such condition on or before the
Closing Date;
(c) by mutual consent of Buyer and Sellers; or
(d) by either Buyer or Sellers if the Closing has not occurred
(other than through the failure of any party seeking to terminate
this Agreement to comply fully with its obligations under this
Agreement) on or before September 1, 1999, or such later date as
the parties may agree upon.
9.2 EFFECT OF TERMINATION
Each party's right of termination under Section 9.1 is in addition
to any other rights it may have under this Agreement or otherwise,
and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to
Section 9.1, all further obligations of the parties under this
Agreement will terminate, except that the obligations in Sections
11.1 and 11.3 will survive; provided, however, that if this
Agreement is terminated by a party because of the Breach of the
Agreement by the other party or because one or more of the
conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's
failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
10. INDEMNIFICATION; REMEDIES
10.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE
All representations, warranties, covenants, and obligations of
Sellers in this Agreement, the Disclosure Letter, the supplements
to the Disclosure Letter, the certificate delivered pursuant to
Section 2.4(a)(iv), and any other certificate or document
delivered pursuant to this Agreement will survive the Closing. The
right to indemnification, payment of Damages or other remedy based
on such representations, warranties, covenants, and obligations
will not be affected by any investigation conducted with respect
to, or any Knowledge acquired (or capable of being acquired) at
any time, whether before or after the execution and delivery of
this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will
not affect the right to indemnification, payment of Damages, or
other remedy based on such representations, warranties, covenants,
and obligations.
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS
Sellers, jointly and severally, will indemnify and hold harmless
Buyer, the Acquired Companies, and their respective
Representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim,
damage (including incidental and consequential damages), expense
(including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving
a third-party claim (collectively, "Damages"), arising, directly
or indirectly, from or in connection with:
(a) any Breach of any representation or warranty made by Sellers
in this Agreement (without giving effect to any supplement to the
Disclosure Letter), the Disclosure Letter, the supplements to the
Disclosure Letter, or any other certificate or document delivered
by Sellers pursuant to this Agreement;
(b) any Breach of any representation or warranty made by Sellers
in this Agreement as if such representation or warranty were made
on and as of the Closing Date without giving effect to any
supplement to the Disclosure Letter, other than any such Breach
that is disclosed in a supplement to the Disclosure Letter and is
expressly identified in the certificate delivered pursuant to
Section 2.4(a)(v) as having caused the condition specified in
Section 7.1 not to be satisfied;
(c) any Breach by either Seller of any covenant or obligation of
such Seller in this Agreement;
(d) any product shipped or manufactured by, or any services
provided by, any Acquired Company prior to the Closing Date;
(e) any matter disclosed in Part ____ of the Disclosure Letter [to
be completed upon receipt of Disclosure Letter];
(f) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such Person with
either Seller or any Acquired Company (or any Person acting on
their behalf) in connection with any of the Contemplated
Transactions; or
The remedies provided in this Section 10.2 will not be exclusive
of or limit any other remedies that may be available to Buyer or
the other Indemnified Persons.
10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS--
ENVIRONMENTAL MATTERS
In addition to the provisions of Section 10.2, Sellers, jointly
and severally, will indemnify and hold harmless Buyer, the
Acquired Companies, and the other Indemnified Persons for, and
will pay to Buyer, the Acquired Companies, and the other
Indemnified Persons the amount of, any Damages (including costs of
cleanup, containment, or other remediation) arising, directly or
indirectly, from or in connection with:
(a) any Environmental, Health, and Safety Liabilities arising out
of or relating to: (i) (A) the ownership, operation, or condition
at any time on or prior to the Closing Date of the Facilities or
any other properties and assets (whether real, personal, or mixed
and whether tangible or intangible) in which Sellers or any
Acquired Company has or had an interest, or (B) any Hazardous
Materials or other contaminants that were present on the
Facilities or such other properties and assets at any time on or
prior to the Closing Date; or (ii) (A) any Hazardous Materials or
other contaminants, wherever located, that were, or were
allegedly, generated, transported, stored, treated, Released, or
otherwise handled by Sellers or any Acquired Company or by any
other Person for whose conduct they are or may be held responsible
at any time on or prior to the Closing Date, or (B) any Hazardous
Activities that were, or were allegedly, conducted by Sellers or
any Acquired Company or by any other Person for whose conduct they
are or may be held responsible; or
(b) any bodily injury (including illness, disability, and death,
and regardless of when any such bodily injury occurred, was
incurred, or manifested itself), personal injury, property damage
(including trespass, nuisance, wrongful eviction, and deprivation
of the use of real property), or other damage of or to any Person,
including any employee or former employee of Sellers or any
Acquired Company or any other Person for whose conduct they are or
may be held responsible, in any way arising from or allegedly
arising from any Hazardous Activity conducted or allegedly
conducted with respect to the Facilities or the operation of the
Acquired Companies prior to the Closing Date, or from Hazardous
Material that was (i) present or suspected to be present on or
before the Closing Date on or at the Facilities (or present or
suspected to be present on any other property, if such Hazardous
Material emanated or allegedly emanated from any of the Facilities
and was present or suspected to be present on any of the
Facilities on or prior to the Closing Date) or (ii) Released or
allegedly Released by Sellers or any Acquired Company or any other
Person for whose conduct they are or may be held responsible, at
any time on or prior to the Closing Date.
Buyer will be entitled to control any Cleanup, any related
Proceeding, and, except as provided in the following sentence, any
other Proceeding with respect to which indemnity may be sought
under this Section 10.3. The procedure described in Section 10.9
will apply to any claim solely for monetary damages relating to a
matter covered by this Section 10.3.
10.4 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER
Buyer will indemnify and hold harmless Sellers, and will pay to
Sellers the amount of any Damages arising, directly or indirectly,
from or in connection with (a) any Breach of any representation or
warranty made by Buyer in this Agreement or in any certificate
delivered by Buyer pursuant to this Agreement, (b) any Breach by
Buyer of any covenant or obligation of Buyer in this Agreement, or
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by such Person with Buyer
(or any Person acting on its behalf) in connection with any of the
Contemplated Transactions.
10.5 TIME LIMITATIONS
If the Closing occurs, Sellers will have no liability (for
indemnification or otherwise) with respect to any representation
or warranty, or covenant or obligation to be performed and
complied with prior to the Closing Date, other than those in
Sections 3.3, 3.11, 3.13, 3.14, and 3.19, unless on or before the
date two years after the Closing Date Buyer notifies Sellers of a
claim specifying the factual basis of that claim in reasonable
detail to the extent then known by Buyer; a claim with respect to
Section 3.3, 3.11, 3.13, 3.14, or 3.19, or a claim for
indemnification or reimbursement not based upon any representation
or warranty or any covenant or obligation to be performed and
complied with prior to the Closing Date, may be made at any time.
If the Closing occurs, Buyer will have no liability (for
indemnification or otherwise) with respect to any representation
or warranty, or covenant or obligation to be performed and
complied with prior to the Closing Date, unless on or before the
date two years after the Closing Date Sellers notify Buyer of a
claim specifying the factual basis of that claim in reasonable
detail to the extent then known by Sellers.
10.6 LIMITATIONS ON AMOUNT--SELLERS
Sellers will have no liability (for indemnification or otherwise)
with respect to the matters described in clause (a), clause (b),
clause (d) or, to the extent relating to any failure to perform or
comply prior to the Closing Date, clause (c) of Section 10.2 until
the total of all Damages with respect to such matters exceeds
$10,000, and then for the full amount of such Damages. However,
this Section 10.6 will not apply to any Breach of any of Sellers'
representations and warranties of which either Seller had
Knowledge at any time prior to the date on which such
representation and warranty is made or any intentional Breach by
either Seller of any covenant or obligation, and Sellers will be
jointly and severally liable for all Damages with respect to such
Breaches.
10.7 LIMITATIONS ON AMOUNT--BUYER
Buyer will have no liability (for indemnification or otherwise)
with respect to the matters described in clause (a) or (b) of
Section 10.4 until the total of all Damages with respect to such
matters exceeds $10,000, and then for the full amount of such
Damages. However, this Section 10.7 will not apply to any Breach
of any of Buyer's representations and warranties of which Buyer
had Knowledge at any time prior to the date on which such
representation and warranty is made or any intentional Breach by
Buyer of any covenant or obligation, and Buyer will be liable for
all Damages with respect to such Breaches.
10.8 RIGHT OF SET-OFF
Upon notice to Sellers specifying in reasonable detail the basis
for such set-off, Buyer may set off any amount to which it may be
entitled under this Section 10 against principal payments
otherwise payable under the Promissory Note and against amounts
otherwise payable under Section 2.6 of this Agreement. The
exercise of such right of set-off by Buyer in good faith, whether
or not ultimately determined to be justified, will not constitute
an event of default under the Promissory Note or any instrument
securing the Promissory Note or a breach of this Agreement.
Neither the exercise of nor the failure to exercise such right of
set-off will constitute an election of remedies or limit Buyer in
any manner in the enforcement of any other remedies that may be
available to it.
10.9 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS
(a) Promptly after receipt by an indemnified party under Section
10.2, 10.4, or (to the extent provided in the last sentence of
Section 10.3) Section 10.3 of notice of the commencement of any
Proceeding against it, such indemnified party will, if a claim is
to be made against an indemnifying party under such Section, give
notice to the indemnifying party of the commencement of such
claim, but the failure to notify the indemnifying party will not
relieve the indemnifying party of any liability that it may have
to any indemnified party, except to the extent that the
indemnifying party demonstrates that the defense of such action is
prejudiced by the indemnified party's failure to give such notice.
(b) If any Proceeding referred to in Section 10.9(a) is brought
against an indemnified party and it gives notice to the
indemnifying party of the commencement of such Proceeding, the
indemnifying party will, unless the claim involves Taxes, be
entitled to participate in such Proceeding and, to the extent that
it wishes (unless (i) the indemnifying party is also a party to
such Proceeding and the indemnified party determines in good faith
that joint representation would be inappropriate, or (ii) the
indemnifying party fails to provide reasonable assurance to the
indemnified party of its financial capacity to defend such
Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel
satisfactory to the indemnified party and, after notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such Proceeding, the indemnifying party will
not, as long as it diligently conducts such defense, be liable to
the indemnified party under this Section 10 for any fees of other
counsel or any other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by the indemnified
party in connection with the defense of such Proceeding, other
than reasonable costs of investigation. If the indemnifying party
assumes the defense of a Proceeding, (i) it will be conclusively
established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to
indemnification; (ii) no compromise or settlement of such claims
may be effected by the indemnifying party without the indemnified
party's consent unless (A) there is no finding or admission of any
violation of Legal Requirements or any violation of the rights of
any Person and no effect on any other claims that may be made
against the indemnified party, and (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying party;
(iii) the indemnified party will have no liability with respect to
any compromise or settlement of such claims effected without its
consent and (iv) the indemnified party will cooperate with the
indemnifying party in connection with such defense and provide it
with such information as it reasonably requests. If notice is
given to an indemnifying party of the commencement of any
Proceeding and the indemnifying party does not, within ten days
after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will be bound by any
determination made in such Proceeding or any compromise or
settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability
that a Proceeding may adversely affect it or its affiliates other
than as a result of monetary damages for which it would be
entitled to indemnification under this Agreement, the indemnified
party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise, or settle such Proceeding,
but the indemnifying party will not be bound by any determination
of a Proceeding so defended or any compromise or settlement
effected without its consent (which may not be unreasonably
withheld).
(d) Sellers hereby consent to the non-exclusive jurisdiction of
any court in which a Proceeding is brought against any Indemnified
Person for purposes of any claim that an Indemnified Person may
have under this Agreement with respect to such Proceeding or the
matters alleged therein, and agree that process may be served on
Sellers with respect to such a claim anywhere in the world.
10.10 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS
A claim for indemnification for any matter not involving a third-
party claim may be asserted by notice to the party from whom
indemnification is sought.
11. GENERAL PROVISIONS
11.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each
party to this Agreement will bear its respective expenses incurred
in connection with the preparation, execution, and performance of
this Agreement and the Contemplated Transactions, including all
fees and expenses of agents, representatives, counsel, and
accountants, except that Buyer shall pay the legal fees of the
Company owing to Xxxxxx & Xxxxxxxx as follows: $10,000 upon
execution of this Agreement and up to an additional $10,000 at
such time as Sellers become irrevocably obligated to consummate
the transactions contemplated hereby. Sellers will cause the
Acquired Companies not to incur any out-of-pocket expenses in
connection with this Agreement. In the event of termination of
this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from
a breach of this Agreement by another party.
11.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at
all, at such time and in such manner as Buyer determines. Unless
consented to by Buyer in advance or required by Legal
Requirements, prior to the Closing Sellers shall, and shall cause
the Acquired Companies to, keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to
any Person. Sellers and Buyer will consult with each other
concerning the means by which the Acquired Companies' employees,
customers, and suppliers and others having dealings with the
Acquired Companies will be informed of the Contemplated
Transactions, and Buyer will have the right to be present for any
such communication.
11.3 CONFIDENTIALITY
Between the date of this Agreement and the Closing Date, Buyer and
Sellers will maintain in confidence, and will cause the directors,
officers, employees, agents, and advisors of Buyer and the
Acquired Companies to maintain in confidence, and not use to the
detriment of another party or an Acquired Company any written,
oral, or other information obtained in confidence from another
party or an Acquired Company in connection with this Agreement or
the Contemplated Transactions, unless (a) such information is
already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available
through no fault of such party, (b) the use of such information is
necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the
Contemplated Transactions, or (c) the furnishing or use of such
information is required by or necessary or appropriate in
connection with legal proceedings.
If the Contemplated Transactions are not consummated, each party
will return or destroy as much of such written information as the
other party may reasonably request. Whether or not the Closing
takes place, Sellers waive, and will upon Buyer's request cause
the Acquired Companies to waive, any cause of action, right, or
claim arising out of the access of Buyer or its representatives to
any trade secrets or other confidential information of the
Acquired Companies except for the intentional competitive misuse
by Buyer of such trade secrets or confidential information.
11.4 CERTAIN POST-CLOSING OBLIGATIONS
(a) Sellers will not sell convey, assign, transfer or otherwise
dispose of the Promissory Note without the prior consent of Buyer.
(b) Buyer shall provide, or shall cause the Company to provide,
medical insurance for Xxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxxx,
on substantially the same terms as currently provide such
individuals, for such time as the Promissory Note remains
outstanding or such individual reaches 65 years of age, whichever
is earlier.
11.5 NOTICES
All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been
duly given when (a) delivered by hand (with written confirmation
of receipt), (b) sent by telecopier (with written confirmation of
receipt), provided that a copy is mailed by registered mail,
return receipt requested, or (c) when received by the addressee,
if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and
telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other
parties):
Sellers:
Xxxxx X. and Xxxxxxx Xxxxxxxx
00 Xxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
with a copy to:
Xxxxxx & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx, #000
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Xx., Esq.
Facsimile No.: (000) 000-0000
Buyer:
United Xxxxxxx Corporation
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Shohl LLP
1900 Chemed Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Xx., Esq.
Facsimile No.: (000) 000-0000
11.6 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Agreement may be brought
against any of the parties in the courts of the State of Ohio,
County of Xxxxxxxx, or, if it has or can acquire jurisdiction, in
the United States District Court for the Southern District of
Ohio, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such
action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the
world.
11.7 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other such
further information, (b) to execute and deliver to each other such
other documents, and (c) to do such other acts and things, all as
the other party may reasonably request for the purpose of carrying
out the intent of this Agreement and the documents referred to in
this Agreement.
11.8 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under
this Agreement or the documents referred to in this Agreement will
operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege
will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement or the
documents referred to in this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no
waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to
or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand
as provided in this Agreement or the documents referred to in this
Agreement.
11.9 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties
with respect to its subject matter (including the Letter of Intent
between Buyer and Sellers dated June 16, 1999) and constitutes
(along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
11.10 DISCLOSURE LETTER
(a) The disclosures in the Disclosure Letter, and those in any
Supplement thereto, must relate only to the representations and
warranties in the Section of the Agreement to which they expressly
relate and not to any other representation or warranty in this
Agreement.
(b) In the event of any inconsistency between the statements in
the body of this Agreement and those in the Disclosure Letter
(other than an exception expressly set forth as such in the
Disclosure Letter with respect to a specifically identified
representation or warranty), the statements in the body of this
Agreement will control.
11.11 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this Agreement
without the prior written consent of the other parties except that
Buyer may assign any of its rights under this Agreement to any
Subsidiary of Buyer. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and
inure to the benefit of the successors and permitted assigns of
the parties. Nothing expressed or referred to in this Agreement
will be construed to give any Person other than the parties to
this Agreement any legal or equitable right, remedy, or claim
under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions
are for the sole and exclusive benefit of the parties to this
Agreement and their successors and assigns.
11.12 SEVERABILITY
If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect.
Any provision of this Agreement held invalid or unenforceable only
in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
11.13 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections" refer to
the corresponding Section or Sections of this Agreement. All words
used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words
or terms.
11.14 TIME OF ESSENCE
With regard to all dates and time periods set forth or referred to
in this Agreement, time is of the essence.
11.15 GOVERNING LAW
This Agreement will be governed by the laws of the State of Ohio
without regard to conflicts of laws principles.
11.16 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original copy of this Agreement
and all of which, when taken together, will be deemed to
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer: Sellers:
UNITED XXXXXXX CORPORATION /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
By: /s/Xxxxxx X. Xxxxxxxxx, Xx./s/ Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxxx, Xx. Xxxxxxx X. Xxxxxxxx
The Xxxxx X. Xxxxxxxx
Revocable Trust
By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
The Xxxxxxx X. Xxxxxxxx
Revocable Trust
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxxx Family Nominee Trust
By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
EXHIBITS
[To be delivered prior to the Closing]
2.4(a)(ii) Releases
2.4(a)(iii) Form of Employment Agreement
2.4(a)(iv) Form of Noncompetition Agreement
2.4(b)(ii) Form of Promissory Note
2.5 Real Estate Purchase Agreement
2.7 Stock Option Agreement
7.4(a) Opinion of Seller's counsel
8.4(a) Opinion of Buyer's counsel
