ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is entered into this
23rd day of March, 1999 by and between THERMOVIEW INDUSTRIES, INC., (the
"Buyer"), a Delaware corporation, THERMO-SHIELD COMPANY, INC., an Illinois
corporation and THERMO-SHIELD OF AMERICA (WISCONSIN), INC., a Wisconsin
corporation (together, the "Sellers").
PRELIMINARY STATEMENTS:
The Sellers are engaged in the business of designing, selling and
installing state of the art custom vinyl new and replacement thermal paned
windows; replacement cabinet doors and cabinet refacing supplies; and vinyl
siding for the existing home market (the "Business");
The Sellers desire to sell or otherwise transfer certain of their
assets related to the Business to Buyer;
The Buyer desires to assign its rights to acquire the Illinois
Transferred Assets (defined below) to T-Shield Illinois, LLC, an Illinois
limited liability company and an affiliate of Buyer to be known as
"Thermo-Shield Company, LLC", and its rights to acquire the Wisconsin
Transferred Assets (defined below) to T-Shield Wisconsin, LLC, a Wisconsin
limited liability company and an affiliate of Buyer to be known as
"Thermo-Shield of America (Wisconsin), LLC; and
Concurrently with the transactions contemplated in this Agreement,
Buyer and Xxxx X. Xxxx and Xxxxxxxx X. Xxxx have entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement"), pursuant to which
ThermoView has agreed to purchase all of the issued and outstanding stock of
Thermo-Shield of America (Arizona), Inc., an Arizona corporation and
Thermo-Shield of America (Michigan), Inc., a Michigan corporation.
In consideration of these preliminary statements and the mutual
covenants, representations, warranties and agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:
ARTICLE I. PURCHASE AND SALE OF ASSETS
SECTION 1.1 TRANSFER OF ASSETS.
(a) Upon the terms and subject to the conditions set forth
in this Agreement, at the Effective Time (as hereinafter defined) the Sellers
shall transfer to the Buyer, free and clear of all claims, charges, liens,
contracts, rights, options, security interests, mortgages, encumbrances and
restrictions whatsoever (collectively, "Claims"), all of the assets,
properties
and rights owned by the Sellers or in which the Sellers have any right or
interest of every type and description, real, personal and mixed, tangible
and intangible, confirmed or contingent, (other than the Excluded Assets as
hereinafter defined), including, without limitation, business agreements, p
roperty, Inventory (as defined in Section 2.29), the Accounts Receivable (as
defined in Section 2.30), including all receivables from employees, goodwill,
supplier lists, customer lists, prepaid insurance, licenses and permits,
processes, service marks, know-how, show-how, trade secrets, software
(including, without limitation, documentation and related source and object
codes), licenses thereto, computers and computer equipment, files and other
records, systems and processes, security deposits, contracts, arrangements
and understandings, oral and written, formal and informal, for work to be
performed and/or services to be provided, real estate and interests therein,
leasehold and other improvements, machines, machinery, equipment, furniture,
fixtures, supplies, all health insurance plans, all rights and claims under
insurance policies and other contracts of whatever nature, all causes of
action, claims and demands of every nature relating to the assumed
Liabilities, Contracts and Leases (as hereinafter defined), the right to use
the names "Thermo-Shield Company, Inc." or "Thermo-Shield of America
(Wisconsin), Inc." or any derivative thereof, and all other assets,
properties and rights of every kind and nature owned by the Sellers,
including the shares of stock of Thermo-Rose Manufacturing Co., Inc., an
Illinois corporation, held by Thermo-Shield Company, Inc., whether or not
specifically referred to in this Agreement (collectively, the "Transferred
Assets"; the separate assets of Thermo-Shield Company, Inc. shall sometimes
hereinafter be referred to herein as the "Illinois Transferred Assets" and
the separate assets of Thermo-Shield of America (Wisconsin), Inc. shall
sometimes hereinafter be referred to as the "Wisconsin Transferred Assets"),
all with the intention that the Business shall be transferred to the Buyer as
a going concern.
(b) Notwithstanding any provision of this Agreement to the
contrary, there shall be excluded from the Transferred Assets and retained by
the Sellers the following assets (the "Excluded Assets"): (i) all cash on
hand and in banks (including all uncollected items); (ii) all other claims
for services provided to customers prior to the Effective Time; (iii) the
Lease and Sublease of Thermo-Shield Company, Inc. relating to the property
located at 000 Xxxxxxxxx Xxxxx, Xxxxx X, Xxxxxxx, Xxxxxxxx; (iv) Lexus Truck;
(v) life insurance policy of Xxxx X. Xxxx; (vi) promissory note of Xxxx X.
Xxxx in the principal amount of $127,000 payable to Thermo-Shield Company,
Inc.; (vii) all intercompany promissory notes; and (viii) all contracts,
arrangements and understandings which are not capable of being transferred or
assigned without the approval or consent of any party thereto other than the
Sellers if such approval or consent has not been obtained, subject, however,
to Sections 1.3 and 5.1 herein.
(c) Thermo-Shield Company, Inc. shall transfer the Illinois
Transferred Assets to the Buyer, or its assignee, pursuant to a Xxxx of Sale
in substantially the form of EXHIBIT A-1, an Assignment and Assumption
Agreement in substantially the form of EXHIBIT B-1, Lease Assignments in
substantially the form of EXHIBIT C-1 and EXHIBIT C-2 and such other
documents and instruments as the Buyer or its counsel may reasonably request.
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(d) Thermo-Shield of America (Wisconsin), Inc. shall
transfer the Wisconsin Transferred Assets to the Buyer, or its assignee,
pursuant to a Xxxx of Sale in substantially the form of EXHIBIT A-2, an
Assignment and Assumption Agreement in substantially the form of EXHIBIT B-2,
a Lease Assignment in substantially the form of EXHIBIT C-3 and such other
documents and instruments as the Buyer or its counsel may reasonably request.
(e) At any time and from time to time after the Closing
Date, at the request of the Buyer and without further consideration, the
Sellers shall execute and deliver such other instruments of sale, transfer,
conveyance, assignment and confirmation as may be reasonably requested in
order to more effectively transfer, convey and assign to the Buyer and to
confirm the Buyer's title to the Transferred Assets.
SECTION 1.2 CONSIDERATION FOR THE TRANSFERRED ASSETS AND SECURITY.
In consideration for the transfer of the Transferred Assets, upon the terms
and subject to the conditions set forth in this Agreement, the Buyer shall
assume the Assumed Liabilities pursuant to Section 1.3 hereof and shall make
a payment of Six Hundred Thousand Dollars ($600,000) to Thermo-Shield
Company, Inc. and One Hundred Thousand Dollars ($100,000) to Thermo-Shield of
America (Wisconsin), Inc. ( together, the "Purchase Price"), which shall be
delivered to the Sellers in the form of a promissory note in substantially
the form attached hereto as EXHIBIT D. Buyer's obligations hereunder shall
be secured by Security Agreements in substantially the form attached hereto
as EXHIBIT E and a Pledge of Membership Interests of T-Shield Illinois, LLC
and T-Shield Wisconsin, LLC in substantially the form attached hereto as
EXHIBIT F.
SECTION 1.3 ASSUMPTION OF LIABILITIES. The only obligations and
liabilities to be assumed by the Buyer in connection with its acquisition of
the Illinois Transferred Assets (the "Illinois Assumed Liabilities") and the
Wisconsin Transferred Assets (the "Wisconsin Assumed Liabilities") are the
obligations and liabilities specifically listed on SCHEDULE 1.3 and
obligations and liabilities arising from the operation of the Business after
the Effective Date, including obligations under executory contracts listed on
SCHEDULE 1.3 arising from the operation of the Business after the Effective
Date (provided such contracts are not in default and are assigned in writing
by the Sellers with the written consent of the other party or parties
thereto, if necessary, and are delivered to the Buyer on or prior to the
Effective Date).
The Buyer shall assume such obligations and liabilities pursuant to
the Assignment and Assumption Agreements substantially in the form of EXHIBIT
B-1 and EXHIBIT B-2 and the Lease Assignments in substantially the form of
EXHIBIT C(1), EXHIBIT C(2), and EXHIBIT C(3). The Sellers shall remain liable
for the payment of all other liabilities and obligations which accrue prior to
or subsequent to the Effective Date. Except for the Illinois Assumed
Liabilities and the Wisconsin Assumed Liabilities in the amount and to the
extent provided in this Section 1.3, the Buyer shall not assume or be
responsible for any other liabilities or obligations which relate in any
manner to the operation of the Business prior to the Effective Date, and the
Sellers shall indemnify, defend, and hold the Buyer harmless from all of such
obligations and liabilities as set forth in Section 9.2 below. Operating
expenses, including without limitation rent payable under real estate and
equipment leases, staff commissions, unpaid vacation and holiday pay and
rebates to customers for which bills are received or payment became due after
the Effective Date with respect to
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periods both prior to and after the Effective Date will be allocated to each
of the Sellers on the one hand and the Buyer on the other hand on a pro-rata
basis according to the ratio of pre-Effective Time days to post-Effective
Time days; promptly upon receipt of notice from Buyer of amounts so allocated
to the Sellers, the Sellers shall remit full payment therefor to the Buyer.
SECTION 1.4 ALLOCATION OF PURCHASE PRICE. The considerations paid
and the liabilities assumed by the Buyer pursuant to Sections 1.2 and 1.3
above shall be allocated among the Transferred Assets purchased hereunder as
set forth on SCHEDULE 1.4 attached hereto. The Sellers and the Buyer each
hereby covenant and agree that none of them will take a position on any
income tax return, before any governmental agency, or in any judicial
proceeding that is in any way inconsistent with the allocation set forth on
SCHEDULE 1.4. Each party shall duly and timely file Form 8594 with its
appropriate tax returns.
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
As an inducement to the Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, the Sellers represent and
warrant to the Buyer as follows:
SECTION 2.1 ORGANIZATION AND QUALIFICATION. Thermo-Shield Company,
Inc. is a corporation duly organized, validly existing and in good standing
under the laws of the State of Illinois. Thermo-Shield of America
(Wisconsin), Inc. is a corporation duly organized, validly existing and in
good standing under the laws of the State of Wisconsin. The nature of the
Business or the Transferred Assets does not require the Sellers to be
licensed or qualified in any other jurisdiction. Each of the Sellers has
made available to the Buyer complete and correct copies of its Articles of
Incorporation and By-laws as currently in effect.
SECTION 2.2 CORPORATE POWER AND AUTHORITY. Each of the Sellers has
the corporate power and authority to own and hold its properties and to carry
on its business as now conducted, including in the case of Thermo-Shield
Company, Inc., the right to use the corporate name "Thermo-Shield Company,
Inc." and in the case of Thermo-Shield of America (Wisconsin), Inc. the right
to use the corporate name "Thermo-Shield of America (Wisconsin), Inc." Each
of the Sellers (a) has the corporate power and authority to execute, deliver
and perform this Agreement and the Exhibits and to deliver the Schedules
hereto and other documents and instruments contemplated hereby (collectively
this Agreement, the Exhibits and Schedules hereto, and the other documents
and instruments contemplated hereby shall constitute the "Documents") and to
consummate the transactions contemplated hereby and thereby and (b) has taken
all necessary corporate and shareholder action to authorize and approve the
execution, delivery and performance of this Agreement and the other Documents
and the consummation of the transactions contemplated hereby and thereby.
This Agreement and the other Documents have been duly and validly executed
and delivered by the Sellers and constitute valid and binding obligations of
each of the Sellers, enforceable against the Sellers in accordance with their
terms.
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SECTION 2.3 VALIDITY, ETC. Except as set forth on SCHEDULE 2.3, the
execution and delivery of this Agreement or the other Documents, the
consummation of the transactions contemplated hereby or thereby, the
performance of this Agreement or the other Documents and in compliance with
the terms and conditions hereof and thereof by the Sellers will not (i)
violate, conflict with or result in a breach of any trust agreement, Articles
of Incorporation, bylaw, judgment, decree, order, statute or regulation
applicable to either of the Sellers, (ii) violate, conflict with or result in
a breach, default or termination or give rise to any right of termination,
cancellation or acceleration of the maturity of any payment date of any of
the obligations of either of the Sellers or increase or otherwise affect the
obligations of either of the Sellers under any law, rule, regulation or any
judgment, decree, order, governmental permit, license or order or any of the
terms, conditions or provisions of any mortgage, indenture, note, license,
agreement or other instrument or obligation related to either of the Sellers
or to the Sellers' ability to consummate the transactions contemplated hereby
or thereby, except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have been obtained
in writing and provided to the Buyer, (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to either of the
Sellers or (iv) result in the creation of any Claim upon the Transferred
Assets.
SECTION 2.4 SUBSIDIARIES AND INVESTMENTS. Neither of the Sellers
has any subsidiaries nor do they own, directly or indirectly, any capital
stock or other equity or ownership or proprietary interest in any other
corporation, partnership, association, trust, joint venture, or other entity.
SECTION 2.5 BOOKS AND RECORDS. The minute books of each of the
Sellers, which have been and will be made available to the Buyer and its
representatives, contain accurate records of all meetings of the corporate
actions or written consents by the shareholders and Board of Directors of
each of the Sellers set forth in such minute books.
SECTION 2.6 FINANCIAL STATEMENTS. The Sellers have previously
furnished to the Buyer, and attached hereto as SCHEDULE 2.6 are (a) the
compiled balance sheet of the Thermo-Shield Company, Inc. as at March 31,
1998 and 1997, the related statements of income and expense for the fiscal
years then ended; (b) the compiled balance sheet of Thermo-Shield of America
(Wisconsin), Inc. as at December 31, 1997 and 1996, the related statements of
income and expense for the fiscal years then ended; and (c) the unaudited
balance sheets of each of the Sellers (the "Balance Sheets") as at January
31, 1999 (the "Balance Sheet Date") and the related statements of income and
expense for the two months then ended. All such financial statements
(collectively, the "Financial Statements") have been prepared in accordance
with the standards established by the American Institute of Certified Public
Accountants and were prepared from the books and records of the Sellers.
Such books and records are complete and correct in all material respects,
accurately reflect all transactions of the Business, and have been made
available to the Buyer for examination. The Financial Statements fairly
present the financial position of each of the Sellers as of the dates thereof
and the results of their operations and cash flows for the periods ended on
the dates thereof. Since the Balance Sheet Date (i) there has been no change
in the assets, liabilities or financial condition of the assets of either of
the Sellers from
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that reflected in the Balance Sheets except for changes in the ordinary
course of business consistent with past practice and which have not been
materially adverse, and (ii) none of the business, prospects, financial
condition, operations, property or affairs of either of the Sellers has been
materially adversely affected by any occurrence or development, individually
or in the aggregate, whether or not insured against. Each of the Sellers has
disclosed to the Buyer all material facts relating to the preparation of
their respective Financial Statements.
SECTION 2.7 ABSENCE OF UNDISCLOSED LIABILITIES.
(a) Except as and to the extent of the amounts specifically
reflected or reserved against in the Balance Sheets, or except as set forth
on SCHEDULE 2.7, neither of the Sellers has any liabilities or obligations of
any nature whatsoever due or to become due, accrued, absolute, contingent or
otherwise, except for liabilities and obligations incurred since the date
thereof in the ordinary course of business and consistent with past practice.
Neither of the Sellers knows, or has any reason to know of, any basis for the
assertion against the Sellers of any liability or obligation not fully
reflected or reserved against in the Balance Sheets.
(b) Neither of the Sellers is bound by any agreement, or
subject to any charter or other corporate restriction or any legal
requirement, which has, or in the future can reasonably be expected to have,
a material adverse effect on the business or prospects of either of the
Sellers.
SECTION 2.8 EMPLOYMENT AND LABOR MATTERS.
(a) SCHEDULE 2.8 lists all employees and officers of each of
the Sellers on the date hereof, along with the amount of the current annual
salaries and total compensation paid or due for services to such employee or
officer for the most recent fiscal year end and the year to date, and a full
and complete description of any commitments to such employees and officers
with respect to compensation payable thereafter. To the best knowledge of
the Sellers, except for Xxxxxxxx Xxxx, no key employee or group of employees
has any plans to terminate employment with either of the Sellers.
(b) Neither of the Sellers is a party to or bound by any
collective bargaining agreement with any labor organization, group or
association covering any of its employees, nor do the Sellers have any
knowledge of any attempt to organize either of the Sellers' employees by any
Person, unit or group seeking to act as their bargaining agent. There are no
pending or, to the best knowledge of the Sellers, threatened charges (by
employees, their representatives or governmental authorities) of unfair labor
practices or of employment discrimination or of any other wrongful action
with respect to any aspect of employment of any person employed or formerly
employed by either of the Sellers. No union representation election relating
to employees of either of the Sellers has been scheduled by any governmental
agency or authority, no organizational effort is being made with respect to
any of such employees, and there is no investigation of either of the
Sellers' employment policies or practices by any governmental
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agency or authority pending or threatened. Neither of the Sellers is
currently, nor have they been, involved in labor negotiations with any unit
or group seeking to become the bargaining unit for any employees of either of
the Sellers. Neither of the Sellers has experienced any material work
stoppages, and to the best knowledge of Sellers, no work stoppage is planned.
Each of the Sellers has complied with all material laws and regulations
relating to the employment of labor, including, without limitation, any
provisions thereof relating to wages, hours, employment practices, terms and
conditions of employment, collective bargaining, equal opportunity or similar
laws and the payment of social security and similar taxes, and is not liable
for any material arrears of wages or any material taxes or penalties for
failure to comply with any of the foregoing.
SECTION 2.9 REAL PROPERTY. Neither of the Sellers owns any real
property.
SECTION 2.10 POWERS OF ATTORNEY; ABSENCE OF LIMITATIONS ON
COMPETITION; GUARANTEES.
Except as set forth in SCHEDULE 2.10, (i) no power of attorney or
similar authorization given by either of the Sellers presently is in effect
or outstanding; (ii) no contract or agreement to which either of the Sellers
is a party or is bound or to which either of the Sellers' properties or
assets are subject limits the freedom of either of the Sellers to compete in
any line of business or with any Person; and (iii) neither of the Sellers is
a party to our bound by any guarantee of any debt or obligation of any other
Person.
SECTION 2.11 SIGNIFICANT SUPPLIERS AND CUSTOMERS. Set forth on
SCHEDULE 2.11 is a true and correct list of each of the Sellers' ten largest
suppliers for the twelve month period ending December 31, 1998 and the two
month period ending February 28, 1999, together with the amount of services
attributable to such suppliers expressed in dollars and as a percentage of
total sales and services. None of the suppliers identified on SCHEDULE 2.11
has terminated, materially reduced or threatened to terminate or materially
reduce its supplies to the Sellers during the period covered by such
schedule. Also, set forth on SCHEDULE 2.11 is a true and correct list of the
Sellers' five largest lead sources for the twelve (12) month period ending
December 31, 1998 and two month period ending January 31, 1999, together with
the amount attributable to such lead sources expressed in number of leads and
as a percentage of total leads. None of the customers identified on SCHEDULE
2.11 has terminated or threatened to terminate its relationship of either of
the Sellers during the period covered by such schedule.
SECTION 2.12 GOVERNMENTAL APPROVALS. No registration or filing with,
or consent or approval of or other action by, any Federal, state or other
governmental agency or instrumentality is or will be necessary for the valid
execution, delivery and performance by the Sellers of this Agreement.
SECTION 2.13 ABSENCE OF ADVERSE CHANGE; CONDUCT OF BUSINESS. During
the period from the Balance Sheet Date to and including the date of this
Agreement, except as set forth on SCHEDULE 2.13, neither of the Sellers has
(i) borrowed or agreed to borrow any material amount
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of funds or incurred any material liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), or guaranteed or agreed
to guarantee any obligations of others, (ii) canceled any indebtedness owing
to it or any claims that it might have possessed, waived any material rights
of substantial value or sold, leased, encumbered, transferred or otherwise
disposed of, or agreed to sell, lease, encumber, or otherwise dispose of its
assets or permitted any of its assets to be subjected to any mortgage,
pledge, lien, security interest, encumbrance, restriction or charge of any
kind, (iii) made any capital expenditure or commitment therefor, (iv)
increased its indebtedness for borrowed money or made any loan to any Person,
except advances to employees in the ordinary course of business and
consistent with past practices, which are set forth on SCHEDULE 2.30 (v)
written off as uncollectible any notes or accounts receivable, except
write-offs in the ordinary course of business charged to applicable reserves,
(vi) made any material change in any method of accounting or auditing
practice, except as may be required by Buyer, (vii) otherwise conducted its
business or entered into any transaction, except in the usual and ordinary
manner, or (viii) agreed, whether or not in writing, to do any of the
foregoing.
SECTION 2.14 CERTAIN PRACTICES. Neither of the Sellers, the Sellers'
directors or officers, or to the best knowledge of the Sellers, the Sellers'
employees have, directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to
political activity; made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties
or campaigns from corporate funds; violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; established or maintained any
unlawful or unrecorded fund of corporate monies or other assets; made any
false of fictitious entry on the books or records of either of the Sellers or
any subsidiary; made any bribe, rebate, payoff, influence payment, kickback,
or other unlawful payment; given any favor or gift which is not deductible
for federal income tax purposes; or made any bribe, kickback, or other
payment of a similar or comparable nature, whether lawful or not, to any
person or entity, private or public, regardless of form, whether in money,
business or to obtain special concessions, or to pay for favorable treatment
for business secured or for special concessions already obtained.
SECTION 2.15 COMPLIANCE WITH LAW; LICENSES AND PERMITS. Except as
set forth on SCHEDULE 2.15, each of the Sellers has complied in all material
respects with all laws, ordinances, legal requirements, rules, regulations
and orders applicable to it, its operations, properties, assets, products and
services. Except as set forth on SCHEDULE 2.15, there is no existing law,
rule, regulation or order, and neither of the Sellers is aware of any
proposed law, rule, regulation or order, whether Federal, state or local,
which would prohibit or materially restrict the Buyer from, or otherwise
materially adversely affect the Buyer in, conducting the Business in the
manner heretofore conducted by the Sellers in any jurisdiction in which the
Business is not conducted. Each of the Sellers possesses all franchises,
permits, licenses, certificates, and consents required from any governmental
or regulatory authority in order for the Sellers to carry on their businesses
as currently conducted and to own and operate their properties and assets as
now owned and operated and all of such licenses and permits are set forth on
SCHEDULE 2.15.
SECTION 2.16 EMPLOYEE BENEFITS.
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(a) Set forth on SCHEDULE 2.16 is a list of all pension,
profit sharing, retirement, deferred compensation, multiemployer (as defined
under ERISA), stock purchase, stock option, incentive, bonus, vacation,
severance, disability, hospitalization, medical insurance, life insurance,
fringe benefit, welfare and other employee benefit plans, programs or
arrangements pursuant to which either of the Sellers or its ERISA Affiliates
provides (directly or indirectly, individually or jointly through others)
benefits or compensation to or on behalf of employees or independent
contractors or former employees or former independent contractors of either
of the Sellers or its ERISA Affiliates, whether formal or informal, whether
or not written ("Employee Plan"). On request by the Buyer, the Sellers shall
furnish a copy of each Employee Plan and a copy of any related materials.
The Sellers will maintain the benefits listed on SCHEDULE 2.16 in full force
and effect through the Effective Date. The Buyer shall have no obligation or
liability of any kind or nature for any compensation or benefits of any kind
or nature to the employees or independent contractors of the Sellers for
services rendered prior to the Effective Date.
(b) Each Employee Plan covering any present or former
employee of the Sellers which is subject to continuation health coverage
requirements of Section 4980B of the Code or Section 601 of ERISA or any
applicable state law has complied with all such requirements for continuation
coverage.
(c) Each Employee Plan has been administered and maintained
in accordance with its terms and with applicable law. No Employee Plan has
unfunded liabilities that as of the Closing Date are not accurately and fully
reflected on the Sellers' Balance Sheets.
(d) Neither the Sellers nor any of their ERISA Affiliates is
or had been a participant in, or is or has been obligated to maintain or to
make contributions to, a multiemployer plan (within the meaning of ERISA
Section 3(37) and ERISA Section 4001(a)(3) or an Employee Plan which is
subject to Title IV of ERISA. Neither the Sellers nor any ERISA Affiliate
has sponsored, contributed to or been obligated under Title I or IV of ERISA
to contribute to a "defined benefit plan" (as defined in ERISA Section 3(35).
(e) Neither the Sellers nor their ERISA Affiliates have
entered into any contract, agreement or arrangement (whether oral or written)
under which either of the Sellers or their ERISA Affiliates have assumed any
liability relating to their clients' retirement plans, nor have the Sellers
and/or their ERISA Affiliates made any verbal representations that the use of
any employees of the Sellers or their ERISA Affiliates would have no adverse
consequence on such client retirement plans.
(f) Neither of the Sellers nor their ERISA Affiliates is
subject to and, to the best knowledge of the Sellers, no facts exist which
could subject either of the Sellers or any of their ERISA Affiliates to, any
liability whatsoever which is directly or indirectly related to any Employee
Plan, including, but not limited to, liability for benefit payments or
related claims, any liability for any tax or related penalty under the Code,
or liability for any damages or penalties arising under Title I or Title IV
of ERISA.
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(g) Termination or withdrawal from any Employee Plan
immediately after the Closing Date would not subject the Buyer to any
liability, tax or penalty whatsoever.
(h) For purposes of this Section 2.16, the term "ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as amended,
and the term "ERISA Affiliate" shall mean each trade or business (whether or
not incorporated) which together with the Sellers is treated as a single
employer under Section 414(b), (c), (m), (o) or (t) of the Code.
SECTION 2.17 FIXED ASSETS. SCHEDULE 2.17 contains a true and
complete list of all of the Transferred Assets which are fixed assets with a
net book value of greater than $1,000.00, whether owned or leased. Except as
shown on SCHEDULE 2.17, each of the Sellers has good and marketable title to
all of its fixed assets, free and clear of all claims, liens, mortgages,
charges and encumbrances except as disclosed in the Balance Sheets. All of
the Sellers' fixed assets, whether owned or leased, are adequate and usable
for the purposes for which they are currently used, are in good operating
condition and repair and have been properly maintained.
SECTION 2.18 INSURANCE. The Sellers are, and will be through the
Effective Date, insured with insurers in respect of their respective
properties, assets and businesses as set forth on the attached SCHEDULE 2.18.
SCHEDULE 2.18 lists the insurance coverage carried by each of the Sellers,
which insurance will remain in full force and effect with respect to all
events occurring prior to the Effective Date. Except as set forth on
SCHEDULE 2.18, neither of the Sellers (i) has failed to give any notice or
present any claim under any such policy or binder in due and timely fashion,
(ii) has received notice of cancellation or non-renewal of any such policy or
binder, (iii) is aware of any threatened or proposed cancellation or
non-renewal of any such policy or binder, (iv) has received notice of any
insurance premium which will be materially increased in the future, (v) is
aware of any insurance premium which will be materially increased in the
future. Thee are no outstanding claims under any such policy which have gone
unpaid for more than 45 days, or as to which the insurer has disclaimed
liability.
SECTION 2.19 OUTSTANDING CONTRACTS. SCHEDULE 2.19 sets forth a
description of all existing contracts, agreements, leases (other than leases
of real property), commitments, licenses and franchises, which involve
obligations or commitments by either of the Sellers of $10,000 or more and
are not cancelable by such Seller without penalty within 30 days
(collectively "Contracts"), whether written or oral, relating to the Sellers.
The Sellers have delivered or made available to the Buyer true correct and
complete copies of all of the Contracts specified on SCHEDULE 2.19 which are
in writing. All of the Contracts are in full force and effect and
enforceable in accordance with their terms, except to the extent that the
enforceability thereof may be subject to or affected by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or
other laws relating to or affecting the rights of creditors generally.
Except as set forth on SCHEDULE 2.19, each of the Sellers and, to the best
knowledge of the Sellers, each other party thereto has materially performed
all the obligations required to be performed by it, has received no notice of
default and is not in default (with due notice or lapse of time or both)
under any of the Contracts. Neither of the Sellers has any present
expectation or intention of not fully performing all its obligations under
each of the Contracts, and neither of the
10
Sellers have any knowledge of any breach or anticipated breach by the other
party to any of the Contracts to which either of the Sellers is a party.
Except as set forth on SCHEDULE 2.19, none of the Contracts has been
terminated; no notice has been given by any party thereto of any alleged
default by any party thereunder; and neither of the Sellers is aware of any
intention or right of any party to declare another party to any of the
Contracts to be in default. Except as set forth on SCHEDULE 2.19, there
exists no actual or, to the best knowledge of the Sellers, threatened
termination, cancellation or limitation of the business relationship of
either of the Sellers by any party to any of the Contracts.
SECTION 2.20 OUTSTANDING LEASES. SCHEDULE 2.20 sets forth a
description of each agreement by which the either of the Sellers leases each
parcel of real property (the "Leased Parcels") used in connection with the
Business (collectively, the "Leases"). The Sellers have delivered or made
available to the Buyer true, correct and complete copies of all of the Leases
specified on SCHEDULE 2.20. All rents due under the Leases have been paid.
All of the Leases are in full force and effect and enforceable in accordance
with their terms, except to the extent that the enforceability thereof may be
subject to or affected by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, or other laws relating to or
affecting the rights of creditors generally. Except as set forth on SCHEDULE
2.20, each of the Sellers and to the best knowledge of the Sellers, each
other party thereto has performed all the obligations required to be
performed by it, has received no notice of default and is not in default
(with due notice or lapse of time or both) under any of the Leases. Neither
of the Sellers has any present expectation or intention of not fully
performing all its obligations under each of the Leases, and neither of the
Sellers has any knowledge of any breach or anticipated breach by the other
party to any of the Leases. Except as set forth on SCHEDULE 2.20, none of
the Leases has been terminated; no notice has been given by any party thereto
of any alleged default by any party thereunder; and neither of the Sellers is
aware of any intention or right of any part to declare another party to any
of the Leases to be in default. There exists no actual or, to the best
knowledge of the Sellers, threatened termination, cancellation or limitation
of the business relationship of either of the Sellers with any party to any
of the Leases.
SECTION 2.21 INTELLECTUAL PROPERTIES. SCHEDULE 2.21 contains an
accurate and complete list of all domestic and foreign letters patent,
patents, patent applications, patent licenses, software licenses and know-how
licenses, trade names, trademarks, copyrights, unpatented inventions, service
marks, trademark registrations and applications, service xxxx registrations
and applications and copy right registrations and applications, trade secrets
or other confidential proprietary information owned or used by either of the
Sellers in the operation of the Business (collectively the "Intellectual
Property"). Except as set forth on SCHEDULE 2.21 and except for commercial
software licensed for use on personal computers, the Sellers collectively own
the entire right, title and interest in and to the Intellectual Property and
trade secrets and technology which is owned by such Seller has been, to the
extent indicated in SCHEDULE 2.21, duly registered with, filed in or issued
by, as the case may be, the United States Patent and Trademark office or such
other government entities, domestic or foreign, as are indicated in SCHEDULE
2.21 and such registrations, filings and issuances remain in full force and
effect. There have not been and there are no pending or, to the best
knowledge of the Sellers, threatened proceedings or litigation or other
adverse claims affecting or with respect to the Intellectual
11
Property. There is, to the best knowledge of the Sellers, no reasonable
basis upon which a claim may be asserted against either of the Sellers for
infringement of any domestic or foreign letters patent, patents, patent
applications, common law trademarks, service marks, service xxxx
registrations or applications, copyrights, copyright registrations or
applications, trade secrets or other confidential proprietary information. To
the best knowledge of the Sellers, no Person is infringing the Intellectual
Property.
SECTION 2.22 PROPRIETARY INFORMATION OF THIRD PARTIES. Except as
disclosed on SCHEDULE 2.22, no third party has claimed or, to the best
knowledge of the Sellers, has reason to claim that any Person employed by or
consulting with either of the Sellers ("Related Person") has (i) violated or
may be violating any of the terms or conditions of such person's employment,
non-competition or non-disclosure agreement with such third party, (ii)
disclosed or may be disclosing or utilized or may be utilizing any trade
secret or proprietary information or documentation of such third party, or
(iii) interfered or may be interfering in the employment relationship between
such third party and any of its present or former employees. No third party
has requested information from either of the Sellers which suggests that such
a claim might be contemplated. Except as disclosed on SCHEDULE 2.22, to the
best knowledge of the Sellers, no Related Person has employed or proposes to
employ any trade secret or any information or documentation proprietary to
any former employer and no Related Person has violated any confidential
relationship with such person may have had with any third party, in
connection with the development or sale of any service of either of the
Sellers, and neither of the Sellers has reason to believe there will be any
such employment or violation.
SECTION 2.23 TRANSACTIONS WITH AFFILIATES. Except as set forth on
SCHEDULE 2.23, no director, officer or shareholder of either of the Sellers,
or member of the family of any such person, or any corporation, partnership,
trust or other entity in which any such person, or any member of the family
of any such person, has a beneficial interest greater than 5% or is an
officer, director, trustee, partner or holder of any equity interest greater
than 5%, is a party to any transaction with either of the Sellers, including
any contract, agreement or other arrangement providing for the employment of,
furnishing of services by, rental of real or personal property from or
otherwise requiring payments or involving other obligations to any such
person or firm.
SECTION 2.24 TAXES. Each of the Sellers is and has been taxed as a C
Corporation for all periods preceding the Closing Date. SCHEDULE 2.24 lists
all the states and localities with respect to which each of the Sellers is
required to file any corporate, income and/or franchise tax returns. Except
as set forth on SCHEDULE 2.24, all federal, state, local and foreign tax
returns and tax reports are required to be filed by the Sellers on or before
the date hereof have been timely filed with the appropriate governmental
agencies in all jurisdictions in which such returns and reports are required
to be filed and all amounts shown as owing thereon have been paid. All taxes
(including, without limitation, income, accumulated earnings, property,
sales, use, franchise, excise, license, value added, fuel, employees' income
withholding and social security taxes) which have become due or payable or
are required to be collected by either of the Sellers or are otherwise
attributable to any periods ending on or before the Closing Date and all
interest and penalties thereon, whether disputed or not, have been paid or
will be paid in full or
12
adequately reflected on the Balance Sheets or the Sellers' books and records
in accordance with generally accepted accounting principles on or prior to
the Closing Date. Except as set forth on SCHEDULE 2.24, all deposits required
by law to be made by either of the Sellers with respect to employees'
withholding taxes have been duly made, and as of the Closing Date all such
deposits due will have been made. Each of the Sellers has delivered to the
Buyer true and complete copies of all of its federal and state income tax
returns for the tax years 1997 and 1996 and all reports and results of income
tax audits, if any, related thereto. Except as set forth on SCHEDULE 2.24,
no examination of any tax return of either of the Sellers is currently in
progress. There are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any such tax return.
SECTION 2.25 LITIGATION. Except as set forth on SCHEDULE 2.25, there
is no (i) action, suit, claim, proceeding, or investigation pending or, to
the best knowledge of the Sellers, threatened against or affecting either of
the Sellers (whether or not such Seller is a party or prospective party
thereto), at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) arbitration proceeding pending
relating to either of the Sellers or (iii) governmental inquiry pending or
threatened against or involving either of the Sellers, and there is no basis
for any of the foregoing. Neither of the Sellers has received any opinion or
memorandum or legal advice from legal counsel to the effect that it is
exposed, from a legal standpoint, to any liability or disadvantage which may
be material to the business, prospects, financial condition, operations,
property or affairs of such Seller. There are no outstanding orders, writs,
judgments, injunctions or decrees served upon the Sellers by any court,
governmental agency or arbitration tribunal against either of the Sellers.
There are no facts or circumstances which may result in institution of any
action, suit, claim or legal, administrative or arbitration proceeding or
investigation against, involving or affecting the either of Sellers or the
transactions contemplated hereby. Neither of the Sellers is in default with
respect to any order, writ, injunction or decrees known to or served upon it
from any court or of any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign. Except as disclosed on SCHEDULE 2.25, there is no action or suit by
either of the Sellers pending or threatened against others.
SECTION 2.26 ENVIRONMENTAL MATTERS.
(a) COMPLIANCE. The Sellers and all Leased Parcels are in
compliance with all applicable laws, rules, regulations, orders, ordinances,
judgments and decrees of all governmental authorities with respect to all
environmental statutes, rules and regulations. Except as set forth on
SCHEDULE 2.26, neither of the Sellers has received notice of, nor do the
Sellers have knowledge of, any past, present or future events, conditions,
circumstances, activities, practices, incidents, actions or plans of the
Sellers or the Sellers' predecessors, either collectively, individually or
severally, which may interfere with or prevent continued compliance with, or
which may give sure to any common law or legal liability or otherwise form
the basis of any claim, action, suit, proceeding, hearing, or investigation,
based on or related to the disposal, storage, handling, manufacture,
processing, distribution, use, treatment or transport, or the
13
emission, discharge, release or threatened release into the environment, of
any Substance. As used in this Section 2.26, the term "Substance" or
"Substances" shall mean any pollutant, contaminant, hazardous substance,
hazardous material, hazardous waste or toxic waste, as defined in any
presently enacted federal, state or local statute or any regulation that has
been promulgated pursuant thereto. No part of any of the Leased Parcels has
been listed or proposed for listing on the National Priorities List
established by the United States Environmental Protection Agency, or any
corresponding list by any state or local authorities.
(b) ENVIRONMENTAL SUBSTANCE LIABILITY. No event has
occurred or condition exists or operating practice is being employed that
could give rise to liability on the part of the Sellers, either at the
present time or in the future, for any losses, liabilities, damages (whether
consequential or otherwise), settlements, penalties, interest, expenses and
costs of responses, including any such liability on account of the right of
any governmental or private entity or person, and including closure expenses,
costs of assessment, containment, removal, or response (other than monitoring
or transportation or disposal of materials required to be transported or
disposed of in the ordinary course of business consistent with past practice)
arising under any rule of federal, state or local statute, or any regulation
that has been promulgated pursuant thereto, or common law, as a result of or
in connection with, or alleged to be as a result of or in connection with,
the following (collectively the "Hazardous Activities"):
(1) the handling, storage, use, transportation or disposal of any
Substances in or near or from the Leased Parcels;
(2) the handling, storage, use, transportation or disposal of any
Substances by either of the Sellers or its predecessors which
Substances were a product, by-product or otherwise resulted
from the operations conducted by or on behalf of the Sellers or
its predecessors;
(3) any intentional or unintentional emission, discharge or release
of any Substances in or near from facilities into or upon the
air, surface water, ground water or land or any disposal,
handling, manufacturing, processing, distribution, use,
treatment, or transport of such Substances in or near or from
facilities by or on behalf of the Sellers or its predecessors;
or
(4) the presence of any toxic or hazardous building materials
(including but not limited to friable asbestos or similar
substances) in any facilities if the Sellers, including but not
limited to the inclusion of such materials in the exterior and
interior walls, floors, ceilings, tile, insulation or any other
portion of building structures.
14
(c) ENVIRONMENTAL PERMITS. Each of the Sellers has obtained
and hodls all registrations, permits, licenses, and approvals issued by or on
behalf of any federal, state or local governmental body or agency if any
("Environmental Permits") that are required in connection with the operation
by the Sellers of the Leased Parcels, the discharge or emission of Substances
by the Sellers from the Leased Parcels or the generation, treatment, storage,
transportation, or disposal of any such Substances by the Sellers. Such
Environmental Permits, which are described on SCHEDULE 2.26, are currently
effective and sufficient for the operation of the Leased Parcels and the
business of the Sellers as currently conducted and intended to be conducted.
The Sellers is in compliance with all terms and conditions of the
Environmental Permits, and is also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules, and timetables contained in those laws or provisions or contained
in any regulation, code, plan, order, decree, judgment, notice or demand
letter issued, entered, promulgated or approved thereunder and applicable to
Sellers.
(d) DELIVERIES. The Sellers have delivered to the Buyer
true and complete copies and results of any reports, studies, analyses,
tests, or monitoring possessed or initiated by either of the Sellers
pertaining to Substances or Hazardous Activities in, on, or under the Leased
Parcels or concerning compliance by either of the Sellers or any other Person
for whose conduct they are or may be held responsible, with environmental
statutes, rules and regulations.
SECTION 2.27 BROKER'S OR FINDER'S FEES. Except as set forth on
SCHEDULE 2.27, no agent, broker, person or firm acting on behalf of either of
the Sellers is, or will be, entitled to any commission or broker's or
finder's fees from of either of the Sellers or from any person controlling,
controlled by or under common control with either of the Sellers in
connection with any of the transactions contemplated herein.
SECTION 2.28 YEAR-2000 COMPLIANCE.
(a) SCHEDULE 2.28 contains a true and complete list of all
Systems (as hereinafter defined), and each System is Year-2000 Compliant (as
hereinafter defined) to the extent indicated on SCHEDULE 2.28.
(b) As used throughout this Agreement, the following
definitions shall have the following meanings:
(1) "External Systems" shall mean all services which are provided
to Sellers by third parties and which are dependent on
information technology, including, but not limited to, any
external payroll, accounting, or tax filing services or any
checking, savings, or other financial services.
(2) "Internal Systems" shall mean all technology products and
systems generally operated or controlled in-house by Sellers,
or its
15
employees, agents, or independent contractors including, but
not limited to, computers, computer networks, telephone
systems, voice mail systems, intercom systems, pager systems,
and software applications.
(3) "Licensed Systems" shall mean all products and systems
developed by or for Sellers which are licensed, sold,
distributed, or otherwise transferred by Sellers to third
parties.
(4) "System" or "Systems" shall mean any, all or any combination of
any Internal System, External System, or Licensed System.
(5) "Year-2000 Compliant" shall mean, with respect to each System,
that such System is designed to be used before, during, and
after the calendar year 2000 A.D. and will accurately accept
date input and process, store, and output date data and
date-related data, including, without limitation, calculating,
comparing, sorting and sequencing such data and calculating
leap years before, during and after the calendar year 2000 A.D.
without any manual intervention.
SECTION 2.29 INVENTORY. All inventory of each of the Sellers,
whether or not reflected in the financial statements or Balance Sheets,
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 financial statements or the Balance Sheets, as the case may be (the
"Inventory"). All inventory 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 Sellers.
SECTION 2.30 ACCOUNTS RECEIVABLE. The accounts receivable and other
debts due or recorded in the respective records and books of account of the
Sellers as being due to the Sellers as of the Effective Time, all of which
are set forth on SCHEDULE 2.30 (the "Accounts Receivable"), arose in the
ordinary course of business of the Sellers, are not subject to any
counterclaim or set-off and, except for notes receivables from sales
representatives approximating an aggregate of $183,097.19 which are not
reflected on the balance sheets, but are fully collectible within 120 days
after the Effective Date without resort to litigation and without offset or
counterclaim.
SECTION 2.31 DISCLOSURE. All Documents delivered or to be delivered by
or on behalf of either of the Sellers in connection with this Agreement and the
transactions contemplated hereby are true, complete and correct in all material
respects. Neither this Agreement, nor any of the other Documents contains any
untrue statement of a material fact or omits a material fact necessary to make
the statements made by either of the Sellers herein or
16
therein, in light of the circumstances in which made, not misleading. There
is no fact known to either of the Sellers which materially and adversely
affects the business, prospects or financial condition of either of the
Sellers or their respective properties or assets, which has not been set
forth in the Documents.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE BUYER
As an inducement to the Sellers to enter into this Agreement and to
consummate the transactions contemplated hereby, the Buyer represents and
warrants to the Sellers as follows:
SECTION 3.1 ORGANIZATION. The Buyer is a Delaware corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware and is duly qualified to transact business as a foreign
corporation in each jurisdiction in which the failure to so qualify would
have a material adverse impact on the Buyer's ability to purchase the
Business pursuant to this Agreement and perform its obligations under this
Agreement.
SECTION 3.2 CORPORATE POWER AND AUTHORITY. The Buyer has the
corporate power and authority to execute, deliver and perform this Agreement
and the other Documents. The execution, delivery and performance of the
Documents contemplated hereby and the consummation of the transactions
contemplated hereby and thereby have been duly authorized and approved by all
necessary corporate action of the Buyer. The Documents to be executed and
delivered by the Buyer have been duly executed and delivered by, and
constitute the legal, valid and binding obligation of the Buyer enforceable
against the Buyer in accordance with their terms.
SECTION 3.3 VALIDITY, ETC. Neither the execution and delivery by
the Buyer of this Agreement and the other Documents, the consummation by the
Buyer of the transactions contemplated hereby or thereby, nor the performance
by the Buyer of this Agreement and such other agreements in compliance with
the terms and conditions hereof and thereof will (i) violate, conflict with
or result in any breach of any trust agreement, articles of incorporation,
bylaw, judgment, decree, order, statute or regulation applicable to the
Buyer, (ii) violate, conflict with or result in a breach of or default (or
give rise to any right of termination, cancellation or acceleration) under
any law, rule or regulation or any judgment, decree, order, governmental
permit, license or order or any of the terms, conditions or provisions of any
mortgage, indenture, note, license, agreement or other instrument to which
the Buyer is a party, or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Buyer.
SECTION 3.4 BROKER'S OR FINDER'S FEE. No agent, broker, person or
firm acting on behalf of the Buyer is, or will be, entitled to any commission
or broker's or finder's fees from the Buyer, or from any person controlling,
controlled by or under common control with the Buyer, in connection with any
of the transactions contemplated herein.
17
SECTION 3.5 DISCLOSURE STATEMENT. Buyer's Disclosure Statement,
dated February 25, 1999 and supplemented on March 19, 1999, which has been
previously delivered to the Sellers is true, complete and correct in all
material respects.
SECTION 3.6 DISCLOSURE. All Documents delivered or to be delivered
by or on behalf of the Buyer in connection with this Agreement and the
transactions contemplated hereby are true, complete and correct. Neither
this Agreement, nor any of the other Documents contains any untrue statement
of a material fact or omits a material fact necessary to make the statements
made by the Buyer herein or therein, in light of the circumstances in which
made, not misleading. There is no fact known to the Buyer which may have a
material adverse effect on the Buyer's ability to pay its obligations under
this Agreement, which has not been set forth in the Documents.
ARTICLE IV. COVENANTS AND AGREEMENTS
SECTION 4.1 BEST EFFORTS. Each of the Sellers and the Buyer shall
each use its best efforts to procure upon reasonable terms and conditions all
consents and approvals, completion of all filings, all registrations and
certificates, and satisfaction of all other requirements prescribed by law
which are necessary for the consummation of the transactions contemplated by
this Agreement and the Buyer's ownership and operation of the Sellers'
Business after the Closing Date.
SECTION 4.2 TAX RETURNS. Each of the Sellers shall prepare and
timely file, at its sole expense, all of its required tax returns for all
periods ending on or prior to the Effective Date. Each of the Sellers shall
be responsible for the payment of, and will indemnify, defend and hold the
Buyer harmless against all taxes due or assessed which relate to the
operations of the Business for all periods ending on or prior to the
Effective Date.
SECTION 4.3 PAYMENT OF LIABILITIES. Except for the Assumed
Liabilities, each of the Sellers shall pay and satisfy in full all of its
other obligations and liabilities, of any nature whatsoever, which accrue
prior or subsequent to the Effective Date.
SECTION 4.4 EMPLOYEES. The Buyer and the Sellers have determined
in good faith that the closing of the transactions contemplated by this
Agreement will not result in an "employment loss" within the meaning of the
Workers Adjustment Retraining and Notification Act, 29 U.S.C. Section 2101 ET
SEQ (the "Warn Act"). The Sellers have made all of their employees available
to be hired by the Buyer. Notwithstanding the foregoing and except as
otherwise set forth in this Agreement, the Buyer shall be under no obligation
to hire any such employees. The Buyer and the Sellers understand and
acknowledge that each is an employer subject to the Warn Act. The Sellers
shall be responsible for any Warn Act violations based on or arising from
acts, events or omissions prior to the Closing, and the Buyer shall be
responsible for any Warn Act
18
violations based on or arising from acts, events or omissions after the
Closing. At the Closing, each of the Sellers shall provide to the Buyer a
list of all employees or former employees terminated by such Seller during
the ninety (90) day period prior to the Closing. The Buyer represents and
warrants that during the first ninety (90) days after the Closing it will not
terminate any employee or employees whose termination would, in the aggregate
with terminations by the Sellers during the ninety (90) day period prior to
the Closing, result in a violation of the Warn Act. Nothing herein shall be
deemed either to affect or to limit in any way the management prerogatives of
the Buyer with respect to employees, or to create or to grant to such
employees any third party beneficiary rights or claims or causes of action of
any kind or nature.
SECTION 4.5 SPECIAL PROVISIONS REGARDING EMPLOYEES OF THE SELLERS.
(a) NEW EMPLOYEES OF THE BUYER. It is the intention of the
Buyer, and the Sellers hereby acknowledge and agree with such position, that
any employees of either of the Sellers that the Buyer hires will be new
employees of the Buyer as of the Effective Date or the date of hire,
whichever is later. Such new employees shall be entitled only to such
compensation and employee benefits as are agreed to by such employees and the
Buyer or as are otherwise provided by the Buyer, in its sole discretion.
(b) HIRING OF EMPLOYEES. The Buyer will use its reasonable
efforts to hire the existing employees of the Sellers engaged in the Business
in connection with its purchase of the Transferred Assets; provided, however,
that the Buyer shall be entitled to review employee records, conduct employee
interviews and employee screening procedures used by the Buyer in its
business, and may refuse to offer employment to any employee of the Sellers
if such employee fails to meet the hiring criteria of the Buyer.
(c) NO CONTRIBUTIONS. After the Closing, neither of the
Sellers shall make any contributions to any Employee Plan on behalf of any
former employee or independent contractor of either of the Sellers who is
employed by the Buyer after the Closing.
(d) COBRA ISSUES. The Buyer shall be a successor employer
of the Sellers solely for the purposes of providing continuation coverage to
the extent required under Code Section 4980B and ERISA Section 601 to
individuals receiving such continuation coverage on the Effective Date and
individuals qualifying (or who would otherwise qualify but for this Section
4.5) for such coverage commencing on or after the Effective Date. The
Sellers shall be liable for any and all liabilities, costs, expenses and fees
whatsoever arising under Code Section 4980B and ERISA Section 601 before the
Effective Date.
SECTION 4.6 CONSENTS OF LANDLORDS. Within thirty (30) days following
closing, Sellers shall have obtained the consent of the landlords to the
assignment of the Leases to Buyer or its affiliate.
19
ARTICLE V. CONDITIONS TO THE BUYER'S OBLIGATIONS
The obligations of the Buyer to make deliveries to the Sellers
pursuant to Section 1.2 and 1.3 hereof and to consummate the other
transactions contemplated hereby is subject to the satisfactions, on or
before the Closing Date, of the following conditions each of which may be
waived by the Buyer in its sole discretion:
SECTION 5.1 CONSENTS. Except for the landlord consents provided for
in Section 4.6 or except as set forth on SCHEDULE 5.1, all requisite
governmental approvals identified on and consents of third parties identified
on such schedule or otherwise identified by the Sellers as required to be
received to prevent any material license, permit or agreement relating to the
Business from terminating prior to its scheduled termination, as a result of
the consummation of the transactions contemplated hereby, shall have been
obtained and all permits listed in SCHEDULE 2.15 shall have been transferred
or reissued to the Buyer.
SECTION 5.2 OPINION OF COUNSEL TO SELLERS. The Buyer shall have
received from Xxxxxxxx X. Xxxx, counsel to the Sellers, an opinion, dated as
of the Closing Date, in form and substance reasonably satisfactory to the
Buyer, and to the following effect:
(a) Thermo-Shield Company, Inc. is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Illinois. Thermo-Shield of America (Wisconsin), Inc. is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Wisconsin. The nature of the Business or the Transferred Assets
does not require the Sellers to be licensed or qualified in any other
jurisdiction;
(b) Each of the Sellers has the corporate power and
authority to own and hold its properties and to carry on its business as now
conducted. Each of the Sellers has the corporate power and authority to
execute, deliver and perform the Agreement and the other Documents. The
execution, delivery and performance of the Agreement and the other Documents
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized and approved by all necessary corporate action of the
Sellers. The Agreement and each of the other Documents to be executed and
delivered by the Sellers have been duly executed and delivered by, and
constitute the legal, valid and binding obligations of the Sellers,
enforceable against the Sellers in accordance with their terms;
(c) There is no (i) action, suit, claim, proceeding or
investigation pending or, to the best knowledge of Counsel, threatened against
or affecting the Sellers (whether or not the Sellers is a party or prospective
party thereto), at law or in equity, or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) arbitration proceeding pending
relating to the Sellers or (iii) governmental inquiry pending or threatened
against or involving the Sellers, and, to the best knowledge of counsel, there
is no basis for any of the foregoing. The Sellers has not received any opinion
or memorandum or legal advice from legal counsel to the effect that it is
exposed, from a legal standpoint, to any liability or disadvantage which may be
material to the business,
20
prospects, financial condition, operations, property or affairs of the
Sellers. There are no outstanding orders, writs, judgments, injunctions or
decrees served upon the Sellers by any court, governmental agency or
arbitration tribunal against the Sellers. To the best knowledge of counsel,
there are no facts or circumstances which may result in institution of any
action, suit, claim or legal, administrative or arbitration proceeding or
investigation against, involving or affecting the Sellers or the transactions
contemplated hereby. The Sellers is not in default with respect to any
order, writ, injunction or decree known to or served upon it from any court
or of any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign.
There is no action or suit by the Sellers pending or threatened against
others;
(d) The execution and delivery of this Agreement and the
other Documents, the consummation of the transactions contemplated hereby and
thereby, and the performance of the Agreement and such other agreements in
compliance with the terms and conditions hereof and thereof by the Sellers
will not (i) violate, conflict with or result in any breach of any trust
agreement, articles of incorporation, bylaw, judgment, decree, order, statute
or regulation applicable to the Sellers, (ii) violate, conflict with or
result in a breach, default or termination or give rise to any right of
termination, cancellation or acceleration of the maturity of any payment date
of any of the obligations of the Sellers or increase or otherwise affect the
obligations of the Sellers under any law, rule, regulation or any judgment,
decree, order, governmental permit,, license or order or any of the terms,
conditions or provisions of any mortgage, indenture, note, license, agreement
or other instrument or obligation related to the Sellers or to the Sellers'
ability to consummate the transactions contemplated hereby or thereby, except
for such defaults (or rights of termination, cancellation or acceleration) as
to which requisite waivers or consents have been obtained in writing and
provided to the Buyer, (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Sellers or (iv) result in the
creation of any Claim upon the Transferred Assets; and
(e) The Bills of Sale convey all right, title and interest
in and to the Transferred Assets.
SECTION 5.3 CHANGE OF CORPORATE NAME. Thermo-Shield Company, Inc.
shall amend its Articles of Incorporation to change its name to a name other
than "Thermo-Shield Company, Inc." Thermo-Shield of America (Wisconsin), Inc.
shall amend its Articles of Incorporation to change its name to a name other
than "Thermo-Shield of America (Wisconsin), Inc. The Sellers shall deliver
to the Buyer at the Closing, an executed copy of such Amendment to the
Articles of Incorporation, and any such other documents or consents needed to
effectuate such change in name, for filing with the Office of the Illinois or
Wisconsin Secretary of State, as applicable.
SECTION 5.4 THERMO-ROSE CORPORATE DOCUMENTS. Inconsistencies between
the shareholder records and the Shareholder Agreement of Thermo-Rose
Manufacturing Co., Inc. shall be resolved to reflect that Thermo-Shield
Company, Inc. rather than Xxxx Xxxx is the owner of 50% of the common stock
of Thermo-Rose Manufacturing Co., Inc.
21
SECTION 5.5 SELLERS' EMPLOYMENT RECORDS. Sellers shall have in their
possession and available for inspection by Buyer at Buyer's request, I-9s and
W-4s for each current employee of the Sellers.
SECTION 5.6 AMENDMENT TO XXXXX AVENUE LEASE. Thermo-Shield Company,
Inc. shall have entered into the Amendment to Lease attached hereto as
EXHIBIT G.
SECTION 5.7 THERMO-SHIELD TRANSACTIONS. The transactions
contemplated in the Stock Purchase Agreement shall have closed simultaneously
with the transactions contained herein.
SECTION 5.8 CLOSING DOCUMENTS. The Sellers shall have delivered all
of the resolutions, certificates, documents and instruments required by this
Agreement.
SECTION 5.9 APPROVAL OF THE BUYER AND ITS COUNSEL. All actions,
proceedings, consents, instruments and documents required to be delivered by,
or at the behest of direction of, the Sellers hereunder or incident to its
performance hereunder, and all other related matters, shall be reasonably
satisfactory as to form and substance to the Buyer and its counsel.
ARTICLE VI. CONDITIONS TO THE SELLERS' OBLIGATIONS
The obligation of the Sellers to transfer the Transferred
Assets to the Buyer and to consummate the other transactions contemplated
hereby is subject to the satisfaction, on or before the closing date, of the
following conditions, each of which may be waived by the Sellers in its sole
discretion:
SECTION 6.1 OPINION OF XXXXXX & XXXXXXXX. The Sellers shall have
received from Xxxxxx & Xxxxxxxx, counsel to the Buyer, an opinion dated as of
the Closing Date, in form and substance reasonably satisfactory to the
Sellers, and the following effect:
(a) The Buyer is a Delaware corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified to transact business as a foreign corporation in each
jurisdiction in which the failure to so qualify would have a material adverse
impact on the Buyer's ability to pay its obligations under this Agreement;
(b) The Buyer has the corporate power and authority to
execute, deliver and perform the Agreement and the other Documents. The
execution, delivery and performance of the Agreement and the other Documents
and the consummation of the transactions contemplated hereby and thereby have
been duly and validly executed and delivered by the Buyer and constitute the
legal, valid and binding obligations of the Buyer, enforceable against the
Buyer in accordance with their terms; and
22
(c) The execution and delivery of the Agreement and the
other Documents, the consummation of the transactions contemplated hereby and
thereby, and the performance of the Agreement and such other agreements in
compliance with the terms and conditions hereof and thereof by the Buyer will
not (i) violate, conflict with or result in a breach of or default (or give
rise to any right of termination, cancellation, or acceleration) under any
law, rule or regulation or any judgment, decree, order, governmental permit,
license or order or any of the terms, conditions or provisions of any
mortgage, indenture, note, license, agreement or other instrument to which
the Buyer is a party, or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Buyer.
SECTION 6.2 THERMO-SHIELD TRANSACTIONS. The transactions
contemplated in the Stock Purchase Agreement shall have closed simultaneously
with the transactions contained herein.
SECTION 6.3 CLOSING DOCUMENTS. The Buyer shall have delivered all
of the resolutions, certificates, documents and instruments required by this
Agreement.
SECTION 6.4 APPROVAL OF THE SELLERS AND ITS COUNSEL. All actions,
proceedings, consents, instruments and documents required to be delivered by,
or at the behest or direction of, the Buyer hereunder or incident to its
performance hereunder, and all other related matters, shall be reasonably
satisfactory as to form and substance to the Sellers and its counsel.
ARTICLE VII. THE CLOSING AND CERTAIN CLOSING DELIVERIES
SECTION 7.1 TIME AND PLACE OF CLOSING. Upon the terms and subject
to the satisfaction of waiver of the conditions contained in this Agreement,
the closing of the transactions contemplated by this Agreement (the
"Closing') shall take place at the offices of Xxxxxx & Xxxxxxxx, 000 Xxxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxx on the date hereof (the
"Closing Date"). The transactions contemplated by this Agreement shall be
effective as of the close of business (the "Effective Time") on March 1, 1999
(the "Effective Date").
SECTION 7.2 DELIVERIES BY THE SELLERS. At the Closing, the Sellers
will deliver or cause to be delivered to the Buyer the following:
(a) All required consents of third parties to the sale,
conveyance, transfer, assignment and delivery of the Transferred Assets and
Business of the Sellers hereunder;
(b) A certificate of the President of the Sellers certifying
as of the Closing Date, (i) a true, correct and complete copy of the
Certificate of Incorporation of the Sellers and all amendments thereto as in
effect on the Closing Date; (ii) a true, correct and complete copy of the
bylaws of the Sellers and all amendments thereto as in effect on the Closing
Date; (iii) a true, correct, and complete copy of the resolutions approved
and adopted by the Sellers' Board of Directors and Shareholders authorizing
and approving the execution, performance and delivery
23
of this Agreement and the transactions contemplated by this Agreement; (iv)
Good Standing Certificate from the Illinois Secretary of State and the
Wisconsin Secretary of State and all other jurisdictions where the Sellers is
qualified to do business; and (v) the incumbency of the duly authorized
offers of the Sellers.
(c) The affidavit of the Sellers certifying as to its
non-foreign status in accordance with Section 1445(b)(2) of the Code;
(d) The Bills of Sale required by Section 1.1(c);
(e) The Assignment and Assumption Agreements required by
Section 1.1(c);
(f) The Lease Assignments required by Section 1.1(c);
(g) The Security Agreements and the Membership Pledge
Agreements required by Section 1.2;
(h) The opinion of the Sellers' counsel required by Section 5.2
above;
(i) Duly executed Amendment to the Articles of Incorporation
of each of the Sellers and withdrawal of assumed trade names as required by
Section 5.3 above;
(j) Copies of the stock records of Thermo Rose as required
by Section 5.4;
(k) The I-9s and W-4s required by Section 5.5;
(l) The Amendment to Lease required by Section 5.6;
(m) All other documents, instruments and writings requiring
to be delivered by the Sellers at or prior to the Closing Date pursuant to
this Agreement or otherwise required in connection herewith.
SECTION 7.3 DELIVERIES BY THE BUYER. At the Closing, the Buyer will
deliver the following to or for the account of the Sellers or certain of its
employees, as the case may be:
(a) The Promissory Note required by Section 1.2 above;
(b) The Assignment and Assumption Agreements required by
Section 1.3;
(c) The Lease Assignments required by Section 1.3;
24
(d) The Security Agreements and the Membership Pledge
Agreements required by Section 1.2;
(e) The Opinion of the Buyer's counsel required by Section
6.1 above;
(f) A certificate of an officer of the Buyer certifying as
of the Closing Date (i) a true, correct and complete copy of the Articles of
Incorporation of the Buyer and all amendments thereto as in effect on the
Closing Date; (ii) a true, correct and complete copy of the bylaws of the
Buyer and all amendments thereto as in effect on the Closing Date; (iii) a
true, correct and complete copy of the resolutions approved and adopted by
the Board of Directors of the Buyer authorizing the transactions contemplated
herein; and (iv) Good Standing Certificate from the Delaware Secretary of
State; and
(g) All other documents, instruments and writings required
to be delivered by the Buyer at or prior to the Closing Date pursuant to this
Agreement or otherwise required in connection herewith.
ARTICLE VIII. TERMINATION
[INTENTIONALLY OMITTED]
ARTICLE IX. INDEMNIFICATION
SECTION 9.1 SURVIVAL. All representations and warranties in this
Agreement and the other Documents shall survive the Closing of the purchase
of the Transferred Assets contemplated hereby and any investigation at
anytime made by or on behalf of any party for a period of three years and all
such representations and warranties shall expire on the third anniversary of
the Closing Date, except that (a) claims, if any, asserted in writing prior
to such third anniversary identified as a claim for indemnification pursuant
to this Article IX shall survive until finally resolved and satisfied in
full; (b) any Year-2000 Indemnification Obligations (as hereinafter defined)
shall survive until February 1, 2003 and until finally resolved and satisfies
in full if asserts on or prior to February 1, 2003; and (c) tax or
environmental claims arising from a breach of Section 2.24 or Section 2.26,
respectively, shall survive for the full period of the applicable statute of
limitations, and until finally resolved and satisfied in full if asserted on
or prior to the expiration of any such period. The representations and
warranties shall not be affected or otherwise diminished by any investigation
at any time by or on behalf of the party for whose benefit such
representations and warranties were made.
25
SECTION 9.2 INDEMNIFICATION BY THE SELLERS. Subject to the terms
herein, the Sellers shall indemnify, defend and hold the Buyer and the
respective officers, directors, and employees of the Buyer, and their
successors and assigns (the "Sellers' Indemnitees") harmless from, against
and with respect to any claim, liability, obligation, loss, damage,
assessment, judgment, cost or expense of any kind or character, including
reasonable attorneys' fees (the "Damages"), arising out of or in any manner
incident, relating or attributable to:
(a) Any inaccuracy in any representation or breach of any
warranty of the Sellers contained in this Agreement;
(b) Any failure by the Sellers to perform or observe, or to
have performed or observed, in full, any covenant, agreement or condition to
be performed or observed by it under this Agreement, except to the extent
such failure to perform or observe is due to the Buyer's actions;
(c) Reliance by the Buyer on any books or records of the
Sellers or written information furnished to the Buyer pursuant to this
Agreement by or on behalf of the Sellers in the event that such books and
records or written information are false or materially inaccurate; or
(d) Liabilities or obligations of, or claims against, the
Buyer (whether absolute, accrued, contingent or otherwise) relating to, or
arising out of, the operation of the Business prior to the Closing Date or
facts and circumstances relating specifically to the Business, the Leased
Parcels, or the Sellers existing at or prior to the Closing Date, including
but not limited to matters set forth on SCHEDULE 2.25, whether or not such
liabilities, obligations or claims were known on such date, excluding only
the Assumed Liabilities.
(e) Any amounts due ThermoView in connection with Xxxx
Xxxx'x or Xxxxxxxx Xxxx'x obligations under the Stock Purchase Agreement,
including without limitation, Section 9.2.
Provided, however, the Sellers' Indemnitees shall not be entitled to
indemnification or offset hereunder until Damages under this Agreement and
the Stock Purchase Agreement in the aggregate exceed $50,000 and then only to
the extent of aggregate Damages in excess of $50,000; provided further,
however, this limitation or "basket" shall not apply to any Damages arising
in connection with the representations and warranties with respect to taxes
and litigation as set forth in Sections 2.24 and 2.25 hereof, respectively.
SECTION 9.3 NOTICE TO THE SELLERS, ETC. If any of the matters as to
which the Sellers' Indemnitees are entitled to receive indemnification under
Section 9.2 should entail litigation with or claims asserted by parties other
than the Sellers, the Sellers shall be given prompt notice thereof and shall
have the right, at his expense, to control such claim or litigation upon
prompt notice to the Buyer of his election to do so. To the extent requested
by the Sellers, the Buyer, at its expense, shall cooperate with and assist
the Sellers, in connection with such
26
claim or litigation. The Sellers shall have final authority to determine all
matters in connection with such claim or litigation; PROVIDED, HOWEVER, that
the Sellers shall not settle any third-party claim without the consent of the
Buyer, which shall not be unreasonably denied or delayed.
SECTION 9.4 INDEMNIFICATION BY THE BUYER. The Buyer shall
indemnify, defend and hold the Sellers and its successors and assigns (the
"Buyer's Indemnitees") harmless from, against and with respect to any claim,
liability, obligation, loss, damage, assessment, judgment, cost or expense of
any kind or character, including reasonable attorneys' fees (the "Damages"),
arising out of or in any manner incident, relating or attributable to:
(a) Any inaccuracy in any representation or breach of
warranty of the Buyer contained in this Agreement;
(b) Any failure by the Buyer to perform or observe, or to
have performed or observed, in full, any covenant, agreement or condition to
be performed or observed by it under any of the Documents;
(c) Reliance by the Sellers on any books or records of the
Buyer or reliance by the Sellers on any written information furnished to the
Sellers pursuant to this Agreement by or on behalf of the Buyer in the event
that such books and records or written information are false or inaccurate;
(d) The failure of the Buyer to pay or perform the Assumed
Liabilities, Contracts and Leases subsequent to the Closing Date; or
(e) Liabilities or obligations of, or claims against, the
Sellers (whether absolute, accrued, contingent or otherwise) relating to, or
arising out of, the operation of the Business subsequent to the Closing Date.
Provided, however, the Buyer's Indemnitees shall not be entitled to
indemnification hereunder until Damages in total exceed $50,000 and then only
to the extent of aggregate damages in excess of $50,000.
SECTION 9.5 NOTICE TO BUYER, ETC. If any of the matters as to which
the Buyer's Indemnitees are entitled to receive indemnification under Section
9.4 should entail litigation with or claims asserted by parties other than
the Buyer, the Buyer shall be given prompt notice thereof and shall have the
right, at its expense, to control such claim or litigation upon prompt notice
to the Sellers of its election to do so. To the extent requested by the
Buyer, the Sellers, at his expense, shall cooperate with and assist the
Buyer, in connection with such claim or litigation. The Sellers shall have
the right to appoint, at its expense, single counsel to consult with and
remain advised by the Buyer in connection with such claim or litigation. The
Buyer shall have final authority to determine all matters in connection with
such claim or litigation; PROVIDED,
27
HOWEVER, that the Buyer shall not settle any third-party claim without the
consent of the Sellers, which shall not be unreasonably denied or delayed.
SECTION 9.6 SURVIVAL OF INDEMNIFICATION. The obligations to
indemnify and hold harmless pursuant to this Article IX shall survive the
Closing of the purchase of the Transferred Assets contemplated hereby for a
period of three years, notwithstanding any investigation at any time made by
or on behalf of any party, except that (a) claims, if any, asserted in
writing prior to such third anniversary identified as a claim for
indemnification pursuant to this Article IX shall survive until finally
resolved and satisfied in full; (b) any Year-2000 Indemnification Obligations
(as hereinafter defined) shall survive until February 1, 2003 and until
finally resolved and satisfied in full if asserted on or prior to February 1,
2003; and (c) tax or environmental claims arising from a breach of Section
2.24 or Section 2.26, respectively, shall survive for the full period of the
applicable statute of limitations, and until finally resolved and satisfied
in full if asserted on or prior to the expiration of any such period. As used
in this Article IX, the term "Year-2000 Indemnification Obligations" shall
mean Sellers' obligation to indemnify, defend and hold the Sellers'
Indemnitees harmless from, against and with respect to any Damages arising
out of or in any manner incident, relating or attributable to (i) any claim
or allegation that any Licensed System is not Year-2000 Compliant and (ii)
any claim arising from a breach of Section 2.28.
SECTION 9.7 OFFSET. The Sellers acknowledges and agrees that the
Buyer shall be entitled to offset any indemnity claim under Section 9.2,
including without limitation indemnity claims arising under the Stock
Purchase Agreement pursuant to Section 9.2(e), against any payment due to the
Sellers under Section 1.2 hereof or any payment due under the Stock Purchase
Agreement at the Buyer's sole option.
ARTICLE X. MISCELLANEOUS
SECTION 10.1 KNOWLEDGE OF THE SELLERS. Where any representation or
warranty contained in this Agreement is expressly qualified by reference to
the best knowledge of the Sellers, the Sellers confirms that it has made due
and diligent inquiry of its President as to the matters that are the subject
of such representation and warranty.
SECTION 10.2 KNOWLEDGE OF THE BUYER. Where any representation or
warranty contained in this Agreement is expressly qualified by reference to
the best of knowledge of the Buyer, the Buyer confirms that it has made due
and diligent inquiry of its President as to the matters that are the subject
of such representations and warranties.
SECTION 10.3 "PERSON" DEFINED. "Person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or other department or agency
thereof.
28
SECTION 10.4 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) sent by recognized overnight courier, (iii) made by telecopy or
facsimile transmission, or (iv) sent by registered or certified mail, return
receipt requested, postage prepaid.
If to the Buyer:
ThermoView Industries, Inc.
0000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx,
Chief Executive Officer
Fax No. (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxxx
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Fax No. (000) 000-0000
If to the Sellers:
Thermo-Shield Company, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxx
With a copy to:
Xxxxxxxx X. Xxxx, Esq.
0000 Xxxx Xxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
All notices, requests, consents and other communications hereunder shall be
deemed to have been given (i) if by hand, at the time of the delivery thereof
to the receiving party at the address of such party set forth above, (ii) if
sent by overnight courier, on the next business day following the day such
notice is delivered to the courier service, (iii) if made by telecopy or
facsimile transmission, at the time that receipt thereof has been
acknowledged by electronic confirmation or otherwise, or (iv) if sent by
registered or certified mail, on the fifth business day following the day
such mailing is sent. The address of any party herein may be changed at any
time by written notice to the parties.
29
SECTION 10.5 ENTIRE AGREEMENT. This Agreement and the other
Documents embody the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersede all prior oral
or written agreements and understandings relating to the subject matter
hereof. No statements, representation, warranty, covenant or agreement of
any kind not expressly set forth in the other Documents shall affect, or be
used to interpret, change or restrict, the express terms and provisions of
this Agreement.
SECTION 10.6 MODIFICATIONS AND AMENDMENTS. The terms and provisions
of this Agreement may be modified or amended only by written agreement
executed by all parties hereto.
SECTION 10.7 ASSIGNMENT/BINDING EFFECT. Neither this Agreement, nor
any right hereunder, may be assigned by any of the parties hereto without the
prior written consent of the other parties, provided, however, that the Buyer
may assign its rights to acquire the Transferred Assets to one or more of its
affiliates. This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their respective heirs, personal representatives,
successors and permitted assigns.
SECTION 10.8 PARTIES IN INTEREST. Nothing in this Agreement, express
or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
Nothing in this Agreement shall be construed to create any rights or
obligations except among the parties hereto, and no person or entity shall be
regarded as a third-party beneficiary of this Agreement.
SECTION 10.9 GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with
and governed by the internal laws of the State of Illinois without giving
effect to the conflict of law principles thereof.
SECTION 10.10 ARBITRATION. Any dispute or difference between the
parties hereto arising out of or relating to this Agreement shall be finally
settled by arbitration in accordance with the Commercial Rules of the
American Arbitration Association by a panel of three qualified arbitrators.
The Sellers and the Buyer shall each choose an arbitrator and the third shall
be chosen by the two so chosen. If either the Sellers or the Buyer fails to
choose an arbitrator within 30 days after notice of commencement of
arbitration or if the two arbitrators fail to choose a third arbitrator
within 30 days after their appointment, the American Arbitration Association
shall, upon the request of any party to the dispute or difference, appoint
the arbitrator or arbitrators to constitute or complete the panel as the case
may be. Arbitration proceedings hereunder may be initiated by either the
Sellers or the buyer making a written request to the American Arbitration
Association, together with any appropriate filing fee, at the office of the
American Arbitration Association in Chicago, Illinois. All arbitration
proceedings shall be held in Chicago, Illinois. Any order or determination
of the arbitral tribunal shall be final and binding upon the parties to the
arbitration and may be entered in any court having jurisdiction.
30
SECTION 10.11 SEVERABILITY. In the event that any arbitral tribunal
of competent jurisdiction shall finally determine that any provision, or any
portion thereof, contained in this Agreement shall be void or unenforceable
in any respect, then such provision shall be deemed limited to the extent
that such arbitral tribunal determines it enforceable, and as so limited
shall remain in full force and effect. In the event that such arbitral
tribunal shall determine any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall nevertheless
remain in full force and effect.
SECTION 10.12 INTERPRETATION. The parties hereto acknowledge and
agree that: (i) the rule of construction to the effect that ambiguities are
resolved against the drafting party shall not be employed in the
interpretation of this Agreement, and (ii) the terms and provisions of this
Agreement shall be construed fairly as to all parties hereto and not in favor
of or against any party, regardless of which party was generally responsible
for the preparation of this Agreement.
SECTION 10.13 HEADINGS AND CAPTIONS. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference only
and shall in no way modify, or affect, or be considered in construing or
interpreting the meaning or construction of any of the terms or provisions
hereof.
SECTION 10.14 RELIANCE. The parties hereto agree that,
notwithstanding any right of any party to this Agreement to investigate the
affairs of any other party to this Agreement, the party having such right to
investigate shall have the right to rely fully upon the representations and
warranties of the other party expressly contained herein.
SECTION 10.15 EXPENSES. Each party shall pay its own fees and
expenses (including the fees of any attorneys, accountants, appraisers or
others engaged by such party) incurred in connection with this Agreement and
the transactions contemplated hereby whether or not the transactions
contemplated hereby are consummated.
SECTION 10.16 GENDER. All pronouns and any variation thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or entity or the context may require.
SECTION 10.17 PUBLICITY. Except by the mutual agreement between the
Sellers and the Buyer, no party shall issue any press release or otherwise
make any public statement with respect to the execution of, or the
transactions contemplated by, this Agreement except as may be required by law.
SECTION 10.18 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by different parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
31
IN WITNESS WHEREOF, the Buyer and the Sellers have each caused this
Agreement to be executed by its duly authorized officer all as of the day and
year first above written.
Buyer:
THERMOVIEW INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Title: President
------------------------------
Sellers:
THERMO-SHIELD COMPANY, INC.
By: /s/ Xxxx X. Xxxx
---------------------------------
Title: President
------------------------------
THERMO-SHIELD OF AMERICA
(WISCONSIN) INC.
By: /s/ Xxxx X. Xxxx
---------------------------------
Title: President
------------------------------
32
