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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
[x] CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
July 1, 1999
------------------------------------------------
Date of Report (Date of earliest event reported)
ANTHONY CRANE RENTAL, L.P.
(Exact Name of Registrant as Specified in Its Charter)
PENNSYLVANIA
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(State or Other Jurisdiction of Incorporation or Organization)
25-1739175
- -------------------------- ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
1165 CAMP HOLLOW ROAD
WEST MIFFLIN, PA 15122 (Address of Principal Executive Offices)
(412) 469-3700
(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name of Former Address if Changed Since Last Report)
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ITEM 2. Acquisition or Disposition of Assets
On July 1, 1999, Anthony Crane Rental, L.P., ("ACR") through Carlisle
Equipment Group, L.P., a wholly-owned subsidiary, (collectively, the
"Company"), purchased substantially all of the assets and assumed
substantially all of the liabilities and obligations relating to the
operations of the businesses of Carlisle Construction Co., Inc., and its
subsidiaries ("Carlisle"), a privately-owned company headquartered in Wilder,
Kentucky. Accordingly, the acquisition has been accounted for using the
purchase method of accounting. Carlisle is engaged in the business of selling,
renting and leasing crane and lifting equipment and heavy construction
equipment, excavation services and marine transportation services. Carlisle
had annual net revenues of approximately $90.2 million and $92.1 million in
1998 and 1997, respectively.
The purchase price at closing was $177.5 million consisting of (1) $20.0
million of Class B Preferred Units of Anthony Crane Rental Holdings, L.P.; (2)
the assumption or retirement of $68.6 million of Carlisle debt; and (3) $85.9
million in cash (net of $3.0 million in prepayment penalties and other
expenses). The cash payment and the retirement of the Carlisle debt were
funded by the Company through borrowings under a $250.0 million first priority
term loan. The asset purchase agreement, which contains customary
representations, warranties and indemnities, also provides for certain post-
closing purchase price adjustments.
ITEM 7. Financial Statements and Exhibits
A. Financial statements of businesses acquired /(1)/
B. Pro forma financial information /(1)/
C. Exhibits
2.01 Asset Purchase Agreement by and among Carlisle Equipment Group, L.P.,
the Sellers Listed on the Schedule of Sellers and the Current Owners Listed
on the Schedule of Current Owners and the Other Parties Set Forth Herein,
dated June 30, 1999, filed herewith.
4.01 Supplemental Indenture, dated July 1, 1999, between Anthony Crane
Rental Holdings, L.P. and State Street Bank and Trust Company, as
trustee under the Indenture.
4.02 Supplemental Indenture, dated July 1, 1999, among ACR/Dunn
Acquisition, Inc., Husky Crane, Inc., Carlisle Equipment Group, L.P.,
Anthony Sales & Leasing Corporation, Anthony International Equipment
Services Corporation and Carlisle G.P., L.L.C., each of which is a
subsidiary of Anthony Crane Rental, L.P., the Other Subsidiary Guarantors
(as defined in the Indenture) and State Street Bank and Trust Company, as
trustee under the Indenture.
/(1)/ The financial statements of the businesses acquired and pro forma
financial information required by Item 7(a) and Item 7(b) are not
included herein and such information will be filed within 60 days via an
amendment to this Form 8-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 15, 1999 ANTHONY CRANE RENTAL, L.P.
By: /s/ David W. Mahokey
--------------------------
David W. Mahokey
President and Chief Operating Officer
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EXHIBIT 2.01
________________________________________________________________________________
ASSET PURCHASE AGREEMENT
BY AND AMONG
CARLISLE EQUIPMENT GROUP, L.P.,
THE SELLERS LISTED ON
THE SCHEDULE OF SELLERS
AND
THE CURRENT OWNERS LISTED ON
THE SCHEDULE OF CURRENT OWNERS
AND
THE OTHER PARTIES SET FORTH HEREIN
DATED AS OF JUNE 30, 1999
________________________________________________________________________________
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TABLE OF CONTENTS
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ARTICLE 1. PURCHASE AND SALE; ASSUMPTION OF CERTAIN LIABILITIES; CLOSING....... 1
1.01 Purchase and Sale............................................... 1
1.02 The Closing..................................................... 7
1.03 Purchase Price Adjustment....................................... 7
ARTICLE 2. CONDITIONS TO THE PURCHASER'S OBLIGATIONS........................... 11
2.01 Representations and Warranties; Covenants....................... 11
2.02 Amendment of Limited Partnership Agreement...................... 11
2.03 Amendment to the Securityholders Agreement...................... 11
2.04 Amendment to the Registration Agreement......................... 11
2.05 Employment Agreement............................................ 11
2.06 Financing Arrangements.......................................... 11
2.07 Opinion of the Sellers' and the Current Owners' Counsel......... 12
2.08 Real Estate Leases.............................................. 12
2.09 Material Adverse Change......................................... 12
2.10 Proceedings..................................................... 12
2.11 Compliance with Applicable Laws................................. 12
2.12 Filings......................................................... 12
2.13 Consents and Approvals.......................................... 13
2.14 Payoff Letters and Releases..................................... 13
2.16 Waiver.......................................................... 14
ARTICLE 3. CONDITIONS TO THE SELLERS' OBLIGATIONS.............................. 14
3.01 Representations and Warranties; Covenants....................... 14
3.02 Amendment of Limited Partnership Agreement...................... 14
3.03 Amendment to the Securityholders Agreement...................... 14
3.04 Amendment to the Registration Agreement......................... 14
3.05 Employment Agreements........................................... 14
3.06 Lease Agreements................................................ 14
3.07 Filings......................................................... 14
3.08 Proceedings..................................................... 14
3.09 Compliance with Applicable Laws................................. 15
3.10 Consents and Approvals.......................................... 15
3.12 Opinion of the Purchaser's Counsel.............................. 15
3.13 Waiver.......................................................... 15
ARTICLE 4. PRE-CLOSING COVENANTS AND AGREEMENTS................................ 16
4.01 General......................................................... 16
4.02 Notices and Consents............................................ 16
4.03 Affirmative Covenants of the Current Owners and the Sellers..... 16
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4.04 Negative Covenants of the Current Owners and the Sellers..................... 17
4.05 Full Access.................................................................. 18
4.06 Notice of Material Developments.............................................. 18
4.07 Exclusivity.................................................................. 18
4.08 Actions with Respect to Ownership Interests.................................. 19
4.09 Real Estate Matters.......................................................... 19
4.10 Financial Information........................................................ 19
4.11 Tax Distributions............................................................ 20
ARTICLE 5. REPRESENTATION AND WARRANTIESCONCERNING THE SELLERS.............................. 20
5.01 Organization................................................................. 20
5.02 Authorization................................................................ 20
5.03 Capitalization and Related Matters........................................... 20
5.04 Noncontravention............................................................. 21
5.05 Brokerage.................................................................... 21
5.06 Subsidiaries and Investments................................................. 21
5.07 Financial Statements......................................................... 22
5.08 Undisclosed Liabilities...................................................... 22
5.09 Legal Compliance............................................................. 22
5.10 Tangible Assets.............................................................. 23
5.11 Title to Personal Property................................................... 23
5.12 Title to Real Property....................................................... 24
5.13 Litigation................................................................... 24
5.14 Contracts.................................................................... 24
5.15 Tax Matters.................................................................. 25
5.16 Intellectual Property........................................................ 27
5.17 Insurance.................................................................... 29
5.18 Labor and Employment Matters................................................. 29
5.19 Employee Benefits............................................................ 30
5.20 No Material Adverse Change................................................... 30
5.21 Events Subsequent to Most Recent Fiscal Year End............................. 32
5.22 Environment, Health and Safety Matters....................................... 32
5.23 Affiliated Transactions...................................................... 34
5.24 Names and Locations.......................................................... 35
5.25 Suppliers and Customers...................................................... 35
5.26 Seller Transactions.......................................................... 35
5.27 Enterprise Zone Exemption.................................................... 36
5.28 Disclosure................................................................... 36
5.29 Closing Date................................................................. 36
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF THE CURRENT OWNERS............................. 36
6.01 Power and Authority 37
6.02 Execution; No Breach......................................................... 37
6.03 Title to Capital Stock....................................................... 37
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6.04 Brokerage.................................................................... 37
6.05 Seller Transactions.......................................................... 37
6.06 Closing Date................................................................. 37
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER................................. 38
7.01 Organization, Power and Authority............................................ 38
7.02 Authorization; No Breach..................................................... 38
7.03 Capitalization............................................................... 38
7.04 Noncontravention............................................................. 39
7.05 Subsidiaries and Investments................................................. 39
7.06 Litigation................................................................... 39
7.07 No ACR Material Adverse Change............................................... 40
7.08 Affiliated Transactions...................................................... 40
7.09 SEC Reports.................................................................. 40
7.10 Brokerage.................................................................... 40
7.11 Closing Date................................................................. 40
ARTICLE 8. ADDITIONAL AGREEMENTS............................................................ 40
8.01 Indemnification.............................................................. 40
8.02 Dispute Settlement........................................................... 47
8.03 Noncompete and Nonsolicitation............................................... 49
8.04 Powers of Attorney........................................................... 50
8.05 Replacement of the Current Owner Representative.............................. 52
8.06 Actions of the Current Owner Representative; Liability of the
Current Owner Representative................................................. 52
8.07 Sellers' Name Changes........................................................ 52
8.08 Employees.................................................................... 53
8.09 Third Party Consents......................................................... 54
8.10 Bulk Sales Law............................................................... 54
8.11 Multiemployer Plan........................................................... 54
ARTICLE 9. DEFINITIONS...................................................................... 56
ARTICLE 10. TERMINATION..................................................................... 60
10.01 Termination of the Agreement................................................. 60
10.02 Limitations; Effect.......................................................... 61
ARTICLE 11. MISCELLANEOUS................................................................ 61
11.01 Expenses..................................................................... 61
11.02 Press Release and Announcements.............................................. 61
11.03 Further Assurances........................................................... 61
11.04 Confidentiality.............................................................. 61
11.05 Entire Agreement............................................................. 62
11.06 Counterparts................................................................. 62
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11.07 Headings..................................................................... 62
11.08 Notices...................................................................... 62
11.09 Governing Law................................................................ 64
11.10 Amendments and Waivers....................................................... 64
11.11 Construction................................................................. 64
11.12 Remedies..................................................................... 64
11.13 Binding Agreement; Assignment................................................ 64
11.14 Severability................................................................. 65
11.15 Parties in Interest.......................................................... 65
11.16 Guarantee.................................................................... 65
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EXHIBITS
Exhibit A - Amended and Restated Limited Partnership Agreement of
Holdings
Exhibit B - Amendment to the Securityholders Agreement
Exhibit C - Amendment to the Registration Agreement
Exhibit D-1 - Agreement with Wayne Carlisle
Exhibit D-2 - Employment Agreement with Bryan Carlisle
Exhibit D-3 - Employment Agreement with Gary Strassel
Exhibit D-4 - Employment Agreement with Robert Carlisle
Exhibit E - Form of Opinion of the Sellers' and the Current Owners'
Counsel
Exhibit F-1 - Lease Agreement with respect to Wilder Facility
Exhibit F-2 - Lease Agreement with respect to the Dayton Facility
Exhibit F-3 - Lease Agreement with respect to the Indianapolis Facility
Exhibit F-4 - Lease Agreement with respect to the Orlando Facility
Exhibit F-5 - Lease Agreement with respect to the Hebron Facility
Exhibit G - Form of Opinion of the Purchaser's Counsel
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SCHEDULES
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Schedule of Sellers
Schedule of Current Owners
Machinery, Equipment and Vehicles Schedule
Excluded Assets Schedule
Assumed Employee Benefit Plans Schedule
Excluded Benefits Schedule
Boats Schedule
Allocation Schedule
Organization Schedule
Capitalization Schedule
Noncontravention Schedule
Subsidiaries Schedule
Financial Statements Schedule
Undisclosed Liability Schedule
Legal Compliance and Permits Schedule
Assets Schedule
Liens Schedule
Real Property Schedule
Litigation Schedule
Contracts Schedule
Taxes Schedule
Intellectual Property Schedule
Insurance Schedule
Labor Schedule
Employee Benefits Schedule
Subsequent Events Schedule
Political Contributions Schedule
Environmental and Safety Matters Schedule
Affiliated Transactions Schedule
Names and Locations Schedule
Suppliers and Customers Schedule
Holdings Schedule
Purchaser Noncontravention Schedule
Holdings Subsidiaries Schedule
Purchaser Litigation Schedule
ACR Affiliated Transactions Schedule
Noncompete Schedule
Capital Expenditure Schedule
Use of the Carlisle Name Schedule
Excluded Employee Schedule
Deductions Schedule
<PAGE>
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of June
---------
30, 1999, by and among Carlisle Equipment Group, L.P., a Delaware limited
partnership (the "Purchaser"), the Persons listed on the Schedule of Sellers
--------- -------------------
attached hereto (collectively referred to herein as the "Sellers" and
-------
individually as a "Seller"), the Persons listed on the Schedule of Current
------ -------------------
Owners attached hereto (collectively referred to herein as the "Current Owners"
- ------ --------------
and individually as a "Current Owner"), solely for purposes of Sections 1.01(g)
------------- ----------------
and 11.16 hereof, Anthony Crane Rental, L.P., a Pennsylvania limited partnership
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("ACR"), solely for purposes of Section 1.01(g) hereof, Anthony Crane Rental
--- ---------------
Holdings, L.P., a Delaware limited partnership ("Holdings") and solely for
--------
purposes of Sections 8.03 and 11.04(b), Robert Carlisle and Bryan Carlisle. The
--------------------------
Purchaser, the Sellers and the Current Owners are collectively referred to
herein as the "Parties." Except as otherwise indicated herein, capitalized
-------
terms used herein are defined in Article 9.
---------
WHEREAS, each Seller is engaged in the businesses set forth beside
such Seller's name on the Schedule of Sellers and in the aggregate such
-------------------
businesses are referred to herein as the "Businesses."
----------
WHEREAS, the Current Owners (other than Wayne Carlisle) own
beneficially and of record 100% of the issued and outstanding shares of capital
stock of Carlisle Construction Co., Inc. (the "Parent");
------
WHEREAS, the Parent and Carlisle Investments, Inc. ("Investments") own
beneficially and of record 100% of the outstanding equity interests in all of
the other Sellers; and
WHEREAS, upon the terms and subject to the conditions set forth in
this Agreement, the Purchaser desires to acquire from each of the Sellers, and
each of the Sellers desires to sell to the Purchaser, substantially all of its
assets and properties (operating as a going concern), including all assets and
properties required to conduct, and currently used in conducting, the Business
of each such Seller, except for the Excluded Assets (as defined in Section
-------
1.01(b) below).
- -------
NOW, THEREFORE, in consideration of the mutual covenants, agreements
and understandings herein contained, the Parties, intending to be legally bound,
agree as follows:
ARTICLE 1.
PURCHASE AND SALE; ASSUMPTION OF CERTAIN LIABILITIES; CLOSING
1.1 Purchase and Sale.
-----------------
(a) Acquired Assets. Upon the terms and subject to the conditions set
---------------
forth in this Agreement, at the Closing each of the Sellers shall sell, assign,
transfer and deliver to the Purchaser, and the Purchaser shall purchase from
each of the Sellers, all properties, assets, rights and interests of every kind
and nature, whether tangible or intangible, and wherever located and by whomever
possessed, owned by each such Seller as of the Closing Date, including, without
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limitation, all of such Seller's assets and properties (operating as a going
concern) required to conduct, and currently used in conducting, the Business of
such Seller (collectively, the "Acquired Assets"); provided, however, that the
--------------- --------
Sellers shall retain and not transfer to the Purchaser the Excluded Assets (as
defined below in Section 1.01(b)). The Acquired Assets shall include, without
---------------
limitation the following, except to the extent solely related to the Excluded
Assets:
(i) all accounts and notes receivables (whether current or
noncurrent);
(ii) all cash and cash equivalents;
(iii) all Related Entity Receivables (as defined in Section 5.23
------------
below);
(iv) all Intellectual Property, along with all income,
royalties, damages and payments due or payable as of the Closing or
thereafter, including, without limitation, damages and payments for past,
present or future infringements or misappropriations thereof, the right to
sue and recover for past infringements or misappropriations thereof and any
and all corresponding rights that, now or hereafter, may be secured
throughout the world;
(v) all of the Sellers' rights existing under leases,
contracts, licenses, permits, distribution arrangements, sales and purchase
agreements, accounts receivable, other agreements and business
arrangements, including, without limitation, all contracts and agreements
described on the Contracts Schedule attached hereto;
------------------
(vi) all machinery, rental equipment, all other equipment
(whether held for sale or not), automobiles and automotive equipment,
trucks, trailers, other vehicles, fixtures, trade fixtures, tools, dies,
furniture and computers and related software, source codes and
documentation owned by the Sellers wherever located, including, without
limitation, all such items which are located in any building, warehouse,
office or other space leased, owned or occupied by the Sellers or used in
connection with the operation of the Businesses, including, without
limitation, all machinery, equipment and vehicles set forth on the
Machinery, Equipment and Vehicles Schedule attached hereto, except for any
------------------------------------------
such items which are specifically identified as Excluded Assets;
(vii) all inventories of work in process, semi-finished and
finished goods, stores, replacement and spare parts, equipment held for
resale, packaging materials, operating supplies, and fuels, owned by the
Sellers wherever located;
(viii) all office supplies, production supplies, other
miscellaneous supplies, and other tangible property of any kind wherever
located, including, without limitation, all property of any kind located in
any building, office or other space leased, owned or occupied by the
Sellers or in any warehouse where any of the Sellers' properties and assets
may be situated;
(ix) all prepayments and prepaid expenses, including, without
limitation, all security deposits under all of the Leases;
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(x) all of the Sellers' claims, causes of action, choses in
action, rights of recovery and rights of set-off of any kind;
(xi) the right to receive and retain mail, accounts receivable
payments and other communications relating to the Businesses;
(xii) the right to bill and receive payment for products
shipped or delivered and services performed but unbilled or unpaid as of
the Closing;
(xiii) all lists, records and other information pertaining to
accounts, credit information, drawings, blueprints, work orders, product
data, personnel and referral sources, and equipment maintenance,
utilization, purchase, rental and resale history, all lists and records
pertaining to suppliers and customers, sales leads, and all books, ledgers,
files and business records of every kind; whether evidenced in writing,
electronically (including, without limitation, by computer) or otherwise;
(xiv) all creative materials (including, without limitation,
photographs, films, art work, color separations and the like), advertising,
marketing and promotional materials and all other printed or written
materials;
(xv) all permits, licenses, certifications, registrations,
authorizations and approvals (and any applications for the foregoing) from
all permitting, licensing, accrediting and certifying agencies, and the
rights to all data and records held by such permitting, licensing and
certifying agencies, except for any such materials solely related to the
Excluded Assets;
(xvi) all telephone numbers (e.g. "800" numbers) used by the
Sellers;
(xvii) all goodwill as a going concern and all other intangible
properties;
(xviii) all rights and use of the name "Carlisle" in connection
with the Businesses; and
(xix) except for the Excluded Assets, all other property,
assets, rights and interests of every kind and nature owned by the Sellers,
or in which they have an interest on the Closing Date, including, without
limitation, all fixed assets included on the Latest Balance Sheet and any
and all subsequent improvements or additions thereon through the Closing
Date.
(b) Excluded Assets. Notwithstanding anything contained in Section
--------------- -------
1.01(a) above, the following assets are expressly excluded from the purchase and
- -------
sale contemplated hereby and, as such, are not Acquired Assets (collectively,
the "Excluded Assets"):
---------------
(i) all monies and other consideration to be received by the
Sellers from
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the Purchaser pursuant hereto;
(ii) all rights of the Sellers under this Agreement;
(iii) all assets contained in the investment accounts
identified on the Excluded Assets Schedule;
------------------------
(iv) all equity interests of the Other Sellers held by the
Parent and Investments, the equity interests of RGC Family Limited
Partnership No. 3 held by Investments and all equity interests of the
Sellers in Ludlow Development Enterprises, Inc.;
(v) all fee interests in all of the parcels of real property
set forth on the Excluded Assets Schedule attached hereto;
------------------------
(vi) all assets (whether operating assets or investment
assets) of the Sellers which are related to the Sellers' aircraft
operations;
(vii) all Affiliate Receivables (as defined in Section 5.23
------------
below);
(viii) all rights of the Sellers to their federal income tax
deposits, if any;
(ix) all qualifications of the Sellers to do business as
foreign entities;
(x) all arrangements of the Sellers with registered agents
relating to foreign qualifications;
(xi) all taxpayer and other identification numbers of the
Sellers and tax returns;
(xii) all seals, minute books, stock transfer books, blank
stock certificates and other documents relating to the organization,
maintenance, and existence of each of the Sellers as a legal entity; and
(xiii) all other assets specifically identified on the Excluded
--------
Assets Schedule.
---------------
(c) Assumed Liabilities. Subject to the conditions specified in this
-------------------
Agreement, as a portion of the Purchase Price and as additional consideration
for the Acquired Assets, on the Closing Date, the Purchaser will assume and
agree to pay, defend, discharge and perform as and when due only the following
liabilities and obligations of the Sellers (the "Assumed Liabilities");
-------------------
(i) the liabilities and obligations of the Sellers as of Closing
of the type which would be reflected on the liability side of a balance
sheet prepared in accordance with GAAP and consistent with the Most Recent
Fiscal Year End Balance Sheet and the Latest Balance Sheet and which are
set forth on the Closing Balance Sheet, including, without
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limitation, Related Entity Payables (except (A) to the extent specifically
incurred and related to any of the Excluded Assets, (B) those which
represent Affiliate Payables (as defined in Section 5.23 below), (C) any
------------
liabilities for income Taxes or Taxes imposed in lieu thereof; (D) any cash
or book overdrafts and (E) the Indebtedness described in clause (x) of the
definition of Indebtedness, which preceding items shall be considered
Excluded Liabilities); and
(ii) the liabilities and obligations of the Sellers for both
payment and performance under the agreements, leases, contracts or
commitments listed on the Contracts Schedule (but not including any
------------------
liability or obligation arising out of or in connection with any breach,
violation or default in respect thereof occurring prior to the Closing
Date) and under written agreements, leases, contracts and commitments
entered into in the ordinary course of business which are not required by
the terms of this Agreement to be listed on the Contracts Schedule in
------------------
existence on the date of the Latest Balance Sheet and incurred in the
ordinary course of business consistent with past practice by the Sellers
after the date of the Latest Balance Sheet, but only to the extent that
such contracts, leases and commitments constitute Acquired Assets; and
(iii) subject to indemnification obligations pursuant to
Sections 8.01(b)(i)(F) and (G), the liabilities and obligations of the
------------------------------
Sellers for maintenance, payment, administration and performance under all
Employee Benefit Plans that are listed on the Assumed Employee Benefit
------------------------
Plans Schedule, including but not limited to any and all liabilities and
--------------
obligations that are related to the continuation coverage requirements of
Section 4980B(f) of the Code and Sections 601 through 608 of ERISA (such
Code and ERISA sections collectively referred to as "COBRA") with respect
-----
to each person who on or before the Closing Date incurs a qualifying event
(as defined under COBRA), who lost or will lose any type of health coverage
under any such Employee Benefit Plan by reason of such qualifying event and
who has exercised or is or will be eligible to exercise rights to any
continuation coverage pursuant to COBRA under any such Employee Benefit
Plan by reason of such qualifying event, regardless of whether or not such
qualifying event and loss of coverage are related to the transactions
contemplated by this Agreement, but excluding those liabilities and
obligations set forth on the Excluded Benefits Schedule attached hereto
--------------------------
(which items set forth on the Excluded Benefits Schedule shall be
--------------------------
considered Excluded Liabilities).
(d) Excluded Liabilities. Except with respect to the Assumed
--------------------
Liabilities as set forth in Section 1.01(c) above, the Purchaser shall not
---------------
assume or become liable for, and shall not be deemed to have assumed or have
become liable for, any of the liabilities and obligations of the Sellers not
expressly assumed by the Purchaser pursuant to Section 1.01(c) above, whether
---------------
accrued, absolute or contingent, whether known or unknown, whether disclosed or
undisclosed, whether due or to become due and whether related to the Acquired
Assets or otherwise, and regardless of when asserted, including, without
limitation, any liabilities or obligations arising from or relating to the
Acquired Assets or operation of the Businesses by the Sellers prior to the
Closing Date, any obligations or liabilities with respect to any cash or book
overdrafts, any obligations to make distributions to Sellers or Current Owners
for S-corporation taxes or other purposes, any liabilities or obligations
arising under Environmental, Health and Safety Requirements, any liabilities or
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obligations for Taxes, any liabilities or obligations related to the Excluded
Assets, any liabilities or obligations arising under any of the items set forth
on the Excluded Benefits Schedule and any liabilities or obligations for
--------------------------
breaches of contracts, breaches or warranty, torts, infringements, claims or
lawsuits occurring at or prior to the Closing Date (the "Excluded Liabilities").
--------------------
(e) Purchase Price for Acquired Assets. The purchase price for the
----------------------------------
Acquired Assets (the "Purchase Price") will consist of (i) the assumption by the
--------------
Purchaser of the Assumed Liabilities, (ii) the delivery to the Sellers
(according to the percentages set forth on the Schedule of Sellers) of Class B
-------------------
Preferred Units with an initial liquidation value of $20,000,000 (the "Class B
-------
Preferred Units") of Holdings, which will have the terms set forth in the Fifth
- ---------------
Amended and Restated Limited Partnership Agreement of Holdings, the form of
which is attached hereto as Exhibit A (the "Amended and Restated Limited
--------- ----------------------------
Partnership Agreement"), and (iii) the payment to the Sellers (according to the
- ---------------------
percentages set forth on the Schedule of Sellers) of $161,322,849 (as such
-------------------
amount is adjusted pursuant to Section 1.03 below) in cash (the "Cash Purchase
------------ -------------
Price") at the Closing. The Cash Purchase Price is subject to adjustment
- -----
pursuant to Section 1.03 hereof.
------------
(f) Allocation of the Purchase Price. The allocation ("Allocation")
-------------------------------- ----------
of the Purchase Price among the Acquired Assets shall be determined by the
Purchaser with the reasonable concurrence of the Sellers in a manner consistent
with the methodology set forth on the Allocation Schedule attached hereto (as
-------------------
adjusted to reflect any adjustments to the Purchase Price pursuant to Section
-------
1.03 or Section 8.01) and such Allocation shall be used by the Parties in
- ---- ------------
preparing (i) Form 8594, Asset Acquisition Statement, for each of the Purchaser
and the Sellers, and (ii) all Tax Returns. Each of the Purchaser and the
Sellers shall file Form 8594, prepared in accordance with the Allocation, with
its federal income Tax Return for its Tax period including the Closing Date.
The Allocation made pursuant to this Section 1.01(f) shall be binding upon the
---------------
Parties and upon each of their successors and assigns. The Allocation Schedule
-------------------
shall set forth a list of the Acquired Assets which will be acquired in exchange
for the Class B Preferred Units.
(g) Exchange and Contribution. The Parties acknowledge that the
-------------------------
Acquired Assets that are being acquired in exchange for the Class B Preferred
Units will be treated as having been contributed by the Sellers directly to
Holdings in exchange for Class B Preferred Units in accordance with Section
721(a) of the Code, then contributed by Holdings to ACR, and then contributed by
ACR to the Purchaser. The transfer of such assets directly by the Sellers to
the Purchaser is being done in accordance with the directions of Holdings and
ACR as a matter of administrative convenience to avoid duplicate costs and
expenses as a result of multiple transfers of assets.
1.2 The Closing. The closing of the transactions contemplated by
-----------
this Agreement (the "Closing") shall take place at the offices of Kirkland &
-------
Ellis, 153 East 53rd Street, New York, New York 10022, on July 1, 1999, or at
such other place or on such other date as may be mutually agreeable to each of
the Parties (the "Closing Date"); provided that in any event, if the Purchaser's
------------ --------
senior lenders require that the Closing take place at the offices of their
attorneys, the Parties agree that the Closing shall take place at such offices.
Subject to the conditions set forth in this Agreement, at the Closing:
-6-
<PAGE>
(a) the Current Owners shall cause the Sellers to, and the Sellers
shall, convey to the Purchaser good and marketable title to all of the Acquired
Assets, free and clear of all Liens (other than Permitted Liens), and deliver to
the Purchaser warranty deeds, bills of sale, assignment of leases and contracts
and all other instruments of conveyance which are necessary or desirable to
effect transfer of the Acquired Assets, in form and substance satisfactory to
the Purchaser;
(b) the Purchaser shall deliver to the Sellers such instruments of
assumption as are required in order for the Purchaser to assume the Assumed
Liabilities, in form and substance satisfactory to the Sellers;
(c) the Purchaser shall deliver to the Sellers the Cash Purchase
Price by wire transfer of immediately available funds and shall deliver to the
Sellers such documents as are necessary to establish the Sellers' ownership of
the Class B Preferred Units;
(d) the Sellers shall deliver to Purchaser all appropriate payoff
letters (in form and substance satisfactory to the Purchaser) from holders of
any Indebtedness of the Sellers as are requested by the Purchaser and shall make
arrangements reasonably satisfactory to Purchaser for such holders to deliver
lien releases and canceled notes at the Closing; and
(e) the Sellers and the Purchaser, as applicable, shall deliver the
opinions, certificates and other documents and instruments required to be
delivered by or on behalf of such Party under Article 2 hereof.
---------
1.3 Purchase Price Adjustment.
-------------------------
(a) Closing Date Adjustments.
------------------------
-7-
<PAGE>
(i) Not more than five (5) business days, but in no event less
than two (2) business days, before the Closing Date, the Sellers shall
prepare and deliver to the Purchaser an estimated combined unaudited
consolidated balance sheet of the Sellers, dated as of May 31, 1999, in
good faith and in accordance with GAAP and consistent with the Most Recent
Fiscal Year End Balance Sheet (as defined below in Section 5.07), an
------------
estimate of the Net Asset Value as of May 31, 1999 and an estimate of the
Deduction Amount as of June 30, 1999. If the Purchaser does not agree with
the Sellers' estimates of the Net Asset Value and the Deduction Amount and
the Sellers and the Purchaser cannot reach agreement with respect thereto
prior to the Closing Date, the estimates of the Net Asset Value and the
Deduction Amount will be deemed to be equal to the average of the Sellers'
and the Purchaser's good faith determinations thereof. Such Net Asset
Value as finally estimated pursuant to this Section 1.03(a)(i) is referred
------------------
to herein as the "Estimated Net Asset Value" and such Deduction Amount as
-------------------------
finally estimated pursuant to this Section 1.03(a)(i) is referred to herein
------------------
as the "Estimated Deduction Amount." At the closing, (A) the Cash Purchase
--------------------------
Price shall be decreased dollar-for-dollar by the Estimated Deduction
Amount, and (B) if the Estimated Net Asset Value is less than the Target
Net Asset Value, then the Cash Purchase Price will be decreased dollar-for-
dollar by the amount of such deficiency, and if the Estimated Net Asset
Value is greater than the Target Net Asset Value, then the Cash Purchase
Price will be increased by the lesser of (X) the amount of such excess and
(Y) $1,500,000.
(ii) At the Closing, the Cash Purchase Price will be decreased
dollar-for-dollar by the amount necessary to discharge fully the then
outstanding balance of the Sellers' Indebtedness relating to any of the
Acquired Assets, otherwise paid off or discharged by the Purchaser on the
Closing Date or assumed by the Purchaser pursuant to Section 1.01(c)
---------------
(including, without limitation, accrued interest, prepayment penalties and
premiums) and the Indebtedness described in clause (x) of the definition of
Indebtedness.
(iii) At the Closing, the Cash Purchase Price will be decreased
dollar-for-dollar by the fair market value as of the end of the day
immediately preceding the Closing Date of all assets contained in the
investment accounts identified on the Excluded Assets Schedule.
------------------------
(iv) Not more than five (5) business days, but in no event less
than two (2) business days, before the Closing Date, the Sellers shall
prepare and deliver to the Purchaser in addition to such items described in
clause (i) above an estimate of the Net Income Amount as of the day
immediately preceding the Closing Date, determined in good faith and in
accordance with GAAP. If the Purchaser does not agree with the Sellers'
estimate of the Net Income Amount and the Sellers and the Purchaser cannot
reach agreement with respect thereto prior to the Closing Date, the
estimate of the Net Income Amount will be deemed to be equal to the average
of the Sellers' and the Purchaser's good faith determinations thereof. The
Net Income Amount as finally estimated pursuant to this Section
-------
1.03(a)(iii) is referred to herein as the "Estimated Net Income Amount."
------------ ---------------------------
At the Closing, the Cash Purchase Price shall be increased dollar-for-
dollar by the lesser of (A) the Estimated Net Income Amount and (B)
$250,000.
-8-
<PAGE>
(b) Post-Closing Determination. As promptly as practicable, but in no
--------------------------
event later than ninety (90) days after the Closing Date, the Sellers and their
auditors will conduct a review of the Businesses and prepare a combined and
consolidated balance sheet with respect thereto (the "Closing Balance Sheet")
---------------------
and a determination of the Net Asset Value, the Deduction Amount, the Tax Amount
and the Net Income Amount, each as of the close of business on the day before
the Closing Date and, at their expense, will prepare and deliver to the
Purchaser, a computation of the Net Asset Value, the Deduction Amount, the Tax
Amount and the Net Income Amount as of the close of business on the day before
the Closing Date (the "Draft Computations"). The Purchaser will pay, or
------------------
reimburse the Sellers for, the reasonable expenses of Arthur Andersen incurred
by the Sellers in connection with the preparation of the Closing Balance Sheet.
The Sellers and their auditors will make available to the Purchaser and its
auditors all records and work papers used in preparing the Draft Computations.
If the Purchaser disagrees with the Sellers' determination of the Net Asset
Value, the Deduction Amount, the Tax Amount and/or the Net Income Amount
reflected in the Draft Computations, the Purchaser shall notify Wayne Carlisle
(the "Current Owner Representative") in writing of such disagreement (such
----------------------------
notice setting forth the basis for such disagreement in reasonable detail)
within thirty (30) days after the Sellers' delivery of the Draft Computations to
the Purchaser. The Current Owner Representative and the Purchaser thereafter
shall negotiate in good faith to resolve any such disagreements. If there is an
amount as to which the Current Owner Representative and the Purchaser are able
to agree, such amount shall be paid to the appropriate party pursuant to Section
-------
1.03 (d) below. If the Current Owner Representative and the Purchaser are
- --------
unable to resolve any disagreements about remaining amounts within thirty (30)
days after the Purchaser's delivery of his notice of disagreement to the Current
Owner Representative, the Current Owner Representative and the Purchaser shall
submit the dispute to a "Big Five" public accounting firm (or any of their
--------
respective successors) (the "Auditor") for resolution; provided that if the
------- --------
Current Owner Representative and the Purchaser are unable to agree upon an
Auditor, the Auditor shall be a "Big Five" public accounting firm (or any of
--------
their respective successors) selected by lot (after the Current Owner
Representative and the Purchaser each exclude one such accounting firm). The
selection of the Auditor shall be conclusive, final, binding and non-appealable
by the Parties.
(c) The Purchaser and the Current Owner Representative shall use
their best efforts to cause the Auditor to resolve all disagreements over the
Net Asset Value, the Deduction Amount, the Tax Amount or the Net Income Amount
as soon as practicable, but in any event within sixty (60) days after submission
of the dispute to the Auditor. The resolution of such disagreements and the
determination of the Net Asset Value, the Deduction Amount, the Tax Amount and
the Net Income Amount by the Auditor shall be final and binding on the Parties.
The Purchaser, on one hand, and the Sellers, on the other hand, will each bear
one-half of the costs and expenses of the Auditor. The Net Asset Value as
finally determined pursuant to this Section 1.03(c) is referred to herein as the
---------------
"Actual Net Asset Value," the Deduction Amount as finally determined pursuant to
-----------------------
this Section 1.03(c) is referred to herein as the "Actual Deduction Amount," the
--------------- -----------------------
Tax Amount as finally determined pursuant to this Section 1.03(c) is referred to
---------------
herein as the "Actual Tax Amount," and the Net Income Amount determined pursuant
-----------------
to this Section 1.03(c) is referred to herein as the "Actual Net Income Amount."
------------------------
-9-
<PAGE>
(d) Within five (5) days after the Actual Net Asset Value, the Actual
Deduction Amount, the Actual Tax Amount and the Actual Net Income Amount are
finally determined pursuant to Section 1.03(b):
---------------
(i) if the Actual Net Asset Value is greater than the
Estimated Net Asset Value, the Purchaser shall pay to the Current Owner
Representative on behalf of the Sellers an amount in cash equal to the
Actual Net Asset Value minus the Estimated Net Asset Value; provided that
----- --------
(A) if the Cash Purchase Price was decreased pursuant to Section
-------
1.03(a)(i)(C) then any such payment pursuant to this Section 1.03(d)(i)
------------- ------------------
shall not exceed $1,500,000 plus the amount that the Cash Purchase Price
was decreased pursuant to Section 1.03(a)(i)(C) or (B) if the Cash Purchase
---------------------
Price was increased pursuant to Section 1.03(a)(i)(C) then any such payment
---------------------
pursuant to this Section 1.03(d)(i) plus any increase in the Cash Purchase
------------------
Price made pursuant to Section 1.03(a)(i)(C) shall not in the aggregate
---------------------
exceed $1,500,000;
(ii) if the Actual Deduction Amount is less than the Estimated
Deduction Amount, the Purchaser shall pay to the Current Owner
Representative on behalf of the Sellers an amount in cash equal to the
Estimated Deduction Amount minus the Actual Deduction Amount;
(iii) if the Actual Net Income Amount is greater than the
Estimated Net Income Amount, the Purchaser shall pay to the Current Owner
Representative on behalf of the Sellers an amount in cash equal to the
Actual Net Income Amount minus the Estimated Net Income Amount; provided
----- --------
that any such payment pursuant to this Section 1.03(d)(iv) plus any
-------------------
increase in the Cash Purchase Price made pursuant to Section 1.03(a)(iii)
--------------------
shall not in the aggregate exceed $250,000;
(iv) if the Actual Net Asset Value is less than the Estimated
Net Asset Value, the Current Owner Representative shall, on behalf of the
Sellers, pay to the Purchaser an amount in cash equal to the Estimated Net
Asset Value minus the Actual Net Asset Value;
-----
(v) if the Actual Deduction Amount is greater than the
Estimated Deduction Amount, the Current Owner Representative shall, on
behalf of the Sellers, pay to the Purchaser an amount in cash equal to the
Actual Deduction Amount minus the Estimated Deduction Amount;
(vi) if the Actual Tax Amount is less than zero, the Current
Owner Representative shall, on behalf of the Sellers, pay to the Purchaser
an amount in cash equal to the amount by which the Actual Tax Amount is
less than zero; and
(vii) if the Actual Net Income Amount is less than the
Estimated Net Income Amount, the Current Owner Representative shall, on
behalf of the Sellers, pay to the Purchaser an amount in cash equal to the
Estimated Net Income Amount minus the Actual Net Income Amount; provided
----- --------
that any such payment pursuant to this Section 1.03(d)(viii) shall not
---------------------
exceed the increase in the Cash Purchase Price made pursuant to Section
-------
1.03(a)(iii).
------------
-10-
<PAGE>
All amounts payable pursuant to this Section 1.03(d) shall be added together or
---------------
netted against one another, as applicable, such that only one payment will be
made from one Party to another Party and such amount shall include simple
interest thereon at the rate of 8% per annum, calculated on the basis of a 365-
day year, from the Closing Date through the date of payment, and shall be
payable by a cashier's or certified check, or by wire transfer of immediately
available funds to the accounts designated by the payee.
ARTICLE 2.
CONDITIONS TO THE PURCHASER'S OBLIGATIONS
The obligation of the Purchaser to purchase and pay for the Acquired
Assets and to assume the Assumed Liabilities at the Closing is subject to the
satisfaction as of the Closing of the following conditions:
2.1 Representations and Warranties; Covenants. The representations
-----------------------------------------
and warranties contained in Articles 5 and 6 hereof shall be true and correct in
----------------
all material respects at and as of the Closing as though then made (without
giving effect to any disclosures made by the Sellers or the Current Owners after
the date hereof); provided that the representations and warranties set forth in
--------
Section 5.15 shall be deemed to be true and correct in all material respects
- ------------
unless such breach could reasonably be expected to subject the Purchaser to a
material Loss. The Sellers and the Current Owners shall have performed in all
material respects all of the covenants required to be performed by them
hereunder prior to the Closing.
2.2 Amendment of Limited Partnership Agreement. The Amended and
------------------------------------------
Restated Limited Partnership Agreement of Holdings shall have been amended and
restated in the form of Exhibit A attached hereto, shall be in full force and
---------
effect under the laws of the Commonwealth of Pennsylvania as of the Closing as
so amended and restated and shall not have been further amended or modified.
2.3 Amendment to the Securityholders Agreement. The Securityholders
------------------------------------------
Agreement, dated as of July 22, 1998, between Holdings and Holdings' partners
shall have been amended as set forth in Exhibit B attached hereto (the
---------
"Amendment to the Securityholders Agreement"), and the Amendment to the
- -------------------------------------------
Securityholders Agreement shall be in full force and effect as of the Closing.
2.4 Amendment to the Registration Agreement. The Registration
---------------------------------------
Agreement, dated as of July 22, 1998, between Holdings and Holdings' partners
shall have been amended as set forth in Exhibit C attached hereto (the
---------
"Amendment to the Registration Agreement"), and the Amendment to the
- ----------------------------------------
Registration Agreement shall be in full force and effect as of the Closing.
2.5 Employment Agreement. The Purchaser and Wayne Carlisle, Bryan
--------------------
Carlisle, Gary Strassel and Robert Carlisle shall have entered into Employment
Agreements, respectively, in the form of Exhibits D-1, D-2, D-3 and D-4 attached
------------------------------
hereto (the "Employment Agreements"), and
---------------------
-11-
<PAGE>
the Employment Agreements shall be in full force and effect as of the Closing
and shall not have been amended or modified.
2.6 Financing Arrangements. The Purchaser shall have obtained on
----------------------
terms and conditions satisfactory to it all the debt financing proceeds
necessary to consummate the transactions contemplated hereby and to fund the
ongoing working capital requirements of the Businesses as acquired by the
Purchaser hereunder.
2.7 Opinion of the Sellers' and the Current Owners' Counsel. The
-------------------------------------------------------
Purchaser shall have received from Frost & Jacobs, counsel for the Sellers and
the Current Owners, an opinion with respect to the matters set forth in Exhibit
-------
E attached hereto, which shall be addressed to the Purchaser and to the lenders
- -
providing the financing for the transactions contemplated hereby, dated the date
of the Closing, and in form and substance reasonably satisfactory to the
Purchaser.
2.8 Real Estate Leases. The Purchaser and the Sellers, as
------------------
applicable, shall have entered into certain Lease Agreements in the form of
Exhibits F-1, F-2, F-3, F-4 and F-5 attached hereto (the "Lease Agreements"),
- ----------------------------------- ----------------
and the Lease Agreements shall be in full force and effect as of the Closing and
shall not have been amended or modified.
2.9 Material Adverse Change. Since the date of the Latest Balance
-----------------------
Sheet, no material adverse change shall have taken place with respect to the
business, assets, liabilities, financial condition, operating results, business
prospects or labor, customer or supplier relations of the Sellers, taken as a
whole ("Material Adverse Change"), except as expressly contemplated herein.
-----------------------
2.10 Proceedings. All corporate and other proceedings taken or
-----------
required to be taken by the Sellers in connection with the transactions
contemplated hereby to be consummated at or prior to the Closing and all
documents incident thereto shall be satisfactory in form and substance to the
Purchaser and its special counsel.
2.11 Compliance with Applicable Laws.
-------------------------------
(a No action or proceeding before any court or governmental body
will be pending or threatened which, in the judgment of the Purchaser, makes it
inadvisable or undesirable to consummate the transactions contemplated by this
Agreement by reason of the probability that the action or proceeding will result
in a judgment, decree or order that would prevent the carrying out of this
Agreement or any of the transactions contemplated hereby, declare unlawful the
transactions contemplated hereby or cause such transactions to be rescinded.
(b The purchase or receipt of the Acquired Assets and the assumption
of the Assumed Liabilities by the Purchaser hereunder shall not be prohibited by
any applicable law or governmental rule or regulation and shall not subject the
Purchaser to any penalty, liability or, in the Purchaser's judgment, other
onerous conditions under or pursuant to any applicable law or governmental rule
or regulation, and the purchase of the Acquired Assets and the assumption of the
Assumed Liabilities by the Purchaser hereunder shall be permitted by laws, rules
and regulations of the jurisdictions and governmental authorities and agencies
to which the Purchaser is subject.
-12-
<PAGE>
2.12 Filings. All filings under all applicable federal and state laws
-------
necessary to consummate the transactions contemplated by this Agreement shall
have been made and the applicable waiting periods, if any, under the Hart-Scott-
Rodino Antitrust Improvement Act of 1976, as amended (the "HSR Act") shall have
-------
expired or been terminated.
2.13 Consents and Approvals. All consents and approvals by (a)
----------------------
governmental agencies that are required for the consummation of the transactions
contemplated hereby or the other agreements contemplated hereby will have been
obtained and (b) third parties that are required in order to prevent a breach
of, a default under, or a termination, change in the terms or conditions or
modification of, any instrument, contract, lease, license or other agreement and
required to be listed on the Contracts Schedule with an asterisk (*) or on the
------------------
Noncontravention Schedule will have been obtained on terms and conditions
- -------------------------
satisfactory to the Purchaser.
2.14 Payoff Letters and Releases. The Sellers shall have provided to
---------------------------
the Purchaser payoff letters with respect to all Indebtedness of the Sellers
relating to any of the Acquired Assets and obtained releases of all Liens,
including appropriate UCC termination statements, against the Acquired Assets,
all on terms reasonably satisfactory to the Purchaser.
2.15 Closing Documents. At the Closing, the Sellers shall have
-----------------
delivered to the Purchaser all of the following documents:
(a a certificate of an officer of each of the Sellers, dated as of
the Closing Date, stating that the conditions specified in Sections 2.01 through
---------------------
2.05, 2.07 and 2.9, have been fully satisfied;
- ------------------
(b certified copies of the resolutions duly adopted by each of the
Sellers and their stockholders or members, as applicable, authorizing the
execution, delivery and performance of this Agreement and each of the
transactions contemplated herein;
(c a certified copy of the certificates of incorporation or limited
liability company agreements of each of the Sellers, in each case as in effect
immediately prior to the Closing;
(d copies of all third party and governmental consents, approvals
and filings required in connection with the consummation of the transactions
hereunder;
(e good standing certificates of each of the Sellers from their
jurisdiction of organization and each jurisdiction in which such Seller is
qualified to do business as a foreign entity, in each case dated as of a recent
date prior to the Closing Date;
(f landlord consents and estoppel certificates from each of the
Sellers' landlords in form and substance satisfactory to the Purchaser;
-13-
<PAGE>
(g such instruments of sale, transfer, assignment, conveyance and
delivery, in form and substance satisfactory to the Purchaser, as are required
in order to transfer to the Purchaser good and marketable title to the Acquired
Assets, free and clear of all Liens (other than the Permitted Liens); and
(h such other documents relating to the transactions contemplated by
this Agreement as the Purchaser or its special counsel may reasonably request.
2.16 Waiver. Any condition specified in this Article 2 may be waived
------ ---------
if consented to in writing by the Purchaser.
ARTICLE 3.
CONDITIONS TO THE SELLERS' OBLIGATIONS
The obligation of the Sellers and the Current Owners to take the
actions set forth in this Agreement and to consummate the transactions
contemplated hereby at or prior to the Closing is subject to the satisfaction as
of the Closing of the following conditions:
3.1 Representations and Warranties; Covenants. The representations
-----------------------------------------
and warranties contained in Article 7 hereof shall be true and correct in all
---------
material respects at and as of the Closing as though then made, and the
Purchasers shall have performed in all material respects all of the covenants
required to be performed by them hereunder at or prior to the Closing.
3.2 Amendment of Limited Partnership Agreement. The Amended and
------------------------------------------
Restated Limited Partnership Agreement shall be in full force and effect under
the laws of the Commonwealth of Pennsylvania as of the Closing and shall not
have been further amended or modified.
3.3 Amendment to the Securityholders Agreement. Holdings and
------------------------------------------
Holdings' partners as of the date hereof shall have entered into the Amendment
to the Securityholders Agreement, and the Amendment to the Securityholders
Agreement shall be in full force and effect as of the Closing.
3.4 Amendment to the Registration Agreement. Holdings and Holdings'
---------------------------------------
partners as of the date hereof shall have entered into the Amendment to the
Registration Agreement, and the Amendment to the Registration Agreement shall be
in full force and effect as of the Closing.
3.5 Employment Agreements. The Purchaser shall have entered into the
---------------------
Employment Agreements, and the Employment Agreements shall be in full force and
effect as of the Closing.
3.6 Lease Agreements. The Purchaser shall have entered into the
----------------
Lease Agreements, and the Lease Agreements shall be in full force and effect as
of the Closing.
-14-
<PAGE>
3.7 Filings. All filings under all applicable federal and state laws
-------
necessary to consummate the transactions contemplated by this Agreement shall
have been made and the applicable waiting periods, if any, under the HSR Act
shall have expired or been terminated.
3.8 Proceedings. All proceedings taken or required to be taken by
-----------
the Purchaser in connection with the transactions contemplated hereby to be
consummated at or prior to the Closing and all documents incident thereto shall
be reasonably satisfactory in form and substance to the Sellers, the Current
Owner Representative and their special counsel.
3.9 Compliance with Applicable Laws; Permits. No action or
----------------------------------------
proceeding before any court or governmental body will be pending or threatened
which, in the judgment of the Current Owner Representative, makes it inadvisable
or undesirable to consummate the transactions contemplated by this Agreement by
reason of the probability that the action or proceeding will result in a
judgment, decree or order that would prevent the carrying out of this Agreement
or any of the transactions contemplated hereby, declare unlawful the
transactions contemplated hereby or cause such transactions to be rescinded.
3.10 Consents and Approvals. All consents and approvals by (a)
----------------------
governmental agencies that are required for the consummation of the transactions
contemplated hereby or the other agreements contemplated hereby will have been
obtained on terms and conditions satisfactory to the Sellers and the Current
Owner Representative and (b) third parties that are required in order to prevent
a breach of, a default under, or a termination, change in the terms or
conditions or modification of, any instrument, contract, lease, license or other
agreement and required to be listed on the Purchaser Noncontravention Schedule
-----------------------------------
will have been obtained by the Purchaser.
3.11 Closing Documents. At the Closing, the Purchaser shall have
-----------------
delivered to the Sellers all of the following documents:
(a a certificate of an officer of the Purchaser, dated as of the
Closing Date, stating that the conditions specified in Sections 3.01 through
---------------------
3.06 and 3.12, have been fully satisfied;
- -------------
(b certified copies of the resolutions duly adopted by the general
partner of the Purchaser authorizing the execution, delivery and performance of
this Agreement and each of the transactions contemplated herein;
(c good standing certificates of the Purchaser from its jurisdiction
of organization and each jurisdiction in which the Purchaser is qualified to do
business as a foreign entity, in each case dated as of a recent date prior to
the Closing Date; and
(d such other documents relating to the transactions contemplated by
this Agreement as the Seller, the Current Owner Representative or its special
counsel may reasonably request.
3.12 Opinion of the Purchaser's Counsel. The Sellers shall have
----------------------------------
received from Kirkland & Ellis, counsel for the Purchaser, an opinion with
respect to the matters set forth in
-15-
<PAGE>
Exhibit H attached hereto, which shall be addressed to the Sellers, dated the
- ---------
date of the Closing, and in form and substance reasonably satisfactory to the
Sellers.
3.13 Waiver. Any condition specified in this Article 3 may be waived
------ ---------
if consented to in writing by the Sellers and the Current Owner Representative.
ARTICLE 4.
PRE-CLOSING COVENANTS AND AGREEMENTS
Each of the Parties agrees as follows with respect to the period
between the execution of this Agreement and the Closing:
4.1 General. Each of the Parties will use its reasonable best
-------
efforts to take all actions and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the conditions set forth
in Articles 2 and 3).
----------------
4.2 Notices and Consents. The Sellers and the Current Owners will
--------------------
use its, his or her reasonable best efforts to (a) give required notices to
third parties, (b) obtain any required governmental or third party consents and
make any filings pursuant thereto that may be necessary, proper or advisable in
connection therewith and (c) take any actions reasonably required by a third
party, in each case, in connection with the matters contemplated by this
Agreement.
4.3 Affirmative Covenants of the Current Owners and the Sellers.
-----------------------------------------------------------
Prior to the Closing, except as otherwise expressly provided herein, the Current
Owners will cause the Sellers to, and the Sellers will (and in the case of
clauses (e), (f) and (g) hereof, the Current Owners will):
(a conduct its Businesses (including, without limitation, the
collection of receivables, purchase of inventory, provision of services, payment
of payables and incurrence of and payment or financing of capital expenditures)
only in the usual and ordinary course of business in accordance with past custom
and practice;
(b carry on its business in the same manner as presently conducted
and keep its business organization and properties substantially intact,
including, without limitation, its present business operations, physical
facilities and assets, working conditions and employees and its present
relationships with lessors, licensors, suppliers and customers and others having
business relations with it;
(c maintain in full force and effect all Intellectual Property which
is material to the Sellers;
(d encourage (and not act to dissuade or discourage) employees to
continue their employment with the Purchaser after the Closing;
-16-
<PAGE>
(e comply with all applicable laws, ordinances and regulations in
the operation of the Businesses;
(f promptly (once they have knowledge thereof) inform the Purchaser
in writing of (i) any variances from the representations and warranties
contained in Articles 5 or 6 hereof or event or occurrence which would cause
---------------
such representations and warranties to be incorrect as of the Closing, (ii) any
breach of any covenant hereunder by the Sellers or any Current Owner and (iii)
any other material development affecting the ability of such Party to consummate
the transactions contemplated by this Agreement;
(g cooperate with the Purchaser and use their reasonable best
efforts to cause the conditions to the Purchasers' obligations to close
specified in Article 2 above to be satisfied and execute and deliver such
---------
further instruments of conveyance and transfer and take such additional action
as the Purchaser may reasonably request to effect, consummate, confirm or
evidence the transactions contemplated by this Agreement;
(h transfer all assets (other than the Excluded Assets), if any,
which are used in the Businesses, but owned by the Current Owners (or the
stockholders, partners or Affiliates of the Current Owners) into the name of the
Sellers, with the exception of certain boats owned by Carlisle Marine Service,
Inc. and set forth on the Boats Schedule attached hereto;
--------------
(i maintain the books, accounts and records of the Sellers in
accordance with past custom and practice as used in the preparation of the
Latest Balance Sheet and upon the reasonable request of the Purchaser, report on
financial reporting, operational matters and the general status of ongoing
operations; and
(j amend the Carlisle Enterprises, Inc. Phantom Stock Plan (the
"Phantom Stock Plan") so that the value of each Phantom Share (as defined in the
- -------------------
Phantom Stock Plan) that is credited under such plan as of the Closing Date to a
person who is still employed by a Seller immediately prior to the Closing shall
be fixed as of the Closing (with such value being determined as of the Closing
Date on the basis of the provisions of Appendix A to the Phantom Stock Plan).
4.4 Negative Covenants of the Current Owners and the Sellers. Prior
--------------------------------------------------------
to the Closing, without the prior written consent of the Purchaser, the Current
Owners will cause the Sellers to not, and the Sellers will not:
(a take any action that would require disclosure under Section 5.21
------------
below;
(b make any loan or enter into any transaction with any of its
officers, directors, partners or Affiliates other than arms length transactions
consistent with past custom and practice;
(c sell, lease, license or otherwise dispose of any interest in any
of the Acquired Assets, other than sales of inventory and equipment and leases
of equipment in the ordinary course of business consistent with past practice,
or permit, allow or suffer any of the Acquired Assets to be subjected to any
Lien (other than Permitted Liens);
-17-
<PAGE>
(d terminate or modify in any material respect any contract required
to be disclosed on the Contracts Schedule or any government license, permit or
------------------
other authorization;
(e enter into any new, or amend any existing, material contracts,
agreements or commitments, including, without limitation, any lease agreements
or collective bargaining agreements, (except for contracts, agreements or
commitments entered into in the ordinary course of business and for commitments
relating to capital expenditures consistent with the budget provided to the
Purchaser prior to the date hereof);
(f institute any material change in the conduct of its business, or
any change in its method of purchase, sale, lease, management, marketing,
operation or accounting;
(g establish, amend (unless such amendment is provided for under
Section 4.03(j) above), or, except in the ordinary course of business consistent
- ---------------
with past practice, contribute to any pension, retirement, profit sharing or
stock bonus plan or multiemployer plan covering the employees of the Sellers;
(h incur any Indebtedness for borrowed money (other than
Indebtedness incurred to finance the Sellers' ordinary course working capital
and capital expenditure needs);
(i increase any officer's or employee's compensation, incentive
arrangements or other benefits, except for increases made in the ordinary course
of business consistent with past custom and practice, or pursuant to any written
agreement disclosed to the Purchaser and in existence on the date hereof;
(j undertake any employee layoffs to which the WARN Act or the Older
Workers Benefits Protection Act, as amended (the "Older Workers Act"), could
-----------------
apply; or
(k sell or otherwise dispose of any interest in any marketable
securities.
4.5 Full Access. The Sellers will permit representatives of the
-----------
Purchaser to have full access at all reasonable times, and in a manner so as not
to interfere with the normal business operations of the Sellers, to all
properties, personnel, books, records, contracts and other documents of or
pertaining to the Sellers.
4.6 Notice of Material Developments. Purchaser will give prompt
-------------------------------
written notice to the Sellers and the Current Owner Representative of any (a)
representation or warranty of the Purchaser contained in Article 7 which was
---------
true as of the date hereof, but which has subsequently become untrue, (b) breach
of any covenant hereunder by the Purchaser and (c) other material development
affecting the ability of the Purchaser to consummate the transactions
contemplated by this Agreement.
4.7 Exclusivity. Until consummation of the transactions contemplated
-----------
hereby or termination of this Agreement pursuant to the provisions of Article
-------
10, none of the Sellers, the
- --
-18-
<PAGE>
Current Owners or any of their respective Affiliates, stockholders, partners,
representatives, officers, employees, directors, or agents will, directly or
indirectly, (a) submit, solicit, initiate, encourage or discuss any proposal or
offer from any Person or enter into any agreement or accept any offer relating
to any (i) reorganization, merger, liquidation, dissolution or refinancing of
any of the Sellers, (ii) purchase or sale of any assets (other than a purchase
or sale of inventory or equipment in the ordinary course of business consistent
with past custom and practice or a sale of any Excluded Assets) or equity
interests of any of the Sellers or (iii) similar transaction or business
combination involving any of the Sellers or the assets of any of them (each of
the foregoing actions described in clauses (i) through (iii), a "Seller
------
Transaction") or (b) furnish any information with respect to, assist or
- -----------
participate in or facilitate in any other manner any effort or attempt by any
Person to do or seek to do any of the foregoing; provided that any transactions
--------
contemplated hereby shall not constitute a Seller Transaction for purposes
hereof. The Sellers and each Current Owner agree to notify the Purchaser
immediately if any Person makes any bona fide oral or any written proposal,
offer, inquiry or contact with respect to a Seller Transaction.
4.8 Actions with Respect to Ownership Interests. Until consummation
-------------------------------------------
of the transactions contemplated hereby or termination of this Agreement
pursuant to Article 10, the Current Owners agree that they will not sell,
----------
redeem, convert, assign, exchange, transfer, pledge or otherwise dispose of any
of their ownership interests in the Parent.
4.9 Real Estate Matters. Prior to Closing, the Sellers shall use
-------------------
reasonable best efforts to obtain with respect to each parcel of Leased Real
Property (as defined below in Section 5.12) for which the Purchaser requests
------------
from the Seller in writing at least fifteen (15) days prior to the Closing (i)
an estoppel and consent letter in a form reasonably satisfactory to the
Purchaser and prepared by the Purchaser (the "Estoppel and Consent Letter") from
---------------------------
the landlords, lessors, sublessors or licensors of such Leased Real Property
(each a "Landlord") stating that (A) a copy of the lease, sublease, license or
--------
tenancy agreement demising the Leased Real Property (each a "Lease"), attached
-----
to the Estoppel and Consent Letter is a true, correct and complete copy of the
Lease, and represents the entire agreement between the Landlord and the
applicable Seller; (B) to the Landlord's knowledge the applicable Seller is not
in breach or default under the Lease, and no event has occurred which would with
notice or passage of time, or both, constitute a breach or default or permit
termination, modification, or acceleration under the Lease and the Landlord has
not repudiated any provision of the Lease; (C) all rent and other payments owed
by the applicable Seller to the Landlord have been paid to date, (D) to the
Landlord's knowledge there are no disputes, oral agreements or forbearance
agreements in effect as to the Lease, (E) that the Landlord consents to the
assignment of the Lease to the Purchaser and (F) containing such other
statements or agreements as the Purchaser may reasonably request; (ii) a non-
disturbance agreement in form and content reasonably satisfactory to the
Purchaser from each lender of each Landlord; and (iii) a landlord lien waiver
agreement in form and content reasonably satisfactory to the Purchaser stating
that Landlord agrees to be subordinated to the Purchaser's lenders with respect
to rights to foreclose on any of the Purchaser's property and equipment which
are located on such Leased Real Property.
4.10 Financial Information. The Sellers shall furnish to the
---------------------
Purchaser: (a) audited combined and consolidated financial statements for the
Company for the years ended December 31, 1998 and 1997 and for the nine-month
period ended December 31, 1996, each prepared in
-19-
<PAGE>
accordance with GAAP and in a form meeting the requirements of Regulation S-X of
the Securities Act of 1933, as amended ("Regulation S-X"); (b) the reviewed
--------------
unaudited combined and consolidated financial statements for the Company for the
three-month periods ending March 31, 1999 and 1998 (and, to the extent the
Closing does not occur until June 30, 1999, such comparable information for the
three and six months ended June 30, 1999 and 1998) prepared in accordance with
GAAP and in a form meeting the requirements of Rule 10-01 of Regulation S-X; and
(c) assistance with preparing "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in accordance with Item 303 of Regulation
S-K of the Securities Act of 1933, as amended for the years 1998 and 1997 and
the nine-month period ended December 31, 1996 and the interim periods ended
March 31, 1999 and March 31, 1998 (and June 30, 1999 and June 30, 1998, if
necessary) (and, in each case, use reasonable best efforts to obtain the consent
of the Sellers' independent accountants to the use of their reports thereon);
provided that the Purchaser shall be responsible for the reimbursement of any
- --------
reasonable fees and expenses incurred by the Sellers in adjusting the Seller's
Financial Statements (as defined below in Section 5.7) to conform with the
-----------
requirements of Regulation S-X.
4.11 Tax Distributions. Notwithstanding anything to the contrary
-----------------
contained herein, between the date hereof and the Closing Date, Parent and
Investments shall have the right to make distributions (the "Distributions") to
-------------
their respective stockholders to pay income Taxes due with respect to Parent's
and Investment's combined and consolidated taxable income for the period
between January 1, 1999 and day immediately preceding the Closing Date; provided
--------
that the Distributions in the aggregate do not exceed the Tax Amount.
ARTICLE 5.
REPRESENTATION AND WARRANTIES
CONCERNING THE SELLERS
----------------------
As a material inducement to the Purchaser to enter into this Agreement
and to purchase the Acquired Assets and to assume the Assumed Liabilities
hereunder, the Sellers and the Current Owners, jointly and severally, hereby
represent and warrant that:
5.1 Organization. The Parent is a corporation duly organized and
------------
validly existing under the laws of the Commonwealth of Kentucky, each of the
other Sellers is a limited liability company duly organized and validly existing
under the laws of the Commonwealth of Kentucky and each Seller has full power
and authority and all material licenses, permits, and authorizations necessary
to carry on the Business in which it is engaged and to own and use the
properties owned and used by it. The Organization Schedule attached hereto
---------------------
lists all of the jurisdictions in which the Sellers are required to qualify to
do business as a foreign entity, except where the failure to be qualified would
not have a Material Adverse Effect. Each of the Sellers is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
listed on the Organization Schedule.
---------------------
5.2 Authorization. Each of the Sellers has full power and authority
-------------
to execute and deliver this Agreement and the agreements contemplated hereby to
which it is a party and to
-20-
<PAGE>
perform its obligations hereunder and thereunder. This Agreement has been duly
authorized, executed and delivered by each such Seller, and constitutes the
valid and legally binding obligation of each such Seller enforceable in
accordance with its terms.
5.3 Capitalization and Related Matters. The authorized, issued and
----------------------------------
outstanding capital stock of the Parent is set forth on the Capitalization
--------------
Schedule attached hereto. All of the issued and outstanding shares of the
- --------
Parent's capital stock have been duly authorized, are validly issued, fully
paid, and nonassessable, and are held of record and beneficially by the Current
Owners in the amounts set forth on the Capitalization Schedule and, except as
-----------------------
set forth on the Capitalization Schedule, are not subject to, nor were they
-----------------------
issued in violation of, any preemptive rights or rights of first refusal, and
are owned of record and beneficially by the respective Current Owners free and
clear of all Liens. Except as set forth on the Capitalization Schedule, there
-----------------------
are no outstanding or authorized options, warrants, rights, contracts, calls,
puts, rights to subscribe, conversion rights or other agreements or commitments
to which any Seller is a party or which are binding upon any Seller providing
for the issuance, disposition or acquisition of any of its capital stock or
equity interests. Except as set forth on the Capitalization Schedule, there are
-----------------------
no outstanding or authorized stock or equity appreciation, phantom stock or
equity or similar rights with respect to any Seller. Except as set forth on the
Capitalization Schedule, there are no voting trusts, proxies or any other
- -----------------------
agreements or understandings with respect to the voting of the capital stock or
equity interests of any Seller. None of the Sellers is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock or any of its equity interests.
5.4 Noncontravention. Except as set forth on the Noncontravention
---------------- ----------------
Schedule, neither the execution and the delivery of this Agreement or the
- --------
agreements contemplated hereby nor the consummation of the transactions
contemplated hereby or thereby, will (a) violate in any material respect any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which any Seller is subject, (b) violate any provision of any of the
Sellers' organizational documents or (c) materially conflict with, result in a
material breach of, constitute a material default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement required to be set forth on the Contracts
---------
Schedule or (d) result in the imposition of any security interest upon any
- --------
material assets of any Seller. Except with respect to approvals under the HSR
Act and except as set forth on Noncontravention Schedule attached hereto, to
-------------------------
each of the Sellers' knowledge, none of the Sellers is required to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for (i) the Parties
to consummate the transactions contemplated by this Agreement and (ii) the
Purchaser to carry on the Businesses after the Closing in substantially the same
manner as presently conducted.
5.5 Brokerage. Except for the fees and expenses of McDonald &
---------
Company (which will be paid by the Sellers out of the Cash Purchase Price), none
of the Sellers has any liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement.
-21-
<PAGE>
5.6 Subsidiaries and Investments. Except as set forth on the
----------------------------
Subsidiaries Schedule attached hereto, none of the Sellers own, directly or
- ---------------------
indirectly, any stock, partnership interest, membership interests, joint venture
interest or other security or interest in any other Person. The Subsidiaries
------------
Schedule also sets forth the Persons owning the equity interests in any entity
- --------
listed thereon pursuant to the previous sentence. Except as set forth on the
Subsidiaries Schedule, there are no outstanding or authorized options, warrants,
- ---------------------
rights, contracts, calls, puts, rights to subscribe, conversion rights or other
agreements or commitments to which any entity listed on the Subsidiaries
------------
Schedule is a party or which are binding upon any such entity providing for the
- --------
issuance, disposition or acquisition of any of its equity interests. There are
no outstanding or authorized stock or equity appreciation, phantom stock or
equity or similar rights with respect to any entity listed on the Subsidiary
----------
Schedule. Except as set forth on the Subsidiary Schedule, there are no voting
- -------- -------------------
trusts, proxies or any other agreements or understandings with respect to the
voting of the capital stock or equity interests of any entity listed thereon.
None of the entities listed on the Subsidiaries Schedule is subject to any
---------------------
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock or any of its equity interests.
5.7 Financial Statements. The Financial Statements Schedule attached
-------------------- -----------------------------
hereto contains the following financial statements (collectively the "Financial
---------
Statements"): (a) audited consolidated balance sheets and statements of income
- ----------
and statements of cash flows as of and for the nine-months ended December 31,
1996 and the years ended December 31, 1997, and December 31, 1998 (the "Most
----
Recent Fiscal Year End Balance Sheet") for the Sellers; and (b) an unaudited
- ------------------------------------
consolidated balance sheet (the "Latest Balance Sheet") and statement of income
--------------------
and statement of cash flows as of and for the three months ended March 31, 1999
(together with the Latest Balance Sheet, the "Latest Financial Statements"), for
---------------------------
the Sellers. The Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, present fairly the financial condition of the Sellers
as of such dates and the results of operations of the Sellers for such periods,
are correct and complete in all material respects, and are consistent with the
books and records of the Sellers, except that the Latest Financial Statements do
not contain any footnotes required by GAAP for complete financial statements.
The Latest Financial Statements include normal and recurring adjustments in
accordance with GAAP which, in the opinion of management of the Sellers, are
necessary for a fair presentation of the results of operations and the financial
position for the interim periods.
5.8 Undisclosed Liabilities. Except as set forth on the Undisclosed
----------------------- -----------
Liability Schedule, the Sellers have no material liabilities (whether known or
- ------------------
unknown, whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due), except for
liabilities (a) recorded in the Most Recent Fiscal Year End Balance Sheet or the
Latest Balance Sheet or disclosed in the footnotes thereto, (b) liabilities and
obligations incurred after the date as of which such balance sheet is dated in
the ordinary course of business (none of which relates to (i) breach of contract
(other than customer write-offs, discounts or adjustments in the ordinary course
of business and consistent with past custom and practice) (ii) breach of
warranty, (iii) tort, (iv) infringement, (v) violation of law, (vi) any action,
suit or proceeding (including, without limitation, any proceeding in eminent
domain or other similar proceeding affecting any portion of the Owned Real
Property or the Leased Real Property), (vii) any environmental matter,
including, without limitation, any matter arising under Environmental, Health
-22-
<PAGE>
and Safety Requirements or (viii) any writ, injunction, decree, order, judgment,
or litigation affecting the ownership, lease, occupancy or operation of the
Owned Real Property or the Leased Real Property, in each case which could
reasonably be expected to have a Material Adverse Effect), (c) set forth on the
Disclosure Schedules attached hereto, and (d) under or in connection with
contracts, agreements and other arrangements disclosed on the Contracts Schedule
------------------
or not required to be disclosed on the Contracts Schedule attached hereto due
------------------
solely to the specific dollar thresholds and other requirements contained in
Section 5.14 below.
- ------------
5.9 Legal Compliance and Permits.
----------------------------
(a Except as set forth on the Legal Compliance and Permits Schedule
-------------------------------------
attached hereto, the Sellers have complied with and are in compliance with all
applicable laws, rules, regulations and orders of federal, state, local, and
foreign governments (and all agencies thereof) and with all instruments of
record, agreements, easements, covenants, conditions and restrictions affecting
the Owned Real Property and the Leased Real Property, except for such
noncompliance which would not reasonably be expected to have a Material Adverse
Effect, and no action, suit, proceeding or hearing is pending against any of the
Sellers alleging any failure to so comply and no notice (written or oral),
charge or claim has been received by any of the Sellers alleging any failure to
so comply in respect of any of the Sellers. Except as set forth on the Legal
-----
Compliance and Permits Schedule attached hereto, the Owned Real Property and the
- -------------------------------
Leased Real Property is in compliance with all applicable building, zoning,
subdivision, entitlement and all other land use and similar laws affecting the
Owned Real Property and the Leased Real Property (collectively, the "Real
----
Property Laws"), except for such noncompliance which would not reasonably be
- -------------
expected to have a Material Adverse Effect, and none of the Sellers has received
any notice of violation or claimed violation of any Real Property Law.
(b Except as set forth on the Legal Compliance and Permits Schedule
-------------------------------------
attached hereto, to the knowledge of the Sellers, each of the Sellers holds all
material permits, licenses, certificates, accreditations and other
authorizations (including, but not limited to, OSHA ratings) (the "Permits") of
-------
all foreign, federal, state and local governmental agencies for the conduct of
its business and the ownership of its properties. Each of the Sellers is in
compliance with the terms and conditions of all such Permits which it holds and,
except as set forth on the Legal Compliance and Permits Schedule, all such
-------------------------------------
Permits will be available for use by the Purchaser immediately after the
Closing.
5.10 Tangible Assets. Except as set forth on the Assets Schedule, the
--------------- ---------------
assets owned or leased by the Sellers include all buildings, machinery,
equipment, and other tangible assets sufficient for the conduct of the
Businesses of the Sellers as presently conducted, and such assets are, subject
to normal wear and tear, free from material defects, are in good operating
condition and repair, and are suitable for the purposes for which they presently
are used (except for equipment that is being or is planned to be repaired
consistent with past custom or practice or immaterial amounts of assets which
are used as spare parts, which are intended to be reworked or which are scrap
items consistent with past custom and practice).
5.11 Title to Personal Property. Each of the Sellers has good title
--------------------------
to, or a valid leasehold interest in, all personal property used in connection
with the operation of the business of
-23-
<PAGE>
such Seller, free and clear of any material Liens, except (a) as set forth in
the Liens Schedule attached hereto, (b) Liens for Taxes not yet due and payable
--------------
or being contested in good faith by appropriate proceedings and in respect of
which adequate reserves under GAAP have been established on the Financial
Statements and (c) Permitted Liens.
5.12 Title to Real Property.
----------------------
(a The Real Property Schedule attached hereto sets forth all of the
----------------------
real property owned by the Sellers (the "Owned Real Property"). Except as
-------------------
disclosed on the Real Property Schedule, with respect to each parcel of Owned
----------------------
Real Property, (i) the Sellers have, or on the Closing Date will have, good and
marketable title, free and clear of any material Lien, except for Permitted
Liens, (ii) there are no leases, subleases, licenses, concessions, or other
agreements granting to any party or parties the right to use or occupy any
portion thereof and (iii) there are no outstanding options or rights of first
refusal to purchase such parcels or any portions thereof or interest therein.
(b The Real Property Schedule attached hereto sets forth all of the
-----------------------
real property leased or subleased by the Sellers (the "Leased Real Property").
--------------------
The Sellers have a good and valid leasehold interest in and to all of the Leased
Real Property, free and clear of any material Lien, except for Permitted Liens.
The Leases under which the Sellers lease and sublease the Leased Real Property
are in full force and effect and the Sellers have previously delivered to the
Purchasers true, correct and complete copies of each of the Leases, including,
without limitation, all amendments or modifications thereto, referred to on the
Real Property Schedule. With respect to each Lease: (i) such Lease is legal,
- ----------------------
valid, binding and enforceable in accordance with its terms and such Lease is in
full force and effect, and (ii) none of the Sellers nor, to the best of the
Sellers' and the Current Owners' knowledge, any third party, is in material
breach or default under such Lease, and, except as noted on the Real Property
-------------
Schedule by an asterisk (*) opposite the applicable Lease, no event has occurred
- --------
(including the consummation of the transactions contemplated hereby) which, with
the lapse of time or the giving of notice, or otherwise would constitute such a
material breach or default or permit termination, modification, or acceleration
under such Lease. Except as disclosed on the Real Property Schedule, no
----------------------
consent, waiver, approval or authorization is required from any Landlord under
any Lease as a result of the execution and delivery of this Agreement or the
agreements contemplated hereby or the consummation of the transactions
contemplated hereby or thereby.
(c The Owned Real Property and the Leased Real Property constitutes
all of the real property owned, leased, occupied or otherwise utilized in
connection with the Businesses. The Lease Agreements, together with all of the
Leases listed on the Real Property Schedule to be assigned to the Purchaser on
----------------------
or prior to the Closing, will demise all of the Real Property leased, occupied
or otherwise utilized in connection with the Businesses.
5.13 Litigation. The Litigation Schedule attached hereto sets forth
---------- -------------------
each instance in which the Sellers or any of their assets (a) is subject to any
outstanding injunction, judgment, order, decree, ruling, settlement or charge or
(b) is a party or subject to, or, to the knowledge of the Sellers and the
Current Owners, is threatened to be made a party or be made subject to any
action, suit, proceeding (including, without limitation, any proceeding in
eminent domain or similar
-24-
<PAGE>
proceeding), hearing, or investigation of, in, or before any court, or any
arbitrator or other body or administrative agency of any federal, state, local,
or foreign jurisdiction.
5.14 Contracts.
---------
(a) The Contracts Schedule attached hereto lists the following
------------------
contracts, agreements and other arrangements to which any Seller is a party and
denotes with an asterisk (*) whether the consent of any third party thereto is
required as a result of the consummation of the transactions contemplated by
this Agreement:
(i) collective bargaining agreement or any other material
contract with any labor union, or severance agreements, programs, policies
or arrangements;
(ii) management agreement, contract for the employment of any
officer, individual employee or other Person on a full-time, part-time,
consulting or other basis providing annual cash or other compensation in
excess of $50,000 (other than at-will employment arrangements) or providing
for the payment of any cash or other compensation or benefits upon the
consummation of the transactions contemplated hereby;
(iii) material contract or agreement requiring the consent of
any party in connection with the consummation of the transactions
contemplated hereby, containing any provision which would result in a
modification of any rights or obligations of any party thereunder in
connection with the consummation of the transactions contemplated hereby or
which would provide any party any remedy (including rescission or
liquidated damages)in connection with the consummation of the transactions
contemplated hereby;
(iv) contract under which any Seller has advanced or loaned
monies to any other Person or otherwise agreed to advance, loan or invest
any funds (other than advances to the Sellers' employees in the ordinary
course of business consistent with past practice or amounts less than
$50,000 in the aggregate);
(v) agreement or indenture relating to borrowed money or
other Indebtedness or the mortgaging, pledging or otherwise placing a
material Lien on any asset or group of assets of any Seller or any letter
of credit arrangements;
(vi) guaranty of any material obligation for borrowed money or
otherwise (other than endorsements made for collection in the ordinary
course of business);
(vii) lease or agreement under which any Seller is lessee of or
holds or operates any property, real or personal, owned by any other
Person, except for any lease of personal property under which the aggregate
annual rental payments do not exceed $50,000;
(viii) material lease or agreement under which any Seller is
lessor of or permits any third party to hold or operate any property, real
or personal, owned or controlled by the Sellers;
-25-
<PAGE>
(ix) material license or royalty agreements;
(x) nondisclosure or confidentiality agreements (other than
those entered into in the ordinary course of business with customers,
suppliers and employees);
(xi) contract or group of related contracts with the same
party or group of affiliated parties for the purchase of raw materials,
commodities, supplies, products, equipment or other personal property or
for the receipt of services under which the undelivered balance of such
products and services has a selling price in excess of $100,000;
(xii) open purchase orders for the purchase or sale of
equipment in excess of $100,000;
(xiii) brokerage contracts involving equipment with a value in
excess of $100,000;
(xiv) fixed price or set price contracts for leasing services
with the Sellers' top 20 customers measured by rental revenue;
(xv) material contract relating to the marketing, sale,
advertising or promotion of its products;
(xvi) agreements relating to the ownership of or investments in
any business or enterprise, including investments in joint ventures and
minority equity investments;
(xvii) material assignment, license, indemnification or other
agreement with respect to any intangible property (including any
Intellectual Property);
(xviii) material broker, agent, sales representative, sales or
distribution agreement or agreement relating to the export and/or import of
any goods or equipment;
(xix) power of attorney or other similar agreement or grant of
agency;
(xx) contract or agreement prohibiting any Seller from freely
engaging in any business or competing anywhere in the world; or
(xxi) other agreement not in the ordinary course of business
which involves consideration in excess of $100,000.
(b) To the knowledge of the Sellers and the Current Owners, all of
the contracts, leases, agreements and instruments set forth or required to be
set forth on the Contracts Schedule are
------------------
-26-
<PAGE>
valid, binding and enforceable in accordance with their respective terms subject
to the effects of (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other laws now or hereafter in effect relating to
creditors' rights generally or (ii) general principles of equity. To the
knowledge of the Sellers and the Current Owners, the Sellers have performed all
obligations required to be performed by them and are not in material default
under or in material breach of nor in receipt of any claim of default or breach
under any contract, lease, agreement or instrument to which any Seller is
subject; no event has occurred which with the passage of time or the giving of
notice or both would result in a material default, material breach or event of
noncompliance by any Seller under any contract, lease, agreement or instrument
to which any Seller is subject; none of the Sellers have any present expectation
or intention of not fully performing all such obligations; none of the Sellers
or Current Owners have knowledge of any breach or anticipated breach by the
other parties to any contract, lease, agreement, instrument or commitment to
which it is a party; and none of the Sellers are parties to any contract or
commitment that could reasonably be expected to have a Material Adverse Effect.
(c) The Purchaser's special counsel has been supplied with a true and
correct copy (or a copy has been made available to the Purchaser's special
counsel) of each of the written instruments, contracts and agreements and an
accurate description of each of the oral arrangements, contracts and agreements
which are referred to on the attached Contracts Schedule, together with all
------------------
amendments, waivers or other changes thereto.
5.15 Tax Matters. Except as set forth on the Taxes Schedule attached
----------- --------------
hereto:
(a) the Sellers have timely filed all Tax Returns which are required
to be filed by the Sellers, and all such Tax Returns are true, complete and
accurate in all respects and have been prepared in compliance with applicable
law;
(b) all Taxes due and payable by the Sellers, whether or not shown on
a Tax Return, have been paid by the Sellers and no Taxes are delinquent;
(c) during the past five (5) years with respect to federal, state and
local Taxes, there has been no material action, suit, proceeding or audit or any
notice of inquiry of any of the foregoing pending against or with respect to the
Sellers regarding Taxes and, to the knowledge of the Sellers, no action, suit,
proceeding or audit has been threatened against or with respect to the Sellers
regarding Taxes;
(d) none of the Sellers is a party to or bound by any Tax allocation
or Tax sharing agreement, none has any current or potential material contractual
obligation to indemnify any other Person with respect to Taxes, and none has any
material liability for the Taxes of any Person (other than any of the Sellers),
as a transferee or successor, by contract, or otherwise;
(e) to the knowledge of the Sellers and the Current Owners, no claim
has ever been made by a taxing authority in a jurisdiction where the Sellers do
not file Tax Returns that such Person is or may be subject to taxation by such
jurisdiction;
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<PAGE>
(f) each of the Sellers has made available to the Purchaser true,
correct and complete copies of all income Tax Returns filed by such Person for
the past three (3) years along with all private rulings (to the extent
reasonably available or obtainable by the Sellers) and related material with
respect to such period;
(g) none of the Sellers has consented to extend the time, nor is the
beneficiary of any extension of time, in which any federal or state income Tax
may be assessed or collected by any taxing authority;
(h) neither the Sellers nor any of the Current Owners expects any
taxing authority to assess any material amount of additional Taxes (other than
Taxes not yet due and payable) against the Sellers for any Tax period ending on
or before the Closing;
(i) there are no material Liens for Taxes (other than for Taxes not
yet due and payable) upon the assets of the Sellers;
(j) none of the Sellers will be required (i) as a result of a change
in method of accounting for a Tax period ending prior to December 31, 1998, to
include any adjustment under Section 481(c) of the Code (or any corresponding
provision of state, local or foreign Tax law) in taxable income for any such Tax
period or (ii) as a result of any "closing agreement," as described in Section
7121 of the Code (or any corresponding provision of state, local or foreign Tax
law), to include any item of income or exclude any item of deduction from any
Tax period;
(k) none of the Current Owners is a "foreign person" for purposes of
the withholding requirements of Section 1445(a) of the Code (or any
corresponding provision of state, local or foreign Tax law), and none of the
Sellers has any permanent establishment in any foreign country, as defined in
the relevant tax treaty between the United States of America and such foreign
country;
(l) a valid election to be an S Corporation (as defined in Section
1361 of the Code and any corresponding provision of state, local or foreign law)
has been in effect with respect to the Parent and Investments at all times since
April 1, 1996 and each of the Sellers (other than the Parent) has been a
partnership for federal and all applicable state and local Tax purposes, in each
case since the date of its formation; and
(m) the Taxes Schedule lists all income Tax Returns relating to
--------------
federal, state, and foreign income filed with respect to any of the Sellers for
taxable periods ended on or after December 31, 1993, indicates those Tax Returns
that have been audited, and indicates those Tax Returns that currently are the
subject of audit.
5.16 Intellectual Property.
---------------------
(a) The Intellectual Property Schedule attached hereto identifies (i)
------------------------------
each patent, trademark, servicemark, tradename, copyright or other registration
which has been issued to the Sellers with respect to any Intellectual Property
used by the Sellers, (ii) each pending patent
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application or application for registration which the Sellers have made with
respect to any Intellectual Property used by the Sellers, (iii) each material
item of unregistered Intellectual Property owned or used by the Sellers; (iv)
each material license, agreement, or other permission which the Sellers have
granted to any third party with respect to any Intellectual Property used by the
Sellers (together with any exceptions), and (v) each material license, agreement
or other permission under which the Sellers use any Intellectual Property owned
by a third party.
(b) Except as set forth on the Intellectual Property Schedule, to the
------------------------------
knowledge of the Sellers and the Current Owners, the conduct of the Sellers'
businesses and the Intellectual Property owned or used by the Sellers do not
interfere with, infringe, misappropriate, or otherwise conflict with any
Intellectual Property or other rights of third parties. None of the Sellers has
received notice of any charge, complaint, claim or demand alleging any such
interference, infringement, misappropriation or conflict. Except as set forth
on the Intellectual Property Schedule, none of the Sellers has knowledge that
------------------------------
any third party has interfered with, infringed, misappropriated, or otherwise
come into conflict with any Intellectual Property owned by the Sellers. Except
as set forth on the Intellectual Property Schedule, the Sellers own or have
------------------------------
valid and enforceable rights to use all material Intellectual Property necessary
for the conduct of their Businesses.
(c) None of the computer software, computer firmware, computer
hardware (whether general or special purpose), and other similar or related
items of automated, computerized, and/or software system(s) that are used or
relied on by the Sellers or that are designed, developed, implemented or managed
by the Sellers in the conduct of their respective businesses will malfunction,
will cease to function, will generate incorrect data or will produce incorrect
results when processing, providing, and/or receiving (i) date-related data from,
into and between the twentieth and twenty-first centuries or (ii) date-related
data in connection with any valid date in the twentieth and twenty-first
centuries.
5.17 Insurance. The Insurance Schedule attached hereto sets forth the
--------- ------------------
following information with respect to each insurance policy insuring the
properties, business or assets of the Sellers to which the Sellers is a party, a
named insured, or otherwise the beneficiary of coverage: (a) the name of the
insurer, the name of the policyholder, and the name of each covered insured; (b)
the scope, period and amount of coverage; and (c) a description of any
retroactive premium adjustments or other loss-sharing arrangements. To the
knowledge of the Sellers and the Current Owners, with respect to each such
insurance policy: (i) the policy is legal, valid, binding, and enforceable in
accordance with its terms and is in full force and effect; (ii) none of the
Sellers is in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which with notice
or lapse of time would constitute a breach or default by the Sellers or permit
the insurer to terminate, modify, or accelerate, such policy; (iii) none of the
Sellers has repudiated any provision of such policy; and (iv) the insurer is not
in breach or default, and no event has occurred which with notice or lapse of
time would constitute a breach or default by the insurer or permit the Sellers
to terminate, modify, or accelerate, such policy. The Insurance Schedule
------------------
describes any self-insurance arrangements affecting the Sellers.
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5.18 Labor and Employment Matters. Except as set forth in the Labor
---------------------------- -----
Schedule, none of the Sellers is party to or bound by any collective bargaining
- --------
agreement or other contractual arrangement with any labor organization. Except
as set forth in the Labor Schedule, to the knowledge of the Sellers and the
--------------
Current Owners, with respect to the Sellers: (a) no executive, key employee or
group of employees has any plans to terminate employment; (b) no labor
organization or group of employees has filed any representation petition or made
any written or oral demand for recognition; (c) no union organizing or
decertification efforts are underway or threatened and no other question
concerning representation exists; (d) within the past five years no labor
strike, work stoppage or slowdown has occurred, and none is underway or
threatened; (e) there is no employment-related charge, complaint, grievance,
investigation, inquiry or obligation of any material kind, pending or threatened
in any forum, relating to an alleged violation or material breach by the Sellers
(or their officers or directors) of any law, regulation or contract; and (f)
none of the Sellers has committed any material act or omission giving rise to
liability for any violation identified in subsection (e) above, or as a result
of any material adverse workman's compensation experience. Any notice required
under any law or collective bargaining agreement has been given, and, prior to
Closing, the Sellers shall have bargained as required by law with any
appropriate employee representative about the effects of the transactions
contemplated by this Agreement. None of the Sellers has implemented any plant
closing or mass layoff of employees of the Sellers as those terms are defined in
the WARN Act or any similar state or local law or regulation, and no layoffs
that could implicate such laws or regulations will be implemented before Closing
without advance notification to the Purchaser.
5.19 Employee Benefits.
-----------------
(a) Pension Plans. Except as set forth on the Employee Benefits
------------- -----------------
Schedule, none of the Sellers maintains, contributes to or has any material
- --------
liability under (or with respect to) any Employee Benefit Plan that is an
employee pension benefit plan (as defined in Section 3(2) of ERISA), whether or
not any such plan has been terminated, which provides benefits for employees or
former employees of the Sellers or their predecessors, other than any such plan
that is described in Section 5.19(c) below.
---------------
(b) Welfare Plans. Except as set forth on the Employee Benefits
------------- -----------------
Schedule, with respect to all employees and former employees of the Sellers and
- --------
their predecessors, none of the Sellers maintains or has any obligation to
contribute to any Employee Welfare Benefit Plan (as defined in Section 3(1) of
ERISA) and does not have any material liability with respect to any Employee
Welfare Benefit Plan, whether or not terminated, which provides medical, health,
life insurance or other welfare-type benefits for current or future retirees or
current or future former employees or their spouses or dependents (other than in
accordance with Section 4980B(f) of the Code or other applicable law).
(c) Multiemployer Plans. Except as set forth on the Employee Benefits
------------------- -----------------
Schedule, with respect to all employees and former employees of the Sellers and
- --------
their predecessors, none of the Sellers has any obligation to contribute to (or
any other liability with respect to) any (i) Multiemployer Plan (as defined in
Section 3(37) of ERISA) or (ii) any plan of the type described in Section 4063
and 4064 of ERISA or Section 413(c) of the Code. Except as set forth on the
Employee Benefits Schedule, none of the Sellers has incurred any current or
- --------------------------
potential withdrawal
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<PAGE>
liability as a result of a complete or partial withdrawal (or potential partial
withdrawal) from any Multiemployer Plan and no condition exists that presents a
risk to the Sellers of incurring such a liability.
(d) Other Benefit Plans. Except as set forth on the Employee Benefits
------------------- -----------------
Schedule, none of the Sellers maintains, contributes to or has any material
- --------
liability under (or with respect to) any Employee Benefit Plan, whether or not
any such plan has been terminated, which provides benefits for employees or
former employees of the Sellers or their predecessors or their spouses or
dependents other than any such plan that is described in Section 5.19(a), (b),
---------------------
or (c) above or that provides discretionary bonuses and increases in
- ------
compensation in the ordinary course of business, and consistent with past
practice.
(e) Administration and Compliance of the Plans. The plans, programs,
------------------------------------------
policies and other arrangements set forth on the Employee Benefits Schedule in
--------------------------
response to Sections 5.19(a)-(d) are hereinafter referred to collectively as the
--------------------
"Plans." Except as set forth on the Employee Benefits Schedule, with respect to
----- --------------------------
each of the Plans:
(i) all payments, premiums, contributions or reimbursements for
all periods ending prior to or as of the Closing Date that are required to
be made under the Plans (or which would reasonably be expected to be made
under the Plans in accordance with the historical practices of the Sellers)
shall have been or will be made or properly accrued on the Latest Balance
Sheet and the Closing Balance Sheet in accordance with GAAP;
(ii) there is no unfunded liability that exists as of the
Closing Date which is not reflected on the Latest Balance Sheet or which
will not be reflected on the Closing Balance Sheet;
(iii) to the knowledge of the Sellers and the Current Owners,
except as set forth on the Employee Benefits Schedule, (A) there have been
--------------------------
no violations of applicable law, including, without limitation, ERISA or
the Code, with respect thereto (including, without limitation, any
Prohibited Transactions (as defined in ERISA)); (B) the Sellers have
performed all material obligations required to be performed by them with
respect thereto; (C) no Fiduciary (as defined in Section 3(21) of ERISA)
has any liability for breach of fiduciary duty or any other failure to act
or comply in connection with the administration or investment of the assets
thereof; (D) no action, suit, proceeding, hearing or investigation with
respect to the administration or the investment of the assets thereof
(other than routine claims for benefits) is pending or threatened; and (E)
there is no basis for any such action, suit, proceeding, hearing or
investigation; and
(iv) the Sellers have provided the Purchaser with a true and
complete copy of each Plan that is set forth in writing and a summary of
all material terms of each Plan that is not set forth in writing and the
most recent annual report (under the Form 5500 series and including any
financial statement or other attachments thereto) filed prior to the date
of this Agreement with the Internal Revenue Service by the Sellers with
respect to each Plan for which an annual report has been required under
applicable law.
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<PAGE>
5.20 No Material Adverse Change. Since the December 31, 1998, there
--------------------------
has not been any Material Adverse Change.
5.21 Events Subsequent to Most Recent Fiscal Year End.
------------------------------------------------
(a) Except as expressly contemplated by this Agreement or as set
forth on the attached Subsequent Events Schedule, since January 1, 1999, none of
--------------------------
the Sellers has:
(i) amended its organizational documents, issued (or agreed
to issue) any notes, bonds or other debt securities or any capital stock,
membership interests or other equity securities or any securities
convertible, exchangeable or exercisable into any partnership interests or
other equity securities;
(ii) borrowed any material amount or incurred or become
subject to any material liabilities, except current liabilities incurred in
the ordinary course of business, liabilities under contracts entered into
in the ordinary course of business or debt incurred under facilities
existing prior to January 1, 1999 in an aggregate amount not to exceed $10
million;
(iii) discharged or satisfied any material Lien or paid any
material obligation or liability, other than current liabilities paid in
the ordinary course of business;
(iv) declared or made any material payment or distribution of
cash or other property to its stockholders, partners, members or other
equity holders with respect to its capital stock, partnership or membership
interests or other equity securities or purchased or redeemed any capital
stock, partnership or membership interests or other equity securities
(including, without limitation, any warrants, options or other rights to
acquire its capital stock, partnership or membership interests or other
equity securities);
(v) mortgaged or pledged any material amount of its
properties or assets or subjected them to any material Lien, except Liens
for current property taxes not yet due and payable;
(vi) sold, leased, assigned or transferred any material amount
of its tangible assets, except in the ordinary course of business, or
canceled any material debts or claims;
(vii) sold, assigned, transferred or licensed any patents or
patent applications, trademarks, service marks, trade names, internet
domain names, corporate names, copyrights or copyright registrations, trade
secrets or other intangible assets, or disclosed any material proprietary
confidential information to any Person;
(viii) entered into, amended or terminated any material lease,
contract, agreement or commitment, or taken any other action or entered
into any other transaction
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<PAGE>
other than in the ordinary course of business and in accordance with past
custom and practice;
(ix) entered into any material transaction with any Affiliate;
(x) changed any material business practice or manner of
dealing with any customer, supplier, subcontractor or sales representative;
(xi) entered into or modified any employment contract or
collective bargaining agreement, written or oral, or materially changed the
employment terms for any employee or agent or made or granted any bonus or
any wage, salary or compensation increase to any director, officer,
employee or sales representative, group of employees or consultants or made
or granted any increase in any employee benefit plan or arrangement, or
amended or terminated any existing employee benefit plan or arrangement or
adopted any new employee benefit plan or arrangement, except for normal
compensation increases or bonuses in the ordinary course of business
consistent with past practice or as required by applicable law;
(xii) undertaken any layoff of employees to which the WARN Act
or the Older Workers Act could apply;
(xiii) suffered any extraordinary losses or waived any rights of
material value, whether or not in the ordinary course of business or
consistent with past practice;
(xiv) made capital expenditures or commitments that aggregate
in excess of $50,000;
(xv) made any loans or advances to, guarantees for the benefit
of, or any investments in, any Persons in excess of $50,000 in the
aggregate;
(xvi) made any charitable contributions or pledges in excess of
$5,000 to any single charitable organization;
(xvii) suffered any damage, destruction or casualty loss
exceeding in the aggregate $50,000 whether or not covered by insurance;
(xviii) taken steps to organize any Subsidiary; or
(xix) entered into any other material transaction not in the
ordinary course of business.
(b) Except as set forth on the Political Contributions Schedule
--------------------------------
attached hereto, (i) neither the Sellers nor any of their stockholders or
members (or any such stockholder's or member's stockholders, partners or
members) have at any time made any bribes, kickback payments or other illegal
payments and (ii) neither the Sellers nor Wayne Carlisle have at any time made
any payments for political contributions in excess of $25,000 in the aggregate
in any of the most recent
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<PAGE>
five calendar year (if such amount is exceeded, then each contribution of $1,000
or more should be identified on the Political Contributions Schedule).
--------------------------------
(c) Except as set forth on the attached Subsequent Events Schedule,
--------------------------
since April 30, 1999, none of the Sellers has removed any assets from the
investment accounts set forth on the Excluded Assets Schedule.
------------------------
5.22 Environment, Health and Safety Matters. Except as set forth on
--------------------------------------
the Environmental and Safety Matters Schedule attached hereto:
-----------------------------------------
(a) To the knowledge of the Sellers and the Current Owners, each of
the Sellers and their respective Affiliates has complied in all material
respects and is in compliance in all material respects with all Environmental,
Health, and Safety Requirements.
(b) Without limiting the generality of the foregoing, to the
knowledge of the Sellers and the Current Owners, each of the Sellers and their
respective Affiliates has obtained and complied with, and is in compliance with,
all permits, licenses and other authorizations that are required pursuant to
Environmental, Health, and Safety Requirements for the occupation of its
facilities and the operation of its business; a list of all such permits,
licenses and other authorizations is set forth on the attached Environmental and
-----------------
Safety Matters Schedule.
- -----------------------
(c) Neither the Sellers nor their respective Affiliates have received
any written or oral notice, report or other information regarding any actual or
alleged material violation of Environmental, Health, and Safety Requirements, or
any liabilities or potential liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any investigatory, remedial or corrective
obligations, relating to any of them or its facilities arising under
Environmental, Health, and Safety Requirements.
(d) To the knowledge of the Sellers and the Current Owners, none of
the following exists at any property or facility owned or operated by the
Sellers: (i) underground storage tanks, (ii) asbestos-containing material in any
form or condition, (iii) materials or equipment containing polychlorinated
biphenyls, or (iv) landfills, surface impoundments, or disposal areas.
(e) To the knowledge of the Sellers and the Current Owners, none of
the Sellers, or their respective predecessors or Affiliates has treated, stored,
disposed of, arranged for or permitted the disposal of, transported, handled, or
released any substance, including, without limitation, any hazardous substance,
or owned or operated any property or facility (and no such property or facility
is contaminated by any such substance) in a manner that has given or would give
rise to liabilities, including any liability for response costs, corrective
action costs, personal injury, property damage, natural resources damages or
attorney fees, pursuant to CERCLA, the Solid Waste Disposal Act, as amended or
any other Environmental, Health, and Safety Requirements.
(f) Neither the Sellers nor any of their respective Affiliates has,
either expressly or by operation of law, assumed, undertaken or otherwise become
subject to any material liability,
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<PAGE>
including, without limitation, any obligation for corrective or remedial action,
of any other Person relating to Environmental, Health, and Safety Requirements.
(g) To the knowledge of the Sellers and the Current Owners, no facts,
events or conditions relating to the past or present facilities, properties or
operations of the Sellers or any of their respective predecessors or Affiliates
will prevent, hinder or limit continued compliance with Environmental, Health,
and Safety Requirements, give rise to any investigatory, remedial or corrective
obligations pursuant to Environmental, Health, and Safety Requirements, or give
rise to any other liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise) pursuant to Environmental, Health, and Safety
Requirements, including, without limitation, any relating to onsite or offsite
releases or threatened releases of hazardous materials, substances or wastes,
personal injury, property damage or natural resources damage.
5.23 Affiliated Transactions. Except as set forth on the attached
-----------------------
Affiliated Transactions Schedule, no officer, director, employee, partner or
- --------------------------------
Affiliate of any of the Sellers or any individual related by blood, marriage or
adoption to any such individual or any entity (a "Related Entity") in which any
--------------
such Person or individual owns any beneficial interest, is a party to any
agreement, contract, commitment or transaction with any of the Sellers (other
than at-will employment arrangements) or has any material interest in any
material property used by the Sellers. The Affiliated Transaction Schedule
-------------------------------
shall set forth all receivables from Affiliates ("Affiliate Receivables") and
---------------------
Related Entities which are not otherwise Affiliates ("Related Entity
--------------
Receivables") and payables to Affiliates ("Affiliate Payables") and Related
------------------
Entities which are not otherwise Affiliates ("Related Entity Payables") as of
-----------------------
December 31, 1998 and as of the Closing Date (including without limitation,
trade payables or accruals owing to related officers, directors, employees,
partners, family members, or friends of any of the Sellers or Current Owners).
5.24 Names and Locations. Except as set forth on the attached Names
------------------- -----
and Locations Schedule, during the five-year period prior to the execution and
- ----------------------
delivery of this Agreement, none of the Sellers has used any name or names under
which it has invoiced account debtors, maintained records concerning its assets
or otherwise conducted business.
5.25 Suppliers and Customers. The Suppliers and Customers Schedule
----------------------- --------------------------------
attached hereto accurately sets forth a list of the top ten customers and
suppliers of the Sellers by dollar volume of sales and purchases, respectively,
for each of the fiscal years ended December 31, 1998 and December 31, 1997. The
Sellers have not received, to their knowledge, any written notice from any
material supplier to the effect that, and the Sellers have no reason to believe
that, such supplier will stop, decrease the rate of, or change the terms
(whether related to payment, price or otherwise) with respect to, supplying
materials, products or services to the Sellers (whether as a result of the
consummation of the transactions contemplated hereby or otherwise). To the
knowledge of the Sellers and the Current Owners, the Sellers have not received
any written notice from any customer of the Sellers to the effect that, and the
Sellers and the Current Owners have no reason to believe that, such customer
will stop, or materially decrease the rate of, leasing equipment or purchasing
services of the Sellers (whether as a result of the consummation of the
transactions contemplated hereby or otherwise).
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<PAGE>
5.26 Seller Transactions. None of the Sellers is a party to or bound
-------------------
by any agreement with respect to a Seller Transaction other than this Agreement,
and the Sellers have terminated all discussions with third parties regarding a
Seller Transaction.
5.27 Enterprise Zone Exemption. To the knowledge of the Sellers and
-------------------------
the Current Owners, (a) the Kentucky Enterprise Zone Authority (the "Authority")
---------
has approved the transfer of the Parent's Enterprise Zone Exemption (Enterprise
Zone Business Number EZ8-0010) to the Purchaser pending notification of the
Authority that the transactions contemplated hereby have been consummated (the
"Approval") and (b) the Authority has not revoked, or in any way modified or
--------
restricted, the Approval.
5.28 Disclosure. Neither this Agreement nor any of the exhibits,
----------
schedules, or certificates supplied to the Purchaser by or on behalf of the
Sellers with respect to the transactions contemplated hereby contain any untrue
statement of a material fact or omit a material fact necessary to make each
statement contained herein or therein not misleading. To the knowledge of the
Sellers and the Current Owners, there is no fact which the Sellers have not
disclosed to the Purchaser in this Agreement and the Schedules hereto and of
which any of its officers, directors or executive employees is aware and which
has had or would reasonably be expected to have a Material Adverse Effect.
5.29 Closing Date. The representations and warranties contained in
------------
this Article 5 and all information delivered in any schedule, attachment or
---------
Exhibit hereof or in any writing delivered to the Purchaser will be true and
correct on the Closing Date as though then made, except for written disclosures
made by the Current Owner Representative, on behalf of the Sellers and the
Current Owners, to the Purchasers after the date hereof.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF THE CURRENT OWNERS
As a material inducement to the Purchaser to enter into this Agreement
and to purchase the Acquired Assets and to assume the Assumed Liabilities
hereunder, each of the Current Owners hereby represents and warrants that with
respect to itself and not with respect to any other Current Owner:
6.1 Power and Authority. Each Current Owner possesses all requisite
-------------------
power and authority necessary to enter into this Agreement and to carry out the
transactions contemplated by this Agreement.
6.2 Execution; No Breach. This Agreement has been duly executed and
--------------------
delivered by each Current Owner. This Agreement and all other agreements
contemplated hereby to which any Current Owner is a party each constitutes a
valid and binding obligation of such Current Owner, enforceable in accordance
with its terms. The execution and delivery by each Current Owner of this
Agreement and all other agreements contemplated hereby to which such Current
Owner is a party and the fulfillment of and compliance with the respective terms
hereof and thereof by any Current
-36-
<PAGE>
Owner (as the case may be) will not, upon Closing, (a) conflict with or result
in a breach of the terms, conditions or provisions of, (b) constitute a default
under, (c) result in the creation of any Lien upon such Current Owner's
ownership interest in the Sellers pursuant to, (d) give any third party the
right to modify, terminate or accelerate any obligation under, (e) result in a
violation of, or (f) require any authorization, consent, approval, exemption or
other action by or notice or declaration to, or filing with, any court or
administrative or governmental body or agency pursuant to any law, statute, rule
or regulation to which such Current Owner is subject, or any agreement,
instrument, order, judgment or decree to which such Current Owner is subject.
6.3 Title to Capital Stock. Each Current Owner owns beneficially and
----------------------
of record and has good and marketable title to the capital stock of the Parent
as set forth opposite such Current Owner's name on the Capitalization Schedule.
-----------------------
6.4 Brokerage. Except for the fees and expenses of McDonald &
---------
Company (which will be paid by the Sellers out of the Cash Purchase Price),
there are no claims for brokerage commissions, finders' fees or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement or agreement binding upon any Current Owner.
6.5 Seller Transactions. No Current Owner is a party to or bound by
-------------------
any agreement with respect to a Seller Transaction other than this Agreement,
and each Current Owner has terminated all discussions with third parties
regarding a Seller Transaction.
6.6 Closing Date. The representations and warranties of the Current
------------
Owners contained in this Article 6 and elsewhere in this Agreement and all
---------
information contained in any exhibit, schedule or attachment hereto or in any
certificate or other writing delivered by, or on behalf of, any Current Owner or
the Current Owners to the Purchasers, are true and correct on the date of this
Agreement and shall be true and correct on the date of the Closing as though
then made.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As a material inducement to the Sellers and the Current Owners to
enter into this Agreement and to consummate the transactions contemplated
hereby, the Purchaser hereby represents and warrants that:
7.1 Organization, Power and Authority. The Purchaser is a limited
---------------------------------
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Purchaser possesses all requisite power and
authority necessary to carry out the transactions contemplated by this
Agreement.
7.2 Authorization; No Breach. The execution, delivery and
------------------------
performance of this Agreement and all other agreements contemplated hereby to
which the Purchaser is a party, have been duly authorized by such Purchaser.
This Agreement and all other agreements contemplated
-37-
<PAGE>
hereby to which the Purchaser is a party each constitutes a valid and binding
obligation of the Purchaser, enforceable in accordance with its terms. The
execution and delivery by the Purchaser of this Agreement and all other
agreements contemplated hereby to which the Purchaser is a party, the purchase
of the Acquired Assets and the assumption of the Assumed Liabilities hereunder
and compliance with the respective terms hereof and thereof by the Purchaser,
will not, upon Closing, (a) conflict with or result in a breach of the terms,
conditions or provisions of, (b) constitute a default under, (c) result in the
creation of any Lien, upon the Purchaser's assets pursuant to, (d) give any
third party the right to modify, terminate or accelerate any obligation under,
(e) result in a violation of, or (f) except with respect to approvals under the
HSR Act, require any authorization, consent, approval, exemption or other action
by or notice or declaration to, or filing with, any court or administrative or
governmental body or agency pursuant to, the organizational documents of the
Purchaser, or any law, statute, rule or regulation to which the Purchaser is
subject, or any agreement, instrument, order, judgment or decree to which the
Purchaser is subject.
7.3 Capitalization. As of the date hereof, and without giving effect
--------------
to the amendment and restatement of the Holdings' Amended and Restated Limited
Partnership Agreement, the outstanding partnership interests of Holdings are
held beneficially and of record by the Persons as set forth on the Holdings
--------
Schedule attached hereto. Except as set forth on the Holdings Schedule,
- -------- -----------------
Holdings will not, as of the Closing Date, have outstanding any partnership
interests convertible or exchangeable for any partnership interests or
containing any profit participation features, nor any rights or options to
subscribe for or to purchase its partnership interests or any partnership
interests or securities convertible into or exchangeable for its partnership
interests or any partnership interest appreciation rights or phantom partnership
interest plans. Except as set forth on the Holdings Schedule, Holdings is not
-----------------
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any partnership interests or any warrants, options or other
rights to acquire its partnership interests, other than pursuant to the Amended
and Restated Limited Partnership Agreement and the Securityholders Agreement.
As of the date hereof and as of the Closing and immediately thereafter, all of
Holdings' outstanding partnership interests are or shall be validly issued,
fully paid and nonassessable.
7.4 Noncontravention. Except as set forth on the Purchaser
---------------- ---------
Noncontravention Schedule attached hereto, neither the execution and the
- -------------------------
delivery of this Agreement or the agreements contemplated hereby nor the
consummation of the transactions contemplated hereby or thereby, will (a)
violate in any material respect any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Purchaser, ACR or
Holdings is subject, (b) violate any provision of any of Holdings', ACR's or the
Purchaser's organizational documents or (c) materially conflict with, result in
a material breach of, constitute a material default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which Holdings, ACR or the Purchaser is a
party or (d) result in the imposition of any security interest upon any material
assets of the Purchaser, ACR or Holdings. Except with respect to approvals
under the HSR Act and except as set forth on the Purchaser Noncontravention
--------------------------
Schedule, to the Purchaser's knowledge, none of the Purchaser, Holdings or ACR
- --------
is required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for (i) the Parties to
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<PAGE>
consummate the transactions contemplated by this Agreement and (ii) the
Purchaser to carry on the Businesses after the Closing in substantially the same
manner as presently conducted.
7.5 Subsidiaries and Investments. Except as set forth on the
----------------------------
Holdings Subsidiaries Schedule attached hereto, Holdings does not own, directly
- ------------------------------
or indirectly, any stock, partnership interest, membership interests, joint
venture interest or other security or interest in any other Person. The
Holdings Subsidiaries Schedule also sets forth the Persons owning the equity
- ------------------------------
interests in any entity listed thereon pursuant to the previous sentence.
Except as set forth on the Holdings Subsidiaries Schedule, there are no
------------------------------
outstanding or authorized options, warrants, rights, contracts, calls, puts,
rights to subscribe, conversion rights or other agreements or commitments to
which any entity listed on the Holdings Subsidiaries Schedule is a party or
------------------------------
which are binding upon any such entity providing for the issuance, disposition
or acquisition of any of its equity interests. There are no outstanding or
authorized stock or equity appreciation, phantom stock or equity or similar
rights with respect to any entity listed on the Holdings Subsidiary Schedule.
----------------------------
Except as set forth on the Holdings Subsidiary Schedule, there are no voting
----------------------------
trusts, proxies or any other agreements or understandings with respect to the
voting of the capital stock or equity interests of any entity listed thereon.
None of the entities listed on the Holdings Subsidiaries Schedule is subject to
------------------------------
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock or any of its equity interests.
7.6 Litigation. The Purchaser Litigation Schedule attached hereto
---------- -----------------------------
sets forth each instance in which Holdings, the Purchaser, ACR or any of their
respective assets (a) is subject to any material outstanding injunction,
judgment, order, decree, ruling, settlement or charge or (b) is a party or
subject to, or is, to its knowledge, threatened to be made a party or be made
subject to, any material action, suit, proceeding (including, without
limitation, any proceeding in eminent domain or similar proceeding), hearing, or
investigation of, in, or before any court, or any arbitrator or other body or
administrative agency of any federal, state, local, or foreign jurisdiction.
7.7 No ACR Material Adverse Change. Since the December 31, 1998,
------------------------------
there has not been any ACR Material Adverse Change.
7.8 Affiliated Transactions. Except as set forth on the attached ACR
----------------------- ---
Affiliated Transactions Schedule, no officer, director, employee, partner or
- --------------------------------
Affiliate of ACR or any individual related by blood, marriage or adoption to any
such individual or any entity in which any such Person or individual owns any
beneficial interest, is a party to any agreement, contract, commitment or
transaction with ACR (other than at-will employment arrangements) or has any
material interest in any material property used by ACR.
7.9 SEC Reports.
-----------
(a) Holdings has filed all required forms, reports and documents with
the United States Securities and Exchange Commission (the "SEC") required to be
---
filed by it pursuant to the Securities Act and the Exchange Act (hereinafter
collectively referred to as the "Holdings Reports"), all of which have complied
----------------
in all material respects with all applicable requirements of the Securities Act
and the Securities Exchange Act.
-39-
<PAGE>
(b) None of the Holdings Reports, including, without limitation, any
financial statements or schedules included therein, at the time filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
7.10 Brokerage. There are no claims for brokerage commissions,
---------
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement binding
upon the Purchaser.
7.11 Closing Date. The representations and warranties of the
------------
Purchaser contained in this Article 7 and elsewhere in this Agreement are true
---------
and correct as of the date of this Agreement and shall be true and correct on
the date of the Closing as though then made.
ARTICLE 8.
ADDITIONAL AGREEMENTS
8.1 Indemnification.
---------------
(a) Survival of Representations and Warranties. Subject to the
------------------------------------------
limitations contained in this Section 8.01, all representations, warranties
------------
covenants and agreements contained herein or made in writing by any Party in
connection herewith shall survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby, regardless of any
investigation made by any Party or on its behalf, the knowledge of any such
Party's officers, directors, partners, members, employees or agents, or the
acceptance of any certificate or opinion.
(b) Indemnification of the Purchaser by the Sellers and Current
-----------------------------------------------------------
Owners.
(i) Obligation. The Sellers and the Carlisle Current Owners
----------
agree to jointly and severally indemnify, and the Bushman Current Owners
agree to severally (and not jointly and severally) indemnify, the Purchaser
and each of its officers, directors, stockholders, employees, agents,
members, representatives, affiliates, successors and assigns (collectively,
the "Purchaser Parties") and hold each of them harmless from and against
-----------------
and pay on behalf of or reimburse such Purchaser Parties in respect of the
entirety of any Loss which the Purchaser Parties may suffer, sustain or
become subject to, as a result of, arising out of, relating to or in
connection with:
(A) the breach of any representation or warranty made by
the Sellers or any Current Owner in this Agreement or in any
certificate delivered in connection with this Agreement by the Sellers
or any Current Owner (disregarding any materiality, knowledge or
Material Adverse Effect qualifications with respect to any such
representation, warranty, covenant or agreement, except in instances
when knowledge relates to "threatened" matters or with respect to the
representations and warranties contained in Section 5.27);
------------
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<PAGE>
(B) the breach of any covenant or agreement made by the
Sellers or any Current Owner contained in this Agreement or any
certificate delivered by the Sellers or any Current Owner to the
Purchaser with respect thereto in connection with the Closing, other
than the unintentional breach of any covenant or agreement set forth
in Article 4 hereof;
---------
(C) the unintentional breach of any covenant or agreement
set forth in Article 4 hereof by the Sellers or any Current Owner;
---------
(D) any claims of any brokers or finders claiming by,
through or under the Sellers or the Current Owners with respect to the
transactions contemplated hereby;
(E) any facts, events, circumstances or conditions relating
to the Sellers, the Businesses or the Acquired Assets and existing or
occurring at or prior to the Closing (other than with respect to the
Assumed Liabilities), including, without limitation, any Excluded
Liabilities (which the Parties acknowledge shall include, without
limitation, each of the litigation matters set forth on the Litigation
----------
Schedule);
---------
(F) the failure to file on a timely basis annual reports
(on the Form 5500 series) for the Carlisle Construction Co., Inc.
Employee Benefit Plan (formerly known as the Carlisle Enterprises,
Inc. Employee Benefit Plan and which Plan provides health, dental,
life, accidental death and dismemberment, long-term disability and
short-term disability benefits) for the plan years beginning in 1996
and 1997; and
(G) (1) the imposition of a complete or partial withdrawal
liability on the Purchaser by the Central States, Southeast and
Southwest Areas Pension Fund (the "Central States Pension Fund") to
---------------------------
the extent (but only to the extent) by which the amount of such
complete or partial withdrawal liability imposed on the Purchaser by
the Central States Pension Fund exceeds the amount of such withdrawal
liability which would have been imposed on the Purchaser if the sale
of assets provided for in this Agreement did not qualify under Section
4204 of ERISA with respect to the Central States Pension Fund and if
the Purchaser's withdrawal liability had thus been determined without
regard to any contributions which the Sellers were required to
contribute to the Central States Pension Fund with respect to periods
prior to the Closing and (2) the reasonable costs incurred by the
Purchaser in order to comply with Section 4204 of ERISA, including,
without limitation, the cost of providing a bond, if necessary.
Notwithstanding anything to the contrary contained in this Section 8.01,
------------
the aggregate amount of all payments made by Wayne Carlisle, Trustee U/A
James E. Bushman T.A. 5/16/98 and Wayne Carlisle, Trustee U/A James E.
Bushman I.T.A. 11/25/98 in satisfaction of claims for indemnification
pursuant to this Section 8.01 shall not exceed the percentage
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<PAGE>
of the Purchase Price set forth next to such Current Owner's name on the
Schedule of Current Owners. In addition, notwithstanding anything to the
--------------------------
contrary contained in this Section 8.01, to the extent that any claim for
------------
indemnification can be brought pursuant to Section 8.01(b)(i) (E) above,
----------------------
the Purchaser Parties shall bring such claim pursuant to Section
-------
8.01(b)(i)(E).
-------------
(ii) Survival Date. The Sellers and the Current Owners will not
-------------
be liable with respect to any claim for the breach or inaccuracy of any
representation or warranty unless written notice of a clam thereof is
delivered to the Current Owner Representative prior to the Survival Date.
For purposes of this Agreement, the term "Survival Date" shall mean the
-------------
first anniversary of the Closing Date; provided that the Survival Date with
--------
respect to the following Losses shall be as follows: (A) with respect to
any Loss arising from or related to a breach of the representations and
warranties of the Sellers and the Current Owners set forth in Section 5.15
------------
(Tax Matters) and Section 5.21(b) (Events Subsequent to Most Recent Fiscal
---------------
Year End), the Survival Date shall be the 60th day after expiration of the
applicable statute of limitations (including any extensions thereto to the
extent that such statute of limitations may be tolled); (B) with respect to
any Loss arising from or related to a breach of the representations and
warranties of the Sellers and the Current Owners set forth in Section 5.11
------------
(Title to Personal Property) and Section 5.12 (Title to Real Property), the
------------
Survival Date shall be the fifth anniversary of the Closing Date; (C) with
respect to any Loss arising from or related to a breach of the
representations and warranties of the Sellers and the Current Owners set
forth in Section 5.09 (Legal Compliance) and Section 5.22 (Environmental,
------------ ------------
Health and Safety Matters), the Survival Date shall be the third
anniversary of the Closing Date and (D) with respect to any Loss arising
from or related to a breach of the representations and warranties of the
Sellers and the Current Owners set forth in Section 5.01 (Organization),
------------
Section 5.02 (Authorization), Section 5.03 (Capitalization and Related
------------ ------------
Matters), Section 5.05 (Brokerage), Section 5.06 (Subsidiaries and
------------ -------------
Investments) and Section 5.26 (Seller Transactions) and Article 6, there
------------ ---------
shall be no Survival Date (i.e., such representations and warranties shall
survive forever). The Parties agree that so long as written notice is
given on or prior to the Survival Date with respect to such claim, the
representations and warranties with respect to such breach shall continue
to survive until such matter is resolved and the Sellers and the Current
Owners shall be required to indemnify the Purchaser Parties for all Losses
(subject to the limitations set forth in clause (iii) below) which the
Purchaser Parties may incur in respect of the matters which are the subject
of such claim, regardless of when incurred.
(iii) Limitations. The indemnification provided for in Section
----------- -------
8.01(b)(i)(A) and (C) is subject to the following limitations:
---------------------
(A) no amount of indemnity shall be payable pursuant to
Section 8.01(b)(i)(A) or (C) unless, until and only to the extent that
----------------------------
the aggregate amount of all Losses suffered by the Purchaser Parties
pursuant to Section 8.01(b)(i)(A) and (C) exceeds $760,000 (the
-----------------------------
"Deductible"); provided, however, that the Deductible shall not apply
----------- --------
with respect to any Losses resulting from or relating to breaches of
representations and warranties contained in Sections 5.01, 5.02, 5.03,
--------------------------
5.05, 5.06,
------------
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<PAGE>
5.07, 5.11, 5.12 and Article 6 and such Losses shall not count towards
---------------- ---------
satisfaction of the Deductible; and
(B) the aggregate amount of all payments made by the Seller
and the Current Owners in satisfaction of claims for indemnification
pursuant to Section 8.01(b)(i)(A) and (C) shall not exceed $10,000,000
-----------------------------
(the "Cap"); provided, however, that the Cap shall not apply with
--- --------
respect to any Losses resulting from or relating to breaches of
representations or warranties contained in Sections 5.01, 5.02, 5.03,
--------------------------
5.05, 5.06, 5.07, 5.11, 5.12 and Article 6 and such Losses shall not
---------------------------- ---------
count towards satisfaction of the Cap.
Notwithstanding anything to the contrary contained in this Section 8.01,
------------
with respect to any claim for breaches of any representation or warranty
contained in Article 5 the Purchaser Parties shall not be entitled to make
---------
a claim for indemnification against the Sellers and Current Owners if the
Losses the Purchaser Parties may suffer, sustain or become subject to, or a
result of a particular breach are less than $5,000 (the "Mini-Basket");
-----------
provided that (1) if the Losses related to such claim equals or exceeds the
--------
Mini-Basket, the Purchaser Parties shall be entitled to make a claim for
indemnification with respect to such particular breach for the entire
amount of the Losses related thereto, subject to the Deductible and the Cap
and (2) for purposes of this provision, any claim or series of related
claims arising out of or relating to the same or related facts,
circumstances, occurrences, transactions or conditions shall constitute one
claim with respect to any particular breach.
(c) Indemnification of the Sellers and the Current Owners by the
------------------------------------------------------------
Purchaser.
- ---------
(i) The Purchaser agrees to indemnify the Sellers and the
Current Owners (the "Seller Parties") and hold each of them harmless
--------------
against any Loss which any of them may suffer, sustain or become subject
to, as the result of, arising out of, relating to or in connection with (A)
the breach by the Purchaser of any representation or warranty made by the
Purchaser in this Agreement or in any certificate delivered in connection
with this Agreement by the Purchaser, (B) the breach of any covenant or
agreement made by the Purchaser contained in this Agreement or in any
certificate delivered in connection with this Agreement by the Purchaser,
(C) any claims of any brokers or finders claiming by, through or under the
Purchaser or (D) any Assumed Liabilities.
(ii) The indemnification provided for in Section 8.01(c)(i)(A)
---------------------
is subject to the following limitations:
(A) no amount of indemnity shall be payable pursuant to
Section 8.01(c)(i)(A) unless, until and only to the extent that the
---------------------
aggregate amount of all Losses suffered by the Seller Parties pursuant
to Section 8.01(c)(i)(A) exceeds the Deductible; provided, however,
--------------------- --------
that the Deductible shall not apply with respect to any Losses
resulting from or relating to breaches of representations and
warranties contained in Sections 7.01, 7.02 and 7.10 and such Losses
----------------------------
shall not count towards satisfaction of the Deductible; and
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<PAGE>
(B) the aggregate amount of all payments made by the
Purchaser in satisfaction of claims for indemnification pursuant to
Section 8.01(c)(i)(A) shall not exceed the Cap; provided, however,
--------------------- --------
that the Cap shall not apply with respect to any Losses resulting from
or relating to breaches of representations or warranties contained in
Sections 7.01, 7.02 and 7.10 and such Losses shall not count towards
----------------------------
satisfaction of the Cap.
(d) Defense of Claims. If a party hereto seeks indemnification under
-----------------
this Section 8.01, such party (the "Indemnified Party") shall give written
------------ -----------------
notice to the other party (the "Indemnifying Party") after receiving written
------------------
notice of any action, lawsuit, proceeding, investigation or other claim against
it (if by a third party) or discovering the liability, obligation or facts
giving rise to such claim for indemnification, describing the claim, the amount
thereof (if known and quantifiable), and the basis thereof; provided that the
--------
failure to so notify the Indemnifying Party shall not relieve the Indemnifying
Party of its or his obligations hereunder except to the extent such failure
shall have prejudiced the Indemnifying Party. In that regard, if any action,
lawsuit, proceeding, investigation or other claim shall be brought or asserted
by any third party which, if adversely determined, would entitle the Indemnified
Party to indemnity pursuant to this Section 8.01, the Indemnified Party shall
------------
promptly notify the Indemnifying Party of the same in writing, specifying in
detail the basis of such claim and the facts pertaining thereto and the
Indemnifying Party shall be entitled to participate in the defense of such
action, lawsuit, proceeding, investigation or other claim giving rise to the
Indemnified Party's claim for indemnification at its expense, and at its option
(subject to the limitations set forth below) shall be entitled to appoint lead
counsel of such defense with reputable counsel reasonably acceptable to the
Indemnified Party; provided that, as a condition precedent to the Indemnifying
--------
Party's right to assume control of such defense, it must first:
(i) enter into an agreement with the Indemnified Party (in form
and substance reasonably satisfactory to the Indemnified Party) pursuant to
which the Indemnifying Party agrees to be fully responsible for all Losses
relating to such claims and that it will provide full indemnification to
the Indemnified Party for all Losses relating to such claim; and
(ii) furnish the Indemnified Party with reasonable evidence that
the Indemnifying Party is and will be able to satisfy any such liability;
and provided further that the Indemnifying Party shall not have the right to
-------- -------
assume control of such defense and shall pay the fees and expenses of counsel
retained by the Indemnified Party, if the claim which the Indemnifying Party
seeks to assume control (A) seeks non-monetary relief, (B) involves criminal or
quasi-criminal allegations, (C) involves a claim to which the Indemnified Party
reasonably believes an adverse determination would be detrimental to or injure
the Indemnified Party's reputation or future business prospects, or (D) involves
a claim which, upon petition by the Indemnified Party, the appropriate court
rules that the Indemnifying Party failed or is failing to vigorously prosecute
or defend.
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<PAGE>
If the Indemnifying Party is permitted to assume and control the
defense and elects to do so, the Indemnified Party shall have the right to
employ counsel separate from counsel employed by the Indemnifying Party in any
such action and to participate in the defense thereof, but the fees and expenses
of such counsel employed by the Indemnified Party shall be at the expense of the
Indemnified Party unless (a) the employment thereof has been specifically
authorized by the Indemnifying Party in writing, or (b) the Indemnified Party
has been advised by legal counsel that a reasonable likelihood exists of a
conflict of interest between the Indemnifying Party and the Indemnified Party.
If the Indemnifying Party shall control the defense of any such claim,
the Indemnifying Party shall obtain the prior written consent of the Indemnified
Party (which shall not be unreasonably withheld) before entering into any
settlement of a claim or ceasing to defend such claim, if pursuant to or as a
result of such settlement or cessation, injunction or other equitable relief
will be imposed against the Indemnified Party or if such settlement does not
expressly unconditionally release the Indemnified Party from all liabilities and
obligations with respect to such claim, without prejudice.
(e) Payments. Any indemnification pursuant to this Section 8.01 shall
-------- ------------
be effected by wire transfer of immediately available funds from one or more of
the Sellers or the Current Owners, on the one hand, or the Purchaser, on the
other hand, as the case may be, to an account designated by the Current Owner
Representative or the Purchaser, as the case may be, within three (3) days after
the determination thereof, whether pursuant to a Final Determination (as defined
in Section 8.02 below), settlement or agreement among the Parties; provided
------------ --------
that, the Purchaser, at its option, may satisfy any portion of such
indemnification payments due to it from the Sellers or the Current Owners by
offset against any amounts currently distributable, or to become distributable
in the future, by Holdings in respect of the Unreturned Capital of the Class B
Preferred Units and the Unpaid Class B Preferred Yield of the Class B Preferred
Units (as each such term is defined in the Amended and Restated Limited
Partnership Agreement). Any such indemnification payments shall include
interest at the lesser of (i) 8.00% and (ii) the maximum rate permitted by
applicable usury laws, from the date any such Loss is suffered or sustained to
the date of payment. Interest on such unpaid amount shall be compounded
monthly, computed on the basis of a 365-day year and shall be payable on demand.
All indemnification payments to or for the benefit of the Purchaser Parties
under this Section 8.01 shall be deemed adjustments to the Cash Purchase Price.
------------
(f) Taxes, Insurance and Reserves. Any Loss for which an Indemnified
-----------------------------
Party claims indemnification under this Section 8.01 shall take into account (i)
------------
the proceeds of any insurance actually received by the Indemnified Party with
respect to such Loss (the "Insurance Recovery Amount") and (ii) the amount of
-------------------------
any reduction in Tax that (A) is actually realized by a reduction in Taxes
actually paid or by a refund actually received by the Indemnified Party or any
Affiliate and (B) is attributable to any deduction, loss, credit or other tax
benefit resulting from or arising out of such Loss (the "Tax Reduction Amount"),
--------------------
and (iii) any specific reserves against such Losses, but only to the extent of
such specific reserves set forth on the Closing Balance Sheet. Any
indemnification payment under this Section 8.01 shall initially be made without
------------
regard to this Section 8.01(f) (other than with respect to clause (iii) in the
---------------
preceding sentence which will be taken into account at the time the
indemnification payment is made) and the Indemnified Party shall remit
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<PAGE>
to the Indemnifying Party the Tax Reduction Amount or the Insurance Recovery
Amount, as the case may be, when the Indemnified Party actually realizes the Tax
Reduction Amount or actually receives the Insurance Recovery Amount. The amount
of a Loss for purposes of the Mini-Basket, Deductible and Cap hereunder shall be
finally determined after taking into account the net effect of the provisions of
this Section 8.01(f).
---------------
(g) Exclusive Remedy. The Parties acknowledge and agree that the
----------------
indemnification provisions contained in this Section 8.01 shall be the exclusive
------------
remedy of the Parties with respect to money damages for any breach or
noncompliance with the provisions of this Agreement or any agreement,
certificate, instrument or document delivered in connection herewith.
(h) Certain Tax Matters.
-------------------
(i) All transfer, documentary, sales, use, stamp, registration
and other such Taxes and fees (including any penalties and interest
thereon) incurred in connection with this Agreement shall be paid when due
as follows: 50% by the Sellers or the Current Owners (up to a maximum
amount of $105,000) and the remainder by the Purchaser. The Sellers and
the Current Owners shall, at his or its own expense, file all necessary Tax
Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees, and
if required by applicable law, the Purchaser shall, and shall cause its
affiliates to, join in the execution of any such Tax Returns and other
documentation.
(ii) All real property taxes, personal property taxes, ad valorem
-- -------
obligations and similar taxes imposed on a periodic basis, in each case
levied with respect to the Acquired Assets, other than conveyance taxes
provided for in clause (i) above, for a taxable period which includes (but
does not end on) the Closing Date shall be apportioned between the Sellers
and the Purchaser as of the Closing Date based on the number of days of
such taxable period included in the pre-Closing Tax period and the number
of days of such taxable period included in the post-Closing period. The
Sellers shall be liable for the proportionate amount of such Taxes that is
attributable to the pre-Closing Tax period. Within 90 days after the
Closing, the Sellers and the Purchaser shall present a reimbursement to
which each is entitled under this Section together with such supporting
evidence as is reasonably necessary to calculate the proration amount. The
proration amount shall be paid by the party owing it to the other within 10
days after delivery of such statement. Thereafter, the Sellers shall
notify the Purchaser upon receipt of any bill for Taxes relating to the
Acquired Assets, part or all of which are attributable to the post-Closing
Tax period, and shall promptly deliver such bill to the Purchaser who shall
pay the same to the appropriate taxing authority, provided that if such
bill covers the pre-Closing Tax period, the Sellers shall also remit prior
to the due date of assessment to the Purchaser payment for the
proportionate amount of such bill that is attributable to the pre-Closing
Tax period. In the event that either the Sellers or the Purchaser shall
thereafter make a payment for which it is entitled to reimbursement under
this Section, the other party shall make such reimbursement promptly but in
no event later than 30 days after the presentation of a statement setting
forth the amount of reimbursement to which the presenting party is entitled
along with such supporting evidence as is reasonably necessary to calculate
the amount of reimbursement.
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<PAGE>
Any payment required under this Section 8.01(h)(ii) and not made within 10
-------------------
days of delivery of the statement shall bear interest at the rate per annum
determined, from time to time, under the provisions of Section 6621(a)(2)
of the Code for each day until paid.
8.2 Dispute Settlement.
------------------
(a) Each Party agrees that the arbitration procedure set forth below
shall be the sole and exclusive method for resolving and remedying claims for
money damages arising out of the provisions of Section 8.01 (the "Disputes");
------------ --------
provided that, nothing in this Section 8.02 shall prohibit a Party from
- -------- ------------
instituting litigation to enforce any Final Determination (as defined below).
The Parties hereby acknowledge and agree that, except as otherwise provided in
subparagraph (f) below or in the Commercial Arbitration Rules of the American
Arbitration Association as in effect from time to time, the arbitration
procedures and any Final Determination hereunder shall be governed by, and shall
be enforced pursuant to the Pennsylvania Arbitration Act.
(b) In the event that any Party asserts that there exists a Dispute,
such Party shall deliver a written notice to each other Party involved therein
specifying the nature of the asserted Dispute and requesting a meeting to
attempt to resolve the same. If no such resolution is reached within ten
business days after such delivery of such notice, the Party delivering such
notice of Dispute (the "Disputing Party") may, within 45 business days after
---------------
delivery of such notice, commence arbitration hereunder by delivering to each
other Party involved therein a notice of arbitration (a "Notice of
---------
Arbitration"). Such Notice of Arbitration shall specify the matters as to which
arbitration is sought, the nature of any Dispute, the claims of each Party to
the arbitration and shall specify the amount and nature of any damages, if any,
sought to be recovered as a result of any alleged claim, and any other matters
required by the Commercial Arbitration Rules of the American Arbitration
Association as in effect from time to time to be included therein, if any.
(c) The Disputing Party, on the one hand, and the other Parties
involved therein, on the other hand, each shall select one non-neutral
arbitrator expert in the subject matter of the Dispute (the arbitrators so
selected shall be referred to herein as the "Disputing Party's Arbitrator" and
----------------------------
the "Non-Disputing Party's Arbitrator," respectively). In the event that either
--------------------------------
Party fails to select an arbitrator as set forth herein within 20 days from the
delivery of a Notice of Arbitration, then the matter shall be resolved by the
arbitrator selected by the other party. The Disputing Party's Arbitrator and
the Non-Disputing Party's Arbitrator shall select a third independent, neutral
arbitrator expert in the subject matter of the dispute, and the three
arbitrators so selected shall resolve the matter according to the procedures set
forth in this Section 8.02. If the Disputing Party's Arbitrator and the Non-
------------
Disputing Party's Arbitrator are unable to agree on a third arbitrator within 20
days after their selection, the Disputing Party's Arbitrator and the Non-
Disputing Party's Arbitrator shall each prepare a list of three independent
arbitrators. The Disputing Party's Arbitrator and the Non-Disputing Party's
Arbitrator shall each have the opportunity to designate as objectionable and
eliminate one arbitrator from the other arbitrator's list within seven days
after submission thereof, and the third arbitrator shall then be selected by lot
from the arbitrators remaining on the lists submitted by the Disputing Party's
Arbitrator and the Non-Disputing Party's Arbitrator.
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(d) The arbitrators selected pursuant to subparagraph (c) above will
determine the allocation of the costs and expenses of arbitration based upon the
percentage which the portion of the contested amount not awarded to each party
bears to the amount actually contested by such party. For example, if the
Disputing Party submits a claim for $1,000 and if the other Parties involved in
the Dispute contest only $500 of the amount claimed by the Disputing Party, and
if the arbitrators ultimately resolve the dispute by awarding the Disputing
Party $300 of the $500 contested, then the costs and expenses of arbitration
will be allocated 40% (i.e., 200 ) 500) to the Disputing Party and 60% (i.e.,
300 ) 500) to the other Parties involved in the Dispute.
(e) The arbitration shall be conducted in Pittsburgh, Pennsylvania
under the Commercial Arbitration Rules of the American Arbitration Association
as in effect from time to time, except as modified by the agreement of the
Parties. The arbitrators shall conduct the arbitration so that a final result,
determination, finding, judgment and/or award (the "Final Determination") is
-------------------
made or rendered as soon as practicable, but in no event later than the earlier
to occur of (i) the date which is 90 business days after the delivery of the
Notice of Arbitration and (ii) the date which is 10 days after the completion of
the arbitration. The Final Determination must be agreed upon and signed by the
sole arbitrator or by at least two of the three arbitrators (as the case may
be). The Final Determination shall be final and binding on all Parties and
there shall be no appeal from or reexamination of the Final Determination,
except for fraud, perjury, evident partiality or misconduct by an arbitrator
prejudicing the rights of any Party and to correct manifest clerical errors.
(f) A Party may enforce any Final Determination in any state or
federal court located in Pittsburgh, Pennsylvania. For the purpose of any
action or proceeding instituted with respect to any Final Determination, each
Party hereby irrevocably submits to the jurisdiction of such courts, irrevocably
consents to the service of process by registered mail or personal service and
hereby irrevocably waives, to the fullest extent permitted by law, any objection
which it may have or hereafter have as to personal jurisdiction, the laying of
the venue of any such action or proceeding brought in any such court and any
claim that any such action or proceeding brought in any court has been brought
in an inconvenient forum.
8.3 Noncompete and Nonsolicitation.
------------------------------
(a) As an inducement to the Purchaser to enter into this Agreement
and consummate the transactions contemplated hereby, each of the Sellers, each
of the Current Owners and each of Bryan Carlisle and Robert Carlisle (each,
individually, a "Noncompete Party" and, collectively, the "Noncompete Parties")
---------------- ------------------
hereto agrees as follows:
(i) Each of Wayne Carlisle, Bryan Carlisle and Robert Carlisle
acknowledges and agrees (A) that he will be a direct and/or indirect
beneficiary of the payment of the Purchase Price to be paid to the Sellers
hereunder as the direct and/or indirect beneficiary of certain of the
Current Owners and/or the holder of Phantom Stock under the Phantom Stock
Plan and (B) that in the course of his several years of management of and
employment with the Sellers that he has become familiar with the trade
secrets and other confidential information of the Sellers and that his
services have been special, unique and of extraordinary value to the
Sellers. Therefore, in further consideration of the payment of
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<PAGE>
the Purchase Price to the Sellers hereunder, during the period from the
Closing Date to and including the fifth anniversary of the Closing Date
(the "Noncompete Period"), the Noncompete Parties shall not have any
-----------------
affiliation (as defined below) with any Person, anywhere in the world which
engages in the Businesses (a "Competitive Entity"); provided that nothing
------------------ --------
contained herein shall be construed to prohibit any Noncompete Party from
purchasing up to an aggregate of 2% of any class of the outstanding voting
securities of any Person whose securities are listed on a national
securities exchange or traded in the NASDAQ national market system (a
"Public Company") (including, for purposes of calculating the percentage of
--------------
such securities which may be purchased by any Seller or Applicable Current
Owner, the securities of such Public Company then owned by all Affiliates
of such Noncompete Party to the extent such Persons are acting in concert
or otherwise constitute a "group" for purposes of Section 13(d)(3) of the
Securities Exchange Act), if the Noncompete Party does not have an active
role in the management of such Public Company, (it being understood that
the exercise of voting rights with respect to any such voting securities,
in and of itself, shall not constitute such a role). For purposes of this
Section 8.03, the term "affiliation" shall mean any direct or indirect
------------ -----------
interest in or involvement with a Person, whether as an officer, director,
employee, investor, partner, stockholder, sole proprietor, trustee,
consultant, agent, representative, broker, promoter or otherwise; and
(ii) during the Noncompete Period, each Noncompete Party shall
not, and shall not permit any of its or his Affiliates to (i) induce or
attempt to induce any employee of the Purchaser or any of its Affiliates to
leave the employ of the Purchaser or such Affiliate, (ii) hire directly or
through an Affiliate any person who is or was an employee of the Purchaser
or any of its Affiliates within the six-month period prior to the date of
hire, other than persons who were involuntarily terminated by the Purchaser
or its Affiliates, or (iii) call on, service or solicit any customer,
supplier, lessee or other business relation of the Purchaser or any of its
Affiliates on behalf of a Competitive Entity or in any way interfere with
the relationship between any such customer, supplier, lessee or business
relation of the Purchaser or its Affiliates.
(b) Notwithstanding anything in this Section 8.03 to the contrary, if
------------
at any time, in any judicial proceeding, any of the restrictions stated in this
Section 8.03 are found by a final order of a court of competent jurisdiction to
- ------------
be unreasonable or otherwise unenforceable under circumstances then existing,
each of the Noncompete Parties agrees that the period, scope or geographical
area, as the case may be, shall be reduced to the extent necessary to enable the
court to enforce the restrictions to the extent such provisions are allowable
under law, giving effect to the agreement and intent of the Parties that the
restrictions contained herein shall be effective to the fullest extent
permissible. Each of the Noncompete Parties acknowledges and agrees that money
damages may not be an adequate remedy for any breach or threatened breach of the
provisions of Section 8.03 and that, in such event, the Purchaser or its
------------
successors or assigns may, in addition to any other rights and remedies existing
in their favor, apply to any court of competent jurisdiction for specific
performance, injunctive and/or other relief in order to enforce or prevent any
violations of the provisions of this Section 8.03 (including the extension of
------------
the Noncompete Period applicable to such Noncompete Party by a period equal to
the length of court proceedings necessary to stop such
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<PAGE>
violation); provided that such Noncompete Party is found to have been in
--------
violation of the provisions of this Section 8.03. Any injunction shall be
------------
available without the posting of any bond or other security. In the event of an
alleged breach or violation by any Noncompete Party of any of the provisions of
this Section 8.03, the Noncompete Period will be tolled for it or him until such
------------
alleged breach or violation is resolved; provided that if it or he is found to
--------
have not violated the provisions of this Section 8.03, then the Noncompete
------------
Period will not be deemed to have been tolled. Each of the Noncompete Parties
agrees that the restrictions contained in Section 8.03 are reasonable in all
------------
respects.
(c) Each of Bryan Carlisle and Robert Carlisle hereby acknowledge and
agree that, as a result of the consummation of the transactions contemplated
herein, he will receive significant financial benefits as an indirect
beneficiary of certain of the Current Owners and as a holder of Phantom Stock
under the Phantom Stock Plan.
8.4 Powers of Attorney. Each of the Sellers and Current Owners
------------------
irrevocably constitutes and appoints Wayne Carlisle (the "Current Owner
-------------
Representative") as such Person's true and lawful attorney-in-fact and agent and
- --------------
authorizes him acting for such Person and in such Person's name, place and
stead, in any and all capacities to do and perform every act and thing required
or permitted to be done in connection with the transactions contemplated by this
Agreement and all of the other documents and agreements (collectively, the
"Transaction Documents") contemplated hereby, as fully to all intents and
---------------------
purposes as such Person might or could do in person, including, without
limitation:
(a) execute and deliver any and all of this Agreement or the
agreements, documents or instruments contemplated hereby;
(b) execute and deliver such amendments, modifications, alterations
and waivers to this Agreement or the agreements, documents or instruments
contemplated hereby from time to time as the Current Owner Representative deems
necessary or advisable;
(c) designate accounts for payment of the Cash Purchase Price, and
any other amounts owed to the Sellers pursuant to this Agreement or the
agreements, documents or instruments contemplated hereby;
(d) determine the Net Asset Value, the Deduction Amount, the Tax
Amount and the Net Income Amount;
(e) agree or disagree with the determination of Net Asset Value, the
Deduction Amount, the Tax Amount and the Net Income Amount;
(f) reach agreement with the Purchaser with respect to Net Asset
Value, the Deduction Amount, the Tax Amount and the Net Income Amount or select
an Auditor to make a determination thereof;
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<PAGE>
(g) deliver and receive opinions, certificates and other documents
required at or in connection with this Agreement or the agreements, documents or
instruments contemplated hereby or the transactions contemplated hereby or
thereby, and to agree to waivers or modifications of any such opinions,
certificates or other documents;
(h) determine the presence (or absence) of claims for indemnification
against the Purchaser pursuant to Section 8.01 above;
------------
(i) deliver all notices required to be delivered by such Person under
this Agreement, including, without limitation, any notice of a claim, for which
indemnification is sought under Section 8.01 above, any notice of a third party
------------
claim under Section 8.01 above, and any notice of a dispute under Section 8.02
------------ ------------
above;
(j) receive all notices required to be delivered to such Person under
this Agreement, including, without limitation, any notice of a claim for which
indemnification is sought under Section 8.01 above, any notice of a third party
------------
claim under Section 8.01 above, and any notice of a dispute under Section 8.02
------------ ------------
above; and
(k) take any and all action on behalf of such Person from time to
time as the Current Owner Representative may deem necessary or desirable to
resolve and/or settle claims under this Agreement, including, without
limitation, Section 8.01 above.
------------
Each of the Sellers and the Current Owners grants unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
necessary or desirable to be done in connection with the transactions
contemplated by this Agreement and the agreements contemplated hereby, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that the Current Owner Representative may
lawfully do or cause to be done by virtue hereof. Each of the Current Owners
acknowledges and agrees that upon execution and delivery by the Current Owner
Representative of this Agreement and the agreements, documents or instruments
contemplated hereby or any amendments, modifications, alterations or waivers
hereof or thereof or any other agreements, opinions, certificates and other
documents executed and delivered by the Current Owner Representative pursuant to
this Section 8.04, such Person shall be bound by such documents as fully as if
------------
such Person had executed and delivered such documents.
8.5 Replacement of the Current Owner Representative. Upon the death,
-----------------------------------------------
disability or incapacity of the initial Current Owner Representative appointed
pursuant to Section 8.04 above, each of the Sellers and the Current Owners
------------
acknowledges and agrees that the Current Owner Representative's executor,
guardian or legal representative, as the case may be, shall appoint a
replacement reasonably believed by such person as capable of carrying out the
duties and performing the obligations of the Current Owner Representative
hereunder within ten (10) days.
8.6 Actions of the Current Owner Representative; Liability of the
-------------------------------------------------------------
Current Owner Representative. Each Seller and each Current Owner agrees that
- ----------------------------
the Purchaser shall be entitled to rely on any action taken by the Current Owner
Representative, on behalf of the Sellers and the Current Owners, pursuant to
Section 8.04 above (each, an "Authorized Action"), and that each
- ------------ -----------------
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<PAGE>
Authorized Action shall be binding on each Seller and each Current Owner as
fully as if such Current Owner had taken such Authorized Action. The Purchaser
agrees that the Current Owner Representative shall have no liability to the
Purchaser Parties for any Authorized Action, except to the extent that such
Authorized Action is found by a final order of a court of competent jurisdiction
to have constituted fraud or willful misconduct. The Sellers and the Current
Owners jointly and severally agree to pay, and to indemnify and hold harmless
the Purchaser Parties from and against any Losses which they may suffer,
sustain, or become subject to, as the result of any claim by any Person that an
Authorized Action is not binding on, or enforceable against, the Sellers and the
Current Owners.
8.7 Sellers' Name Changes. As soon as practicable after the Closing,
---------------------
the Sellers will change their corporate name to names which are not (and which
are not confusingly similar to) "Carlisle" it being the intent of the Parties
that from and after the Closing the Purchaser will have the sole right as
against the Sellers, the Current Owners and all other Persons to conduct
business under such name and that the Purchaser will commence doing so at the
time of the Closing; provided that the Sellers and the Current Owners may use
--------
the name "Carlisle" in connection with the types of activities set forth on the
"Use of the Carlisle Name Schedule," as long as such uses do not involve
---------------------------------
activities which are in any way related to or similar to the Businesses.
8.8 Employees.
---------
(a) The Sellers have provided the Purchaser with a true, correct and
complete list of all of the Sellers' employees indicating the rate of pay of
each such employee during the twelve months preceding the date hereof and the
status of each such employee as active, on leave, full-time, part-time or
otherwise.
(b) Except for the employees set forth on the "Excluded Employees
------------------
Schedule" attached hereto (the "Excluded Employees") and except for employees
- -------- ------------------
covered by assumed collective bargaining agreements (whose rights are set forth
therein), the Purchaser will offer at-will employment to all active full-time
employees of the Sellers as of the Closing Date (the "Continuing Employees") on
--------------------
terms and conditions which, in the aggregate, are substantially equivalent to
those applicable to such persons' terms and conditions of employment with the
Sellers immediately prior to the Closing Date. Nothing in this Section 8.7
-----------
shall obligate the Purchaser to continue to employ any Continuing Employee for
any period of time.
(c) The Purchaser and the Sellers acknowledge that the Purchaser is
purchasing substantially all of the property used in the Businesses. In
connection therewith, the Purchaser shall employ the Continuing Employees who
immediately before the Closing Date were employed in the Businesses by the
Sellers. Pursuant to Rev. Proc. 96-60, 1996-2 C.B.399, provided that the
Sellers provide the Purchaser with all necessary payroll records for the
calendar year that includes the Closing Date, the Purchaser shall furnish a Form
W-2 to each Continuing Employee employed by the Purchaser who had been employed
by the Sellers disclosing all wages and other compensation paid for such
calendar year, and taxes withheld therefrom, and the Sellers shall be relieved
of the responsibility to do so.
(d) Except for any such amounts which are set forth on the Closing
Balance
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<PAGE>
Sheet, the Sellers will be responsible for and shall pay on or prior to the
Closing Date to the Sellers' employees (i) all amounts of wages, bonuses and
other renumeration (including, without limitation, discretionary benefits and
bonuses) payable to such employees with respect to the period ending on the day
prior to the Closing Date, (ii) any workers' compensation claims, amounts
payable under Plans maintained by the Sellers and other amounts payable on an
ongoing basis to such employees in connection with events or incidents occurring
prior to the Closing Date, except to the extent that such amounts are paid under
insurance, (iii) amounts equal to the vacation pay, sick leave pay and floating
holiday pay earned or accrued by such employees as of the close of business on
the Closing Date, whether or not such pay is vested or has been accrued on the
books of the Sellers at such close of business, based upon the remuneration of
such employees, normally used in computing such vacation pay, sick leave pay and
floating holiday pay and (iv) all severance payments, if any, due to such
employees as a result of the termination of their employment with the Sellers.
The Sellers shall not have any responsibility for payments with respect to the
items identified in the preceding sentence which arise solely after the Closing
Date. The Sellers shall also be responsible for and shall pay any related
payroll burden (including, without limitation, FICA and other employment taxes)
with respect to payments made under this Section 8.08(d).
---------------
8.9 Third Party Consents. Notwithstanding anything to the contrary
--------------------
contained in this Agreement, this Agreement shall not constitute an agreement to
transfer, sell or otherwise assign any instrument, contract, lease, license,
permit or other agreement or arrangement which is not permitted to be assigned
in connection with a transaction of the type contemplated by this Agreement
(collectively, the "Unassigned Contracts"). The beneficial interest in and to
--------------------
each Unassigned Contract shall in any event pass to the Purchaser at the
Closing; and the Sellers covenant and agree to cooperate with the Purchaser in
any lawful and economically feasible arrangement to provide the Purchaser with
the Sellers' entire interest in the benefits under each of the Unassigned
Contracts. If and only if the Purchaser receives the economic benefits under an
Unassigned Contract, the Purchaser agrees to accept the burdens and perform the
obligations under such Unassigned Contract as subcontractor of the Sellers.
Furthermore, if the other party(ies) to an Unassigned Contract subsequently
consent to the assignment of such contract to the Purchaser (without
modification thereto which is adverse to the Purchaser), the Purchaser shall
thereupon agree to assume and perform all liabilities and obligations arising
thereunder after the date of such consent, at which time such Unassigned
Contract shall be deemed an Acquired Asset. The Sellers and the Current Owners
agree to indemnify the Purchaser and hold it harmless against any Losses which
the Purchaser may suffer, sustain or become subject to, as a result of any
claims by any party to any of the Unassigned Contracts for breach of contract in
connection with the consummation of the transactions contemplated by this
Agreement.
8.10 Bulk Sales Law. The Sellers will bear any loss, liability,
--------------
obligation or cost suffered by the Sellers or the Purchaser as a result of the
Sellers' noncompliance with any provision of any bulk sales law which is
applicable to the transfer of the Acquired Assets pursuant to this Agreement.
8.11 Multiemployer Plan. The Sellers have an obligation to contribute
------------------
to the Central States Pension Fund. The Parties agree that the sale of assets
provided for in this Agreement is intended to qualify under Section 4204 of
ERISA with respect to the Central States Pension Fund.
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<PAGE>
As a result, the Parties agree to the following provisions:
(a) From and after the Closing Date, the Purchaser shall have an
obligation to contribute to the Central States Pension Fund, as a result of the
transactions contemplated by this Agreement, for substantially the same number
of contribution base units for which the Sellers had an obligation to contribute
prior to the Closing Date.
(b) Prior to the Closing Date, the Purchaser may apply to the Pension
Benefit Guaranty Corporation or to the Central States Pension Fund for, and
shall use its reasonable best efforts to obtain for the benefit of the Purchaser
and the Sellers, an exemption or variance from the requirements of subparagraphs
(B) and (C) of Section 4204(a)(1) of ERISA and a waiver of the bond and escrow
requirements of Section 4204(a)(3) of ERISA. The Sellers shall cooperate and
join to the extent reasonably necessary in the prosecution of any such
application and implementation of any such exemption, variance or waiver. To
the extent that before the Closing Date such an exemption, variance or waiver is
not granted with respect to the Central States Pension Fund, then the following
provisions of this paragraph (b) shall apply (except that the provisions of
subparagraph (i) immediately below shall not apply if such a variance is granted
prior to the first day of the first plan year of the Central States Pension Fund
beginning after the Closing Date):
(i) The Purchaser shall provide to the Central States Pension
Fund, for a period of the five plan years of the Central States Pension
Fund commencing with the first plan year of the Central States Pension Fund
beginning after the Closing Date, a bond issued by a corporate surety
company that is an acceptable surety for purposes of Section 412 of ERISA,
or an amount held in escrow by a bank or a similar financial institution
satisfactory to the Central States Pension Fund, in an amount equal to 100%
(or 200% in the event that the Central States Pension Fund is in
reorganization in the plan year during which the Closing Date occurs) of
the greater of (A) the average annual contribution required to have been
made by the Sellers with respect to the operations under the Central States
Pension Fund for the three plan years of the Central States Pension Fund
preceding the plan year in which the Closing Date occurs, or (B) the annual
contribution that the Sellers were required to have made with respect to
the operations under the Central States Pension Fund for the last plan year
of the Central States Pension Fund preceding the plan year in which the
Closing Date occurs, which bond or escrow shall be paid to the Central
States Pension Fund if the Purchaser withdraws from the Central States
Pension Fund, or fails to make a contribution to the Central States Pension
Fund when due, at any time during the first five plan years of the Central
States Pension Fund beginning after the Closing Date.
(ii) The Sellers hereby agree that, if the Purchaser withdraws
from the Central States Pension Fund in a complete withdrawal or a partial
withdrawal with respect to operations during the first five plan years of
the Central States Pension Fund beginning after the Closing Date, the
Sellers will be secondarily liable to the Central States Pension Fund for
any withdrawal liability the Sellers would have incurred to the Central
States Pension Fund (but for Section 4204 of ERISA) in the event the
liability of the Purchaser with respect to the Central States Pension Fund
is not paid.
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<PAGE>
(c) As a result of the application of the provisions of this Section
-------
8.11 and Section 4204 of ERISA, it is acknowledged that, in the event the
- ----
Purchaser withdraws from the Central States Pension Fund in a complete
withdrawal or a partial withdrawal, the Purchaser's withdrawal liability to the
Central States Pension Fund will be determined, pursuant to Section 4204(b) of
ERISA, to the extent applicable.
(d) In the event that the Purchaser withdraws from the Central States
Pension Fund in a complete withdrawal or a partial withdrawal during the first
five years of the Central States Pension Fund commencing with the first plan
year of the Central States Pension Fund that begins after the Closing Date, the
Purchaser shall give notice to the Sellers of any such withdrawal within 14 days
following such withdrawal and shall also give notice to the Sellers of any
written demand received by the Purchaser from the Central States Pension Fund
for payment of any withdrawal liability within 14 days of such receipt. In the
event that the Purchaser fails to pay such withdrawal liability to the Central
States Pension Fund, the Sellers, in their sole discretion, may pay such
withdrawal liability on the behalf of, and as agent for, the Purchaser. Any
such payment made on behalf of the Purchaser by the Sellers shall, subject to
the provisions of Section 8.01(b)(i)(G), be reimbursed to the Sellers by the
---------------------
Purchaser. Notwithstanding any terms of this Agreement, this provision shall
survive the Closing Date.
ARTICLE 9.
DEFINITIONS
For the purposes of this Agreement, the following terms have the
meanings set forth below:
"ACR Material Adverse Change" means a material adverse change with
---------------------------
respect to the business, assets, liabilities, financial condition, operating
results, business prospects or labor, customer or supplier relations of ACR,
taken as a whole
"Affiliate" means, in the case of a natural Person, one or more
---------
members of a group comprised of such Person and such Person's parents or
grandparents, his children or grandchildren, his siblings and any spouse of any
of the foregoing. In the case of a corporation or other Person which is not a
natural Person, the term "Affiliate" means a Subsidiary or other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes
hereof, "control" means the power to vote or direct the voting of sufficient
securities or other interests to elect a majority of the directors or to control
the management of a Person.
"Bushman Current Owners" means (i) Wayne Carlisle, Trustee U/A James
----------------------
E. Bushman T.A. 5/16/98 and (ii) Wayne Carlisle, Trustee U/A James E. Bushman
I.T.A. 11/25/98.
"Carlisle Current Owners" means (i) James E. Bushman, Trustee U/A
-----------------------
Wayne Carlisle I.T.A. 6/4/99 and (ii) James E. Bushman, Trustee U/A Wayne
Carlisle I.T.A. 11/24/98.
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<PAGE>
"CERCLA" means the Comprehensive Environmental Response, Compensation,
------
and Liability Act of 1980, as amended.
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time.
"Deduction Amount" means an amount equal to (i) the aggregate amount
----------------
of all payments between December 31, 1998 and the Closing Date by any of the
Sellers which are not made in the ordinary course of business consistent with
past custom and practice plus (ii) the aggregate amount of all payments or
----
charges for the period between December 31, 1998 and the Closing Date related to
the items set forth on the "Deductions Schedule" attached hereto plus (iii) the
------------------- ----
aggregate amount by which capital expenditures by the Sellers between December
31, 1998 and the Closing Date are less than the amounts specified therefor for
such period on the Capital Expenditure Schedule attached hereto.
----------------------------
"Employee Benefit Plan" means (i) any Employee Pension Benefit Plan
---------------------
(as defined in Section 3(2) of ERISA), including any Multiemployer Plan (as
defined in Section 3(37) of ERISA), (ii) any Employee Welfare Benefit Plan (as
defined in Section 3(1) of ERISA), or (iii) any other retirement, deferred
compensation, severance, fringe benefit, vacation, incentive or bonus plan,
program, policy or other arrangement for employees or former employees.
"Environmental, Health, and Safety Requirements" shall mean all
----------------------------------------------
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including, without limitation, all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"GAAP" means United States generally accepted accounting principles,
----
consistently applied.
"Indebtedness" means at a particular time, without duplication, (i)
------------
any indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business which
are not more than 90 days past due, other than retainage under excavation
contracts in the ordinary course of business and other than payables related to
good faith disputes with vendors), (iv) any commitment by which a Person assures
a creditor against loss (including, without limitation, contingent reimbursement
obligations
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<PAGE>
with respect to letters of credit), (v) any indebtedness guaranteed in any
manner by a Person (including, without limitation, guarantees in the form of an
agreement to repurchase or reimburse), (vi) any obligations under capitalized
leases with respect to which a Person is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or with respect to which obligations a Person
assures a creditor against loss, (vii) any indebtedness secured by a Lien on a
Person's assets, (viii) any distributions payable or loans/advances payable to
any related parties or partners as of the Closing, (ix) any other long-term
liabilities recorded in accordance with GAAP as of the Closing, including,
without limitation, any environmental liabilities or unfunded employee or
retiree obligations, (x) $1,622,003 payable to Provident Bank with respect to
checks outstanding on the date hereof and (xi) any accrued interest on any of
the foregoing.
"Intellectual Property" means all (i) patents, patent applications and
---------------------
patent disclosures, (ii) trademarks, service marks, trade dress, trade names,
logos, internet domain names and corporate names and registrations and
applications for registration thereof together with all of the goodwill
associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software, data, data bases and documentation thereof, (vi) trade
secrets and other confidential information (including, without limitation,
ideas, formulas, compositions, inventions (whether patentable or unpatentable
and whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial and marketing plans and customer and supplier lists and information),
(vii) other intellectual property rights and (viii) copies and tangible
embodiments thereof (in whatever form or medium).
"knowledge" of the Sellers and the Current Owners means the actual
---------
knowledge without investigation of the following persons: Wayne Carlisle,
Griffin Carlisle, Bryan Carlisle, Gary Strassel, James Bushman, Robert Carlisle.
"Liens" means any mortgage, pledge, security interest, covenant,
-----
easement, encumbrance, lien or charge of any kind (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof), any sale of receivables with recourse against the Sellers
or any of their Affiliates, any filing or agreement to file a financing
statement as debtor under the applicable Uniform Commercial Code or any similar
statute other than to reflect ownership by a third party of property leased to
the Sellers under a lease which is not in the nature of a conditional sale or
title retention agreement, or any subordination arrangement in favor of another
Person (other than any subordination arising in the ordinary course of
business).
"Loss" means, with respect to any Person, any liability, demand,
----
claim, action, cause of action, cost, damage, deficiency, Tax, penalty, fine or
other loss or expense (including reasonable legal expenses and costs and
including interest and penalties).
"Material Adverse Effect" means a material adverse effect on the
-----------------------
business, assets, liabilities, financial condition, operating results, business
prospects or labor or customer or supplier relations of the Sellers, taken as a
whole.
-57-
<PAGE>
"Net Asset Value" means the excess of (i) the sum of the value of the
---------------
Acquired Assets plus the fair market value of all marketable securities
contained in the accounts identified on the Excluded Assets Schedule over (ii)
------------------------
the value of the Assumed Liabilities, each as determined in accordance with
GAAP, applied on a basis consistent with that used in preparing the Most Recent
Fiscal Year End Balance Sheet; provided that for purposes of determining Net
--------
Asset Value, Assumed Liabilities shall not include Indebtedness. If any item on
(or which should be reflected on) the Closing Balance Sheet is not reflected in
accordance with GAAP in effect as of the Closing Date (based upon authoritative
accounting pronouncements and literature), Net Asset Value will nonetheless be
computed in accordance with GAAP in effect as of the Closing Date. In computing
Net Asset Value, all accounting entries (including all liabilities and accruals)
will be taken into account regardless of their amount and all known errors and
omissions individually in excess of $50,000, and all errors and omissions
exceeding $150,000 in the aggregate, will be corrected and all known proper
adjustments individually in excess of $50,000, and all proper adjustments
exceeding $150,000 in the aggregate, will be made.
"Net Income Amount" means an amount equal to (i) .15 multiplied by
----------------- -------------
(ii) the consolidated net income of the Sellers between May 31, 1999 and the day
immediately preceding the Closing Date, as determined in accordance with GAAP,
applied on a basis consistent with that used in preparing the Latest Balance
Sheet.
"Other Sellers" means the Sellers other than the Parent.
-------------
"Permitted Liens" shall mean: (i) statutory liens for current taxes or
---------------
other governmental charges with respect to the Sellers' assets not yet due and
payable or the amount or validity of which is being contested in good faith by
appropriate proceedings by the Sellers and for which appropriate reserves have
been established on the Sellers' books and records in accordance with GAAP; (ii)
mechanic's, carrier's, worker's, repairer's and similar statutory liens arising
or incurred in the ordinary course of business for amounts which are not
delinquent and which are not, individually or in the aggregate, material to the
Sellers' business and which in the aggregate do not exceed $50,000; (iii)
zoning, entitlement, building and other land use regulations imposed by
governmental agencies having jurisdiction over the Owned Real Property and
Leased Real Property which are not violated by the current use and operation of
the Owned Real Property and Leased Real Property; and (iv) covenants,
conditions, restrictions, easements and other similar matters of record
affecting title to the Owned Real Property and Leased Real Property which do not
materially impair the occupancy or use of the Owned Real Property and Leased
Real Property for the purposes for which it is currently used in the business of
the Sellers.
"Person" means an individual, a partnership, a corporation, a limited
------
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar federal law then in force.
-58-
<PAGE>
"Securities Exchange Act" means the Securities Exchange Act of 1934,
-----------------------
as amended, or any similar federal law then in force.
"Subsidiary" means, with respect to any Person, any corporation,
----------
limited liability company, partnership, association or other business entity of
which (a) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, the stockholders or trustees thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof, or (b) if a
limited liability company, partnership, association or other business entity, a
majority of the partnership or other similar ownership interest thereof is at
the time owned or controlled, directly or indirectly, by any Person or one or
more Subsidiaries of that Person or a combination thereof. For purposes hereof,
a Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of the limited liability
company, partnership, association or other business entity gains or losses or
shall be or control any managing director or member or general partner of such
limited liability company, partnership, association or other business entity.
"Target Net Asset Value" means $107,709,313.
----------------------
"Tax" or "Taxes" means federal, state, county, local, foreign or other
--- -----
income, foreign withholding, gross receipts, ad valorem, franchise, profits,
sales or use, transfer, registration, excise, utility, environmental,
communications, real or personal property, capital stock, license, payroll, wage
or other withholding, employment, social security, severance, stamp, occupation,
alternative or add-on minimum, estimated and other taxes of any kind whatsoever
(including, without limitation, deficiencies, penalties, additions to tax, and
interest attributable thereto) whether disputed or not.
"Tax Amount" means an amount equal to the product of (a) the Parent's
----------
and Investment's combined and consolidated taxable income (loss) for the period
from January 1, 1999 to the day immediately preceding the Closing Date and (b)
44.22% (which is the combined effective marginal federal and Kentucky state
income tax rate) less the aggregate amount of all dividends, distributions and
----
advances made by Parent and Investments to any of their stockholders, the
Current Owners or any of their respective Affiliates between January 1, 1999 and
the Closing Date. Combined and consolidated taxable income (loss) will be
determined based upon current tax statutes and regulations, applied consistently
with the Sellers' prior practice, without giving effect to the gain triggered by
the transactions contemplated hereby.
"Tax Return" means any return, information report or filing with
----------
respect to Taxes, including any schedules attached thereto and including any
amendment thereof.
"WARN Act" means the Worker Adjustment and Retraining Notification Act
--------
of 1988, as amended, and any similar state or local regulation or ordinance.
-59-
<PAGE>
ARTICLE 10.
TERMINATION
10.1 Termination of the Agreement. This Agreement may be terminated
----------------------------
as provided below:
(a) The Purchaser and the Current Owner Representative, on behalf of
the Sellers, may terminate this Agreement by mutual written consent at any time
prior to the Closing.
(b) The Purchaser may terminate this Agreement by giving written
notice to the Current Owner Representative, on behalf of the Sellers and the
Current Owners, at any time prior to the Closing, (i) in the event any of the
Sellers or the Current Owners has breached any representation, warranty,
covenant or agreement contained in this Agreement in any material respect or
(ii) if the Closing shall not have occurred on or before June 30, 1999 (the
"Expiration Date"), by reason of the failure of any condition precedent under
- ----------------
Article 2 above.
- ---------
(c) The Current Owner Representative, on behalf of the Sellers and
the Current Owners, may terminate this Agreement by giving written notice to the
Purchaser at any time prior to the Closing (i) in the event the Purchaser has
breached any representation, warranty, covenant or agreement contained in this
Agreement in any material respect or (ii) if the Closing shall not have occurred
on or before the Expiration Date, by reason of the failure of any condition
precedent under Article 3 above.
---------
10.2 Limitations; Effect. Notwithstanding anything in Section 10.01
------------------- -------------
to the contrary, no Party may terminate this Agreement if such Party is in
material breach of this Agreement or if the circumstance giving rise to such
Party's right to terminate results primarily from a breach by such Party itself
or such Party's Affiliates (or, in the case of termination by the Current Owner
Representative, on behalf of the Current Owners, breach by any of the Sellers or
any of the Current Owners) of any representation, warranty, covenant or
agreement contained in this Agreement. If any Party terminates this Agreement
pursuant to this Section 10.01, all rights and obligations of the Parties
-------------
hereunder and any third party beneficiaries shall terminate and there shall be
no liability on the part of any Party to any other Party under this Agreement,
except that nothing herein shall relieve any party from liability for any breach
of this Agreement prior to such termination.
ARTICLE 11.
MISCELLANEOUS
11.1 Expenses. Except as otherwise provided herein, each of the
--------
Sellers and the Current Owners, on the one hand, and the Purchaser, on the other
hand, will bear their own costs and expenses (including, without limitation, all
legal, accounting, consulting, investment banking, brokerage and other fees and
expenses) (collectively, "Expenses") incurred in connection with this Agreement
--------
and the transactions contemplated hereby.
-60-
<PAGE>
11.2 Press Release and Announcements. No Party shall issue any press
-------------------------------
release or make any public announcement relating to the subject matter of this
Agreement or any agreements contemplated hereby (including announcements to
customers, suppliers, etc.) prior to the Closing without the prior written
approval of the Purchaser and the Current Owner Representative, on behalf of the
Sellers and the Current Owners.
11.3 Further Assurances. The Sellers, the Current Owners and the
------------------
Current Owner Representative, on behalf of the Sellers and the Current Owners,
will execute and deliver such further instruments of conveyance and transfer and
take such additional action as the Purchaser may reasonably request to effect,
consummate, confirm or evidence the transactions contemplated by this Agreement.
The Purchasers will execute and deliver such further instruments of conveyance
and transfer and take such additional action as the Current Owner
Representative, on behalf of the Sellers and the Current Owners, may reasonably
request to effect, consummate, confirm or evidence the transactions contemplated
by this Agreement.
11.4 Confidentiality.
---------------
(a) The Confidentiality Letter Agreement from Carlisle Construction
Co., Inc. to Bain Capital, Inc. and Anthony Crane Rental, L.P. and the
Confidentiality Letter Agreement from Bain Capital, Inc. and Anthony Crane
Rental, L.P. to Carlisle Construction Co., Inc. shall both continue to survive
in full force and effect.
(b) Each of the Sellers, the Current Owners, Bryan Carlisle and Robert
Carlisle (each, a "Confidentiality Party") shall treat and hold as confidential
---------------------
any information concerning the Businesses that is not already generally
available to the public (the "Confidential Information"), refrain from
------------------------
using any of the Confidential Information except in connection with this
Agreement and/or employment by the Purchaser, and deliver promptly to the
Purchaser or destroy, at the request and option of the Purchaser, all original
tangible embodiments (and all copies) of the Confidential Information which are
in his or its possession or under his or its control. In the event that any
Confidentiality Party is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, such Confidentiality Party shall notify the Purchaser promptly of
the request or requirement so that the Purchaser may seek an appropriate
protective order or waive compliance with the provisions of this Section
-------
11.04(b). If, in the absence of a protective order or the receipt of a waiver
- --------
hereunder, any Confidentiality Party is, on the advice of counsel, compelled to
disclose any Confidential Information to any tribunal or else stand liable for
contempt, such Confidentiality Party may disclose the Confidential Information
to the tribunal; provided that such disclosing Confidentiality Party shall use
--------
his or its reasonable best efforts to obtain, at the request of the Purchaser,
an order or other assurance that confidential treatment shall be accorded to
such portion of the Confidential Information required to be disclosed as the
Purchaser shall designate.
11.5 Entire Agreement. This Agreement (including the agreements and
----------------
documents referred to herein) constitutes the entire agreement between the
Parties and supersedes any prior understandings, agreements, or representations
by or among the Parties, written or oral, that may
-61-
<PAGE>
have related in any way to the subject matter hereof.
11.6 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
11.7 Headings. The section headings contained in this Agreement are
--------
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.8 Notices. All notices, requests, demands, claims, and other
-------
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given when
personally delivered, sent by telecopy (with receipt confirmed) on a business
day during regular hours of the recipient (or, if not, on the next succeeding
business day) or one business day after being sent by reputable overnight
courier service (charges prepaid) to the intended recipient as set forth below:
If to the Sellers, the Current Owners or the Current Owner Representative:
-------------------------------------------------------------------------
Carlisle Construction Co., Inc.
P.O. Box 308
Newport, Kentucky 41072
Attention: Wayne Carlisle and Gary Strassel
Telecopy: (606) 422-6201
or
--
Carlisle Construction Co., Inc.
840 Licking Pike
Wilder, Kentucky 41076
Attention: Wayne Carlisle and Gary Strassel
Telecopy: (606) 422-6201
with a copy to:
--------------
(which copy shall not constitute notice to the above Parties)
Frost & Jacobs LLP
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45201
Attention: Mark Longenecker
Telecopy: (513) 651-6981
If to the Purchaser:
-------------------
Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
-62-
<PAGE>
Attention: Robert Gay
Paul Edgerley
Joseph Pretlow
Telecopy: (617) 572-3274
with a copy to:
---------------
(which copy shall not constitute notice to the Purchasers)
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: James L. Learner, P.C.
E. Paul Quinn
Telecopy: (312) 861-2200
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means, but no such notice, request, demand, claim, or other communication
shall be deemed to have been duly given unless and until it actually is received
by the intended recipient. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.
11.9 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the domestic laws of the Commonwealth of Pennsylvania without
giving effect to any choice or conflict of law provision or rule (whether of the
Commonwealth of Pennsylvania or any other jurisdiction) that would cause the
application to this Agreement of the laws of any jurisdiction other than the
Commonwealth of Pennsylvania.
11.10 Amendments and Waivers. No amendment of any provision of this
----------------------
Agreement shall be valid unless the same shall be in writing and signed by the
Purchaser and the Current Owner Representative, on behalf of the Sellers and the
Current Owners. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
11.11 Construction. Where specific language is used to clarify by
------------
example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. Nothing in any Schedule attached hereto
shall be deemed adequate to disclose an exception to a representation or
warranty made herein unless such Schedule identifies the exception with
reasonable particularity.
11.12 Remedies. Except as provided in Section 8.02 above regarding
-------- ------------
the requirement of using the arbitration procedures set forth therein for
resolving and remedying claims for money damages arising out of the provisions
of Article 8 above, each of the Parties shall have
---------
-63-
<PAGE>
and retain all other rights and remedies existing in their favor at law or in
equity, including, without limitation, any actions for specific performance
and/or injunctive or other equitable relief (including, without limitation, the
remedy of rescission) to enforce or prevent any violations of the provisions of
this Agreement.
11.13 Binding Agreement; Assignment. This Agreement and all of the
-----------------------------
provisions hereof shall be binding upon and inure to the benefit of the Parties
and their respective successors and permitted assigns; provided that neither
this Agreement nor any of the rights, interests or obligations hereunder may be
assigned by the Sellers or any Current Owner without the prior written consent
of Purchaser or by Purchaser (except as otherwise provided in this Agreement)
without the prior written consent of the Current Owner Representative; provided
--------
further that:
(a) the Purchaser may at any time prior to the Closing, at its sole
discretion, assign, in whole or in part, its rights and obligations pursuant to
this Agreement to one or more of its Affiliates;
(b) the Purchaser may assign its rights under this Agreement for
collateral security purposes to any lender providing financing to the Purchaser
or any of its Affiliates and any such lender may exercise all of the rights and
remedies of the Purchaser hereunder; and
(c) the Purchaser may assign its rights under this Agreement, in
whole or in part, to any subsequent purchaser of the Purchaser or any material
portion of its assets (whether such sale is structured as a sale of stock, a
sale of assets, a merger or otherwise).
11.14 Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Agreement.
11.15 Parties in Interest. Nothing in this Agreement, express or
-------------------
implied, is intended to confer on any person other than the Parties and their
respective successors and assigns any rights or remedies under or by virtue of
this Agreement.
11.16 Guarantee. ACR hereby guarantees in its entirety the
---------
satisfaction of the obligation of the Purchaser hereunder:
(a) to pay to the Sellers the Purchase Price pursuant to Section
-------
1.01(e);
- -------
(b) under the Employment Agreements;
(c) under the Lease Agreements; and
(d) in connection with the Purchaser's indemnification obligations
pursuant to Section 8.01(c)(i) above.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Asset
Purchase Agreement on the date first written above.
PURCHASER:
---------
CARLISLE EQUIPMENT GROUP, L.P.
By: Carlisle GP, L.L.C.
Its: General Partner
By: ________________________
Name:_______________________
Its: _______________________
SELLERS:
-------
CARLISLE CONSTRUCTION CO., INC.
By:_________________________
Name:_______________________
Its:________________________
CARLISLE EQUIPMENT, LLC
By:_________________________
Name:_______________________
Its:________________________
CARLISLE EXCAVATING, LLC
By:_________________________
Name:_______________________
Its:________________________
GREATER CINCINNATI MARINE, LLC
By:_________________________
Name:_______________________
Its:________________________
MOREHEAD MARINE, LLC
By:_________________________
Name:_______________________
Its:________________________
<PAGE>
[CONTINUATION OF ASSET PURCHASE AGREEMENT SIGNATURE PAGE]
CURRENT OWNERS:
--------------
______________________________
James E. Bushman, Trustee
U/A Wayne Carlisle I.T.A. 6/4/99
_______________________________
James E. Bushman, Trustee
U/A Wayne Carlisle I.T.A. 11/24/98
_______________________________
Wayne Carlisle, Trustee
U/A James E. Bushman T.A. 5/16/98
_______________________________
Wayne Carlisle, Trustee
U/A James E. Bushman I.T.A. 11/25/98
_______________________________
Wayne Carlisle
ANTHONY CRANE RENTAL, L.P.,
solely for purposes of Sections 11.16 and 1.01(g) hereof
By:________________________
Name:______________________
Its:_______________________
ANTHONY CRANE RENTAL HOLDINGS, L.P.,
solely for purposes of Section 1.01(g) hereof
By:________________________
Name:______________________
Its:_______________________
______________________________________
Robert Carlisle, solely for purposes of Section 8.03 and 11.04(b)
______________________________________
Bryan Carlisle, solely for purposes of Sections 8.03 and 11.04(b)
<PAGE>
Exhibit 4.01
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of July 1,
1999, between Anthony Crane Rental Holdings, L.P., a Pennsylvania limited
partnership (the "Company"), and State Street Bank and Trust Company, as trustee
under the Indenture referred to below (the "Trustee"). Capitalized terms used
herein without definition shall have the meanings assigned to them in the
Indenture.
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of July 22, 1998, providing for the
issuance of 13 3/8% Senior Discount Debentures in an aggregate principal amount
at maturity of $48.0 million (the "Debentures");
WHEREAS, Section 9.01 of the Indenture provides that the Issuers, the
Subsidiary Guarantors and the Trustee may amend or supplement the Indenture or
the Notes without the consent of any Holder, among other things, to cure any
ambiguity, defect or inconsistency;
WHEREAS, the Management Committee has determined that the definition of the
term "Subsidiary" in the Indenture is inconsistent with the intent of the
parties as of the date of the Indenture and that it is necessary to cure such
inconsistency; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Trustee
and the Company mutually covenant and agree for the equal and ratable benefit
of the Holders of the Notes as follows:
1. Definitions. The definition of the term "Subsidiary" in Section 1.01
of the Indenture shall read as follows:
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the
shares of Capital Stock is at the time owned or controlled, directly
or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a)
the sole general partner or the managing general partner of which is
such Person, a Subsidiary of such Person or a general partner of such
Person or Subsidiary or (b) the only general partners of which are
such Person, one or more Subsidiaries of such Person (other than an
Unrestricted Subsidiary) or a general partner of such
1
<PAGE>
Person or Subsidiary (or any combination thereof); provided,
however, that in no case shall Holdings be deemed a Subsidiary of
the Company.
2. New York Law to Govern. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
3. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
4. Effect of Headings. The section headings herein are for convenience
only and shall not affect the construction hereof.
5. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiaries and the Company.
[SIGNATURE PAGES FOLLOW]
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
ANTHONY CRANE RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C., its general partner
By: /s/ Dale Buckwalter
--------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
STATE STREET BANK AND TRUST COMPANY as Trustee
By: /s/ Laurel Melody-Casasanta
--------------------------------------------
Name: Laurel Melody-Casasanta
Title: Assistant Vice President
S-1
<PAGE>
Exhibit 4.02
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of July 1,
1999, among ACR/Dunn Acquisition, Inc., Husky Crane, Inc., Carlisle Equipment
Group, L.P., Anthony Sales & Leasing Corporation, Anthony International
Equipment Services Corporation and Carlisle GP, L.L.C. (each, a "Guaranteeing
Subsidiary"), each of which is a subsidiary of Anthony Crane Rental, L.P. (or
its permitted successor), a Pennsylvania limited partnership (the "Company"),
the other Subsidiary Guarantors (as defined in the Indenture referred to herein)
and State Street Bank and Trust Company, as trustee under the Indenture referred
to below (the "Trustee"). Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of July 22, 1998, providing for the
issuance of an aggregate principal amount of up to $255.0 million of 10 3/8%
Senior Notes due 2008 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances a
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which such Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Subsidiary Guarantee");
WHEREAS, Section 9.01 of the Indenture provides that the Issuers, the
Subsidiary Guarantors and the Trustee may amend or supplement the Indenture or
the Notes without the consent of any Holder, among other things, to cure any
ambiguity, defect or inconsistency;
WHEREAS, the Management Committee has determined that the definition of the
term "Subsidiary" in the Indenture is inconsistent with the intent of the
parties as of the date of the Indenture and that it is necessary to cure such
inconsistency; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, each
Guaranteeing Subsidiary, the Trustee and as to paragraphs 7 through 11, the
Company and the Subsidiary Guarantors mutually covenant and agree for the equal
and ratable benefit of the Holders of the Notes as follows:
<PAGE>
1. Agreement to Guarantee. Each Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Subsidiary Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and
assigns, irrespective of the validity and enforceability of the
Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of and interest on the Notes, will be promptly paid
in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of
and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof,
and
(ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due
of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Subsidiary Guarantors shall be jointly and
severally obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture,
the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor.
(c) The following is hereby waived: diligence presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and the
Indenture.
(e) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Subsidiary Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to
either the Company or the Subsidiary Guarantors, any amount paid by
either to the Trustee or such Holder, this Subsidiary Guarantee, to
the extent theretofore discharged, shall be reinstated in full force
and effect.
<PAGE>
(f) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed
hereby.
(g) As between the Subsidiary Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in
Article 6 of the Indenture for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed
hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such
obligations (whether or not due and payable) shall forthwith become
due and payable by the Subsidiary Guarantors for the purpose of this
Subsidiary Guarantee.
(h) The Subsidiary Guarantors shall have the right to seek contribution
from any non-paying Subsidiary Guarantor so long as the exercise of
such right does not impair the rights of the Holders under the
Guarantee.
(i) Pursuant to Section 10.02 of the Indenture, after giving effect to any
maximum amount and any other contingent and fixed liabilities that are
relevant under any applicable Bankruptcy or fraudulent conveyance
laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under Article 10 of the Indenture shall result in
the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.
2. Execution and Delivery. Each Guaranteeing Subsidiary agrees that the
Subsidiary Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
3. Guaranteeing Subsidiary May Consolidate, Etc. on Certain Terms.
(a) Neither Guaranteeing Subsidiary may consolidate with or merge with or
into (whether or not such Subsidiary Guarantor is the surviving
Person) another corporation, Person or entity whether or not
affiliated with such Subsidiary Guarantor unless:
(i) subject to Section 10.05 of the Indenture, the Person formed by
or surviving any such consolidation or merger (if other than a
Subsidiary Guarantor or the Company) unconditionally assumes all
the obligations of such Subsidiary Guarantor, pursuant to a
supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Notes,
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<PAGE>
the Indenture and the Subsidiary Guarantee on the terms set
forth herein or therein; and
(ii) immediately after giving effect to such transaction, no Default
or Event of Default exists.
(b) In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in
form to the Trustee, of the Subsidiary Guarantee endorsed upon the
Notes and the due and punctual performance of all of the covenants and
conditions of the Indenture to be performed by the Subsidiary
Guarantor, such successor corporation shall succeed to and be
substituted for the Subsidiary Guarantor with the same effect as if it
had been named herein as a Subsidiary Guarantor. Such successor
corporation thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon all of the Notes issuable
hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued
shall in all respects have the same legal rank and benefit under the
Indenture as the Subsidiary Guarantees theretofore and thereafter
issued in accordance with the terms of the Indenture as though all of
such Subsidiary Guarantees had been issued at the date of the
execution hereof.
(c) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained in the
Indenture or in any of the Notes shall prevent any consolidation or
merger of a Subsidiary Guarantor with or into the Company or another
Subsidiary Guarantor, or shall prevent any sale or conveyance of the
property of a Subsidiary Guarantor as an entirety or substantially as
an entirety to the Company or another Subsidiary Guarantor.
4. Releases.
(a) In the event of a sale or other disposition of all of the assets of
any Subsidiary Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all to the capital stock
of any Subsidiary Guarantor, then such Subsidiary Guarantor (in the
event of a sale or other disposition, by way of merger, consolidation
or otherwise, of all of the capital stock of such Subsidiary
Guarantor) or the corporation acquiring the property (in the event of
a sale or other disposition of all or substantially all of the assets
of such Subsidiary Guarantor) will be released and relieved of any
obligations under its Subsidiary Guarantee; provided that the Net
Proceeds of such sale or other disposition are applied in accordance
with the applicable provisions of the Indenture, including without
limitation Section 4. 10 of the Indenture. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of
Counsel to the effect that such sale or other disposition was made by
the Company in accordance with the provisions of the Indenture,
including without limitation Section 4.10 of the Indenture, the
Trustee shall execute any documents reasonably required in order
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<PAGE>
to evidence the release of any Subsidiary Guarantor from its
obligations under its Subsidiary Guarantee.
(b) Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations
of any Subsidiary Guarantor under the Indenture as provided in Article
10 of the Indenture.
5. No Recourse Against Others. No past, present or future partner,
director, officer, employee, incorporator, stockholder or agent of any
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.
6. Definitions. The definition of the term "Subsidiary" in Section 1.01
of the Indenture shall read as follows:
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the
shares of Capital Stock is at the time owned or controlled, directly
or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a)
the sole general partner or the managing general partner of which is
such Person, a Subsidiary of such Person or a general partner of such
Person or Subsidiary or (b) the only general partners of which are
such Person, one or more Subsidiaries of such Person (other than an
Unrestricted Subsidiary) or a general partner of such Person or
Subsidiary (or any combination thereof); provided, however, that in no
case shall Holdings be deemed a Subsidiary of the Company.
7. New York Law to Govern. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. Effect of Headings. The section headings herein are for convenience
only and shall not affect the construction hereof.
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<PAGE>
10. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiaries and the Company.
[SIGNATURE PAGES FOLLOW]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
ACR/DUNN ACQUISITION, INC.
By: /s/ Dale Buckwalter
---------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
HUSKY CRANE, INC.
By: /s/ Dale Buckwalter
---------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
CARLISLE EQUIPMENT GROUP, L.P.
By: /s/ Dale Buckwalter
---------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
CARLISLE GP, L.L.C.
By: /s/ Dale Buckwalter
---------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
S-1
<PAGE>
ANTHONY SALES & LEASING
CORPORATION
By: /s/ Dale Buckwalter
----------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
ANTHONY INTERNATIONAL EQUIPMENT
SERVICES CORPORATION
By: /s/ Dale Buckwalter
----------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
ANTHONY CRANE RENTAL, L.P.
By: ACR Management, L.L.C., its general partner
By: /s/ Dale Buckwalter
----------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
ANTHONY CRANE CAPITAL CORPORATION
By: /s/ Dale Buckwalter
----------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
S-2
<PAGE>
ANTHONY CRANE SALES AND LEASING, L.P.
By: Anthony Crane Sales & Leasing Corporation,
its general partner
By: /s/ Dale Buckwalter
----------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
ANTHONY CRANE INTERNATIONAL, L.P.
By: Anthony International Equipment Services
Corporation, its general partner
By: /s/ Dale Buckwalter
----------------------------------------------
Name: Dale Buckwalter
Title: Chief Financial Officer
STATE STREET BANK AND TRUST COMPANY as Trustee
By: /s/ Laurel Melody-Casasanta
----------------------------------------------
Name: Laurel Melody-Casasanta
Title: Assistant Vice President
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