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EXHIBIT 2.1
ASSET AND BUSINESS PURCHASE AGREEMENT
AGREEMENT, dated December 28, 1995, between NEI/GTEL ENVIRONMENTAL
LABORATORIES, INC. , a Delaware corporation ("Buyer"), and GTEL ENVIRONMENTAL
LABORATORIES, INC., a Delaware corporation ("Seller").
WHEREAS, Buyer is a wholly owned subsidiary of Nytest Environmental
Inc., a Delaware corporation ("Buyer's Parent");
WHEREAS, Seller is a wholly owned subsidiary of Groundwater Technology,
Inc., a Delaware corporation ("Seller's Parent");
WHEREAS, Seller conducts certain business operations at laboratories
and offices in Milford, New Hampshire, Tampa, Florida and Wichita, Kansas,
involving the testing of environmental samples (sometimes hereinafter referred
to as the "Business");
WHEREAS, Buyer desires to purchase from Seller substantially all of the
assets and operations of the Business and is willing to assume certain
liabilities and obligations in respect thereof which are specifically identified
in this Agreement; and
WHEREAS, Seller wishes to sell substantially all of the assets and the
operations of the Business to Buyer, and transfer certain liabilities and
obligations of Seller as specifically identified herein, all upon the terms and
subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, representations, warranties and agreements contained herein, the
parties hereby agree as follows:
1. PURCHASE AND SALE.
1.1 Purchase and Sale of the Business Assets.
On the terms and subject to the conditions herein set forth, at the
Closing (as defined in Section 2.3 hereof), Seller agrees to sell, transfer,
convey, assign and deliver to Buyer, and Buyer agrees to purchase from Seller
and accept delivery of, all of Seller's right, title and interest in and to the
Business as a going concern including the name "GTEL Environmental
Laboratories," and all variations and derivations thereof, but specifically
excluding any reference to "Groundwater" or "GTI", and the following tangible,
intangible, real, personal and mixed assets, properties and rights of every kind
and description, wherever located, which constitute or are used by Seller in
connection with the Business, other than the Excluded Assets (as defined in
Section 1.2 hereof), all as the same shall exist on the Closing Date
(collectively the "Assets"):
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(a) all security deposits, prepaid items, unbilled costs and fees,
of a type that was or should have been included in a balance
sheet if it had been audited, and works in process other than
those, if any, specifically identified as an Excluded Asset
herein;
(b) all reagents, bottles, glassware, laboratory supplies, spare
parts, shipping materials, labels, packaging, samples and
materials to be analyzed, stationery, purchase orders and
other forms, labels, catalogs, brochures, art work,
photographs and advertising material, wherever located, which
are used or held for use or sale by the Business
(collectively, "Inventory") except as expressly disclosed in
Section 3.11 of the Disclosure Schedule as being owned by a
third party;
(c) all furniture, fixtures, leasehold improvements (except to the
extent such leasehold improvements are, pursuant to the terms
of the relevant Lease (as defined in Section 3.12 or 3.15
below) the property of the lessor thereunder), machinery,
equipment, computer hardware and software and office equipment
owned or leased by Seller located at or provided to the
Business, or otherwise identified in the disclosure schedule
attached hereto and made a part hereof (the "Disclosure
Schedule") (the "Equipment");
(d) Seller's interest in and to all telephone, telecopier,
electronic mail (but only to the extent such address is
independent of addresses associated with Seller's Parent,
defined below), internet address (but only to the extent such
address is independent of addresses associated with Seller's
Parent, defined below) and telex (if any) numbers and
telephone and other directory listings utilized in connection
with the Business to the extent assignable;
(e) any and all formulae, trade secrets, patents, trademarks,
trade names, inventions, computer software, technology,
proprietary know-how, art work, designs, processes and other
intellectual property now used by Seller in connection with
the Business (collectively, "Intellectual Property");
(f) to the extent assignable, all franchises, permits and
licenses, registration, certificate of occupancy, contracts,
agreements and commitments, customer lists, restrictive
covenants, confidentiality obligations and similar obligations
of present and former shareholders, officers and employees of
Seller, and any of their predecessors;
(g) all rights or choses in action arising out of occurrences
before or after the Closing, including without limitation all
rights under express or implied warranties relating to the
Assets;
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(h) all assets and properties reflected on the Closing Balance
Sheet as defined in Section 2.6; and
(i) all books, files, papers, engineering, sales, marketing and
other studies, data and plans, records and other data of
Seller, including but not limited to all personnel files,
computer software and customer and supplier lists and other
data bases, if any, relating to the foregoing;
it being the parties' intention that (x) all tangible, intangible, real,
personal and mixed property, assets and rights considered by Seller to
constitute part of the Business as an ongoing business, wherever located, except
as expressly set forth in Sections 1.2 below, are to be conveyed to Buyer as
part of the Assets, and (y) the Assets comprise all the business, properties,
assets (however, employees, to the extent they could be considered assets, are
not included as assets in this Section) and goodwill employed by the Seller and
its affiliates in connection with the Business other than the Excluded Assets
(as defined below).
1.2 Excluded Assets.
Notwithstanding the forgoing, it is agreed by the parties hereto that
Seller is not selling, and Buyer is not purchasing, any of the following:
(a) Seller's franchise as a corporation and any prepaid taxes or
expenses or deferred charges in connection therewith and tax
refund claims for the periods prior to Closing;
(b) Seller's minute books, corporate seals and stock books;
(c) the consideration to be paid by Buyer to Seller and rights of
Seller pursuant to this Agreement;
(d) all cash and cash equivalents on hand and in bank accounts on
and prior to the Closing Date;
(e) all intercompany accounts between Seller and any of its
Affiliates (as such term is defined herein), including,
without limitation, Groundwater Technology, Inc. ("Seller's
Parent");
(f) the X.X. Xxxxxxx software used by Seller with respect to its
financial information, except Buyer will be, to the extent
possible and subject to the implementation of appropriate
security measures, given a license to use such software for up
to 180 days, at no cost to the Buyer;
(g) all insurance policies maintained by Seller in respect of the
Business;
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(h) all claims against third parties, known or unknown, for
refunds or otherwise in respect of events prior to the
Closing;
(i) all assets of Seller held under any "employee benefit plan"
(as defined in Section 3(3) of ERISA (defined in Section 3.25
below) currently or heretofore maintained by Seller;
(j) all assets of Seller located in Tempe, Arizona or Concord,
California and not used as part of the Business (all of which
assets are set forth on Schedule 1.2(j) hereof);
(k) all assets sold to Columbia Analytical Services' Inc. pursuant
to a Purchase Agreement and Xxxx of Sale dated as of November
8, 1995 and all claims and all payments made or to be made to
Seller in connection therewith;
(l) all accounts, notes and other receivables, and unbilled fees
for services rendered by Seller prior to and on the Closing
Date;
(m) all payments in connection with the Business which are in
transit, including but not limited to cash and cash
equivalents; and
(n) the Wichita Property, defined below.
1.3 Method of Conveyance.
(a) The sale, transfer, conveyance, assignment and delivery by
Seller of the Assets to Buyer in accordance with Section 1.1
hereof shall be effected on the Closing Date by Seller's
execution and delivery of one or more bills of sale and other
instruments of conveyance and transfer, substantially in the
forms attached hereto as Exhibit A (the "Xxxx of Sale").
(b) At the Closing Seller shall transfer, convey, assign and
deliver to Buyer all of the Assets pursuant to this Agreement
and the Xxxx of Sale free and clear of any and all liens,
encumbrances, claims, rights of Seller or any third party,
rights of redemption equities, and other restrictions of any
kind or nature whatsoever (collectively, "Liens"), except for
liens for current taxes not yet due and except as set forth in
Section 3.11(c) of the Disclosure Schedule, and subject only
to those liabilities or obligations of Seller in respect of
the Business to be specifically assumed by Buyer pursuant to
Section 1.4 and Section 2.4 hereof.
(c) Buyer will pay all of the costs payable by reason of the
purchase and sale of the Assets hereunder or Buyer's
assumption of the Assumed Obligations and the Assumed
Liabilities hereunder.
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(d) Seller covenants and agrees that in the event that either (i)
any of the Assets cannot be transferred or assigned by it
without the consent of or notice to a third party and in
respect of which any necessary consent or notice has not as of
the Closing Date been given or obtained, or (ii) any Assets
are non-assignable in their nature, Seller will use its
reasonable best efforts to cause the beneficial interest in
and to the same to in any event pass to the Buyer; and Seller
covenants and agrees, on and after the Closing Date, (x) to
use its reasonable best efforts to hold such Assets in trust
for, and for the benefit of, the Buyer; (y) to continue, to
use its reasonable best efforts, on and after the Closing
Date, to obtain and to secure such consent and give such
notice as may be required to effect a valid transfer or
transfers of such Assets to the extent such consent reasonably
can be obtained; provided, however, that, in the case of
Leases to be transferred as part of the Assets, Seller shall
continue, if such consent will not be obtained and/or until
any such consent is received, as a party to each such Lease
for the benefit of the Buyer, and Buyer shall perform Seller's
post-Closing obligations under such Leases as specifically set
forth in subleases between Seller and Buyer and hold Seller
and its affiliates harmless with respect to such performance
by Buyer and with respect to any post-Closing liability Seller
or any of its affiliates may incur in connection with any such
Lease subsequent to the Closing; and (z) to make or complete
such transfer or transfers as soon as possible. Buyer and
Buyer's Parent will execute such documents and take such
actions, including the guaranty by Buyer's Parent of Buyer's
obligations to landlords with respect to any real property
leases.
1.4 Assumed Obligations.
(a) At the Closing, Buyer shall assume and shall, subject to all
rights, against third parties, of offset, defenses, causes of
action, counterclaims and claims of any nature that may be
available to Buyer in respect of the Assumed Obligations,
agree to satisfy and discharge, as the same shall become due,
all of the liabilities and obligations of Seller (the "Assumed
Obligations") under:
(i) the contracts, agreements and commitments of Seller
which are specifically identified in Sections 3.12,
3.15 and 3.17(a), (b), (c) or (p) of the Disclosure
Schedule and obligations to perform testing services
in the ordinary course of business (the "Assumed
Contracts") but only to the extent any such
liabilities and obligations arise after the Closing
and then only in respect of events and time periods
occurring after the Closing, provided, however, Buyer
shall not assume or agree to pay, discharge or
perform:
(A) any liabilities or obligations
arising exclusively in respect of a
breach of the non-assignment
provision of any Assumed Contract
by virtue of the assignment of such
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contract to Buyer hereunder, (but
Buyer shall allow Seller to take
all such steps as may be necessary
to remedy any such breach);
(B) liabilities or obligations of the
aforesaid character existing as of
the Closing Date, and which under
generally accepted accounting
principles should have been accrued
or reserved for on a balance sheet
or the notes thereto as a liability
or obligation, if and to the extent
that the same were not accrued or
reserved for on the Closing Balance
Sheet;
(C) liabilities or obligations arising
out of any breach by Seller of any
provision of any agreement,
contract, commitment or lease
referred to in this Section
1.4(a)(i), including but not
limited to liabilities or
obligations arising out of Seller's
failure to perform any agreement,
contract, commitment or lease in
accordance with its terms prior to
the Closing; or
(D) any liability of Seller to Seller's
Parent or any of its affiliates.
(ii) all permits, registrations, and licenses which are
being transferred to Buyer on the Closing Date, if
and to the extent transferable, but only to the
extent any such liabilities and obligations arise
after the Closing and then only in respect of events
and time periods occurring after the Closing; and
(iii) all of Seller's obligations under purchase orders or
agreements entered into until the Closing to acquire
goods and services solely in connection with the
operation of the Business in the ordinary course and
which are in existence as of the Closing (subject to
the limit on capital expenditures set forth in
Section 3.10(j), below).
(b) Buyer agrees to execute and deliver to Seller: (i) the
Assignment and Assumption Agreement (the "Assignment and
Assumption Agreement"), substantially in the form of Exhibit
B1 hereto, to evidence Buyer's assumption of the Assumed
Obligations and the Assumed Liabilities (as such term is
defined in Section 2.4 below); and (ii) Assignment and
Assumption Agreements substantially in the form annexed hereto
as Exhibit B2, related to the Leased Properties in Tampa, FL,
Milford, NH and Atlanta, GA, defined in Section 3.12 (c),
below.
1.5 Excluded Obligations.
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Buyer shall not assume or be responsible for any liability, obligation,
debt or commitment of Seller, other than the Assumed Obligations and the Assumed
Liabilities, which liabilities, obligations, debts and commitments not so
assumed (the "Excluded Obligations") shall include and not be limited to
liabilities, obligations, debts or commitments, absolute or contingent, whenever
the same may arise:
(a) as set forth in Section 2.4(u) through (z) below;
(b) which arise or are asserted by operation of any law, including
but not limited to any liability (other than an Assumed
Obligation or Assumed Liability) which may be sought to be
imposed on Buyer as successor to any part of Seller's
Business, or otherwise, by reason of any event (including but
not limited to the provision of services by Seller prior to
the Closing), act or omission, injury or transaction which
shall have occurred or failed to have occurred, whether by
reason of the operation of the Business or otherwise, prior to
the Closing;
(c) to issue or purchase or make any payment in respect of any
shares of capital stock or any other security of Seller or any
of its affiliates;
(d) except as otherwise expressly provided herein, including,
without limitation in Section 2.4 hereof, which arises prior
to Closing or is otherwise incurred in respect of any event
which occurs prior to the Closing, whether under any of
Seller's contracts which are assumed by Buyer or otherwise;
(e) relating in any way to any of Seller's affiliates;
(f) which did not arise in the Business;
(g) except as provided in Section 2.4(b) and subject to Section
7.11(c) in respect of any of Seller's employee policies
(whether set forth in any of Seller's employee handbooks,
policies or otherwise) and benefit plans (including but not
limited to the Employee Benefit Plans (as that term is defined
in Section 3.25 of the Disclosure Schedule));
(h) for any deficit in Seller's unemployment compensation
obligations in respect of Seller's employees prior to the
Closing;
(i) to any of Seller's employees in respect of any matter prior to
Closing, whether self-insured by Seller or otherwise, and
including but not limited to worker's compensation and medical
claims;
(j) to any of Seller's retired employees;
(k) for any liability in respect of Seller's operations;
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(l) in respect of any express or implied representation, warranty
or guarantee made in connection with any of Seller's services
or operations (except as provided in Section 7.15 below), or
which are or may be imposed by operation of law in respect of
any operations prior to the Closing; and
(m) any liability, whenever the same may arise, in respect of any
pricing, profit limitation or other regulation applicable to
government contracts, if any, of Seller for all periods prior
to Closing.
Without limiting the generality of the foregoing, Buyer shall,
notwithstanding Seller's disclosure of any matter in this Agreement, or Seller's
failure to disclose any matter in this Agreement whether or not Seller shall
have been required to make any such disclosure, under no circumstances be deemed
to have assumed any debt, liability or obligation of Seller not expressly
assumed in Section 1.4 above or in Section 2.4 below.
2. PURCHASE PRICE AND CLOSING.
2.1 Purchase Price.
The purchase price (the "Purchase Price") for the Assets to be sold,
transferred, conveyed, assigned and delivered by Seller to Buyer pursuant to
this Agreement shall be:
(a) $3,392,000;
(b) decreased by the amount by which normal depreciation between
the date of the July Balance Sheet and the date of the Closing
Balance Sheet has decreased net property, plant and equipment
included in the Assets shown on the Closing Balance Sheet
below $2,802,000 and increased by amount of capital
expenditures (up to a maximum increase of $275,000) made by
Seller during the same period; and
(c) increased or decreased, as the case may be, by the amount that
the "Other Current Assets" as set forth on the Closing Balance
Sheet is greater than or less than $297,000.
2.2 Payment of Purchase Price.
Subject to Section 2.5 below, on the Closing Date, the Buyer shall pay
to Seller on account of the purchase price:
(a) the amount of $1.0 million (the "Cash Closing Payment"),
including a $100,000 deposit transferred to Seller on December
19, 1995 payable by wire transfer of
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immediately payable funds to such account as Seller shall
designate (the "Closing Cash Payment");
(b) the Buyer will issue to Seller a secured convertible note in
the form annexed hereto as Exhibit D (the "Note") in the
principal amount of $1.292 million; and
(c) the Buyer will assume the liabilities described as being
assumed by Buyer in Section 2.4, below.
2.3 Closing.
The closing of the transactions provided for in this Agreement (the
"Closing") shall take place at the offices of Buyer on December 28, 1995, but no
later than 10:00 a.m., New York time on December 29, 1995 to be effective as of
December 31, 1995. The date on which the Closing is to be effective is herein
referred to as the "Closing Date." The Closing shall be deemed to have occurred
at 11:59 P.M. on the Closing Date.
2.4 Assumption of Liabilities.
At the Closing hereunder and except as otherwise specifically provided
in this Section 2.4, Buyer shall assume and agree to pay, discharge or perform,
as appropriate, the following liabilities and obligations of Seller (the
"Assumed Liabilities").
(a) all liabilities and obligations of Seller arising in the
regular and ordinary course of the Business to the extent that
the same remain unpaid and undischarged on the Closing Date
and are accrued or reserved for on the Closing Balance Sheet.
(b) all liabilities for accrued vacation pay for all employees of
the Business as of the Closing Date to the extent such
liabilities are accrued or reserved for on the Closing Balance
Sheet.
In no event, however, shall Buyer assume or incur any liability or
obligation under this Section 2.4 or otherwise in respect of any of the
following:
(u) any undisclosed liability;
(v) except as otherwise expressly provided in Section 1.4 herein,
any product liability or claim for injury to person or
property, regardless of when made or asserted, which arises
out of or is based upon any express or implied representation,
warranty, agreement or guarantee made by Seller, or alleged to
have been made by Seller, or which is imposed or asserted to
be imposed by operation of law, in connection with any service
performed or product sold or leased by or on behalf of Seller
on or prior to the Closing, including without limitation any
claim relating
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to any product delivered in connection with the performance of
such service and any claim seeking recovery for consequential
damage, lost revenue or income;
(w) any federal, state, local or foreign taxes, including, but not
limited to income, franchise, sales and use taxes, and
penalties and interest as a result of Seller to qualify or
become authorized to do business as a foreign corporation in
any jurisdiction (i) payable with respect to the business,
assets, properties or operations of Seller or any member of
any affiliated group of which it is a member for any period
prior to the Closing Date, or (ii) incident to or arising as a
consequence of the negotiation or consummation by Seller or
any member of any affiliated group of which it is a member of
this Agreement and the transactions contemplated hereby;
(x) any liability or obligation under or in connection with
Excluded Assets under Section 1.2;
(y) except as otherwise expressly provided in this Agreement, any
liability or obligation arising prior to or as a result of the
Closing to any employees, agents or independent contractors of
Seller, whether or not employed by Buyer after the Closing, or
under any compensation or benefit arrangement with respect
thereto; or
(z) except as otherwise expressly provided in this Agreement, any
liability or obligation of Seller arising or incurred in
connection with, or incident to, the negotiation, preparation
and execution of this Agreement and the transactions
contemplated hereby and fees and expenses of counsel,
accountants and other experts.
2.5 Closing Adjustment to Closing Cash Payment.
At Closing, on the basis of the best estimates and data then available,
but in no event on information older than the unaudited balance sheet of Seller
as of November 30, 1995, the parties will analyze the financial position of
Seller for the purposes of adjusting the Purchase Price by increasing or
decreasing the principal amount of the Note in the manner set forth below:
(a) by the amount by which the Assumed Liabilities by Buyer are
less than or exceed $1.1 million.
(b) by the amount by which normal depreciation between July 28,
1995 and the Closing Date has decreased net property, plant
and equipment included in the assets below $2,802,000 and
increased by amount of capital expenditures (up to a maximum
increase of $275,000) made by Seller during the same period;
and
(c) by the amount that Other Current Assets is greater than or
less than $297,000.
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2.6 Closing Financial Statements.
Not later than 30 days after the Closing Date, Seller shall prepare a
balance sheet of the Business at the Closing Date ("Closing Balance Sheet") in
accordance with generally accepted accounting principles. Such balance sheet
shall specifically identify all assets reflected thereon which are not included
in the Assets and all liabilities reflected thereon which are not assumed by
Buyer hereunder.
Seller shall cause Coopers & Xxxxxxx, its independent accountants
("Seller's Auditors"), to perform the procedures set forth on Schedule 2.6 and
to issue, as soon as practicable but in any event not later than 45 days after
the Closing Date, its report to Seller and Buyer to the effect that such balance
sheet presents fairly the financial position of the Business as of the Closing
Date, in conformity with generally accepted accounting principles. Such report
shall also include a detailed schedule setting forth the calculation of the
amounts described in Section 2.1 hereof and the Purchase Price and statement to
the effect that the Purchase Price was calculated in accordance with the
provisions of this Agreement. In performing the foregoing procedures and
rendering the foregoing report, Seller's Auditors shall consult with Xxxxxxx,
Xxxxxx & Xxxxxxx, L.L.P., Buyers independent accountants ("Buyer's Auditors"),
and permit Buyer's Auditors at the earliest practicable date to review the
report of Seller's Auditors, including all work papers, schedules and
calculations related thereto, prior to the issuance thereof. Buyer's Auditors
shall commence its review of said work papers, schedules and calculations as
soon as practicable after Seller's Auditors has completed the field work phase
of its procedures, but such review shall not prevent Seller's auditors from
issuing their report.
Any dispute which may arise between Seller and Buyer as to the Closing
Balance Sheet shall be resolved in the following manner:
(a) Buyer, if it disputes the Closing Balance Sheet or its effect
on the Purchase Price, shall notify Seller in writing within
15 days after the issuance of the Closing Balance Sheet that
Buyer disputes the Closing Balance Sheet or its effect on the
Purchase Price; such notice shall specify in reasonable detail
the nature of the dispute;
(b) during the 15 day period following the date of such notice
Seller and Buyer shall attempt to resolve such dispute and to
determine the appropriateness of the Closing Balance Sheet and
the effect on the Purchase Price; and
(c) if at the end of the 15 day period specified in subsection (b)
above, Seller and Buyer shall have failed to reach a written
agreement with respect to such dispute, the matter shall be
referred to, Xxxxxx Xxxxxxxx & Co., independent certified
public accounts (the "Arbitrator"), which shall act as an
arbitrator and shall issue its report as to the items in
dispute within thirty (30) days after such dispute is
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referred to the Arbitrator. Each of the parties hereto shall
bear all costs and expenses incurred by it in connection with
such arbitration, except that the fees and expenses of the
Arbitrator hereunder shall be borne in such proportion as the
Arbitrator shall decide based upon the merits of the dispute.
This provision for arbitration shall be specifically
enforceable by the parties and the decision of the Arbitrator
in accordance with the provisions hereof shall be final and
binding and there shall be no right of appeal therefrom.
References in this Agreement to the Closing Balance Sheet shall mean
the balance sheet of the Business at the Closing Date, prepared and reported
upon as described in this Section 2.6.
After the amounts in the Closing Balance Sheet are finally determined
pursuant to this Section 2.6 (the date of such final determination hereinafter
referred to as the "Adjustment Date"), any adjustment required to be made to the
Purchase Price, as adjusted pursuant to Section 2.1 above, as a result of the
amounts set forth in the Closing Balance Sheet, shall be made in the same manner
as set forth in Section 2.5 above.
If the Note is required to be adjusted within fifteen days of the
Adjustment Date, but effective on the Adjustment Date, Seller shall deliver the
Note to Buyer, and Buyer shall deliver to Seller a new convertible promissory
note, identical to the Note except for the making of an appropriate adjustment
to the principal amount thereunder.
2.7 Bulk Sales Laws.
Buyer and Seller each waive compliance with the Bulk Sales Laws of the
States of New Hampshire, Florida and Kansas.
2.8 Allocation of Purchase Price.
The consideration for the Assets will be allocated consistent with the
allocation set forth on Schedule 2.8 hereto. It is agreed that such an
allocation is fair to both parties and that it will be used as the basis for
reporting this transaction for all tax purposes (subject to Purchase Price
adjustments, if any). Each party hereto agrees to prepare its federal and state
income tax returns for all current and future tax reporting periods and file
Form 8594 (and corresponding state forms) with respect to the transfer of the
Assets to Buyer in a manner consistent with such allocation. The allocation of
the Purchase Price shall in no event limit the liability of Seller to Buyer with
respect to damages, liabilities or expenses incurred by Buyer with respect to
any breach of Seller's representations, warranties, covenants or agreements set
forth herein..
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3. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyer as follows:
3.1 Corporate Organization.
(a) Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
Seller has all requisite corporate power and authority to
carry on the Business as the same is now being conducted and
to own, lease and operate it's properties and assets in the
places where such business is now conducted and where such
properties and assets are now owned, leased or operated.
(b) Seller is duly qualified or licensed to do business as a
foreign corporation in good standing only in the jurisdictions
set forth in Section 3.1(b) of the Disclosure Schedule. There
are no jurisdictions where Seller is not qualified to do
business where the failure to so qualify would have a material
adverse effect on the Business.
(c) Except as set forth in Section 3.1(c) of the Disclosure
Schedule, Seller neither owns nor leases any property, and
does not employ any person or maintain any agent, with respect
to the Business, outside of the jurisdictions set forth in
Section 3.1(b) of the Disclosure Schedule.
3.2 Authorization.
(a) Seller has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to carry
out the transactions contemplated hereby; (b) Seller has taken all necessary
corporate action required by law or otherwise to be taken by Seller to authorize
Seller's execution and delivery of this Agreement and the consummation by Seller
of the transactions contemplated hereby; and (c) this Agreement has been duly
and validly executed and delivered by Seller and constitutes a valid and binding
agreement of and upon Seller enforceable against Seller in accordance with its
terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles of
equity.
3.3 No Violation.
Except for the required consents of third parties identified in
Sections 3.12 and 3.15 of the Disclosure Schedule, and except as set forth in
Section 3.3 of the Disclosure Schedule, neither the execution and delivery of
this Agreement by Seller nor the consummation by Seller of
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the transactions contemplated hereby will violate any provision of the
Certificate of Incorporation or the by-laws of Seller, or be in conflict with,
or constitute a material default (or an event which, with or without notice,
lapse of time or both, would constitute a material default) under, or result in
the termination or invalidity of, or accelerate the performance required by, or
cause the acceleration of the maturity of any of the Assumed Obligations, or
result in the creation or imposition of any security interest, lien or other
encumbrance upon any of the Assets under any agreement or commitment to be
assumed by Buyer pursuant to this Agreement to which Seller is a party or by
which Seller is bound or to which any of the Assets is subject, or violate any
statute or law or any judgment, decree, order, regulation or rule of any
domestic or (to the knowledge of Seller) foreign court or domestic or (to the
knowledge of Seller) foreign government authority applicable to Seller, or any
of the Assets. For purposes of this Agreement, "to Seller's knowledge," "to the
best of Seller's knowledge, " or any similar formulation thereof shall mean to
the actual knowledge of any of the current: (i) laboratory directors of Seller,
(ii) personnel and human resource managers of Seller or Seller's Parent, (iii)
quality assurance and/or quality control directors of Seller, (iv) hazardous
material directors of Seller, or (v) officers and directors of Seller or
Seller's Parent.
3.4 Brokers and Finders.
Except for Tyone Partners (to whom only Seller is liable for fees,
commissions and expenses), no person has been authorized by Seller, or by anyone
acting on behalf of Seller or any of its officers, directors, employees or
trustees, to act as a broker, finder or in any other similar capacity in
connection with the transactions contemplated by this Agreement in such manner
as to give rise to any valid claim against Buyer or Seller for any broker's or
finder's fee or commission or similar type of compensation.
3.5 Financial Statements.
(a) Section 3.5(a) of the Disclosure Schedule sets forth the
following unaudited financial information (the "Financial
Information"):
(i) Internal, unaudited balance sheet of Seller as of
April 29, 1995 and internal unaudited income
statements of Seller for each of the two years ended
April 29, 1995 on a historical basis giving effect to
all operations and costs in existence at the time,
including overhead allocations from the Seller's
Parent, and internal, unaudited balance sheet of
Seller as of April 29, 1995 (the "April Pro Forma
Balance Sheet") and internal, unaudited income
statements for each of the two years ended April 29,
1995 on a pro forma basis giving effect solely to the
operations of Seller at its facilities in Milford,
New Hampshire, Tampa, Florida and Wichita, Kansas,
excluding all overhead allocations from the Seller's
Parent and excluding the assets described in Section
1.2(j) and (k) above.
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(ii) internal, unaudited balance sheets of Seller as of
October 28, 1995 and as of July 28, 1995, adjusted to
reflect the assets and liabilities of the Business
and after giving effect to the disposition or
exclusion, as appropriate, of the Excluded Assets
(the "July and October Pro Forma Balance Sheets");
(iii) internal, unaudited statements of income and cash
flows (prepared in a format previously agreed to by
the parties hereto), of Seller for each of the fiscal
quarters ended July 28, 1995 and October 28, 1995 on
a historical basis giving effect to all operations
and costs in existence at the time including overhead
allocations from the Seller's Parent, and internal,
unaudited statements of income and cash flows
(prepared in a format previously agreed to by the
parties hereto), of Seller for each of the fiscal
quarters ended July 28, 1995 and October 28, 1995 on
a pro forma basis giving effect solely to the
operations of Seller at its facilities in Milford,
New Hampshire, Tampa, Florida and Wichita, Kansas,
and giving effect to all headcount reductions as of
October 28, 1995 as if they had occurred at the
beginning of the periods, excluding all overhead
allocations from the Seller's Parent. The pro forma
adjustments reflecting the headcount reductions and
the overhead allocations are either set forth on the
statements or on a schedule annexed to such
statements.
(b) The Financial Information was compiled from Seller's internal
management reports in the ordinary course of Seller's
business, which is not consistent in all circumstances with
generally accepted accounting principals. The amounts with
respect to property, plant and equipment of the Business set
forth in the April, July and October Pro Forma Balance Sheets,
fairly present, in all material respects, such information as
of the dates referred to therein, and the revenues and gross
margins excluding overhead allocation (after giving effect to
the headcount reductions described above) of the Business set
forth in the April, July and October Pro Forma Income
Statements fairly present, in all material respects, such
information for the periods referred to therein. The estimates
described in subparagraph 3.5(a)(iii) above have been made in
good faith.
(c) Since July 28, 1995, Seller has kept its financial records in
a manner consistent with its practices at the time and during
the periods reflected in clauses (ii) and (iii) of paragraph
(a) above without change, in any material respect, of policy
or procedure, as to nature of item, amount or otherwise.
(d) The aggregate dollar amount of the net property, plant and
equipment included in the July Pro Forma Balance Sheet does
not exceed the cost of such property, plant and equipment to
Seller, less any previous write-downs and less depreciation,
and the value thereof has not been written up.
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3.6 Records and Books of Account; Accounting Practices.
The records and books of account of Seller have been regularly kept and
maintained in reasonable detail and accurately and fairly reflect the
transactions and asset dispositions of the Seller. The Seller also maintains an
adequate system of internal controls.
3.7 No Undisclosed Liabilities.
(a) As of October 28, 1995, except as set forth in Section 3.7 of
the Disclosure Schedule, Seller did not have any material
liabilities or obligations of any nature (absolute, accrued,
contingent or otherwise) which were not fully disclosed or
reserved against in the October Pro Forma Balance Sheet, and
the reserves reflected in the October Pro Forma Balance Sheet
were adequate, appropriate, and reasonable as to both nature
of items and amounts.
(b) Except as set forth in Section 3.7 of the Disclosure Schedule,
since October 28, 1995, Seller has not incurred any material
liabilities (contingent or otherwise) except in the ordinary
and usual course of business and consistent with past
practices.
3.8 Reserved.
3.9 Inventory.
Except as set forth in Section 3.9 of the Disclosure Schedule, (a) all
material items of the Inventory have been acquired in the ordinary and usual
course of business; (b) all material items of the Inventory are of a quality and
quantity usable in the ordinary and usual course of business; and (c) the
quantities of each type of Inventory are not materially excessive, but are
reasonable, adequate and appropriate.
3.10 Interim Operations.
Except as set forth in Section 3.10 of the Disclosure Schedule, since
April 29, 1995 Seller has conducted the Business only in the ordinary and usual
course consistent with past practices. Without limiting the generality of the
foregoing, except as set forth in Section 3.10 of the Disclosure Schedule,
Seller has not with respect to the Business, since April 29, 1995:
(a) suffered any material adverse change in the Assets, or
suffered any material damage, destruction or loss, whether or
not covered by insurance, in either case materially affecting
the business, assets or properties of the Seller;
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(b) agreed to, or incurred, assumed or become subject to, any
liabilities or obligations for returns or allowances, other
than in the ordinary and usual course of business and
materially consistent in nature of item and amount with past
practice, or increased, or experienced any change in any
assumption underlying, or methods of calculating, any bad
debt, contingency or other reserve (except for any such
reserve expressly set forth in the July and October Pro Forma
Balance Sheets);
(c) paid, discharged or satisfied any material claim, liability or
obligation (absolute, accrued, contingent or otherwise), other
than the payment, discharge or satisfaction of liabilities and
obligations reflected or reserved against in the April 29
Statements, July Pro Forma Balance Sheet or October Pro Forma
Balance Sheet, or incurred in the ordinary and usual course of
business consistent with past practices;
(d) prepaid any obligation having a fixed maturity of more than 90
(ninety) days from the date such obligation was issued or
incurred, or not paid, within 30 days of when due, any account
payable, or sought the extension of the payment date of any
material account payable, other than any account payable which
was (until paid) or is being contested in good faith;
(e) subjected any of the Assets, or, to the best of Seller's
knowledge, permitted or allowed any of the Assets to be
subjected, to any mortgage, pledge, lien, security interest,
encumbrance, restriction or charge of any kind, except for
liens for current taxes not yet due;
(f) waived any claims or rights of substantial value under any of
the Assumed Contracts or otherwise in connection with any of
the Assets;
(g) except for the disposition referred to in Section 1.2(k)
above, sold, transferred, licensed or otherwise disposed of
any of its material properties or assets (real, personal or
mixed, tangible or intangible) that, but for such sale,
transfer or other disposition, would have been included in the
Assets, except in a bona fide transaction to an unaffiliated
third party for fair value and in the ordinary and usual
course of business and consistent with past practice (the
exceptions hereto listed in Section 3.10 of the Disclosure
Schedule show date of disposition, identity of transferee,
amount received and book value);
(h) disposed of, licensed or permitted to lapse any rights to the
use of any patent, trademark, trade name or copyright used in
the conduct of the Business, or, to Seller's knowledge,
disposed of or disclosed, or permitted to be disclosed (except
as necessary in the conduct of its business), to any person
other than representatives or agents of Buyer, any trade
secret, formula, process, know-how or similar information not
theretofore a matter of public knowledge;
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(i) granted or committed to make any material increase in any
compensation, bonus, pension, profit-sharing or other benefit
plan or commitment of any employee of Seller;
(j) since July 28, 1995, made any capital expenditures or binding
commitments to be assumed by Buyer or to which any of the
Assets may be or become subject, in excess of $5,000 in any
one case or $275,000 in the aggregate, for repairs or
additions to property, plant, equipment or tangible assets;
(k) paid, loaned or advanced any amount to, or sold, transferred
or leased property or asset (real, personal, mixed, tangible
or intangible) to, or entered into any agreement or
arrangement with, any of Seller's, or Seller's Parents,
officers, employees, directors, stockholders or any
"affiliate" or "associate" (as such terms are defined in Rule
405 under the Securities Act of 1933, as amended) or any
immediate or extended family member (up to and including first
cousins) of any of such persons (collectively, the
"Significant Persons" and, individually, a ("Significant
Person"), except for compensation to such persons expressly
disclosed in Section 3.28 of the Disclosure Section, except
for purchase orders and working capital advances from Seller's
Parent;
(l) made any change in any method of accounting;
(m) changed any of the banking or safe deposit arrangements
comprising part of the Assets;
(n) failed to maintain the books, accounts and records of the
Seller in the usual, regular and ordinary manner; or
(o) agreed, whether in writing or otherwise, to take any action
described in this Section 3.10.
3.11 Title to Assets; Encumbrances.
(a) Section 3.11(a) of the Disclosure Schedule contains an
accurate and complete list (the "Equipment List") of all of
the Equipment and interests therein owned by Seller on the
date hereof and such list includes all of the Equipment owned
by Seller reflected in the July Pro Forma Balance Sheet or
acquired after July 28, 1995 (except to the extent disposed of
to an unaffiliated third party in a bona fide transaction, for
fair value, in the ordinary and usual course of business and
consistent with past practice, and except as contemplated by
Section 3.10(g)) having an original cost in excess of $500.00.
All of such properties are and will be included in the Assets.
Section 3.11(a) of the Disclosure Schedule also contains a
list of all property in the possession of Seller on the date
hereof which is owned by any government agency or other third
party.
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(b) Except as set forth in Section 3.11(b) of the Disclosure
Schedule, Seller has good and valid title to all of the
Assets. The Assets comprise all of the business, properties,
assets (however, employees, to the extent that they could be
considered assets, are not included as assets in this Section)
and goodwill employed by Seller and its affiliates in
connection with the Business except the Excluded Assets.
(c) Except as set forth in Section 3.11(c) of the Disclosure
Schedule, all Assets (excluding Assets that are described in
Section 3.12(c) or Section 3.11(a) of the Disclosure Schedule
as leased Assets or Assets owned by third parties) are owned
by Seller free and clear of all title defects or objections,
liens, claims, charges, rights of others, security interests
or other encumbrances of any nature whatsoever, including
without limitation, any leases, escrows, options, security or
other deposits, rights of redemption, chattel mortgages,
conditional sales contracts, Liens, collateral security
arrangements and other title or interest retention
arrangements, except for liens for current taxes not yet due.
(d) Except as set forth in Section 3.11(d) of the Disclosure
Schedule and the Excluded Assets, the Assets include all
rights, properties and other assets (however, employees, to
the extent that they could be considered assets, are not
included as assets in this Section) necessary to conduct and
to continue to conduct the Business after the Closing
(assuming Buyer conducts the Business in the same manner as
Seller) in the same manner as the Business has since April 29,
1995 been and is now being conducted except for licenses and
permits which Buyer may be required to obtain in its own name,
and except that the transfer of certain of the Assets and
Leases requires the consent of those third parties required to
be identified pursuant to Section 3.3 above.
(e) Except as set forth in Section 3.11(e) of the Disclosure
Schedule, Seller does not, own, lease or use in the Business
any machinery and equipment which is not located at Real
Property described in Section 3.12.
3.12 Real Property.
(a) Real Property Defined. All real property (including, without
limitation, all interests in and rights to real property) and
improvements located thereon which are owned or leased by
Seller and used in connection with the Business or included in
the Assets are listed in Section 3.12(a) or Section 3.12(c) of
the Disclosure Schedule (the "Real Property").
(b) Reserved.
(c) Leased Real Property. With respect to the Real Property that
is leased by Seller, all of which property is identified in
Section 3.12(c) of the Disclosure Schedule
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(the "Leased Property") (but which, for the purposes of
subsections through (k) hereof shall relate only to the Tampa
and Milford leases):
(i) Seller has delivered to Buyer a true and complete
copy of every lease and sublease to which Seller is a
tenant or subtenant (the "Leases"), and has described
each Lease in Section 3.12 (c) of the Disclosure
Schedule by listing the name of the landlord or
sublandlord, the address of the leased premises, the
commencement and expiration dates of the current
term, the security deposited by Seller with the
landlord or sublandlord, if any, and the monthly
rental (including base and all additional rents).
(ii) each Lease is, and at Closing shall be, in full force
and effect and has not been assigned, modified,
supplemented or amended except as listed on the
Disclosure Schedule, and neither Seller nor, to
Seller's knowledge, the landlord or sublandlord under
any Lease is in default under any of the Leases, and
to Seller's knowledge, no circumstances or state of
facts presently exists which, with the giving of
notice or passage of time, or both, would permit the
landlord or sublandlord under any Lease to terminate
any Lease; and
(iii) subject to Section 1.3(d) above, at Closing Seller
shall assign to the Buyer all right, title and
interest of Seller in and to all Leases (and shall
deliver to Buyer original copies of all consents
required for such assignments) and all security
deposits made by Seller pursuant to any of the
Leases, including, but not limited to, the security
deposits listed on the Disclosure Schedule, together
with all interest earned on such deposits.
(d) Utility Services. With respect to the Wichita Property and, to
Seller's knowledge with respect to the Leased Property, the
water, electric, gas and sewer utility services and the septic
tank and storm drainage facilities currently available are
adequate for the present use of the Real Property by Seller in
conducting the Business, Seller has not experienced any
material shortage in any such service in the last three years,
are not being appropriated by Seller but rather are being
supplied to Seller by utility companies or municipalities
pursuant to valid and enforceable contracts, and there is no
condition which will result in the termination of the present
access from the Real Property to such utility services and
other facilities. To the knowledge of Seller, without having
made any independent investigation, no curtailment of any such
utility services is proposed by any provider of any of such
services.
(e) Access. With respect to the Wichita Property and, to Seller's
knowledge, with respect to the Leased Property, Seller has
obtained all Authorizations and rights-of-way, including
proof-of-dedication, which are necessary to ensure vehicular
and pedestrian ingress and egress to and from the Real
Property; and there are no
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restrictions on entrance to or exit from the Real Property to
adjacent public streets and to Seller's knowledge no
conditions which will result in the termination of the present
access from the Real Property to existing highways and roads.
(f) Assessments or Hazards. Seller has received no written
notices, nor, to Seller's knowledge, any oral notice, from any
governmental body, that the assessed value of the Wichita
Property has been determined to be greater than that upon
which county, township or school tax was paid for the current
tax year applicable to each such tax, or from any insurance
carrier of Seller of fire hazards with respect to the Real
Property.
(g) Eminent Domain. Seller has received no written notices, nor,
to Seller's knowledge, any oral notice, and has no actual
knowledge, that any governmental body having the power of
eminent domain over the Real Property has commenced or intends
to exercise the power of eminent domain or a similar power
with respect to all or any part of the Real Property.
(h) No Violations. The Real Property and the present uses thereof
comply with all Regulations of all governmental bodies having
jurisdiction over the Wichita Property and, to Seller's
knowledge, the Leased Properties, and Seller has received no
written notices, nor, to Seller's knowledge, any oral notice,
from any governmental body, and has no actual knowledge, that
the Real Property or any improvements erected or situate
thereon, or the uses conducted thereon or therein, violate any
Regulations of any governmental body having jurisdiction over
the Real Property.
(i) Improvements. The improvements located on the Real Property
are in good condition and are, to Seller's knowledge,
structurally sound, and all mechanical and other systems
located therein are in good operating condition, subject to
normal wear, and no condition exists requiring material
repairs, alterations or corrections.
(j) No Encumbrances. Between the date of this Agreement and the
Closing Date Seller shall not sell, mortgage or encumber the
Real Property, or do or permit any act which diminishes title
to or value of the Real Property.
(k) Public Improvements. No work for municipal improvements that
would have a material adverse effect on the Business has been
commenced on or in connection with the Real Property or any
street adjacent thereto. No assessment for public improvements
has been made against the Wichita Property or, to Seller's
knowledge, the Leased Properties which remains unpaid. No
notice from any county, township or other governmental body
has been served upon the Real Property or received by Seller
since January 1, 1993 requiring or calling attention
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to the need for any work, repair, construction, alteration or
installation on or in connection with the Real Property which
has not been complied with.
(l) Executory Contracts. Set forth in Section 3.12(1) of the
Disclosure Schedule is a list of all executory contracts
currently in effect made by or on behalf of Seller, or by
which Seller is bound, with respect to the Real Property
("Executory Contracts") including, without limitation,
operation, management, maintenance, utility, and construction
contracts. At Closing Seller shall deliver to the Buyer a true
and complete copy (the original execution copy, if available)
of each of the Executory Contracts.
3.13 Laboratory and Equipment; Waste Handling.
(a) Except as set forth in Section 3.13 of the Disclosure
Schedule, (i) the laboratory equipment included in the Assets
is, to Seller's knowledge, structurally sound and with no
material defects (for purposes of this Section 3.13(a)
"material" shall mean defects that would cost in excess of
$2,500 to remedy in any one instance) and (ii) all material
items and pieces of Equipment are in good operating condition
on the date hereof, are used in the ordinary course of the
Business, are suitable for the uses to which they are put by
the Seller, and are adequate in the aggregate to conduct the
Business as presently conducted, subject to normal maintenance
requirements and reasonable wear and tear.
(b) Except as set forth in Section 3.13 of the Disclosure
Schedule, there are no outstanding requirements or
recommendations which have been communicated to Seller in
writing during the past two years and Seller has no knowledge
of any insurance company which has issued a policy covering
any part of any of the properties, plants, structures or
equipment included in the Assets, or by any board of fire
underwriters or other body exercising similar functions,
requiring or recommending that any repairs or work be done on
any part of such properties, plants, structures or equipment.
(c) Except as set forth in Section 3.13 of the Disclosure
Schedule, all material obligations to contractors,
subcontractors and suppliers of labor and materials to
Seller's laboratories in connection with any construction or
renovation of any structures or improvements thereon have been
paid in full, and there are no known pending disputes with any
such contractors, subcontractors or suppliers.
3.14 Patents, Copyrights, Trademarks, Trade Names and Licenses.
(a) Except as set forth in Section 3.14(a) of the Disclosure
Schedule, there are no (i) patents held or used by Seller, or
reissues, divisions, continuations, and extensions thereof, or
pending patent applications by Seller which are or were,
within the past three (3) years, for or intended to be for
Seller's benefit; (ii) registered or
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unregistered trademarks or service marks of or used by Seller
or pending applications for registration of trademarks which
are or were, within the past three (3) years, intended to be
used by or for the benefit of Seller; or (iii) registered
copyrights of or used by Seller, or applications for
registration of copyrights that are or were, within the past
three (3) years, intended to be used by or for the benefit of
Seller ("Intellectual Property").
(b) Except as set forth in Section 3.14(b) of the Disclosure
Schedule, there are no licenses (whether as licensor, licensee
or otherwise) or other contracts or commitments to which
Seller is a party or to which it or any of its assets is
otherwise subject relating to any of the Intellectual
Property.
(c) Except as set forth in Section 3.14(c) of the Disclosure
Schedule: (i) during the past three (3) years no claims have
been asserted by any person against or otherwise in respect of
the use by Seller of any of the Intellectual Property, or
challenging or questioning the validity or effectiveness of
any license or agreement referred to in this Section 3.14,
and, to the knowledge of Seller, there is no valid basis for
any such claim; (ii) during the past three (3) years Seller
has not received notice of any allegation that it has
infringed upon any patent, trademark, service xxxx, trade name
or copyright or misappropriated or misused any invention,
trade secret or other proprietary information of any other
person entitled to legal protection; (iii) during the past
three (3) years Seller has not asserted any claim of such
infringement, misappropriation or misuse against any person;
(iv) Seller has good and valid title to, or otherwise
possesses adequate rights to use all patents, trademarks,
service marks, trade names, copyrights, inventions, trade
secrets and other proprietary information necessary to conduct
its business in the same manner as its business has been
conducted since January 1, 1993; and (v) no shareholder,
officer, director or employee of Seller or affiliates of any
of the foregoing owns or has any interest in any of the
Intellectual Property.
3.15 Personal Property Leases.
(a) Section 3.15 of the Disclosure Schedule sets forth a complete
and accurate list of all personal property leases, subleases,
concessions, licenses, conditional sales agreements or other
title retention agreements (collectively, the "Personal
Property Leases" and individually a "Personal Property Lease")
to which Seller is a party, as lessor, lessee, licensor or
licensee.
(b) Except as set forth in Section 3.15 of the Disclosure
Schedule, (i) each of the Personal Property Leases is valid,
binding and enforceable in accordance with its terms, and is
in full force and effect; (ii) there are no existing defaults
on the part of Seller and, to the best knowledge of the
Seller, any other party, under any Personal Property Lease and
to Seller's knowledge, no event of default under any
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such Personal Property Lease has occurred and is continuing
which (whether with or without the giving of notice, lapse of
time or both, or the happening of any other event) would
constitute a default under such Personal Property Lease; (iii)
each such Personal Property Lease will, subject to obtaining
any consent listed in Section 3.15 of the Disclosure Schedule,
continue to be in full force and effect on the same terms and
conditions immediately after the Closing without the need for
any action on the part of Buyer except for Buyer's performance
of the Assumed Obligations and the execution of documents and
instruments in connections with such assignment; (iv) each
such Personal Property Lease reflects the complete
understanding among the parties thereto in connection with the
subject matter thereof; and (v) accurate and complete copies
of each such Personal Property Lease including all amendments
thereto, have been delivered or will be delivered to Buyer at
or prior to the Closing.
(c) Except as set forth in Section 3.15 of the Disclosure
Schedule, Seller's interest in each of the Personal Property
Leases (i) is free and clear of all Liens (other than any
created by Buyer) and (ii) are not, in the case of real
property, except as set forth in Section 3.15 of the
Disclosure Schedule or in the Personal Property Leases,
subject to any rights of way, building use restrictions,
exceptions, variances, easements (recorded or unrecorded),
rights of redemption, reservations or limitations of any
nature whatsoever of which Seller has knowledge which may
materially and adversely interfere with Buyer's use thereof in
a manner substantially consistent with Seller's use thereof
prior to Closing.
3.16 Taxes.
(a) For any and all periods still open or subject to audit, Seller
or its predecessors have duly filed all tax reports and
returns (including information returns) required to be filed
by it or any of its predecessors relating to or covering the
Business and each of such reports and returns were true,
correct and complete.
(b) For any and all periods still open or subject to audit, Seller
has duly paid all taxes and other charges due or claimed to be
due or shown on any return or declaration to be due from it to
any federal, state, local or foreign taxing authority
(including, without limitation, those due in respect of
properties, income, franchises, licenses, sales and payrolls);
and there are no tax liens upon any of the Assets except liens
for current taxes not yet due.
(c) For any and all periods still open or subject to audit, all
taxes and other assessments and levies required to be withheld
by Seller from customers with respect to the provision of
services, or from or on behalf of employees for income, social
security, unemployment insurance and any other taxes or
similar charges have been collected or withheld and either
paid to the appropriate government agency or properly set
aside and held in accounts for such purpose.
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3.17 Contracts and Commitments.
Except as set forth in Section 3.17 of the Disclosure Schedule:
(a) Seller is not a party to or bound by any written or binding
oral agreements, contracts or commitments, which are material
to the Business, Seller's operations or prospects (for
purposes of this Section 3.17(a), an agreement, contract or
binding commitment shall be deemed to be material if it (i)
shall call for the expenditure of $1,000 or more in any
12-month period, or (ii) shall not be terminable according to
its terms without liability on not more than 30 days' notice);
(b) no purchase contract, contract for the performance of services
or other written or oral binding bid or commitment of Seller
(i) continues for a period of more than three (3) months from
the date hereof and is not terminable by Seller according to
its terms without liability on not more than 30 days' notice;
(ii) is in excess of the normal, ordinary and usual
requirements of the Business; (iii) is with any Affiliate of
Seller; (iv) has been prepaid in whole or part; and/or (v) has
had any delivery thereunder requested to be delayed to a date
past the Closing Date;
(c) Seller is not a party to or bound by any contracts, agreement
or arrangements: (i) with any federal, state, local or foreign
government, or any governmental or quasi-governmental agency,
board, bureau, authority or commission, or any utility company
except for customer contracts entered into in the ordinary
course of business, (ii) with any charitable organization,
(iii) with any officer or director of the Seller or any
Affiliate of the Seller or members of the immediate family of
the foregoing (a "Related Person") or (iv) providing for the
payment of any bonus or commission, whether based on sales or
earnings or otherwise;
(d) Seller is not a party to or otherwise bound by any written or
binding oral (i) employment agreements, (ii) non-competition
agreements or (iii) any other agreements, practices or
understandings that contain or will impose on Buyer any
severance or termination pay liabilities or obligations;
(e) Seller is not a party to or bound by any (i) collective
bargaining or union contracts or agreements or (ii) material
practices or understandings with any of employees which will
be binding on Buyer and are not embodied in a written
collective bargaining or union contract or other written
agreement listed in Section 3.17 of the Disclosure Schedule;
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(f) Seller is not in default, nor to Seller's knowledge is there
any basis for any valid claim of default against Seller, and
to the best of Seller's knowledge no other party is in
default, under any contract, agreement, commitment or
restriction which is an Assumed Obligation, and no event of
default has occurred which (whether with or without the giving
of notice, lapse of time, or both, or the happening or
occurrence of any other event) would constitute a default
thereunder;
(g) Seller is not a party to or bound by any consulting agreement;
(h) Seller is not restricted by any agreement from carrying on the
Business anywhere in the world;
(i) Seller is not a party to or bound by any outstanding powers of
attorney (except for powers of attorney issued to customs
brokers in the ordinary and usual course of business) or any
other outstanding obligations or liabilities (whether
absolute, accrued, contingent or otherwise), as guarantor,
surety, co-signer, endorser, co-maker, indemnitor or otherwise
in respect of the obligation of any other person, corporation,
partnership, joint venture, association, organization or other
entity;
(j) Seller is not a party to or bound by any partnership or joint
venture agreement, or any written or binding oral royalty,
distribution, agency, territorial or license agreement;
(k) There are no credit cards issued to any of Sellers employees
or for which Seller is directly liable and for which any
liability will be sought to be imposed on Buyer;
(l) Seller is not a party to or bound by any barter or counter
trade agreement;
(m) Seller is not a party to or bound by any cooperative
advertising agreement or arrangement;
(n) Seller has no debt obligation for borrowed money;
(o) Seller has no outstanding loans to any person; and
(p) There are no outstanding sales contracts, commitments or bids
of Seller which (i) continue for a period of more than six (6)
months from the date hereof, (ii) were entered into more than
six (6) months prior to the date hereof, or (iii) have been
prepaid in whole or part;
(q) all contracts, agreements, and leases, referred to in Section
3.17 of the Disclosure Schedule (i) are valid and in full
force and effect, (ii) will, except for the obtaining of any
consents listed in Section 3.24 of the Disclosure Schedule
that
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shall not have been obtained by the Closing, continue to be so
on the same terms and conditions immediately after the Closing
without the need for any action on the part of Buyer, other
than Buyer's performance of the Assumed Obligations and, where
specifically and expressly set forth in Section 3.7 of the
Disclosure Schedule, execution of documents and instruments in
connection with such assignment, and, (iii) reflect the
complete understanding among the parties thereto in connection
with the subject matter thereof; true and complete copies of
each thereof, including all amendments thereto, have been
delivered to Buyer at or prior to the date hereof (regarding
material contracts) and will be delivered by Closing (for all
others).
3.18 Customers and Suppliers; Trade Programs.
(a) Section 3.18 of the Disclosure Schedule sets forth:
(i) to Seller's knowledge, an accurate and complete list
of the ten (10) largest customers of Seller in terms
of revenues in each case during (x) the twelve month
period ended April 29, 1995, and (y) the six months
ended October 28, 1995, showing the approximate total
revenues in dollars received by Seller from each such
customer during each such period; and
(ii) an accurate and complete list of the ten (10) largest
suppliers of Seller in terms of purchases during (x)
the twelve month period ended April 29, 1995, and (y)
the six months ended October 28, 1995 showing the
approximate total purchases in dollars by Seller from
each such supplier during each such period.
(b) Except to the extent set forth in Section 3.18 of the
Disclosure Schedule, since January 1, 1994, there has not been
any material adverse change, and Seller has no knowledge that
any material adverse change is reasonably likely, in the
business relationship, or volume of business, of the Business
with any customer or supplier named in Section 3.18 of the
Disclosure Schedule.
(c) Except for the customers and suppliers named in Section 3.18
of the Disclosure Schedule, Seller has not had any customer
which accounted for more than 5% of Seller's revenues during
the six months ended October 28, 1995, or any supplier from
which Seller purchased more than 5% of the goods and services
which it purchased during (i) Seller's fiscal year ended April
29, 1995, or (ii) the six months ended October 28, 1995.
(d) All trade programs of Seller, if any, instituted since January
1, 1994, whether or not in the ordinary and usual course of
business or consistent with past practice, which may result in
claims against Buyer for money, credit or goods, including but
not limited to bonuses, billbacks, in-house programs,
accruals, other sales or
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commission incentives or allowances, discounts, returns,
credits, allowances and contests, are disclosed in Section
3.18 of the Disclosure Schedule.
3.19 Sales Practices; Warranties.
(a) Since April 29, 1995, except as set forth in Section 3.19 to
the Disclosure Schedule, Seller has not received any written
notice, nor, to its knowledge, any oral notice, of any claim
(actual or threatened) of any consumer or customer based on
any warranty other than claims in the ordinary course of
business and not in excess of $5,000.
(b) Since April 29, 1995, Seller has not accelerated its sales of
services except, and has made sales of services only, in the
ordinary course of the business consistent with Seller's past
practices.
(c) Section 3.19 of the Disclosure Schedule also sets forth, as at
October 31, 1995, each material pending claim against Seller
in connection with provision or services.
3.20 Insurance.
(a) Section 3.20 of the Disclosure Schedule contains an accurate
and complete list of all policies of fire, liability, keyman
life insurance, workers' compensation, products liability, and
other forms of insurance owned or held by or beneficially for
Seller. All such policies are in full force and effect and
will not be canceled or modified by Seller prior to Closing
without the express written consent of Buyer (except to extend
the maturity dates thereof), all premiums with respect thereto
covering all periods up to and including the Closing Date have
been or will be paid by Seller, and no written, or to Seller's
knowledge oral, notice of cancellation or termination has been
received by Seller with respect to any such policy.
(b) The aforesaid policies are sufficient for Seller's compliance
with, to Seller's knowledge, all requirements of law and of
all material agreements to which Seller is a party; are valid,
outstanding and enforceable policies; are, in the opinion of
management of Seller, in amounts customarily deemed to be
adequate and cover all risks customarily insured against in
the type of business conducted by Seller in the locality where
Seller operates its business; have been issued by reputable
insurance companies which are in good standing, adequately
capitalized and actively engaged in the insurance business;
and in the judgment of Seller provide adequate insurance
coverage for its assets and operations.
(c) Section 3.20 of the Disclosure Schedule also identifies (i)
all risks for which Seller is self-insured and (ii) the
workers' compensation and if possible unem-
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ployment insurance (for New Hampshire, Kansas and Florida)
ratings of Seller (or, if applicable, Seller's Parent).
(d) Except as set forth in Section 3.20 of the Disclosure
Schedule, in connection with its operations, (i) Seller has
not, since January 1, 1994, been unable to obtain any
insurance coverage in the amounts desired by Seller; (ii)
since January 1, 1994, neither the amount nor scope of any
insurance referred to in Section 3.20 of the Disclosure
Schedule or premiums therefor has been materially changed; and
(iii) Seller has not been notified of any material adverse
change or proposed material adverse change in the workers'
compensation or unemployment insurance ratings or insurance
rates for Seller.
3.21 Labor Difficulties.
Except to the extent set forth in Section 3.21 of the Disclosure
Schedule:
(a) there is no labor strike, formal dispute, formal grievance,
arbitration proceeding, general slowdown or stoppage, or
charge of unfair labor practice actually pending before a
court, regulatory body or arbitration tribunal, or to the best
of Seller's knowledge threatened against or affecting Seller;
(b) no union representation campaign is pending or, to Seller's
knowledge, threatened respecting any employees of Seller;
(c) Seller has not experienced any material work stoppage by its
work force or other material labor difficulty since January 1,
1993;
(d) to Seller's knowledge, there are no charges or complaints of
discrimination pending before the United States Equal
Employment Opportunity Commission or any state, local or
foreign agency against Seller;
(e) to the best of Seller's knowledge, Seller, does not presently
employ, and at no time during the past year did it employ, any
illegal alien;
(f)(i) to Seller's knowledge, Seller is not engaged in any unfair
labor practice, and (ii) at no time during the past three (3)
years has any unfair labor practice, complaint, charge or
similar claim against Seller been filed with, or to Seller's
knowledge, threatened to be filed by any employee with, the
National Labor Relations Board, Equal Employment Opportunity
Commission, Department of Labor or any similar state, local or
foreign agency; and
(g) no collective bargaining agreement which is binding on Seller
will be binding on Buyer or restricts the owner of the
Business from relocating or closing any of the Business's
facilities or operations.
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3.22 Litigation, Judgments and Decrees.
(a) Except as set forth in Section 3.22 of the Disclosure
Schedule, and except for workers compensation claims, there
has not been in the three (3) years prior to the date hereof,
nor is there currently, any action, suit or proceeding of any
nature whatsoever, at law or in equity or both, by or before
any domestic or foreign court, or to the best of Seller's
knowledge any proceeding or claim pending or threatened before
any government or other regulatory or administrative agency,
arbitration tribunal, board, bureau, authority or commission
or involving Seller, any of the Assets or any of the Assumed
Obligations, in any such case which would have a material
adverse effect on the Business or which questions or
challenges the validity of this Agreement or any action taken
or to be taken by Seller pursuant to this Agreement or in
connection with the transactions contemplated hereby.
(b) Except as set forth in Section 3.22 of the Disclosure
Schedule, Seller is not subject to any judgment, order, award
or decree of any domestic or, foreign court or government or
other regulatory or administrative agency, arbitration
tribunal, board, bureau, authority or commission (i) which has
or, to Seller's knowledge, may have a material adverse effect
on Seller's practices in the Business or on its ability to
acquire any property or conduct its Business in any area, (ii)
which is or will be binding on Buyer, or (iii) with respect to
which Seller is in default.
3.23 No Condemnation or Expropriation.
Neither the whole nor any portion of the Assets is subject to any
government decree or order to be sold or is being condemned, expropriated or
otherwise taken by any domestic or foreign public authority with or without
payment of compensation thereof, nor, to Seller's knowledge, has any such
condemnation, expropriation or taking been proposed in writing within the past
two years.
3.24 Consents and Approvals of Government Authorities and Others.
Except as set forth in Section 3.24 of the Disclosure Schedule, no
consent, approval or authorization of, or declaration, filing or registration
with, or the giving of notice to, any domestic or, to Seller's knowledge,
foreign government or regulatory authority or any other person or entity is
required of Seller in connection with the execution, delivery and performance by
Seller of this Agreement or the consummation by Seller of the transactions
contemplated hereby. Accurate and complete copies of each of the forgoing which
have been obtained or made have been delivered to Buyer at or prior to the date
hereto.
3.25 ERISA; Employee Benefit Plans.
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(a) As used in this Section 3.25, the term "Plan" means any bonus,
deferred compensation, pension, profit-sharing, retirement,
stock purchase, stock option, phantom stock, medical or any
other benefit plan, arrangement or practice, whether written
or unwritten including but not limited to any such plan,
arrangement or practice which constitutes an "employee welfare
benefit plan" within the meaning of Section 3(1) of the
Employee Retirement Income Security Act of 1974 and the
regulations thereunder ("ERISA") or an "employee pension
benefit plan" within the meaning of Section 3(2) of ERISA,
covering any employee of the Business. Section 3.25 of the
Disclosure Schedule sets forth a complete list of all Plans
maintained by Seller. Seller has no legally binding
commitment, whether formal or informal, to create any
additional such plan or arrangement.
(b) To Seller's knowledge, except as set forth on Section 3.25(b)
of the Disclosure Statement, all of Seller's Plans are in all
material respects in compliance in operation and in form with
the currently prescribed requirements prescribed by any and
all statutes, orders or governmental rules or regulations
currently in effect with respect to such Plans, including, but
not limited to ERISA and the Code, and there are no pending
or, to the Seller's knowledge, threatened claims, lawsuits or
arbitrations (other than routine claims for benefits) which
have been asserted or instituted against the Seller, any Plan
or the assets of any trust for any Plan.
(c) Seller has complied in all material respects with the
requirements of Section 4980B of the Code and applicable
regulations. Seller has not contributed to, nor has it been
obligated to contribute to, any multi-employer plan (as
defined in Section 3(37) of ERISA), or any other plan subject
to Title IV of ERISA within the preceding three calendar
years.
3.26 Absence of Questionable Payments.
Since January 1, 1994, neither Seller nor any of its officers, agents,
employees or any other person, entity or corporation acting on behalf of any of
them, has, to Seller's knowledge, accepted, received or made any unlawful
contributions, payments, gifts, or expenditures in respect of the Business.
3.27 Distinct Entity.
Except as set forth in Section 3.27 of the Disclosure Schedule, Seller
does not, share any Assets with any related or unrelated third party.
3.28 Personnel.
(a) Section 3.28 of the Disclosure Schedule sets forth an accurate
and complete list as of December 1, 1995 of:
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(i) the names and current salaries of Seller's salaried
employees;
(ii) the wage rates for Seller's non-salaried employees;
(iii) the customary increases on a periodic basis in the
compensation of each of the foregoing or any
increases required by any agreement or understanding
with each of the foregoing;
(iv) a description of any informal understanding generally
concerning employees' rights to continue to receive
compensation during any periods during which such
employees are not performing any services for Seller
other than with respect to vacation, disability and
sick time; and
(v) any increase granted or committed to for any period
subsequent to December 1, 1995 in the compensation of
any employee including, without limitation, any
change in any bonus, pension, profit-sharing or other
benefit plan or commitment except for obligations
imposed on Seller by the Code, ERISA or ADEA.
For a period of 18 months following the Closing, Seller will,
upon the reasonable request of Buyer, provide Buyer with
information relating to Seller's employees.
(b) (i) The vacation period for employees of Seller occurs
normally during the periods described in Section 3.28 of the
Disclosure Schedule. (ii) Except as set forth in Section 3.28
of the Disclosure Schedule, as at the Closing Date there will
be no bonuses, profit sharing, incentives, commissions or
other compensation of any kind due to or expected by present
or former employees of Seller which have not been fully paid
prior to such date.
(c) All employees of Seller are at-will employees.
(d) Except to the extent set forth in Section 3.28 of the
Disclosure Schedule, Seller has no knowledge that any material
adverse change in the relationship of the Business with its
employees is reasonably likely.
3.29 Compliance with Law; Necessary Authorizations.
(a) In conducting the Business, Seller has, except as set forth in
Section 3.29 of the Disclosure Schedule, since January 1,
1993, in all material respects duly complied and is presently
in all material respects duly complying with all applicable
laws (whether statutory or otherwise), rules, regulations,
orders, building and other codes, zoning and other ordinances,
permits, licenses, authorizations, judgments and decrees of
all federal, state, local or, to Seller's knowledge, foreign
governmental authorities, including, but not limited to, the
Federal Occupational
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Safety and Health Act, ERISA, National Labor Relations Act,
Worker Adjustment and Retraining Notification Act, Civil
Rights Act, Immigration Reform and Control Act of 1986, Age
Discrimination in Employment Act, the Water Pollution Control
Act and all applicable domestic and foreign laws, rules and
regulations relating to the safe conduct of business,
employment discrimination, wages and hours, employment of
illegal aliens, collective bargaining, the payment of
withholding and social security taxes, product labeling,
antitrust, consumer protection, occupational safety and
health, consumer product safety, the importation of goods,
product liability, currency exchange, securities and
trading-with-the-enemy matters, except where the failure to so
comply would not have a material adverse effect on the
Business.
(b) Except as set forth in Section 3.29 of the Disclosure
Schedule, since January 1, 1993, (i) Seller has obtained and
adhered to all necessary permits and other approvals,
including interim status under the Federal Solid Waste
Disposal Act, necessary to store, dispose of and otherwise
handle hazardous wastes, if any, and has reported, to the
extent required by all federal, state, local and, to Seller's
knowledge, foreign statutes, laws, ordinances, regulations,
rules, permits, judgments, orders and decrees (accurate and
complete copies of all such permits, judgments, orders and
decrees received by Seller or in Seller's possession being
included in Section 3.29 of the Disclosure Schedule), all past
and present sites, if any, owned and/or operated by Seller
where hazardous wastes have been treated, stored or disposed
of; (ii) there has been no spill, discharge, leak, emission,
injection, escape, dumping or any other release of any kind
onto any property of or used by Seller or into the environment
surrounding any such property of any toxic or hazardous waste
or substance, as such terms are defined under any applicable
law, ordinance, regulation or rule; and (iii) there is no
on-site or to Seller's knowledge off-site location to which
Seller has transported hazardous wastes or arranged for the
transportation of hazardous wastes, which site is the subject
of any federal, state, local or foreign enforcement action or
any other investigation which could lead to any claim against
Seller or Buyer for any clean-up cost, remedial work, damage
to natural resources or personal injury, including, but not
limited to, claims under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980.
(c) Except as set forth in Section 3.29 of the Disclosure
Schedule, Seller (i) has no knowledge and (ii) has not
received any written notification from any third party
(including but not limited to employees and government
agencies) of any present or, within the past three years, past
failure so to comply or has knowledge of any present
condition, activity, incident, action or plan which may
interfere with or prevent continued compliance with any laws,
rules or regulations or which may give rise to any common law
or statutory liability, or otherwise form the basis of any
material claim, action, suit, proceeding, hearing or
investigation which would have a material adverse effect on
the Business.
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(d) Seller has duly obtained all permits, concessions, grants,
franchises, licenses and other government authorizations and
approvals necessary for the conduct of the Business except
where such failure would not have a material adverse effect on
the Business; each of the foregoing is set forth in Section
3.29 of the Disclosure Schedule and is in full force and
effect; to the best of Seller`s knowledge, there are no
proceedings pending or threatened which may result in the
revocation, cancellation, suspension or modification of any
thereof.
3.30 Disclosure.
No representation or warranty by Seller in this Agreement and no
statement contained in the Disclosure Schedule contains any untrue statement of
any material fact or omits to state any material fact necessary, in light of the
circumstances under which it was made, in order to make the statements made
herein or therein not misleading.
3.31 Insider Interests.
Except as set forth in Section 3.32 of the Disclosure Schedule, to
Seller's knowledge, no person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with
(an "Affiliate"), the Seller, and no Significant Person (as defined in Section
3.10(k)) has an interest in any contract or agreement pertaining to the business
of Seller wherein more than $5,000 in any twelve month period is involved.
3A. REPRESENTATIONS AND WARRANTIES OF SELLER'S PARENT.
The Seller's Parent represents and warrants to Buyer as follows:
3A.1 Corporate Organization.
Seller's Parent is a corporation duly organized, validly existing and
in good standing under the laws of its State of Delaware. Seller's Parent has
full corporate power and authority to carry on its businesses as they are now
being conducted and to own, lease and operate its properties and assets as and
in the places where such businesses are now conducted and where such properties
and assets are now owned, leased or operated.
3A.2 Authorization.
Seller's Parent has full corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to carry out the
transactions contemplated hereby. Seller's Parent has taken all action required
by law or otherwise to be taken by Seller's Parent to authorize Seller's
Parent's execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement and the other agreements and
instruments contemplated hereunder to which Seller's Parent is a party have been
duly and validly executed and
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delivered by Seller's Parent and constitutes a valid and binding agreement of
and upon Seller's Parent enforceable against Seller's Parent in accordance with
its terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and (ii) general principles of equity.
3A.3 No Violation.
Neither the execution and delivery of this Agreement by Seller's Parent
nor the consummation by Seller's Parent of the transactions contemplated hereby
will violate any provision of the Certificate of Incorporation or by-laws of
Seller's Parent, or be in conflict with, or constitute a material default (or an
event which, with or without notice, lapse of time or both, would constitute a
material default) under, or result in the termination or invalidity of, or
accelerate the performance required by, or cause the acceleration of the
maturity of any obligations or liabilities of the Seller's Parent or violate any
statute or law or any judgment, decree, order, regulation or rule of any
domestic or foreign court or governmental authority applicable to Seller's
Parent.
3A.4 Litigation.
There is no action, suit or proceeding or any claim or investigation of
any nature whatsoever (including, but not limited to, products liability), at
law or in equity or both, by or before any domestic or foreign court or
government or other regulatory or administrative agency, arbitration tribunal,
board, bureau, authority or commission pending or, to Seller's Parent's
knowledge, which questions or challenges the validity of this Agreement or any
action taken or to be taken by Seller's Parent pursuant to this Agreement or in
connection with the transactions contemplated hereby.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
Buyer represents and warrants to Seller as follows:
4.1 Corporate Organization.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of its State of incorporation. Buyer has full corporate
power and authority to carry on its businesses as they are now being conducted
and to carry on the Business being acquired hereunder and to own, lease and
operate its properties and assets as and in the places where such businesses are
now conducted and where such properties and assets are now owned, leased or
operated. Buyer is, or will be at the time of the Closing, duly qualified or
licensed to do business as a foreign corporation in all jurisdictions where the
failure to so qualify would have a material adverse effect on the business,
financial condition, properties or operations of Buyer, after taking into
consideration the purchase of the Assets and the Business hereunder.
4.2 Authorization.
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Buyer has full corporate power and authority to execute, deliver and
perform its obligations under this Agreement and to carry out the transactions
contemplated hereby. Buyer has taken all action required by law or otherwise to
be taken by Buyer, to authorize Buyer's, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Buyer and
constitutes a valid and binding agreement of and upon the Buyer enforceable
against the Buyer in accordance with its terms, except that such enforcement may
be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and (ii)
general principles of equity.
4.3 No Violation.
Neither the execution and delivery of this Agreement by the Buyer nor
the consummation by the Buyer of the transactions contemplated hereby will
violate any provision of the Certificate of Incorporation or by-laws of the
Buyer, or be in conflict with, or constitute a material default (or an event
which, with or without notice, lapse of time or both, would constitute a
material default) under, or result in the termination or invalidity of, or
accelerate the performance required by, or cause the acceleration of the
maturity of any obligations or liabilities of Buyer or result in the creation or
imposition of any security interest, lien or other encumbrance upon any of its
assets or properties under any agreement or commitment to which Buyer is a party
or by which it is bound or to which any of its assets are subject, or violate
any statute or law or any judgment, decree, order, regulation or rule of any
domestic or foreign court or governmental authority applicable to the Buyer. For
the purposes of this Agreement, "to Buyer's knowledge" "to the best of Buyer's
knowledge" or any similar formulation thereof shall mean to the actual knowledge
of the officers and directors of Buyer and Parent.
4.4 Brokers and Finders.
No person has been authorized by the Buyer, or by anyone acting on any
of its behalf or by any of its officers, directors, employees or trustees, to
act as a broker, finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement in such manner as to give rise to
any valid claim against Buyer or Seller for any broker's or finder's fee or
commission or similar type of compensation.
4.5 Litigation.
There is no action, suit or proceeding or any claim or investigation of
any nature whatsoever (including, but not limited to, products liability), at
law or in equity or both, by or before any domestic or foreign court or
government or other regulatory or administrative agency, arbitration tribunal,
board, bureau, authority or commission pending or, to the Buyer's knowledge,
which questions or challenges the validity of this Agreement or any action taken
or to be taken by the Buyer pursuant to this Agreement or in connection with the
transactions contemplated hereby; and to the best of their knowledge, there is
no valid basis for any such action, suit, inquiry proceeding or investigation.
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4.6 Capitalization.
All of the issued and outstanding capital stock of Buyer is, and will
be on the Closing Date, owned, beneficially and of record by Nytest
Environmental, Inc. (the "Parent"). All such issued and outstanding capital
stock has been duly authorized, validly issued, and is fully paid and
nonassessable. As of the date hereof and on the Closing Date, there are and will
be no outstanding rights (including, without limitation, preemptive rights),
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the Buyer, or any
contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any capital stock of Buyer, any such convertible or
exchangeable securities or any such rights, warrants or options.
4.7 Consents.
No consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or any
other person or entity is required of Buyer in connection with the execution,
delivery and performance of this Agreement or the consummation by Buyer of the
transactions contemplated hereby which consent, approval, etc. has not been
obtained or will not be obtained on or prior to the Closing Date. Accurate and
complete copies of each of the foregoing which have been obtained or made have
been delivered to Seller at or prior to the date hereof.
4A. REPRESENTATIONS AND WARRANTIES OF THE PARENT.
The Parent represents and warrants to Seller as follows:
4A.1 Corporate Organization.
Parent is a corporation duly organized, validly existing and in good
standing under the laws of its State of Delaware. Parent has full corporate
power and authority to carry on its businesses as they are now being conducted
and to own, lease and operate its properties and assets as and in the places
where such businesses are now conducted and where such properties and assets are
now owned, leased or operated.
4A.2 Authorization.
Parent has full corporate power and authority to execute, deliver and
perform its obligations under this Agreement and to carry out the transactions
contemplated hereby. Parent has taken all action required by law or otherwise to
be taken by Parent, to authorize Parent's, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement and the other agreements and instruments contemplated hereunder to
which Parent is a
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party have been duly and validly executed and delivered by Parent and
constitutes a valid and binding agreement of and upon Parent enforceable against
Parent in accordance with its terms, except that such enforcement may be subject
to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (ii) general
principles of equity.
4A.3 No Violation.
Neither the execution and delivery of this Agreement by Parent nor the
consummation by Parent of the transactions contemplated hereby will violate any
provision of the Certificate of Incorporation or by-laws of Parent, or be in
conflict with, or constitute a material default (or an event which, with or
without notice, lapse of time or both, would constitute a material default)
under, or result in the termination or invalidity of, or accelerate the
performance required by, or cause the acceleration of the maturity of any
obligations or liabilities of the Parent result in the creation or imposition of
any security interest, lien or other encumbrance upon any of its assets or
properties under any agreement or commitment to which Parent is a party or by
which it is bound or to which any of its assets are subject, or violate any
statute or law or any judgment, decree, order, regulation or rule of any
domestic or foreign court or governmental authority applicable to Parent.
4A.4 Litigation.
There is no action, suit or proceeding or any claim or investigation of
any nature whatsoever (including, but not limited to, products liability), at
law or in equity or both, by or before any domestic or foreign court or
government or other regulatory or administrative agency, arbitration tribunal,
board, bureau, authority or commission pending or, to Parent's knowledge, which
questions or challenges the validity of this Agreement or any action taken or to
be taken by Parent pursuant to this Agreement or in connection with the
transactions contemplated hereby.
4A.5 Financial Statements.
The financial statements of Parent and the related notes contained in
Parent's Form 10-QSB for the quarterly period ending September 30, 1995 present
fairly the financial position of Parent as of the dates indicated, and the
results of its operations and cash flows for the periods therein specified. Such
financial statements (including the related notes) have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods therein specified.
4A.6 No Material Adverse Change.
Subsequent to September 30, 1995, Parent and its subsidiaries, taken as
a whole, have not incurred any material liabilities or obligations, direct or
contingent, other than in the ordinary course of business, and there has not
been any material adverse change in their consolidated condition (in each case,
financial or other), results of operations, business, prospects, key personnel
or capitalization.
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4A.7 Additional Information.
Parent has filed in a timely manner all documents that Parent was
required to file under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") during the 12 months preceding the date of this Agreement. The
following documents complied in all material respects with the requirements of
the Exchange Act as of their respective filing dates, and the information
contained therein as of the date thereof did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading:
(a) Parent's Annual Report on Form 10-KSB, as amended, for the
fiscal year ended December 31, 1994; and
(b) all other documents, if any, filed by Parent with the
Securities and Exchange Commission since December 31, 1994
pursuant to the reporting requirements of the Exchange Act.
4A.8 Listing.
Parent shall comply with all requirements of the National Association
of Securities Dealers, Inc. with respect to the issuance of any shares of common
stock to Seller or its affiliates under the Note and the listing thereof on the
NASDAQ Small-Cap Market or any other exchange on which Parent's shares are then
trading.
5. AGREEMENTS PENDING CLOSING.
5.1 Agreements of Seller Pending the Closing. Seller covenants and
agrees that, pending the Closing and except as otherwise agreed to in writing by
Buyer:
(a) Business in the Ordinary Course. The Business shall be
conducted solely in the ordinary course consistent with past
practice.
(b) Existing Condition. Seller shall not cause nor permit to occur
any of the events or occurrences described in Section 3.10
hereof.
(c) Maintenance of Physical Assets. Seller shall continue to
maintain and service the physical assets used in the conduct
of the Business in the same manner as has been its consistent
past practice.
(d) Employees and Business Relations. Seller shall use its
reasonable best efforts to keep available the services of the
present employees and agents of the Business and to maintain
the relations and goodwill with the suppliers, customers,
distributors and any others having business relations with the
Business.
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(e) Maintenance of Insurance. Seller shall notify Buyer of any
changes in the terms of the insurance policies and binders
referred to on Schedule 3.20 of the Disclosure Schedule.
(f) Compliance with Laws. etc. Seller shall comply with all laws,
ordinances, rules, regulations and orders applicable to the
Business, or Seller's operations, assets or properties in
respect thereof the noncompliance with which might materially
affect the Business or Assets.
(g) Update Schedules. Seller shall promptly disclose to Buyer any
information contained in its representations and warranties or
the Schedules which, because of an event occurring after the
date hereof, is incomplete or is no longer correct in any
material respect as of all times after the date hereof until
the Closing Date; provided, however, that none of such
disclosures shall be deemed to modify, amend or supplement the
representations and warranties of Seller or the schedules
hereto for the purposes of Article 6 hereof, unless Buyer
shall have consented thereto in writing.
(h) Conduct of Business. Seller shall conduct its business in such
a manner that on the Closing Date the representations and
warranties of Seller contained in this Agreement shall be
true, in all material respects, except as specifically
contemplated by this Section 5, as though such representations
and warranties were made on and as of such date. Furthermore,
Seller shall cooperate with Buyer and use its reasonable best
efforts to cause all of the conditions to the obligations of
Buyer under this Agreement to be satisfied on or prior to the
Closing Date.
(i) Sale of Assets; Negotiations. Seller shall not, directly or
indirectly, sell or encumber all or any part of the Assets,
other than in the ordinary course of the Business consistent
with past practice, or initiate or participate in any
discussions or negotiations or enter into any agreement to do
any of the foregoing. Seller shall not provide any
confidential information concerning the Business or its
properties or assets to any third party other than in the
ordinary course of business.
(j) Access. Seller shall give to Buyer's officers, employees,
counsel, accountants and other representatives all reasonable
opportunity and access to and the right to inspect, during
normal business hours, all of the premises, properties,
assets, records, contracts and other documents relating to the
Business and shall permit them to consult with the officers,
employees, accountants, counsel and agents of Seller for the
purpose of making such investigation of the Business and in
furtherance of the transaction proposed herein, including
without limitation the financial information set forth in
paragraph 3.5(a) above as Buyer shall desire to make, provided
that such investigation shall not unreasonably interfere with
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Seller's business operations, Furthermore, Seller shall
furnish to Buyer all such documents and copies of documents
and records and information with respect to the affairs of the
Business and copies of any working papers relating thereto as
Buyer shall from time to time reasonably request and shall
permit Buyer and its agents to make such inspections of the
Assets as Buyer may request from time to time.
(k) Press Releases. Except as required by applicable law, neither
Seller nor Seller's parent shall give notice to third parties
or otherwise make any public statement or releases concerning
this Agreement or the transactions contemplated hereby except
for such written information as shall have been approved in
writing as to form and content by Buyer, which approval shall
not be unreasonably withheld; provided that Seller may
continue such communications with employees, customers,
suppliers, shareholders, lenders, franchisers, lessors and
other particular groups as may be legally required or
necessary or appropriate and not inconsistent with the best
interests of Buyer or the Closing under this Agreement.
(l) No Default. Seller shall not do any act or omit to do any act,
or permit any act or omission to act, which will cause a
breach of any material contract or commitment of Seller.
(m) Confidentiality. Section 4.6 (B) of the Letter of Intent among
Seller, Seller's Parent and Parent, dated November 6, 1995
(the "Letter of Intent") is incorporated herein and made a
part hereof as if fully set forth herein.
5.2 Agreements of Buyer Pending the Closing. Buyer covenants and
agrees that, pending the Closing and except as otherwise agreed to in writing by
Seller:
(a) Actions of Buyer. Buyer will not knowingly take any action
which would result in a breach of any of its representations
and warranties hereunder. Furthermore, Buyer shall cooperate
with Seller and use its reasonable best efforts to cause all
of the conditions to the obligations of Buyer and Seller under
this Agreement to be satisfied on or prior to the Closing
Date.
(b) Confidentiality. Section 4.6(A) of the Letter of Intent is
incorporated herein and made a part hereof as if fully set
forth herein.
(c) Access. Section 4.1 (b) of the Letter of Intent is
incorporated herein and made a part hereof as if fully set
forth herein.
(d) Press Releases. Except as required by applicable law, neither
Buyer nor Buyer's Parent will not give notice to third parties
or otherwise make any public statement or releases concerning
this Agreement or the transactions contemplated hereby except
for such written information as shall have been approved in
writing as to
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form and content by Seller, which approval shall not be
unreasonably withheld; provided that Buyer may continue such
communications with employees, customers, suppliers,
shareholders, lenders, franchisers, lessors and other
particular groups as may be legally required or necessary or
appropriate and not inconsistent with the best interests of
Seller or the Closing under this Agreement. In addition, Buyer
and Buyer's Parent will provide Seller with information
concerning press releases and filings relating to these
transactions not less than two days prior to proposed release.
6. CONDITIONS PRECEDENT TO THE CLOSING.
6.1 Conditions Precedent to Buyer's Obligations. All obligations
of Buyer under this Agreement are subject to the fulfillment or satisfaction,
prior to or at the Closing, of each of the following conditions precedent:
(a) Representations and Warranties True as of the Closing Date.
The representations and warranties of Seller and Seller's
Parent contained in this Agreement or in any schedule,
certificate or document delivered by Seller or Seller's Parent
to Buyer pursuant to the provisions hereof shall have been
true in all material respects on the date hereof without
regard to any schedule updates furnished by Seller after the
date hereof and shall be true in all material respects on the
Closing Date with the same effect as though such
representations and warranties were made as of such date.
(b) Compliance with this Agreement. Each of Seller and Seller's
Parent shall have performed and complied in all material
respects with all agreements and conditions required by this
Agreement to be performed or complied with by it prior to or
at the Closing.
(c) Closing Certificate. Buyer shall have received a certificate
from each of Seller and Seller's Parent dated the Closing
Date, certifying that the conditions specified in Sections
6.1(a) and 6.1(b) hereof have been fulfilled and certifying
that Seller has obtained all consents and approvals required
with respect to it or the Business by Section 6.1(f) hereof.
(d) Opinions of Counsel for Seller. Counsel for Seller, shall have
delivered to Buyer a written opinion, dated the Closing Date,
in the form of Exhibit F hereto with only such changes as
shall be in form and substance reasonably satisfactory to the
Buyer and its counsel.
(e) No Threatened or Pending Litigation. On the Closing Date, no
suit, action or other proceeding, or injunction or final
judgment relating thereto, shall be threatened or be pending
before any court or governmental or regulatory official, body
or authority in which it is sought to restrain or prohibit or
to obtain damages
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or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby, and no
investigation that might result in any such suit, action or
proceeding shall be pending or threatened.
(f) Consents and Approvals. Except for consents required by the
terms of the contracts, commitments, agreements listed in
Section 6.1(f) of the Disclosure Statement, and subject to the
provisions of Section 1.3(d) above, the holders of any
indebtedness of Seller, the lessors or lessees of any real or
personal property or assets leased by Seller, the parties
(other than Seller) to any contract, commitment or agreement
to which Seller is a party or subject, any governmental or
regulatory official, body or authority or any other person,
and any governmental, judicial or regulatory official, body or
authority having jurisdiction over Seller or Buyer or their
respective affiliates to the extent that their consent or
approval is required or necessary under the pertinent debt,
lease, contract, commitment or agreement or other document or
instrument or under applicable orders, laws, rules or
regulations, for the consummation of the transactions
contemplated hereby in the manner herein provided, shall have
granted such consent or approval, provided such debt, lease,
contract, etc. is material to the Business.
(g) Material Adverse Changes. The assets or the operations of the
Business taken as a whole, shall not have been and shall not
be threatened to be materially adversely affected in any way
as a result of any event or occurrence (except as a result of
general economic conditions).
(h) Lease and Option. Seller shall have executed and delivered the
Lease and Option Agreement with respect to building owned by
Seller in Wichita, KS (the "Wichita Property") substantially
in the form annexed hereto as Exhibit E (the "Lease and Option
Agreement").
(i) Employee Arrangements. Each of Xxxxx Xxxxx, Xxxxx Xxxxxx and
Xxxxxx Xxxxxx shall have executed a "stay-put" agreement
substantially in the form annexed hereto as Exhibit G (for
which Buyer shall have no liability for bonuses).
(j) Supply and Marketing Agreement. Seller's Parent shall have
executed and delivered the Supply and Marketing Agreement in
the form annexed hereto as Exhibit H.
(k) Change in Business. Buyer having no reasonable basis to
believe that either: (i) the net sales of the Business was
less than $12,900,000 for the year ended April 30, 1995 or
less than $4,575,000 for the five fiscal months ended
September 22, 1995; or (ii) the sum of PP&E being less than
$3,400,000 as of July 28, 1995.
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(l) Patent Assignment. Seller shall have executed and delivered
the Patent Assignment in the form Annexed hereto as Exhibit I.
(m) Approval of Counsel; Corporate Matters. All actions,
proceedings, resolutions, instruments and documents required
to carry out this Agreement or incidental hereto and all other
related legal matters shall have been approved on the Closing
Date by The Law Offices of Xxxxxxx X. Xxxxxx, counsel for
Buyer, in the exercise of their reasonable judgment. GTI and
Seller shall also have delivered to Buyer such other
documents, instruments, certifications and further assurances
as such counsel may reasonably require.
6.2 Conditions Precedent to the Obligations of Seller. All
obligations of Seller under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Closing, of each of the following conditions
precedent:
(a) Representations and Warranties True as of the Closing Date.
The representations and warranties of Buyer and Parent
contained in this Agreement or in any list, certificate or
document delivered by Buyer or Parent to Seller pursuant to
the provisions hereof shall have been true in all material
respects on the date hereof and shall be true in all material
respects on the Closing Date with the same effect as though
such representations and warranties were made as of such date.
(b) Compliance with this Agreement. Each of Buyer and Parent shall
have performed and complied in all material respects with all
agreements and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing.
(c) Closing Certificates. Seller shall have received a certificate
from each of Buyer and Parent dated the Closing Date
certifying that the conditions specified in Sections 6.2(a)
and 6.2(b) hereof have been fulfilled.
(d) Opinion of Counsel for Buyer. Xxxxxxx X. Xxxxxx, counsel to
Buyer, shall have delivered to Seller a written opinion, dated
the Closing Date, in the form of Exhibit J hereto with only
such changes as shall be in form and substance reasonably
satisfactory to Seller and its counsel.
(e) No Threatened or Pending Litigation. On the Closing Date, no
suit, action or other proceeding, or injunction or final
judgment relating thereto, shall be threatened or be pending
before any court or governmental or regulatory official, body
or authority in which it is sought to restrain or prohibit or
to obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated
hereby, and no investigation that might result in any such
suit, action or proceeding shall be pending or threatened.
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(f) Lease and Option. Buyer shall have executed and delivered the
Lease and Option Agreement.
(g) Note, Security Agreement and Guaranty. The Buyer shall have
executed and delivered the Note and the Security Agreement and
the Parent shall have executed and delivered the Note, the
Security Agreement, the Registration Rights Agreement and
Guaranty of the Note, substantially in the forms annexed as
hereto as Exhibit K, Exhibit L and Exhibit M, respectively.
(h) Supply and Marketing Agreement. Buyer and Parent shall have
executed and delivered the Supply and Marketing Agreement in
the form annexed hereto as Exhibit H.
(i) Approval of Counsel; Corporate Matters. All actions,
proceedings, resolutions, instruments and documents required
to carry out this Agreement or incidental hereto and all other
related legal matters shall have been approved on the Closing
Date by Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.,
counsel for Seller, in the exercise of their reasonable
judgment. Buyer shall also have delivered to Seller such other
documents, instruments, certifications and further assurances
as such counsel for Seller may reasonably require.
6.3 Termination.
(a) Methods of Termination. Anything in this Agreement to the
contrary notwithstanding, the transactions contemplated hereby
may be terminated and abandoned at any time prior to the
Closing:
(i) by mutual consent of the Buyer and Seller; or
(ii) by Seller if, as of the Closing Date, any of the
conditions set forth in Section 6.2 shall not have
been met;
(iii) by Buyer if, as of the Closing Date, any of the
conditions set forth in Section 6.1 shall not have
been met;
(iv) by Buyer if the net sales of the Business was less
than $12,900,000 for the year ended April 30, 1995 or
$4,575,000 for the five fiscal months ended September
22, 1995;
(v) by Buyer if the sum of net property, plant and
equipment included in the Assets was less than
$2,440,000 as of July 28, 1995; or
(vi) by either party if, without fault of the terminating
party, the Closing shall not have occurred on or
prior to December 31, 1995.
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(b) Procedure Upon Termination. In the event of termination and
abandonment pursuant to Section 6.3(a) hereof, written notice
thereof shall forthwith be given to the other party hereto and
this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned without further action
by the Buyer or the Seller.
(c) Effect of Termination. In the event of termination of this
Agreement as expressly provided in Section 6.3(a) above, this
Agreement shall forthwith become void and neither Buyer, on
the one hand, nor Seller on the other, shall have any
liability to the other, except for either party's breach of
any of its obligations which breach shall be existing at the
time of such termination. Notwithstanding the preceding
sentence:
(i) Buyer shall not be entitled to a return of its
deposit.
(ii) in the event of any termination of this Agreement, if
GTI or Seller, or any of their affiliates, directly
or indirectly, through any officer, director, agent,
or otherwise, from November 6, 1995 through the date
of such termination, solicited or initiated, directly
or indirectly, or encouraged the submission of
inquiries, proposals or offers from any potential
buyer (other than Buyer) relative to the disposition
of the Assets or securities of Seller (which for
these purposes includes GTI and any entity affiliated
with GTI which conducts the Business or has title to
the Assets), or participated in any material
discussions or negotiations regarding, or furnished
to any person any proprietary or confidential
information of Seller which could be used to solicit
an offer from a potential buyer or could be used by
such a potential buyer to make or finance such an
inquiry, proposal or offer, then Seller, within 5
(five) days of demand, which demand must be made
within nine months from the date of termination will
pay Nytest $200,000.
7. CERTAIN COVENANTS, AGREEMENTS AND CLOSING DOCUMENTS.
7.1 Non-Competition and Confidentiality of Seller.
(a) Neither Seller nor Seller's Parent or any subsidiary or
Affiliate of Seller's Parent in which Seller's Parent owns or
has the right, directly or indirectly, to vote 50.1% or more
of the voting stock of such entity (collectively the "GTI
Group") shall, without the written consent of Buyer, for a
period of five years from the Closing Date, operate, directly
or indirectly, an environmental testing laboratory in the
continental United States. The Parties acknowledge and agree
that this Section 7.1 shall not apply to Fluor Xxxxxx, Inc.
("Fluor") and its affiliates, except to the extent such
affiliates become controlled by Seller's Parent as a result of
the
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transactions contemplated by the agreement between Seller's
Parent and Fluor dated December 11, 1995.
(b) Notwithstanding the provisions of this Section 7.1: (i)
nothing herein shall prevent members of the GTI Group from
investing in the securities of any company listed on a
national securities exchange or quoted on the NASDAQ quotation
system, which investment, but for this Section 7.1(b), would
be a violation of Section 7.1(a), provided Seller's and GTI
Group's ownership is not more than 5% of any class of
securities of any such company and Seller's and GTI Group's
involvement with any such company is solely that of a passive
stockholder, (ii) nothing herein shall prevent Seller or any
of its Affiliates from providing specialized laboratory
services not then provided by Buyer or Buyer's Affiliates,
(iii) nothing herein shall prevent Seller's Parent and member
of the GTI Group from providing environmental testing
exclusively in the field for customers (provided, however,
that neither Seller's Parent nor members of the GTI Group will
maintain mobile laboratories); (iv) Seller's Parent or members
of GTI Group may continue to use Seller's remediation
laboratory consistent with past practices; (v) nothing herein
shall prevent an acquisition by or of Seller's Parent or
members of GTI Group involving, peripherally an environmental
test laboratory provided such laboratory is disposed of or
divested within 180 days following such transaction; and (vi)
if any provision of this Section 7.1 is determined to be
unenforceable because of the duration of such provision or the
area covered thereby, the court making such determination
shall have the power to and shall reduce the scope of such
provision with respect to such duration and/or area, and/or to
delete ("blue-pencil") specific words or phrases, and in its
reduced or blue-penciled form such provision shall be
enforceable and shall be enforced.
(c) Seller acknowledges that, after the Closing, Buyer could be
irreparably damaged if Seller, or any affiliate of Seller,
were to disclose or utilize confidential information of the
business, operations and affairs (other than information in
the public domain through no fault of Seller or any such
successor) of the Business on behalf of itself or any person,
firm, corporation or other business entity to which any such
disclosure may be made which competes in any respect with any
present or presently proposed business of the Business, and
Seller covenants and agrees that it will not at any time
(except for any such nonpublic confidential information
lawfully acquired), without the prior written consent of
Buyer, disclose or use (or permit to be disclosed or used) any
such confidential information, unless compelled to disclose by
judicial or administrative process or, in the opinion of its
counsel, by other requirements of law.
(d) Seller agrees that it will not, for a period of 24 months
after the Closing, for its own account or for the account of
any other person, interfere with Buyer's relationships with
any of its suppliers or customers (except to the extent
necessary
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to collect receivables purchased form Buyer pursuant to
Section 7.9) or directly solicit Buyer's employees.
(e) At or prior to Closing, Seller and Seller's Parent will: (i)
use reasonable efforts to enforce or if it chooses not to so
enforce, assign to Buyer all confidentiality agreements signed
by parties from whom Seller or Seller's Parent had
communications in connection with a possible purchase of the
Assets, Business or any interest or part thereof (collectively
the "Offerees") on behalf of Buyer; (ii) provide Buyer with a
list of such Offerees; and (iii) request from such Offerees a
return of all such confidential information.
(f) Seller expressly agrees and understands that Buyer's remedy at
law for any breach of Section 7.1(a), (b), (c), (d) or (e)
will likely be inadequate if it were Buyer's exclusive remedy
and that the damages flowing from any such breach are not
readily susceptible to being measured solely in monetary
terms. Accordingly, it is acknowledged that upon adequate
proof of Seller's violation or threatened violation of any
legally enforceable provisions of any of the above enumerated
Subsections of Section 7.1, and Buyer's satisfaction of any
applicable legal or judicial requirements to support its claim
for equitable relief, Buyer will be entitled to specific
performance of the above enumerated Subsections of Section
7.1, including but not limited to, immediate injunctive
relief, a temporary order restraining any threatened or
further breach and such other equitable relief as may be
appropriate. Nothing in this Section 7.1 shall be deemed to
limit Buyer's remedies at law or in equity for any breach by
Seller of any of the provisions of this Agreement, including
but not limited to the above enumerated Subsections of Section
7.1, which may be pursued or availed of by Buyer. Seller has
carefully considered the nature and extent of the restrictions
upon it and the rights and remedies conferred upon Buyer under
this Section 7.1 and hereby acknowledges and agrees that the
same are reasonable, are fully required to protect the
legitimate interests of Buyer and do not confer a benefit upon
Buyer disproportionate to the detriment of Seller.
(g) The provisions of this Section 7.1 shall be terminated upon
the occurrence of an Event of Default subject to applicable
grace periods under the Note.
7.2 Licenses.
At the Closing, Seller shall assign any and all federal, state, county,
local and foreign licenses necessary for the operation of the Business to the
extent the same may be assigned, and shall cooperate with Buyer and assist
Buyer, at Buyer's expense, in obtaining any other licenses that are not
assignable or that are necessary for Buyer to continue to operate the Business.
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7.3 Consummation of Transactions; Further Assurances.
(a) Each of the parties agrees to use its reasonable best efforts
to bring about the satisfaction of the conditions required to
be performed, fulfilled or complied with by it hereunder and
to take or cause to be taken, all action, and to do, or cause
to be done, all things reasonably necessary, proper or
advisable under applicable laws and regulations to consummate
and make effective the transactions contemplated by this
Agreement as expeditiously as practicable.
(b) In case at any time after the Closing any further action is
reasonably necessary or desirable to carry out the purposes of
this Agreement, the appropriate party will take all such
necessary action, including without limitation, the execution
and delivery of such further instruments and documents as may
be reasonably requested by the other party or parties for such
purposes or otherwise to complete or perfect the transactions
contemplated hereby. After the Closing, Buyer and Seller shall
cooperate fully with the other and shall make available to the
other and to any taxing authority all information, records or
documents in its possession which are reasonably requested in
connection with the preparation of any tax returns or in
connection with any tax liability of Seller for any period
prior to the Closing, and otherwise shall cooperate in
connection with all matters, such as but not limited to
litigations and personnel matters, involved in the transfer of
the Assets and the Business operations from Seller to Buyer.
7.4 Risk of Loss.
Prior to the Closing Date, the risk of loss or damage to, or
destruction of, any or all of the Business and any or all of the Assets shall
remain with Seller.
7.5 Payment of Taxes.
Seller shall file when due, giving effect to all applicable extension
provisions, all federal, state, local and foreign tax returns required to be
filed by it (including but not limited to income, sales, use and payroll taxes)
for all periods to the Closing Date and shall pay all taxes, interest or
penalties (i) shown on, or which are otherwise due and payable pursuant to, such
returns, (ii) which shall become due with respect to any such period pursuant to
any deficiency notice or similar notice or (iii) which otherwise shall become
due with respect to any such period.
7.6 Best Efforts to Obtain Consents.
Each of Seller and Buyer shall use its reasonable best efforts to
obtain promptly all the consents and authorizations of third parties for which
it is responsible to obtain, and to cooperate with the other as the other may
reasonably request, to make all filings, if any, and to give all notices to
third parties which may be required in order to effect the transactions
contemplated by this Agreement.
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7.7 Other Government Filings.
Buyer and Seller agree to cooperate with each other in filing any
necessary applications, reports or other documents with any federal or state
authorities (including federal, state or local taxing authorities as to the
allocation, if agreed, of the Purchase Price to the Assets) having jurisdiction
with respect to the transactions contemplated by this Agreement and in seeking
necessary consultation with and favorable action by any such agencies,
authorities or bodies.
7.8 Closing Apportionments.
(a) The following items shall be apportioned as of the close of
business on the day immediately prior to the Closing Date
(with such meter readings as shall be appropriate) and paid by
Seller or Buyer to the other, as the case may be, in respect
of all periods prior to the Closing Date:
(i) All water, utility and other similar charges, and
sewer rent and assessments, affecting Real Property
which constitutes part of the Assets;
(ii) All payments required to be paid under the Assumed
Contracts;
(iii) All real estate taxes and assessments with respect to
the Real Property, which become due and payable in
respect of any and all periods prior to the date of
Closing shall be paid by Seller, and all real estate
taxes and assessments becoming due and payable in
respect of any and all periods on or after the
Closing Date shall be paid by Buyer, whenever the
same become due or payable. Buyer shall pay all taxes
and assessments after the Closing Date and Seller
shall immediately upon receipt of a xxxx therefore
(which may be an unreceipted xxxx) pay Buyer to
Seller's pro rata portion thereof in respect of all
periods to the Closing Date.
(b) The adjustments above-described (i) shall be determined in
accordance with generally accepted accounting principles,
consistently applied and (ii) shall, to the extent
practicable, be paid by Seller to Buyer or by Buyer to Seller,
as the case may be, at the Closing, by check, subject to
collection.
(c) The provisions of this Section 7.8 shall survive the Closing.
Any errors or omissions in computing apportionments at the
Closing, or any recomputations required as a result of facts
that become known after the Closing, shall be corrected as
soon as practicable thereafter.
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7.9 Accounts Receivable.
(a) Promptly after the Closing Date, the Seller shall deliver to
the Buyer a list of its accounts receivables relating to sales
of services and products by Seller on and before the Closing
Date (the "Accounts Receivables"). The Buyer shall use its
reasonable best efforts to cooperate and assist the Seller and
the Seller's Parent with the collection of the Accounts
Receivable. Such reasonable best efforts may require the Buyer
to take such actions to collect the Accounts Receivables as
though they were accounts receivables of the Buyer, including,
without limitation, ceasing to continue to provide additional
goods and services to account debtors that are delinquent in
payment of the Accounts Receivables, provided, however, that
the Buyer shall not be required to institute legal action
against the account debtors.
(b) The Buyer shall promptly remit to Seller's Parent all payments
received by the Buyer with respect to the Accounts
Receivables. The Buyer shall treat the first payments received
from account debtors as being payments of the Accounts
Receivables, except in the case of disputed invoices. The
existence of any such disputed invoices shall be promptly
communicated in writing by the Buyer to Seller's Parent with
reasonable detail therefor.
(c) Not in limitation of the foregoing, the Buyer will permit the
Seller and Seller's Parent to have reasonable access to
personnel and books and records of the Buyer relating to the
collection of the Accounts Receivables and will provide
periodic reports and such other information concerning the
Accounts Receivables as the Seller or Seller's Parent may
reasonably request from time to time.
7.10 Retention of Records.
(a) Seller shall preserve all files and records directly
pertaining to its operation of the Business (and not delivered
to Buyer at Closing) for a period of seven years after the
date of the respective documents constituting such files and
records. Seller shall, upon prior reasonable notice, allow
Buyer access thereto and the right to make copies and extracts
therefrom at any time during normal business hours, and shall
not dispose of any thereof during said seven year period
without giving at least 30 days' prior written notice to Buyer
of its intention to dispose of same, specifying the items to
be disposed of in reasonable detail. Buyer may, within a
period of 30 days after receipt of any such notice, notify
Seller of Buyer's desire to retain one or more of the items to
be disposed of. Seller shall, upon receipt of such notice from
Buyer, deliver to Buyer, at Buyer's expense, the items
specified in Buyer's notice. If Buyer shall not so notify
Seller within such 30 day period, Seller may dispose of such
items. Seller shall preserve all financial records related to
the Business and shall provide Buyer with access to such
records in accordance with the foregoing provisions of this
Section 7.10.
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(b) Buyer shall preserve all files and records included in the
Assets and delivered by Seller, pertaining directly to its
operation of the Business, for a period of seven years after
the date of the respective documents constituting such files
and records. Buyer shall, upon prior reasonable notice, allow
Seller access thereto and the right to make copies and
extracts therefrom at any time during normal business hours,
and shall not dispose of any thereof during said seven year
period without giving at least 30 days' prior written notice
to Seller of its intention to dispose of same, specifying the
items to be disposed of in reasonable detail. Seller may,
within a period of 30 days after receipt of any such notice,
notify Buyer of Seller's desire to retain one or more of the
items to be disposed of. Buyer shall, upon receipt of such
notice from Seller, deliver to Seller, at Seller's expense,
the items specified in Seller's notice.
7.11 Offer of Employment.
(a) Buyer agrees that as of the Closing Date effective January 1,
1996, it will offer to hire all of the employees of Seller who
were Seller's employees as reflected in Seller's payroll
records on the preceding business day and were terminated by
Seller, on an at-will basis, and for positions or comparable
positions, at the location at which such employees are
currently engaged and on terms (including compensation and
benefit plans and arrangements) that are reasonably comparable
to those offered by Sellers as if such employees had been
employed by Seller on January 1, 1996 on an at-will basis.
Buyer will credit each such employee's period of service with
Seller when determining the eligibility, coverage or benefits
of any such employee under any employee benefit plan, program
or arrangement of Buyer.
(b) Buyer has no present intention to immediately terminate any
employee to whom it offered employment or to make any
immediate material change to any of Buyer's employment
contracts, relationships, practices, plans or programs;
however, Buyer may in its sole discretion amend or terminate
any of Buyer's employment contracts, relationships or
practices, or employee benefit plans or programs, if any, at
any time after the Closing Date.
(c) Seller agrees to allow any and all such employees hired by
Buyer to continue, from the Closing Date through March 31,
1996, to receive and be included in the medical, dental,
supplemental life, basic life and short and long term
disability benefit programs and plans which would have been
offered to such employees as of January 1, 1996, but for the
transactions contemplated by this Agreement by Seller or GTI,
provided Buyer reimburses Seller or GTI, as the case may be,
for any out of pocket employer contributions or payments of
premiums for such plans or programs. Continued inclusion of
employees in such plans will be in Buyer's sole discretion.
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7.12 Financial Statements.
Promptly after the Closing Date, but in no case later than February 15,
1996, Seller shall prepare and deliver to Buyer a balance sheet as of April 28,
1995 and a statement of operations and cash flow for each of the two years then
ended, with a report from Coopers & Xxxxxxx on such statements which report will
have no modifications or emphasis as to any matter.
7.13 Accountants Consents.
During the period beginning on the Closing Date and ending the last
date for which such statements would be required to be included in a filing made
by Nytest with the Securities and Exchange Commission ("SEC"), GTI will, at its
expense, procure and deliver to Nytest, the consent of Coopers & Xxxxxxx to
include and incorporate their reports or the Closing Balance Sheet and April
Statement in Nytest's filings with the SEC.
7.14 Computer Purchase Program.
Buyer will, subject to the consent of the effected employees, withhold
the agreed portion of salary under the GTI Computer Purchase Program and remit
such sums to Seller's Parent within 5 days of such withholding.
7.15 Performance of Services.
Buyer agrees to perform services on Seller's behalf, in connection with
warranty claims arising from services performed by Seller prior to the date of
Closing. Seller agrees to pay the invoices generated by such warranty work
within 30 days. Nothing contained herein shall obligate Buyer to bear the cost
of such warranty work except to extent of any reserve on the Closing Balance
Sheet, including but not limited to the cost of resampling.
7.16 Certain Financial Services.
Seller's Parent agrees, for a period not exceeding 90 days from the
Closing to continue processing payments relating to the accounts receivable
assigned to Buyer and accounts payable assumed by Buyer. Seller's Parent will
remit the cash amount due to such vendors on Buyer's behalf, if it receives
prior payment from Buyer.
7.17 Payments Received.
Seller and Buyer each agree that after the Closing they will hold and
will promptly transfer and deliver to the other, from time to time as and when
received by them, any cash, checks with appropriate endorsements (using their
best efforts not to convert such checks into cash), or other property that they
may receive on or after the Closing which properly belongs to
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the other party, including without limitation any insurance proceeds, and will
account to the other for all such receipts.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
8.1 Survival of Representations.
All representations and warranties contained in this Agreement shall
survive the Closing for a period (the "Survival Period") of eighteen (18) months
after the Closing Date, except for those related to the representations set
forth in Sections 3.16 and 3.25 hereof which shall continue through the
applicable statute of limitations and those related to third party claims in
connection with Excluded Obligations which shall survive the Closing for a
period of twenty-four (24) months.
8.2 Indemnification by Buyer.
Each of Buyer and Parent agree, jointly and severally, to indemnify,
defend and hold harmless Seller and any Affiliate thereof and any parent,
subsidiary or affiliate thereof and all directors, officers, employees and each
of the foregoing (the "Seller Group"), at any time after the Closing and during
the appropriate Survival Period (except that such indemnification obligations
shall continue beyond the Survival Period if a Notice of Claim for
indemnification shall be delivered to Parent and Buyer prior thereto, in which
case such indemnification obligations shall continue until the claim as to which
such notice has been given is resolved and any applicable indemnification
obligations have been satisfied), from and against all demands, claims, actions
or causes of action, assessments, deficiencies, taxes, losses, damages,
liabilities, costs and expenses, including without limitation, interest,
penalties and reasonable attorneys' fees and expenses (collectively "Losses"),
asserted against, resulting from, imposed upon or incurred by the Seller Group,
directly or indirectly, arising out of or in connection with (a) the breach or
inaccuracy of any of the representations or warranties of Buyer or Parent made
in or pursuant to this Agreement; (b) any breach of any covenant or agreement of
Buyer or Parent contained in this Agreement; or (c) any failure to pay any
obligation, liability, debt or commitment of the Seller which is an Assumed
Obligation or Assumed Liability, whether or not paid by Seller; or (d) any and
all obligations, liabilities, debts or commitments in connection with the Assets
or the operation of the Business arising after the Closing to the extent that
they arise after the Closing and only in respect of such time period.
8.3 Indemnification by Seller.
Each of Seller and Seller's Parent agree, jointly and severally, to
indemnify, defend and hold harmless Buyer and any parent, subsidiary or
affiliate thereof and all directors, officers, employees and representatives of
each of the foregoing (the "Buyer Group"), at any time after the Closing and
during the appropriate Survival Period (except that such indemnification
obligations shall continue beyond the Survival Period if a Notice of Claim for
indemnification shall be delivered to Seller and Seller's Parent prior thereto,
in which case such indemnification
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obligations shall continue until the claim as to which such notice has been
given is resolved and any applicable indemnification obligations have been
satisfied), from and against all Losses asserted against, resulting from,
imposed upon or incurred by the Buyer Group or any member thereof, directly or
indirectly, arising out of or in connection with (a) the breach or inaccuracy or
alleged breach or inaccuracy of any of the representations or warranties of
Seller made in or pursuant to this Agreement; (b) any breach of any covenant or
agreement of Seller contained in this Agreement; or (c) any obligation,
liability, debt or commitment of the Seller which is not an Assumed Obligation
or an Assumed Liability (or is an Excluded Obligation), whether or not paid by
Buyer.
8.4 Indemnification Procedure.
(a) A party agreeing to indemnify against any matter pursuant to
this Agreement is referred to herein as the "Indemnifying
Party" and the other party claiming indemnity is referred to
as the "Indemnified Party."
(b) Whenever any claim or threatened claim shall arise for
indemnification hereunder, the Indemnified Party shall notify
the Indemnifying Party in writing promptly after the
Indemnified Party has actual knowledge of the acts
constituting the basis for such claim or threatened claim (the
"Notice of Claim"), provided, however, that the omission so to
notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which the Indemnifying
Party may have to the Indemnified Party otherwise than under
this Section 8 or to the extent the Indemnifying Party is not
prejudiced as a proximate result of the failure to give such
notice promptly. The Notice of Claim shall specify all
material facts known to the Indemnified Party giving rise to
such indemnification claim and the amount or an estimate of
the amount of the liability arising therefrom.
(c) If the facts giving rise to any such indemnification shall
involve any actual, threatened or possible claim or demand by
any third party against the Indemnified Party, the
Indemnifying Party shall be entitled (without prejudice to the
right of the Indemnified Party to participate at its expense
through counsel of its own choosing) to contest, defend,
compromise or settle (without imposing any liability or
obligation on the Indemnified Party) such claim at its expense
and through counsel of its own choosing, so long as it gives
written notice to the Indemnified Party within forty-five (45)
days after receipt of the Notice of Claim (i) of its intention
to do so and (ii) of its agreeing to indemnify to the full
extent required hereunder the Indemnified Party for such claim
hereunder. The Indemnified Party shall provide such
cooperation and such access to its books, records and
properties as the Indemnifying Party shall reasonably request
with respect to such matter and the parties hereto agree to
cooperate with each other in order to ensure the proper and
adequate defense thereof. In the event that the Indemnifying
Party does not so elect to defend any such claim, it shall be
entitled at its expense to
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participate in the defense of such claim by the Indemnified
Party with counsel of its choosing.
(d) The Indemnified Party shall not make any settlement of any
claim which would give rise to liability on the part of the
Indemnifying Party under the indemnity contained in this
Section 8 without the prior written consent of the
Indemnifying Party. If a firm offer is made to settle a claim
or litigation defended by the Indemnified Party and the
Indemnifying Party refuses to accept such offer within twenty
(20) days after receipt of written notice from the Indemnified
Party of the terms of such offer, then, in such event, the
Indemnified Party shall continue to contest or defend such
claim and shall be indemnified pursuant to the terms hereof.
If a firm offer is made to settle a claim or litigation and
the Indemnifying Party notifies the Indemnified Party in
writing that the Indemnifying Party desires to accept and
agree to such settlement, but the Indemnified Party elects not
to accept or agree to it, the Indemnified Party may continue
to contest or defend such claim or litigation and, in such
event, the total maximum liability of the Indemnifying Party
to indemnify or otherwise reimburse the Indemnified Party
hereunder with respect to such claim or litigation shall be
limited to and shall not exceed the amount of such settlement
offer, plus out-of-pocket costs and expenses (including
reasonable attorneys' fees and disbursements) to the date of
notice that the Indemnifying Party desires to accept such
settlement.
(e) The amount of any Losses for which indemnification is
available shall be computed without regard to the tax effect
of any such loss or indemnification.
(f) In the event of payment by an Indemnifying Party to the
Indemnified Party as contemplated in this Section 8, the
Indemnifying Party shall be subrogated to and shall stand in
the place of the Indemnified Party as to any events or
circumstances in respect of which the Indemnified Party may
have any right or claim against any third party relating to
such event giving rise to the claim for which the Indemnifying
Party shall have made payment to the Indemnified Party. The
Indemnified Party shall cooperate with the Indemnifying Party
in any reasonable manner in prosecuting any such subrogated
right or claim.
8.5 Limitations on Indemnification.
(a) No claim may be made against an Indemnifying Party pursuant to
its indemnification obligations set forth in Section 8.2 or
8.3 hereof unless the aggregate amount of all matters for
which such party would (but for this provision) be liable (and
of which matters the Indemnified Party followed the provisions
of Section 8.4 above) exceeds $100,000 (the "Threshold
Amount") and the Indemnified Party's right to indemnification
hereunder shall only be with respect to such amounts in excess
of the Threshold Amount. For purposes of determining the
Threshold Amount and Maximum Amount hereunder, the
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Indemnifying Party's obligations shall be with respect to the
Seller Group as a whole and the Buyer Group as a whole.
(b) The Indemnifying Party shall not be obligated for any
indirect, special or consequential damages or lost profits
incurred by the Indemnified Party.
(c) Neither Buyer and Parent, on the one hand, nor Seller and
Seller's Parent, on the other hand, will be liable in the
aggregate to the other for indemnification pursuant hereto in
excess of the amount of the Purchase Price, as adjusted, (the
"Maximum Amount"). To the extent that the payments to the
Buyer Group from Seller and Seller's Parent pursuant to this
Section 8, in the aggregate, has exceeded the Maximum Amount
less the principal amount of the Note, as adjusted, the Seller
may offset any such further claims against the principal
amount of the Note.
8.6 Successors.
The merger, consolidation, liquidation, dissolution or winding up of,
or any similar transaction with respect to, the Indemnifying Party shall not
affect in any manner the obligations of the Indemnifying Party pursuant to this
Section or any other term or provision of this Agreement, and the Indemnifying
Party covenants and agrees to make adequate provision for its liabilities and
obligations hereunder in the event of any such transaction.
8.7 Time Action Must be Brought.
No action may be brought under this Section 8 unless brought eighteen
(18) months from the date of Closing except: (i) actions related to the
representation set forth in Section 3.16 and 3.25 which shall be brought by the
expiration of the applicable statute of limitation plus one week; and (ii)
actions relating to third party claims arising from Excluded Obligations shall
be brought within 24 months from the Closing Date.
9. MISCELLANEOUS PROVISIONS.
9.1 Amendment.
This Agreement may be amended, modified or supplemented by the parties
hereto only by a written instrument duly signed by or on behalf of the party to
be charged therewith.
9.2 Waiver of Compliance.
Any failure of Seller, on the one hand, or Buyer, on the other hand, to
comply with any obligation, covenant, agreement or condition herein may be
expressly waived in writing by an authorized officer of Buyer or Seller,
respectively, but such waiver or failure to insist upon strict
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compliance with any such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
9.3 Expenses.
(a) Except as set forth in paragraph 9.3(b), whether or not the
transactions contemplated by this Agreement are consummated,
each of the parties hereto shall pay the fees and expenses of
their respective counsel, accountants and other experts, and
shall pay all other expenses incurred by it incident to the
negotiation, preparation, execution and consummation of this
Agreement.
(b) Seller shall bear the cost of fees and expenses charged by
Seller's Auditors in connection with the preparation of and
report described in Section 7.12. In addition, Buyer and
Seller shall bear equally the fees and expenses: (i) Seller's
Auditors up to a maximum of $20,000 in connection with
performing the procedures set forth in Schedule 2.6; and (ii)
Buyer's Auditors up to a maximum of $5,000 in connection with
their supervision of the foregoing.
(c) The provisions of Section 9.3 shall survive any termination of
this Agreement.
9.4 Notices.
All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given (i) upon delivery if delivered by hand; (ii) four business days subsequent
to mailing if mailed by express, certified or registered mail, with postage
prepaid, in the continental United States; (iii) two business days subsequent to
pick up by such courier if sent by a nationally or internationally recognized
overnight courier service that regularly maintains records of items picked up
and delivered; or (iv) when transmitted if sent by telecopier, provided that a
written acknowledgment of receipt signed by or on behalf of the recipient of the
telecopy is transmitted back to the sender by the recipient, as follows:
If to Seller/or
Seller's Parent: Groundwater Technology, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
with a copy to: Groundwater Technology, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
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and to: Mintz, Levin, Cohn, Ferris, Glovsky & Popeo,
P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
or to such other person or address as Seller shall furnish to Buyer in writing.
If to Buyer: NEI/GTEL Environmental Laboratories, Inc.
c/o Nytest Environmental Inc.
00 Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx, President
Telecopier No.: (000) 000-0000
with a copy to
Parent: Nytest Environmental Inc.
00 Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
and to: Xxxxxxx X. Xxxxxx, Esq.
000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
and to: Xxxxxxxx, Xxxxxxxxx & Scope, P.C.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
or to such other person or address as Buyer shall furnish to Seller in writing.
9.5 Binding Effect; Assignment.
This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective
administrators, legal representatives, successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations
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hereunder shall be assigned or assignable by any of the parties hereto without
the prior written consent of the other party, except (i) by operation of law,
(ii) that Buyer may freely assign this Agreement or all or any rights or
obligations it may have hereunder to a direct or indirect wholly-owned
subsidiary of Buyer or Parent, (iii) that Buyer may assign all of its rights but
not its obligations under this Agreement to any institution providing financing
or re-financing for the transactions contemplated by this Agreement, and (iv)
that Seller may assign all of its rights and its obligations under this
Agreement to Seller's Parent.
9.6 Remedies.
Except that the indemnification provision of Section 8 above is the
exclusive remedy for breaches of representations, warranties and covenants as
provided therein, the parties acknowledge and agree that each party hereto may
seek any remedies in equity or law that may be available to it. Nothing herein
shall prevent the Parties from impleading or interpleading the other party at
any time in an action brought by a third party relating to what would otherwise
have been an indemnifiable claim.
9.7 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to its principles of conflict
or choice of law.
9.8 Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
the same instrument.
9.9 Headings.
The headings of the sections of this Agreement are inserted for
convenience only and shall not constitute a part or affect in any way the
meaning or interpretation of this Agreement.
9.10 Entire Agreement.
(a) This Agreement sets forth the entire agreement and
understanding of the parties hereto in respect of the subject
matter contained herein, and supersedes all prior agreements,
promises, letters of intent, covenants, arrangements,
communications, representations or warranties, whether oral or
written, by any party hereto or by any Related Person of any
party hereto.
(b) All Exhibits attached hereto, the Disclosure Schedule, any
exhibits thereto and all certificates, documents and other
instruments delivered or to be delivered pursuant to the terms
hereof are hereby expressly made a part of this Agreement
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as fully as though set forth herein, and all references herein
to the terms "this Agreement," "hereunder," "herein," "hereby"
or "hereto" shall be deemed to refer to this Agreement and to
all such writings.
9.11 Third Parties.
Except as specifically set forth or referred to herein, nothing in this
Agreement, express or implied, is intended or shall be construed to confer upon
or give to any person (including but not limited to Seller's employees), firm,
partnership or corporation other than the parties hereto and their successors or
permitted assigns, any rights or remedies under or by reason of this Agreement.
9.12 Severability.
The invalidity of any one or more of the words, phrases, sentences,
clauses, sections or subsections contained in this Agreement shall not affect
the enforceability of the remaining portions of this Agreement or any part
hereof, all of which are inserted conditionally on their being valid in law,
and, in the event that any one or more of the words, phrases, sentences,
clauses, sections or subsections contained in this Agreement shall be declared
invalid by a court of competent jurisdiction, this Agreement shall be construed
as if such invalid word or words, phrase or phrases, sentence or sentences,
clause or clauses, section or sections, or subsection or subsections had not
been inserted.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
GTEL ENVIRONMENTAL
LABORATORIES, INC.
By: /s/ Xxxx Xxxxx
---------------------------
Name: Xxxx Xxxxx
Title: Assistant Treasurer
NEI/GTEL ENVIRONMENTAL
LABORATORIES INC.
By: /s/ Xxxx Xxxxxxx
---------------------------
Name: Xxxx Xxxxxxx
Title: CEO
Agreed as to Section 3A, 7.1 & 8 only.
GROUNDWATER TECHNOLOGY, INC.
By: /s/ Xxxx Xxxxx
---------------------------
Name: Xxxx Xxxxx
Title: Assistant Treasurer
Agreed as to Section 4A, 7.16 & 8 only.
NYTEST ENVIRONMENTAL INC.
By: /s/ Xxxx Xxxxxxx
---------------------------
Name: Xxxx Xxxxxxx
Title: President
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