UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 15, 1996
Date of Report (Date of earliest event reported)
ANALYTICAL SURVEYS, INC.
(Exact name of registrant as specified in its charter)
COLORADO
(State of incorporation)
0-13111
(Commission File Number)
084-846389
(IRS Employer Identification No.)
1935 Jamboree Drive
Colorado Springs, Colorado 80920
(Address of principal executive offices)
(719)-593-0093
(Registrant's telephone number)
Item 2. Acquisition or Disposition of Assets
Analytical Surveys, Inc. (the "Company") through its wholly owned subsidiary,
ASI Landmark, Inc. acquired substantially all of the net assets of Westinghouse
Landmark GIS, Inc., 1903 North Harrison Avenue, Cary, North Carolina on July 15,
1996.
All of the operating assets, including accounts receivable, unbilled revenue,
prepaid expenses, furniture, fixtures and equipment, leasehold improvements
and goodwill used in the conduct of its sole business as a data conversion
company in the geographic information systems industry were acquired, net of
selected current liabilities assumed. Those current liabilities assumed included
billings in excess of costs and revenues, trade accounts payable and accrued
payroll and benefits. The Company also assumed certain contingent liabilities
primarily in the form of potential warranty claims under current contracts
in process and those completed by Westinghouse Landmark GIS, Inc. in the
last year. Past warranty claims have not been significant in either the
Company's operations nor those of Westinghouse Landmark GIS, Inc. and
management does not believe they will be significant in the future.
The consideration paid for the net assets acquired consisted of cash in the
amount of $1,930,000.
The assets and liabilities were acquired from Westinghouse Landmark GIS, Inc., a
wholly owned subsidiary of Westinghouse Electric Corporation. Prior to this
transaction, there was no material relationship between the Company or any of
its affiliates, officers or directors and Westinghouse Electric Corporation or
any of its affiliates, officers or directors.
Substantially all of the cash consideration paid was provided by a term loan
from Bank One Colorado (the "Bank") in the amount of $1,900,000, payable over a
four year period with interest at floating rate of .50% over the Bank's prime
lending rate.
The net assets acquired were used by the seller in its data conversion business
which included digital mapping, facilities management and geographic information
systems. The Company intends to continue to operate the business in the same
general manner and in the same location.
Item 5. Press Release
The following press release was issued on July 15, 1996:
ANALYTICAL SURVEYS ACQUIRES WESTINGHOUSE LANDMARK GIS
Acquisition Adds Strategic Business Presence
In Eastern United States While Expanding Key Customer Base
COLORADO SPRINGS, Colorado - - Analytical Surveys Inc., (ASI) (Nasdaq National
Market-ANLT), a leading provider of digital mapping and Geographic Information
Systems (GIS) database services, today announced it has acquired the net assets
and selected liabilities of Westinghouse Landmark GIS, Inc. for $1,930,000 in
cash. ASI purchased the Cary, N.C.-based company from Westinghouse Electric
Corporation. Westinghouse Landmark will change its name to ASI Landmark and will
operate as a wholly owned subsidiary of ASI.
Landmark, which reported revenue of approximately $6.4 million and was
profitable in 1995, adds to ASI's backlog and brings more than 100 people to its
employee base. ASI's backlog now stands at more than $32 million.
Landmark specializes in deeds research tax mapping, or parcel mapping, which
involves the construction of maps based on legal descriptions contained in
deeds. In addition to expanding ASI's parcel mapping capabilities, Landmark will
augment ASI's planimetric, topographic and orthophoto-based mapping capacity.
Landmark's customer base, which consists primarily of large municipal and local
governments, significantly enhances ASI's presence in the eastern United States.
Landmark customers include the state of Connecticut, the county of Baltimore,
Charleston County, N.C., and the cities of Raleigh and Durham, N.C. among
others.
"This acquisition will contribute significantly to ASI and strengthens our
position as one of the nation's leading full-service GIS providers," said Sid
Corder, president and CEO of ASI. "We are pleased to add Landmark's very
talented staff to the ASI team and look forward to capitalizing on this new tax
mapping component of our business."
Corder said Jeff Armstrong, who has been president of Westinghouse Landmark GIS
since 1990, will serve as president and chief operating officer of ASI's new
subsidiary. Corder added that Landmark will maintain its headquarters in Cary,
N.C.
Landmark represents ASI's second major acquisition in fiscal 1996. In December,
the Company purchased Wisconsin-based Intelligraphics International. The
Intelligraphics acquisition has contributed significantly to ASI's sales
performance and is having an earlier-than-expected positive impact on bottom
line performance.
Analytical Surveys is America's technology leader in providing data conversion
services and products for municipal, utility, government and commercial
customers. ASI specializes in converting paper based maps, aerial photography
and other information formats into digital form using technologies such as
photogrammetry and digital orthophotography. The resulting digital mapping
systems allow ASI's customers to easily access, analyze and make alterations to
GIS data on computers.
####
CONTACTS:
Analytical Surveys, Inc. Pfeiffer Public Relations, Inc.
Scott Benger Geoff High
Senior Vice President - Finance 303/393-7044
719/593-0093
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired
Independent Auditors' Report
The Board of Directors
Westinghouse Landmark GIS, Inc.:
We have audited the accompanying balance sheet of Westinghouse Landmark GIS,
Inc. (wholly owned by Westinghouse Electric Corporation) as of December 9, 1995,
and the related statements of operations, stockholder's equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Westinghouse Landmark GIS, Inc.
as of December 9, 1995, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Denver, Colorado
June 5, 1996
<PAGE>
WESTINGHOUSE LANDMARK GIS, INC.
(Wholly Owned By Westinghouse Electric Corporation)
Balance Sheet
December 9, 1995
(Amounts In Thousands, Except Shares)
Assets
Current assets:
Cash $ 29
Accounts receivable, less allowance for doubtful accounts
of $35 (note 2) 1,478
Revenue in excess of billings, net (note 2) 503
Inventory, net 18
Prepaid expenses and other 128
-----
Total current assets 2,156
Equipment and leasehold improvements, less accumulated
depreciation and amortization (note 3) 718
-----
Total assets $ 2,874
=====
Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable $ 302
Accrued compensation payable 196
Billings in excess of costs and revenue (note 2) 413
-----
Total current liabilities 911
Stockholder's equity:
Common stock, $1 par value; 1,000 shares authorized,
issued, and outstanding 1
Additional paid-in capital 3,948
Accumulated deficit (485)
Distributions to parent, net (1,501)
-----
Total stockholder's equity 1,963
Commitments (note 6)
Total liabilities and stockholder's equity $ 2,874
=====
See accompanying notes to financial statements.
<PAGE>
WESTINGHOUSE LANDMARK GIS, INC.
(Wholly Owned By Westinghouse Electric Corporation)
Statement of Operations
Year Ended December 9, 1995
(Amounts In Thousands)
Revenue (note 4) $ 6,374
Costs of revenue (note 4) 5,279
-----
Gross margin 1,095
Operating expenses:
Selling, general and administrative 984
Corporate allocations (note 4) 19
Loss on sale of equipment 24
-----
Total operating expenses 1,027
Net earnings $ 68
=====
See accompanying notes to financial statements.
<PAGE>
<TABLE>
WESTINGHOUSE LANDMARK GIS, INC.
(Wholly Owned By Westinghouse Electric Corporation
Statement of Stockholder's Equity
December 9, 1995
(Amounts In Thousands)
<CAPTION>
Common Additional Accumu- Distributions
stock paid in lated to parent, Total
capital deficit net
<S> <C> <C> <C> <C> <C>
Balances at December 10, 1994 $ 1 3,948 (553) (2,574) 822
Transactions with parent, net - 1,073 1,073
Net earnings - 68 - 68
- ------ --- ------ -----
Balances at December 9, 1995 $ 1 3,948 (485) (1,501) 1,963
= ===== ===== ===== =====
</TABLE>
See accompanying notes to financial statements.
<PAGE>
WESTINGHOUSE LANDMARK GIS, INC.
(Wholly Owned By Westinghouse Electric Corporation)
Statement of Cash Flows
Year Ended December 9, 1995
(Amounts In Thousands)
<TABLE>
<CAPTION>
<S> <C>
Cash flows from operating activities:
Net earnings $ 68
Adjustments to reconcile net earnings to net
cash used by operating activities:
Depreciation and amortization expense 306
Loss on sale of equipment 24
Provision for inventory obsolescence 18
Changes in operating assets and liabilities:
Accounts receivable (165)
Revenue in excess of billings (49)
Inventory 27
Prepaid expenses and other assets (67)
Accounts payable 136
Accrued compensation payable 1
Billings in excess of revenue (1,017)
-----
Net cash used by operating activities (718)
-----
Cash flows from investing activities:
Capital expenditures (344)
Proceeds from sale of assets 13
Net cash used by investing activities (331)
-----
Cash flows from financing activities - change in distributions to parent 1,073
-----
Net increase in cash 24
Cash at beginning of year 5
Cash at end of year $ 29
=====
</TABLE>
See accompanying notes to financial statements
<PAGE>
WESTINGHOUSE LANDMARK GIS, INC.
(Wholly Owned By Westinghouse Electric Corporation)
Notes to Financial Statements
December 9, 1995
(1) Summary of Significant Accounting Policies
(a) Business and Basis of Presentation
Westinghouse Landmark GIS, Inc. (the Company), is a 100% owned
subsidiary of Westinghouse Electric Corporation (the Parent). The
Company specializes in large city and county wide digital mapping
projects with an emphasis an Geographic Information Systems (GIS)
implementation. The Company's products and services include Aerial
Photography, Ground Control Surveys, Analytical Aerial
Triangulation, Topographic Mapping, Planimetric Mapping, Cadastral
Mapping, Digital Conversion of Cadastral Maps, Orthophoto Base
Mapping, Data Conversation of Utility Features and other GIS
layers, Global Position Satellite (GPS) Control, GIS
Hardware/Software System Implementation, E911 and Digital
Centerline projects.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
The Company's year-end for financial reporting purposes is based
on ten four-week periods and two six-week periods and ended on
December 9 for fiscal 1995.
(b) Revenue Recognition
The Company recognizes revenue on the percentage of completion
basis using the cost-to-cost method, whereby the percentage
complete is based on costs incurred to date in relation to total
estimated costs. All costs related to revenue are expensed as
incurred. The Company does not combine contracts for purposes of
recognizing revenue.
Revenue in excess of billings represents work completed but not
billed. The Company bills customers based upon the terms included
in the contract, which generally provides for progress billings or
billings upon delivery. When billed, such amounts are recorded as
accounts receivable. Billings in excess of costs and revenue
represent amounts billed to customers in excess of costs and
revenue incurred and are recorded as a liability.
The Company recognizes losses on contracts in the period such
losses are determined. The Company does not believe warranty
obligations on completed contracts are significant.
<PAGE>
WESTINGHOUSE LANDMARK GIS, INC.
(Wholly Owned By Westinghouse Electric Corporation)
Notes to Financial Statements, Continued
(1) Summary of Significant Accounting Policies (continued)
(c) Equipment and Leasehold Improvements
Equipment and leasehold improvements are recorded at cost.
Depreciation and amortization are provided using the straight-line
method over the following estimated lives:
Years
Computer equipment 5
Machinery and equipment 8
Furniture and fixtures 5-10
Leasehold improvements 3
Aircraft and vehicles 3-10
Maintenance, repairs, and renewals which neither add to the value
of the asset nor extend its useful life are charged to operations
as incurred.
(d) Inventory
Inventory, consisting principally of materials and supplies, is
recorded at the lower of first-in, first-out cost or market.
(e) Income Taxes
The Company's results of operations are included in the
consolidated income tax returns of the Parent.
The Company and the Parent account for income taxes under the
provisions of Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes (Statement 109) on a separate return
basis. Under the asset and liability method of Statement 109,
deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Under Statement 109, the
effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the
enactment date. The net deferred tax asset related primarily to
the Company's net operating loss carryforwards has been fully
reserved in the accompanying financial statements.
No income tax expense was allocated to the Company by the Parent
in 1995 due to net operating losses incurred by the Company in
prior years, the benefit of which had been recognized by the
Parent in prior years' consolidated income tax returns. Any income
tax receivables or payables are included in distributions to
parent in the accompanying financial statements.
<PAGE>
WESTINGHOUSE LANDMARK GIS, INC.
(Wholly Owned By Westinghouse Electric Corporation)
Notes to Financial Statements, Continued
(f) Distributions to Parent
Distributions to parent represents the balance of cumulative
transactions with the Parent, and has been presented as a
component of stockholder's equity in the accompanying financial
statements, as such amounts are not expected to be received from
the Parent in the foreseeable future.
(g) Corporate Allocations
Corporate allocations represent actual charges from the Parent for
costs incurred by the Parent and allocated among its various
subsidiaries.
(2) Accounts Receivable, Revenue in Excess of Billings and
Billings in Excess of Costs and Revenue
Accounts receivable include retainages of approximately $274,000, which
have been billed, but are not due until completion of contracts, or
portions thereof, and acceptance by customers.
At December 9, 1995 the range of time to complete contracts in process
was one to thirty months. The Company expects to collect substantially
all related accounts receivable and revenue in excess of billings within
one year.
The following tables summarize contracts in process at December 9, 1995
(in thousands):
Costs incurred on uncompleted contracts
$ 7,889
Estimated earnings 2,234
10,123
Less billings to date (10,033)
$ 90
The above balance is included in the accompanying balance sheet as
follows (in thousands):
Revenue in excess of billings, net of allowance
for estimated losses of $330 $ 503
Billings in excess of costs and revenue (413)
$ 90
<PAGE>
WESTINGHOUSE LANDMARK GIS, INC.
(Wholly Owned By Westinghouse Electric Corporation)
Notes to Financial Statements, Continued
(3) Equipment and Leasehold Improvements
Equipment and leasehold improvements consist of the following (in
thousands):
Machinery and equipment $ 1,122
Aircraft and related assets 189
Vehicles 12
Computer equipment 1,258
Furniture and fixtures 76
Leasehold improvements 14
-----
2,671
Less accumulated depreciation
and amortization (1,953)
Net equipment and leasehold improvements $ 718
=====
(4) Related Party Transactions
The Company performs services for companies affiliated with the Parent
and incurs costs to certain of those affiliates. Certain costs are also
allocated to the Company by the Parent, as discussed in note 1.
The following is a summary of related party transactions included in the
accompanying financial statements (in thousands):
Revenue from affiliates $ 260
===
Cost of revenue paid to affiliates $ 260
===
Corporate allocations from Parent $ 19
===
During 1995, the Company sold substantially all of the assets of its
Dominican Republic production facility to an affiliate of the Parent for
approximately $13,000, and recognized a gain on the transaction of
approximately $6,000. Total costs charged to operations in 1995 relating
to the closing of the facility were approximately $107,000, which
consisted of severance pay, lease termination costs and other items.
(5) Employee Benefit Plan
The Company has a defined contribution employee benefit plan under
Section 401(k) of the Internal Revenue Code, in which substantially all
employees are eligible to participate. The plan provides for 50% employer
matching contributions up to 6% of an employee's gross compensation.
Company contributions to the plan totaled approximately $52,000 during
1995.
<PAGE>
WESTINGHOUSE LANDMARK GIS, INC.
(Wholly Owned By Westinghouse Electric Corporation)
Notes to Financial Statements, Continued
(6) Commitments and Contingencies
The Company leases its facilities and certain equipment under operating
leases. The following is a summary of future minimum rental payments due
under all noncancelable operating leases with terms of one year or more
at December 9, 1995 (in thousands):
Year:
1996 $ 417
1997 314
1998 231
1999 157
2000 39
-----
$ 1,158
Rent expense totaled $454,000 in 1995.
(7) Concentrations of Credit Risk and Significant Customers
Financial instruments which potentially expose the Company to
concentrations of credit risk, as defined by Financial Accounting
Standards Board's Statement No. 105, Disclosure of Information about
Financial Instruments with Off-Balance-Sheet Risk, consist primarily of
accounts receivable with the Company's various customers.
The Company's accounts receivable are due from a variety of organizations
throughout the United States. The Company provides for uncollectible
accounts when recognized and when specific credit problems arise.
Management's estimates of doubtful accounts have been adequate in prior
years, and management believes that all significant credit risks have
been identified and provided for as of December 9, 1995.
Historically, the Company's customers have included cities, counties,
engineering companies, utility companies, and federal government
agencies. Historically, over 90% of the Company's revenue has been
derived from state and local government contracts. During the year ended
December 9, 1995, 29% of revenue related to two significant customers.
End of Item 7(a) Financial Statements of business acquired.
<PAGE>
Item 7 Financial Statements and Exhibits continued.
(b) Proforma financial information
It is impractical for the registrant to provide the required proforma financial
information in time for inclusion in the initial filing of this report on Form
8-K. The required proforma financial information will be provided by an
amendment to this report on Form 8-K as soon as practical which is expected to
be within 60 days.
(c) Exhibits
2. Plan of acquisition, reorganization, arrangement, liquidation or
succession:
2.1 Asset Purchase Agreement dated July 15, 1996 between ASI Landmark,
Inc., a wholly owned subsidiary of Analytical Surveys, Inc., (buyer) and
Westinghouse Landmark GIS, Inc. (seller).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Analytical Surveys, Inc.
by: /s/ Scott C. Benger
Secretary/ Treasurer
<PAGE>
PURCHASE AGREEMENT
PURCHASE AGREEMENT (this "Agreement") is made and entered into as of
this 15th day of July, 1996, by and between Westinghouse Landmark GIS, Inc., a
Delaware corporation ("Seller"), and ASI Landmark, Inc., a Colorado corporation
("Buyer").
W I T N E S S E T H:
WHEREAS, Seller desires to sell and assign to Buyer, and Buyer desires
to purchase and assume, the Assets and Assumed Liabilities of Seller, subject to
all of the terms and conditions hereof;
NOW, THEREFORE, Buyer and Seller, in consideration of the mutual
representations, warranties and covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and subject to the terms and conditions hereinafter set forth, and
intending to be legally bound, do hereby agree as follows:
1. Definitions and Rules of Construction.
1.1. For purposes of this Agreement:
"Affiliate" means with respect to any Person, any Person that directly
or indirectly controls, is controlled by, or is under common control with such
Person, including, without limitation, any Person that directly or indirectly
owns, controls or holds with power to vote 50% or more of the outstanding voting
securities or other voting ownership interests of such Person, any Person 50% or
more of whose outstanding voting securities or other voting ownership interests
are directly or indirectly owned, controlled or held with power to vote by such
Person, any partnership in which the specified Person is a general partner, any
officer and director of the specified Person, and any entity of which such
Person is an executive officer, director or general partner.
"Allocation" shall have the meaning set forth in Section 4.4.
"Assets" shall have the meaning set forth in Section 2.1.
"Assumed Liabilities" shall have the meaning set forth in Section 3.1.
"Balance Sheet" shall mean the Statement of Assets and Liabilities
associated with the Business of Seller as of June 8, 1996, and the accompanying
notes and the schedules thereto and set forth in Schedule 1.1(a).
"Business" means Seller's business of geotechnical mapping and service
specializing in topologically structured digital data.
"Business Intellectual Property" shall have the meaning set forth in
Schedule 2.1(e).
"Buyer Group" shall have the meaning set forth in Section 9.1.
"Closing Date Balance Sheet" shall have the meaning set forth in
Section 4.2.
"Closing Date" means the date on which this Agreement is executed on
behalf of the parties and the transactions contemplated hereby are closed.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contracts" means the agreements listed on Schedule 2.1(f).
"Damages" means any liability, loss, cost, payment, expense or other
damage (including reasonable attorneys' fees and expenses).
"Employee Benefit Plans" shall have the meaning set forth in Section
5.17.
"Environmental Damages" means any and all losses which are incurred at
any time as a result of (A) the existence of Hazardous Substances during the
ownership of the Real Property by Seller, upon or beneath the Real Property or
migrating or threatening to migrate from the Real Property, or (B) the existence
prior to the Closing of a violation of Environmental Laws pertaining to the Real
Property.
"Environmental Laws" means those federal, state and local laws, rules,
regulations, or ordinances in effect and as interpreted as of the Closing Date,
including, but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq. ("CERCLA"), the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
seq. ("TSCA"), and the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901 et seq. as amended ("RCRA"), which are applicable to the Business
and which relate to (a) pollution, or loss of or injury to, or adverse effect
upon, the environment, (b) the protection, cleanup or restoration of, or
removal, remediation or mitigation of conditions affecting the environment, (c)
the release, discharge, emission, generation, handling, transportation, use,
treatment, storage or disposal of any Hazardous Substances as defined in this
Agreement, or (d) the protection of the safety or health of humans, including,
but not limited to, exposure to Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Goodwill" means any favorable impression of the Business held by
customers of the Business, and the good reputation of the Business.
"Governmental Authority" means the United States Government, any state
or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or pertaining
to government.
"Hazardous Substances" means any pollutant, contaminant, petroleum or
petroleum product, toxic substance, hazardous or extremely hazardous substance
or chemical, solid or hazardous waste, liquid, industrial or other waste,
hazardous material, or other material, substance or agent that is designated or
regulated under the Environmental Laws as of the Closing Date.
"Leases" means the leases and licenses listed on Schedule 2.1(d).
"New Employee" shall have the meaning set forth in Section 8.1.
"Party" means Seller or Buyer.
"Person" means an individual, corporation, partnership, limited
liability company, trust, unincorporated organization, association or other
entity.
"Purchase Price" shall have the meaning set forth in Section 4.1.
"Real Property" means the premises leased by Seller located at 1901
Harrison Avenue and 1903 Harrison Avenue, Raleigh, North Carolina, and the other
premises described on Schedule 2.1(d), which premises are used by Seller in the
operation of the Business.
"Retained Assets" shall have the meaning set forth in Section 2.2.
"Retained Liabilities" shall have the meaning set forth in Section 3.2.
"Seller Group" shall have the meaning set forth in Section 9.2.
"To the best of Seller's knowledge", when used to qualify a statement
of fact, means that the following individuals have no actual knowledge of the
falsity of such statement of fact, after having made reasonable inquiry in their
area of responsibility:
Jeffrey Armstrong, Allan Casanova, Gregory Shepherd, John Montague and Douglas
Weaver.
"WEC" means Westinghouse Electric Corporation, a Pennsylvania
corporation.
1.2. Rules of Construction. In this Agreement, unless the context
otherwise requires: (a) definitions shall apply equally to both the singular and
the plural forms of the terms defined; (b) the words "include," "includes" and
"including" shall be deemed to be followed by the words "without limitation";
(c) all references to Articles, Sections and Schedules shall be deemed
references to Articles and Sections of, and Schedules to, this Agreement; and
(d) all references to any agreement or other instrument or statute shall be
deemed references to such agreement, instrument or statute as amended from time
to time (and, except as otherwise stated in the Definitions, in the case of any
statute, to any successor provision and to all rules and regulations under such
statute or successor provision). The headings of the Articles and Sections are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
2. Assets.
2.1. Assets Purchased and Sold. Seller does hereby sell, assign,
transfer and set over to the Buyer and the Buyer does hereby purchase the
following assets (hereinafter collectively called "Assets"):
(a) The inventory listed on Schedule 2.1(a);
(b) The prepaid expenses listed on Schedule 2.1(b);
(c) The equipment and furniture listed on Schedule 2.1(c);
(d) Subject to the provisions of Section 7.2, the Leases
listed on Schedule 2.1(d);
(e) The Business Intellectual Property as described on
Schedule 2.1(e);
(f) Subject to Section 7.2, the Contracts listed on
Schedule 2.1(f);
(g) All of Seller's accounts receivable, billed and
unbilled;
(h) The registered trade names listed on Schedule 2.1(h);
(i) All of Seller's analog and digital records relating
exclusively to the Business, including databases for Seller's internal use
containing records of work-in-progress, customer records, supplier records,
licenses, marketing records, contract data and information, financial data and
other similar records;
(j) All software and codes owned by Seller, subject to
any licenses which are in effect for such software and codes;
(k) The Goodwill, if any, of the Business;
(l) All sales, manufacturing, supplier and customer lists and
records, personnel and payroll records, accounting records, purchasing and sales
records, and all other records of the Business, in Seller's or WEC's possession,
custody or control (except Seller's corporate minute and stock record books);
and
(m) The other assets listed on Schedule 2.1(m).
The Assets listed on Schedules 2.1(a)-(m) are the assets to be transferred to
the Buyer as identified as of the date such Schedules; however, Seller shall not
be obligated to transfer to Buyer on the Closing Date any Assets which are sold,
transferred, terminated, eliminated or otherwise disposed of in the ordinary
course of the Business between the date of such Schedules and the Closing Date
(which shall not be material); Seller shall transfer to Buyer on the Closing
Date all assets of the type described in this Section 2.1 which are created,
acquired, entered into, or otherwise come into existence in the ordinary course
of the Business between the date of such Schedules and the Closing Date, and
such newly created, acquired, entered into or existing assets shall constitute
Assets for all purposes of this Agreement; the specific Assets transferred to
Buyer on the Closing Date shall be set forth in revised Schedules which shall be
delivered in connection with the Purchase Price adjustment procedure set forth
in Section 4.3.
2.2. Retained Assets. Anything contained herein to the contrary
notwithstanding, Seller shall retain and not sell, and Buyer shall not acquire,
the following assets of Seller (the "Retained Assets"):
(a) any and all cash and cash equivalents, such as bank
deposits, of Seller;
(b) any and all claims (including counterclaims and cross
claims), rights and choses in action of Seller to the extent related to any
Retained Liability or Retained Asset;
(c) the assets set forth in Schedule 2.2(c);
(d) any right or privilege to use the trademark or trade name
"WESTINGHOUSE" in logo-type or in any other style or the symbol trademark of
Westinghouse Electric Corporation known as the "CIRCLE W," or any other
trademarks or trade names owned, used by, belonging to or registered in the name
of WEC, except to the extent specifically permitted under Section 7.5;
(e) any right or privilege to use the name "Westinghouse
Landmark GIS, Inc.", except to the extent specifically permitted under Section
7.5; and
(f) any and all assets, properties, rights or interests of
Seller which are not those specifically set forth in Section 2.1 and the
Schedules thereto.
<PAGE>
3. Liabilities.
3.1. Assumed Liabilities. Buyer hereby assumes and agrees to pay,
perform and discharge as and when due all the liabilities and obligations set
forth below, all of which are collectively referred to herein as the "Assumed
Liabilities." The Assumed Liabilities include, as they exist on the Closing
Date:
3.1.1. any and all accounts payable of Seller arising out of
the Business;
3.1.2. any and all liabilities and obligations arising out
of the Leases and Contracts identified on Schedules 2.1(d) and 2.1(f), including
without limitation, warranty claims;
3.1.3. any and all liabilities and obligations for Billing
in Excess of Revenue as set forth on Schedule 3.1.3A and any and all liabilties
and obligations under the purchase orders set forth on Schedule 3.1.3B; and
3.1.4 any and all liabilities and obligations for taxes for
all taxable periods, other than taxes on or determined by reference to net
income.
The Assumed Liabilities listed on Schedules 3.1.3A and 3.1.3B are the
liabilities described in Section 3.1.3 to be assumed by the Buyer as identified
as of the date of such Schedules, but Buyer shall not be obligated to assume any
liabilities which are, between the date of such Schedules and the Closing Date,
either (i) satisfied or otherwise eliminated, or (ii) created or otherwise come
into existence other than in the ordinary course of the Business ; Buyer shall
assume all liabilities of the type described in this Section 3.1 which are
created or otherwise come into existence in the ordinary course of the Business
between the date of such Schedules and the Closing Date (which newly created or
existing liabilities shall not be material to the Business as a whole, after
considering any newly created or existing Assets), and such newly created or
existing liabilities shall constitute Assumed Liabilities for all purposes of
this Agreement; the specific Assumed Liabilities assumed by Buyer on the Closing
Date of the type described in the Schedules referred to in this Section 3.1
shall be set forth in revised Schedules which shall be delivered in connection
with the Purchase Price adjustment procedure set forth in Section 4.3.
3.2. Retained Liabilities. Anything contained herein to the
contrary notwithstanding, Buyer shall not be required to assume or to pay,
perform or discharge any of the following liabilities or obligations (the
"Retained Liabilities"):
3.2.1. liabilities not specifically enumerated and stated in
Section 3.1 or in the revised Schedules attached to the Closing Date Balance
Sheet;
3.2.2. any and all liabilities and obligations of Seller for
borrowed money;
3.2.3. except to the extent a liability is assumed pursuant
to Section 3.1, any and all liabilities and obligations of Seller to the extent
the cause of action accrued prior to the Closing Date;
3.2.4. any and all liabilities and obligations of Seller to
the extent arising out of any Retained Asset.
3.3. Sales and Transfer Taxes. Buyer shall be responsible for and
shall pay all sales, transfer, and other similar taxes, duties and transfer fees
applicable to the transaction contemplated by this Agreement.
<PAGE>
4. Price.
4.1. Purchase Price and Payment. The aggregate purchase price to be
paid to Seller pursuant to this Agreement (the "Purchase Price") shall be One
Million Nine Hundred Thirty Thousand and no/100 Dollars ($1,930,000.00), which
shall be paid in cash or other immediately available funds at Closing.
4.2. Closing Balance Sheet. Within forty-five (45) days after the
Closing Date, Seller shall deliver to Buyer at Seller's expense a balance sheet
for the Business as of the close of business on the Closing Date (the "Closing
Date Balance Sheet"). The Closing Date Balance Sheet shall be prepared
consistent with the accounting principles used and applied in the preparation of
the Balance Sheet.
4.3. Adjustment to the Purchase Price; Procedure. Following
delivery of the Closing Date Balance Sheet in accordance with Section 4.2, the
Purchase Price shall be adjusted as follows:
4.3.1. Within 30 days after receipt of the Closing Date
Balance Sheet, the Buyer shall, in a written notice to the Seller, either accept
the Closing Date Balance Sheet or object thereto by describing in reasonable
detail any proposed adjustments to the Closing Date Balance Sheet and the
reasons therefor. If the Seller shall not have received such notice of proposed
adjustments within such 30-day period, the Buyer will be deemed to have accepted
the Closing Date Balance Sheet.
4.3.2. If any adjustments to the Closing Date Balance Sheet
are proposed, the Buyer and the Seller shall negotiate in good faith to resolve
any disputes, provided that if not resolved within 30 days following the
Seller's receipt of the proposed adjustments, the Buyer and the Seller shall
retain the accounting firm of KPMG Peat Marwick LLP ("Peat Marwick") or shall
select jointly another mutually acceptable nationally recognized independent
public accounting firm to resolve such dispute, which resolution shall be final
and binding. The fees and expenses of any such accounting firm shall be shared
equally by the Buyer and the Seller, and such accounting firm shall be retained
by a retention letter executed by the parties that specifies that the
determination by said firm of any such disputes concerning the Closing Date
Balance Sheet shall be resolved on the basis of the accounting principles used
and applied in the preparation of the Balance Sheet.
4.3.3. Within ten (10) business days after the later of
acceptance of the Closing Date Balance Sheet by the Buyer or the resolution of
any disputes, as the case may be, then to the extent that the "Adjusted Net
Worth" (as defined below) of Seller as set forth on the Closing Date Balance
Sheet is less than $1,930,000, the Seller will pay to the Buyer the difference
between such two amounts. Such payment shall include interest accrued from the
Closing Date to the date of such payment at the so-called "Prime Rate" announced
by Mellon Bank, N.A., in Pittsburgh, Pennsylvania, from time to time computed on
the basis of 30-day months and 360-day years. If the Adjusted Net Worth of
Seller as set forth on the Closing Date Balance Sheet is greater than
$2,168,000, then Seller shall be entitled to a return of accounts receivable
selected by Seller (so that such returned accounts receivable will become, and
thereafter will be, "Retained Assets") with a book value equal to the difference
between such Adjusted Net Worth and $2,168,000. At any time before, during or
after the course of such negotiations, Buyer may, in lieu of returning assets as
provided for above, pay to Seller in cash the difference between such Adjusted
Net Worth and $2,168,000.
4.3.4. "Adjusted Net Worth" shall mean the assets minus the
liabilities as shown on the Balance Sheet and the Closing Date Balance Sheet, as
applicable; provided, that, the Balance Sheet and the Closing Date Balance Sheet
shall be consistently adjusted to exclude the Retained Assets and the Retained
Liabilities, and there shall be no adjustment to the Purchase Price for any
changes in costs to complete as reflected in the accounting records of the
Business.
4.4. Allocation of Purchase Price.
4.4.1. The Purchase Price and the amount of Assumed
Liabilities hereunder shall be allocated to the Assets and the Assumed
Liabilities (the "Allocation") as set forth in Schedule 4.4. The Allocation
shall be adjusted to reflect specifically any changes in the assets or
liabilities reflected on the Closing Date Balance Sheet from the assets or
liabilities reflected on the Balance Sheet, whether or not such changes cause an
adjustment to the Purchase Price pursuant to Section 4.3.4.
4.4.2. Buyer and Seller acknowledge that the Allocation has
been determined pursuant to arm's length bargaining between the Parties
regarding the fair market values of the Assets in accordance with the provisions
of Internal Revenue Code Section 1060. Buyer and Seller agree to prepare and
file all income tax returns (including, if applicable, IRS Form 8594) in a
manner consistent with the Allocation and will not in connection with the filing
of such returns make any allocation of the Purchase Price which is contrary to
the Allocation. Buyer and Seller agree to consult with each other with respect
to all issues related to such Allocation in connection with any tax audits,
controversy or litigation. Neither party shall take or agree to any position
inconsistent with the Allocation in connection with any tax audit, controversy
or litigation which would adversely affect the taxes of the other party to any
material extent without the prior written consent of such other party. Such
consent shall not be unreasonably withheld, and shall not be necessary to the
extent the party which takes or agrees to such inconsistent position has
indemnified the other party against the effects of such action.
5. Seller's Representations and Warranties. Seller makes the
following representations and warranties, each of which is true and correct on
the date hereof (except where any such representation and warranty expressly is
made as of another date):
5.1. Organization and Authority. Seller is a corporation duly
organized and validly existing under the laws of the State of Delaware and has
all requisite power and authority to carry on its business as now conducted.
The execution and delivery of this Agreement by Seller has been duly authorized
by all necessary corporate action.
5.2. Due Execution. This Agreement has been duly and validly executed
and delivered by Seller and constitutes the valid and binding obligation of
Seller, enforceable against it in accordance with its terms. Each other document
arising out of or related to this Agreement to which Seller is specified to be a
party has been duly executed and delivered by Seller and constitutes the valid
and binding obligation of Seller enforceable against it in accordance with its
terms.
5.3. Title to Property and Assets. Except (a) as reflected in the
Balance Sheet or the Closing Date Balance Sheet, or in the notes thereto, (b)
for liens for current taxes not yet delinquent, (c) for liens imposed by law and
incurred in the ordinary course of business for obligations not yet due, (d) for
liens or claims pursuant to applicable Bulk Sales Laws, if any (as to which the
provisions of Section 10.7 shall apply), and (e) for liens, and security
interests, if any, set forth on Schedule 5.3 hereto, the Seller owns the Assets,
other than property subject to the Leases, free and clear of all mortgages,
liens, claims, security interests and encumbrances. With respect to the property
subject to the Leases, the Seller is in compliance with such Leases and, to the
best of its knowledge, holds a valid leasehold interest free of any liens,
claims and encumbrances.
5.4. Litigation. Except as set forth in Schedule 5.4, and except for
all other matters the aggregate of which would not be material, to the best of
Seller's knowledge: (a) there is no judgment, order, decree, or pending
litigation, relating to the Assets, the Assumed Liabilities, or the Business,
and (b) Seller has not received written notice of any such matter which is or
could become a lien or charge against the Assets or would otherwise adversely
affect the Assets, the Assumed Liabilities, or the Business, or the use of the
Assets by Buyer.
<PAGE>
5.5. Assets.
5.5.1. Any description of said Assets contained in the
Schedules is for identification only; the use of a word or symbol to describe
any item creates no warranty.
5.5.2. Except as noted on Schedule 2.1(a), the inventories
are currently useable and saleable in the normal course of business.
5.5.3. The Equipment and Furniture listed on Schedule 2.1(c)
are being sold "as is, where is" and Seller makes no representations or
warranties concerning its condition, except Seller represents that the Equipment
is in useable condition, subject to normal "wear and tear" .
5.5.4. All Business Intellectual Property listed on Schedule
2.1(e) is transferable to Buyer without the consent or participation of any
third party, except that such representation and warranty is made only to the
best of Seller's knowledge with respect to certain Business Intellectual
Property, as designated as Schedule 2.1(e). Except as indicated in Schedule
2.1(e), Seller or WEC owns all such items outright, pays no royalty, and is
required to pay no royalty, to anyone under any of them, and has the right to
bring actions for their infringement, except that such representation and
warranty is made only to the best of Seller's knowledge with respect to certain
Business Intellectual Property, as designated as Schedule 2.1(e). To the best of
Seller's knowledge, Seller owns (or possesses adequate and enforceable rights to
use) all trademarks, trade names, copyrights, patents, trade secrets and
processes presently used by Seller in connection with the Business. Seller has
received no notice to the effect that in the operation of its Business, it may
infringe any trademark, trade name, copyright or patent of another and to the
best of Seller's knowledge it is not infringing any trademark, trade name,
copyright or patent of another. Except as set forth on Schedule 5.4, no claim or
litigation is pending or threatened against Seller or WEC (i) contesting
Seller's or WEC's right to use any trademark or trade name, (ii) contesting the
validity of any copyright or patent listed on the Schedule, (iii) alleging
misuse, or (iv) seeking a remedy which would interfere with the operation of the
Business.
5.5.5. Except for: (i) assets owned by WEC and used by WEC on
behalf of Seller for accounting, billing, payroll and similar general and
administrative functions that WEC conducts on behalf of Seller as its
consolidated subsidiary, (ii) as described in Schedule 5.5.5, (iii) assets sold,
liquidated or otherwise disposed of in the ordinary course of business in
accordance with Section 2.1, and (iv) the Retained Assets, the Assets constitute
all of the assets that have been used by Seller in the conduct of the Business
since January 1, 1996, and, when conveyed to Buyer under this Agreement, will
enable Buyer to conduct the Business in all material respects in the same manner
as it has been conducted by Seller since January 1, 1996.
5.5.6. All of Seller's accounts receivable have arisen in the
ordinary course of business and reflect bona fide business arrangements; no
payor has given Seller written notice of any inability to pay such account
receivable in due course or of any claim or defense against payment of such
account receivable; to the best of Seller's knowledge, no oral statements to
such effect have been made to Seller; to the best of Seller's knowledge, no
basis exists for any payor to raise any claim or defense against payment with
respect to any such account receivable; and Schedule 5.5.6 sets forth a true and
correct statement regarding the aging of such accounts receivable as of the date
of such Schedule (and Seller will prepare and deliver to Buyer a revised
Schedule 5.5.6, which sets forth such information as of the Closing Date in
connection with the Purchase Price adjustment procedure set forth in Section
4.3).
5.6. Employees. Schedule 5.6 is a listing of all current employees
who are involved with the Business (the "Business Employees"). Seller does not
have any employment contracts with any of the Business Employees which are not
terminable at will.
5.7. Taxes. All federal, state and local tax returns, estimates,
reports, declarations and forms (collectively, "Returns") which are required to
be filed by Seller and that are Related to the Business have been prepared and
timely filed. Except for taxes set forth on Schedule 5.7 which are being
contested in good faith and by appropriate proceedings, the following taxes have
(or by the Closing Date will have) been duly and timely paid: (a) all taxes
shown to be due on the Returns; and (b) all taxes that are or may become payable
by Seller or chargeable as a lien upon the Purchased Assets in connection with
Seller's operation of the Business. All taxes required to be withheld by or on
behalf of the Seller with respect to the Business and Business Employees have
been withheld, and such withheld taxes have either been duly and timely paid to
the proper Governmental Authority or, if such payment is not yet due, set aside
in accounts for such purpose and will be paid when due.
5.8. Permits. Seller has all material permits that are required by any
Governmental Authority to operate the Business as conducted by Seller. Such
permits, and all other material licenses, rights and authorities issued by the
State of North Carolina and other states, the United States, and any
municipality, foreign or domestic Governmental Authority and any and all
applications for same, which authorize Seller to conduct the Business are
identified on Schedule 5.8. Seller is in material compliance with all such
permits. To the best of Seller's knowledge, since January 1, 1992, Seller has
received no notice in writing from any Governmental Authority on account of any
alleged violation of any such license, right, or authority. Buyer acknowledges
that such permits, licenses, rights and authorities may not be transferable to
Buyer.
5.9. Environmental Compliance.
(a) Except to the extent specified on Schedule 5.9, (i) except
as permitted by and in accordance with applicable law, neither Seller, nor, to
the best of Seller's knowledge, any other person, has engaged in or permitted
any operations or activities upon, or any use or occupancy of, all or any
portion of the Real Property, resulting in the emission, release, discharge,
dumping or disposal of any Hazardous Substances on or under the Real Property,
(ii) to the best of Seller's knowledge, no Hazardous Substances have migrated
from the Real Property onto or beneath other properties, and (iii) to the best
of Seller's knowledge, no Hazardous Substances have migrated from other
properties onto or beneath the Real Property.
(b) Except to the extent specified on Schedule 5.9, to the
best of Seller's knowledge: (i) there is not nor has there ever been
constructed, placed, deposited, stored, disposed of or located on the Real
Property any asbestos in any form by or on behalf of Seller or any other person,
(ii) no underground treatment or storage tanks or gas or oil wells, are or have
been located on the Real Property, (iii) there are no polychlorinated biphenyls
(PCBs) or transformers, capacitors or other equipment which contains dielectric
fluid containing PCBs at levels in excess of fifty parts per million (50 ppm)
constructed, placed, deposited, disposed of or located on the Real Property,
(iv) the uses of and activities of Seller on the Real Property have at all times
complied in all material respects with all applicable Environmental Laws, (v)
Seller has obtained all permits necessary under applicable Environmental Laws to
conduct the Business at the Real Property, (vi) neither the Seller nor any other
person or entity has received any notice or other communication from a
Governmental Authority concerning any alleged violation of Environmental Laws,
whether or not corrected to the satisfaction of the appropriate authority, or
any notice or other communication concerning alleged liability for Environmental
Damages in connection with the Real Property, and (vii) there exists no
judgment, decree, order, writ or injunction outstanding, or litigation, action,
suit, claim (including citation or directive) or proceeding pending or
threatened, relating to the alleged violation of Environmental Laws, or from the
suspected presence of Hazardous Materials thereon or potential migration thereto
or therefrom.
5.10. Labor Controversies. With respect to the employees of the
Business, to the best of Seller's knowledge, Seller is in compliance in all
material respects with all federal, state and local laws, rules and regulations
relating to the employment of labor, employment discrimination, employee welfare
and labor standards which are applicable to it. No proceedings are pending
before any court, government agency or instrumentality or arbitrator relating to
labor matters, and to the best knowledge of Seller, there is no pending
investigation by any Governmental Authority or threatened claim by any such
agency or other person with respect to Seller relating to labor or employment
matters. Except for the Employee Benefit Plans, Seller is not a party to any
agreement or contract with any union, labor organization, employee group, or
other entity or individual which affects the employment of employees of the
Business, including but not limited to, any collective bargaining agreements or
labor contracts. To the best of Seller's knowledge, no organizational activity
is currently underway with respect to the Business Employees.
5.11. Violations and Defaults. Seller is not in violation of any law,
regulation, or order of any court or Governmental Authority which would have a
material adverse effect, in the aggregate, on the Assets, the Assumed
Liabilities, and the Business. Seller is not in default in the payment of
principal or interest on any indebtedness for borrowed money, nor is Seller in
default or breach under the terms of such indebtedness. To Seller's knowledge,
no event has occurred and no condition exists which, with the passage of time or
the giving of notice, or both, would constitute such a default or breach by
Seller. Seller is not in default under, or in violation of the provisions of (a)
any provisions of its Articles of Incorporation or Bylaws, or (b) to the best of
Seller's knowledge, any provision of any franchise or license, promissory note,
indenture or any evidence of indebtedness or security therefor, any lease,
contract, purchase or other commitment or any other agreement by which it or any
of its property is bound which, in any such case, could materially adversely
affect the consummation of the transactions contemplated by this Agreement, or
the Assets, the Assumed Liabilities and the Business, in the aggregate, nor, to
the best of Seller's knowledge, is Seller in violation of any applicable
statute, law, ordinance, decree, order, rule or regulation of any Governmental
Authority which may reasonably be anticipated to result in any material adverse
effect on the transactions contemplated by this Agreement, or the Assets, the
Assumed Liabilities and the Business, in the aggregate.
5.12 [Omitted]
5.13. Leases. Set forth on Schedule 2.1(d) hereof is a list of each
Lease for real or personal property which involves payments by Seller
aggregating in excess of $1,000 annually. The property covered by the terms of
the Leases is currently occupied or used by Seller as lessee under the terms of
said Leases for the Business. All rentals due under the Leases have been paid
and, to the best of Seller's knowledge, there exists no default by Seller under
any of the Leases which would have a material adverse effect on the operation of
the Business which cannot be cured without material penalty to Seller under the
terms of said Leases and, to the best of Seller's knowledge, no event has
occurred which, with the passage of time or the giving of notice, or both, would
result in any event of default thereunder by Seller or prevent Seller,
currently, or Buyer, after consummation of the transactions contemplated
hereunder, from exercising or obtaining the benefits thereunder. To the best of
Seller's knowledge, all of the Leases are valid and in full force and effect.
5.14. Customer Contracts. To the best of Seller's knowledge: (i)
Schedule 2.1(f) is a list of all of the Contracts which have not been completed
as of the Closing Date or with respect to which the warranty period has not
expired as of the Closing Date, (ii) each of the Contracts is valid and
subsisting and is currently in full force and effect according to the terms
thereof, (iii) Seller has not assigned any rights thereto, (iv) there exists no
event of default under any Contract by Seller or by the other party thereto, and
(v) no event of default by Seller has occurred and is continuing which would
prevent Buyer from exercising or obtaining the benefits thereunder (including
any options contained therein), would cause the acceleration of any obligation
of Seller under any of such contracts, or would cause the creation of a lien or
encumbrance upon any of the Assets which would be material to the Business.
5.15. Contracts and Commitments. Except as set forth on attached
Schedule 5.14, Seller does not have outstanding:
(a) Any single contract, including consulting contracts,
providing for an expenditure in excess of $10,000, or contracts in the aggregate
providing for expenditures in excess of $10,000 for the purchase, leasing or
licensing of any real property, machinery, equipment, software or other items
which are in the nature of a capital investment, or for consulting services.
(b) Any loan agreement, indenture, promissory note, mortgage,
conditional sales agreement, guaranty, surety agreement, installment debt
agreement or other similar type agreement.
(c) Any contract for sale or purchase of materials, products,
or supplies which contains an escalator, renegotiation or redetermination clause
or which establishes a commitment for sale or purchase for a fixed term, except
for those contracts which (A) are cancelable by Seller on thirty (30) days'
notice or less without penalty or (B) involve payments by Seller of less than
$5,000 per year.
(d) Any other material contract or commitment (other than the
Contracts) which is not cancelable on thirty (30) days notice or less without
penalty.
5.16. Discrimination, Occupational Safety and other Statutes and
Regulations. No person or party (including, but not limited to, any Governmental
Authority) has any claim against Seller pending before any court or
administrative agency, and, to the best of Seller's knowledge, no claim of such
nature has been threatened against Seller in writing within the two (2) year
period prior to the Closing, arising out of any statute, ordinance or regulation
relating to discrimination in employment or employment practices or occupational
safety and health standards (including, but without limiting the foregoing, the
Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964, or the Age
Discrimination in Employment Act of 1967, all as amended, where applicable).
5.17. ERISA.
(a) Schedule 5.17 lists all profit sharing, pension or
retirement plans, programs, arrangements or agreements, and each other employee
benefit plan, program or agreement maintained or contributed to or required to
be contributed to in connection with the employment of any employee or
terminated employee with the Business, whether formal or informal (individually,
a "Plan", and collectively, the "Employee Benefit Plans" or "Plans"). Seller
does not have any formal plan or commitment, whether legally binding or not, to
create any additional Plan or modify or change any existing Plan that would
affect any employee or terminated employee of the Business.
(b) Except as set forth in Schedule 5.17B, with respect to
each Plan, the Seller and each such Plan is, and at all times has been, in
compliance in all material respects with all applicable laws including, without
limitation, the Code and ERISA. All contributions, premiums or other payments
required by the Plans have been made on or before their due dates. There are no
pending or, to the best of Seller's knowledge, threatened claims under, by or on
behalf of any of the Plans, by any employee or beneficiary covered by any such
Plan, or otherwise involving any such Plan (other than routine claims for
benefits), nor have there been any "prohibited transactions" within the meaning
of ERISA or the Code. Each Plan that is intended to be qualified under Section
401(a) or Section 401(k) of the Code has received a favorable determination
letter from the Internal Revenue Service to that effect, and to the best of
Seller's knowledge, no fact or event has occurred from the date thereof which
would adversely affect the qualified status of such Plans. No Plan maintained by
Seller is "top heavy" within the meaning of Section 416(g) of the Code.
5.18. Financial Statements. The Balance Sheet has been prepared, in all
material respects, in accordance with Seller's regular accounting principles as
required by WEC, and fairly presents, in all material respects, the financial
position of Seller as of the date of such Balance Sheet.
6. Buyer's Representations and Warranties. Buyer makes the
following representations and warranties, each of which is true and correct on
the date hereof (except where any such representation and warranty expressly is
made as of another date):
6.1. Organization and Authority. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of Colorado.
The execution and delivery of this Agreement by Buyer and the performance of
Buyer's obligations under this Agreement, have been duly authorized by all
necessary corporate action.
6.2. Due Execution. This Agreement has been duly and validly executed
and delivered by Buyer and constitutes the valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms. Each other
document to which Buyer is specified to be a party has been duly executed and
delivered by Buyer and constitutes the valid and binding obligation of Buyer
enforceable against Buyer in accordance with its terms.
7. Covenants.
7.1. Preservation of Records. Buyer shall preserve and maintain any and
all material business records and other documentation transferred to it
hereunder for a period of three (3) years from the Closing Date and will grant
to Seller access to such records and documentation in the event Seller has a
reasonable business need for access to such records. In addition, Buyer within
seven (7) years from the Closing Date will not destroy any such records or
documentation without first offering to Seller the opportunity to take delivery
of such records or documentation at Seller's expense.
7.2. Cooperation by Parties.
7.2.1. Seller and Buyer will use reasonable efforts to secure
all consents, approvals, novations and authorizations as shall be required in
order to transfer the Leases to the Buyer and to assign the Contracts to Buyer
with such modifications or amendments as are acceptable to Buyer, Seller and the
other party(ies) to such Contracts. No Contract or Lease shall be deemed to be
transferred by this Agreement prior to obtaining the consent of such other
party, if a transfer without such consent would be deemed to be a breach of such
Contract or Lease.
7.2.2. To the extent that the consents, approvals, novations
and authorizations referred to in Section 7.2.1 are not obtained by Seller, or
until the impediments to the assignment or transfer referred to therein are
resolved, Seller shall, commencing with the Closing Date, and for the remainder
of the life or term of the Leases and Contracts, use all reasonable efforts, to
(i) provide to Buyer, at the request of Buyer, the benefits of the Leases and
Contracts referred to in Section 7.2.1 for which such consents, approvals,
novations or authorizations are not obtained, (ii) cooperate in any reasonable
and lawful arrangement designed to provide such benefits to Buyer, including
without limitation subcontracts, without incurring any financial obligation to
Buyer, and (iii) enforce, at the request of Buyer and for the account of Buyer,
any rights of Seller arising from the Leases and Contracts referred to in
Section 7.2.1 for which such consents, approvals, novations or authorizations
are not obtained, against any third Person (including a Governmental Authority),
including the right to elect to terminate in accordance with the terms thereof
upon the advice of Buyer. The failure to obtain any necessary consent or waiver
with respect thereto shall not be a breach of this Agreement or entitle Buyer to
an adjustment of the Purchase Price.
7.2.3. To the extent that Buyer is provided the benefits
pursuant to this Section 7.2 of any Leases or Contracts referred to in Section
7.2.1, Buyer shall perform for the benefit of any third Person (including a
Governmental Authority), the obligations of Seller thereunder or in connection
therewith, but only to the extent that such action by Buyer would not result in
any default thereunder or in connection therewith.
7.2.4. Seller's obligation to transfer to Buyer software
presently licensed to Seller shall not require that Seller obtain the written
consent to a software license transfer if the software is what is commonly
understood in the industry to be "shrink wrap" software, provided that the
"shrink wrap" software license is not part of a master license with Seller that
prohibits a transfer to a third party without consent or payment of a fee.
7.3. Further Assurances.
At any time and from time to time after the Closing Date, Seller and
Buyer shall, at the reasonable request of the other, execute and deliver any
further instruments or documents and take all such further action as such other
Party may reasonably request in order to consummate more effectively the
transactions contemplated hereby.
7.4. Non-Competition. Solely for the benefit of Buyer, Seller and WEC
agree that neither of them, and no entity which is an Affiliate of Seller or WEC
shall: (i) for a period of three (3) years after the Closing Date, engage in the
business of geotechnical mapping in the United States or its possessions or
territories; or (ii) for a period of five (5) years after the Closing Date,
solicit the Business' or Buyer's customers to sell, or to sell to such
customers, any geotechnical mapping products or services of the type sold and
provided by Seller as of the Closing Date. Nothing in this Section 7.4 shall be
deemed to prohibit Seller, WEC or any Affiliate of Seller or WEC from:
(a) acquiring or holding equity interests in any entity as
investments of WEC's pension funds or funds of any other employee benefit plan
of Seller or WEC, whether or not such entity is engaged in the same business as
the Business;
(b) acquiring or holding less than a majority of the
equity interests in any entity, whether or not such entity is engaged in the
same business as the Business;
(c) performing any act or conducting any business
contemplated by this Agreement or the agreements contemplated hereby.
7.5. Use of Certain Names and Marks by the Buyer.
(a) To the extent that any trademarks, service marks, brand
names or trade, corporate or business names consisting of, or derived from, or
including, the word "Westinghouse", in whole or in part, or the "Circle W" mark,
are used by Seller or the Business on stationery, signage, invoices, receipts,
forms, packaging, advertising and promotional materials, product, training and
service literature and materials, computer programs or like materials existing
on the Closing Date and included in the Assets ("Marked Materials") or appear on
inventory included in the Assets at the Closing, Buyer may use such inventory
after Closing and, for a period of twelve (12) months after Closing, use such
Marked Materials without altering or modifying such inventory or Marked
Materials, or removing such trademarks, service marks, brand names, or trade,
corporate or business names, provided that Buyer will (A) use such Marked
Materials only in a manner consistent with prior practice of Seller and (B) at
the end of such twelve-month period, (i) remove or obliterate such trademarks,
service marks, brand names or trade, corporate or business names from any
remaining (unused) Marked Materials or appropriately mark or otherwise alter or
modify such Marked Materials so as to indicate clearly that such Marked
Materials and their use are no longer associated with or related to Seller or
(ii) destroy any unused Marked Materials (in each case, other than inventory or
packaging thereof on which such trademarks, service marks, brand names or trade,
corporate or business names have been placed by either Seller or Buyer in the
course of manufacture of such inventory). Buyer will not use such trademarks,
service marks, brand names or trade, corporate or business names in any manner
other than as provided in this Section 7.5 or as otherwise permitted by written
agreement with, or with the prior written consent of, Seller. In addition, for a
period of twelve (12) months after Closing, Buyer may use the words "formerly a
subsidiary of Westinghouse Electric Corporation" in connection with activities
of Buyer which are consistent with Seller's conduct of the Business.
(b) Buyer admits the validity of the "Westinghouse" name and
mark and the "Circle W" mark. Any and all rights and goodwill that might accrue
by the use by Buyer of any marks of Seller pursuant to Section 7.5(a) shall
inure to the sole benefit of Seller. Nothing contained in the second sentence of
this Section 7.5(b) is intended to require Buyer to make any payments to Seller
for or with respect to such benefits. Buyer undertakes no duty to defend any
alleged infringements of such names and marks.
(c) Buyer will not, and will not permit any of its Affiliates
to, use or register in any country any trademark or trade name confusingly
similar to the names "Westinghouse" or the "Circle W" mark.
(d) Seller or WEC may terminate the rights granted under
Section 7.5(a) at any time upon written notice to Buyer if (i) in the reasonable
opinion of Seller or WEC, the use by Buyer of the name "Westinghouse" or the
"Circle W" mark has brought or has the potential to bring discredit to Seller or
WEC, its name or any of its trademarks, provided, that use by Buyer of the name
"Westinghouse" or the "Circle W" mark in a manner substantially identical to the
use thereof by the Business prior to the Closing shall be deemed not to bring or
have the potential to bring discredit to Seller or WEC, its name or any of its
trademarks, or (ii) Buyer is in material breach of its obligations under this
Section 7.5.
(e) If, in the reasonable opinion of Seller or WEC, any use of
the name "Westinghouse" or the "Circle W" mark, as specifically permitted in
Section 7.5(a), fails to conform to the existing standards of quality as
practiced by Seller prior to the Closing Date, Buyer will promptly cease the use
of the name "Westinghouse" and the "Circle W" mark.
(f) Notwithstanding anything in this Agreement to the
contrary, nothing contained in this Agreement shall be deemed to prohibit Buyer
from using the names "Landmark" or "Landmark GIS, Inc." or any other names in
combination therewith, as long as the name "Westinghouse" is not used. Seller
will promptly after Closing amend its articles of incorporation to change its
name to a name that does not include "Landmark" or "GIS", and will assign to
Buyer at the Closing an assignment, in form and substance reasonably
satisfactory to Buyer, of all of its rights to use such names.
7.6. Performance Bonds. The performance bonds listed on Schedule 7.6
(the "Bonds"), have been posted by Seller to secure Seller's performance of
certain obligations under Contracts, and with respect to bids that have been
awarded but no contracts have been executed as of the date of this Agreement.
Seller shall cause such Bonds to remain in place and in effect after Closing,
except that any payments necessary to keep such Bonds in place after Closing
will be the responsibility of Buyer. At Closing, Buyer shall deliver to Seller
an Indemnification Agreement, in the form attached as Exhibit 7.6, under the
terms of which Buyer agrees to indemnify, defend and hold harmless Seller and
WEC from and against any and all Damages resulting from any call or draw against
or upon the Bonds to the extent that such Damages arise out of any breach by
Buyer of its obligations under the Assumption Agreement.
7.7. Cooperation for Audit. Seller and WEC will, at Buyer's request,
provide all information to Buyer that is reasonably necessary for Buyer's
independent accounting firm to perform an audit of the financial statements of
Seller for the period beginning January 1, 1995, and ending on or about December
31, 1995, and a review of such financial statements for the period beginning on
or about January 1, 1996 and ending on or about the Closing Date. Seller and WEC
also will cooperate to provide, at Buyer's request and expense, any additional
information concerning financial information or data relating to Seller or the
Business, but Seller's and WEC's obligation to cooperate shall be limited to
providing to Buyer access to any financial information or data relating to
Seller or the Business which either is in Seller's or WEC's custody, possession
or control or can be obtained without undue effort. The costs of the independent
accounting firm that conducts the audit will be borne by Buyer.
8. Mutual Covenants.
8.1. Employees. Buyer will make offers of employment to each and every
Business Employee, with current wages and benefits as specified in Schedule 8.1.
Nothing contained herein is intended to require Buyer to continue the employment
of any particular employee or employees for any period of time after the
Closing. Seller intends that Buyer's offer of employment with the foregoing
wages and benefits to each Business Employee creates a successor employer (as
that term is commonly understood in acquisition/divestiture transactions)
relationship and, therefore, that no severance, shutdown, or permanent job
separation benefits shall be owed by Seller to such Business Employees. The
Business Employees who accept Buyer's offer of employment are referred to herein
as the "New Employees".
8.2. Employee Benefit Plans.
8.2.1. Termination of Coverage Under Seller's Employee Benefit
Plans and Coverage Under Buyer's Employee Benefit Plans. Effective as of the
Closing Date, each Business Employee who is an active participant in Seller's
Employee Benefit Plans shall cease to be an active participant and all of such
Business Employees shall become eligible to participate in Buyer's employee
benefit plans in accordance with the applicable provisions of this Agreement and
the terms and conditions of each such plan.
8.2.2. Credit for Service. Buyer shall grant to each New
Employee credit for his or her service with Seller and/or WEC prior to the
Closing Date for the purposes of eligibility and vesting, but not for benefit
accrual, under Buyer's employee benefit plans and other welfare and fringe
benefit arrangements applicable to the New Employees (including but not limited
to any 401(k) plans, pension plans and arrangements providing retiree health,
disability, vacation, severance and sick time benefits). Such credit for service
will apply so that (a) any period of service of such New Employee with Seller
and/or WEC will be treated as if such New Employee had been an employee of Buyer
for such period, (b) the rules of eligibility for participation, vesting of
benefits, and seniority credits for past service will be determined under the
terms of Buyer's employee benefit plans, and (c) no such New Employee will be
entitled to any retroactive payment or crediting of benefits with respect to
periods prior to the Closing Date, except as specifically set forth in this
Section 8.2.
8.2.3 Welfare and Fringe Benefits. (a) Buyer shall grant
credit for deductibles and co-payments previously paid during any partial
Buyer's employee-benefit -plan-year in which any New Employees first became
eligible to receive coverage under Buyer's employee benefit plans. In addition,
Buyer's employee benefit plans shall not exclude from coverage any pre-existing
condition of any of the New Employees, but any such New Employee's eligibility
for participation in any applicable Buyer's employee benefit plan from and after
the Closing Date shall be contingent upon his satisfaction of any applicable age
restriction or any employment waiting period, considering his combined
continuous employment with Seller and/or WEC and Buyer for the purpose of
satisfying any such waiting period.
(b) All claims of New Employees which are made against
Seller's Employee Benefit Plans and which arise in connection with incidents
occurring prior to the Closing shall be Retained Liabilities. All claims of New
Employees which are made against Buyer's employee benefit plans and which arise
in connection with incidents occurring after the Closing shall be Assumed
Liabilities.
8.2.4 Seller's Employee Benefit Plans. (a) Immediately upon
Closing, Seller's Employee Benefit Plans shall terminate as follows: (i) the
welfare plans shall only provide for run-out claims after the Closing; and (ii)
Seller's 401(k) plan shall be submitted to the IRS for approval of the
termination application within a reasonable time after Closing. When the IRS
approval is received, the New Employees' account balances shall be distributed
to the New Employees.
(b) It shall be Seller's responsibility for taking all actions
necessary to terminate Seller's Employee Benefit Plans and to file all necessary
reports, disclosures and applications with respect thereto. Buyer shall
cooperate as may be reasonably requested by Seller with respect to each of the
filings, calculations and other actions contemplated by this Section 8.2.4 and
in obtaining any governmental approvals required in connection therewith.
(c) Seller shall retain full responsibility and liability for
offering and providing "continuation coverage" to any "qualified beneficiary"
who is covered by a "group health plan" sponsored or contributed to by the
Seller and who has experienced a "qualifying event" or is receiving
"continuation coverage" on or prior to the Closing Date. "Continuation
Coverage," "qualified beneficiary," "group health plan," and "qualifying event"
all shall have the meanings given such terms under Code Section 4980B. Seller
will indemnify, defend, and hold harmless Buyer and its affiliates, from and
against any acto or omission of Seller which relates to "continuation coverage"
or because Buyer is deemed to be a successor employer to Seller.
8.3. Payroll Taxes. (a) Seller and Buyer shall (i) treat Buyer as a
"successor employer" and Seller as a "predecessor" within the meaning of
sections 3121(a)(1) and 3306(b)(1) of the Code, with respect to New Employees
who are employed by Buyer for purposes of taxes imposed under the United States
Federal Unemployment Tax Act ("FUTA") or the United States Federal Insurance
Contributions Act ("FICA") and (ii) cooperate with each other to avoid, to the
extent possible, the filing of more than one IRS Form W-2 with respect to each
such New Business Employee for the calendar year within which the Closing Date
occurs.
(b) At the request of Buyer with respect to any particular
applicable tax law relating to employment, unemployment insurance, social
security, disability, workers' compensation, payroll, health care or other
similar tax other than taxes imposed under FICA and FUTA, Seller and Buyer shall
(i) treat Buyer as a successor employer and Seller as a predecessor employer,
within the meaning of the relevant provisions of such tax law, with respect to
New Employees who are employed by the Buyer and (ii) cooperate with each other
to avoid, to the extent possible, the filing of more than one individual
information reporting form pursuant to each such tax law with respect to each
such New Employee for the calendar year within which the Closing Date occurs.
9. Indemnification.
9.1. Indemnification by Seller. Subject to the other provisions of this
Article, from and after the Closing Date, Seller shall indemnify and hold Buyer
and its employees, representatives, officers, directors and affiliates ("Buyer
Group") harmless from and against any and all Damages suffered by Buyer or any
other member of the Buyer Group to the extent resulting from, arising out of, or
incurred with respect to: (a) the breach of any representation, warranty,
covenant or agreement made by Seller in this Agreement; provided, however, that
if Buyer waives any breach of a representation, warranty, or covenant in
accordance with the procedures specified in Section 9.3, Seller shall not be
required to indemnify and hold the Buyer Group harmless from or against any
Damages to the extent that such Damages result from, arise out of or are
incurred with respect to such breach; (b) the Retained Liabilities; (c) the use
of the Assets by Seller prior to the Closing Date (except to the extent that
such Damages are, or arise from, Assumed Liabilities); and (d) from any lien or
claim by any Person under applicable Bulk Sales Laws (except to the extent that
such claim arises from an Assumed Liability).
9.2. Indemnification by Buyer. Subject to the other provisions of this
Article, from and after the Closing Date, Buyer shall indemnify and hold Seller
and its employees, representatives, officers and directors and affiliates
("Seller Group") harmless from and against any Damages suffered by Seller or any
other member of the Seller Group resulting from, arising out of, or incurred
with respect to: (a) the breach of any representation, warranty, covenant or
agreement made by Buyer in this Agreement; provided, however, that if Seller
waives any breach of a representation, warranty, or covenant, Buyer shall not be
required to indemnify and hold the Seller Group harmless from or against any
Damages to the extent that such Damages result from, arise out of or are
incurred with respect to such breach; (b) the Assumed Liabilities; and (c) the
use of the Assets by Buyer after the Closing Date.
9.3. Notice and Resolution of Claim. An indemnified party hereunder
shall promptly give written notice to the indemnifying party after obtaining
knowledge of any claim against the indemnified party as to which recovery may be
sought against the indemnifying party because of the indemnity set forth above
specifying, to the extent feasible and in reasonable detail, the nature of the
claim and the basis for the indemnified party's claim of indemnification, but
the failure to give such written notice promptly will not relieve the
indemnifying party of its obligation to indemnify except to the extent that the
indemnifying party's rights are prejudiced by such failure. If such indemnity
shall arise from the claim of a third party, the indemnified party shall permit
the indemnifying party to assume the defense of any such claim or any Action
resulting from such claim in the manner and to the extent set forth in Section
9.4.
9.4. Defense of Third-Party Claim. If any claim, demand or liability is
asserted by any third party against any indemnified party, the indemnifying
party shall have the right, but not the obligation to, defend and control the
defense of any action or proceeding brought against the indemnified party in
respect of any indemnifiable claim. If, within ten (10) business days after
receiving written notice thereof, the indemnifying party fails to assume the
defense of the matter with respect to which indemnification is being sought, by
notice to the indemnified party stating that the indemnifying party assumes the
duty to defend without qualification, then the indemnified party shall have the
right to conduct and control the defense, compromise or settlement of any
indemnifiable claim on behalf of and for the account and risk of the
indemnifying party who shall be bound by the result so obtained to the extent
provided herein. If, after a request to defend any action or proceeding, the
indemnifying party fails to provide the required notice within such 10-day
period, a recovery against the indemnified party suffered by it in good faith
(whether by settlement, judgment, arbitration award or otherwise) will entitle
the indemnified party to be indemnified by the indemnifying party with respect
to such recovery. Notwithstanding the other provisions of this Section 9.4, the
Party controlling the defense of an action or proceeding shall not be entitled
to cause the other Party to plead guilty or no contest to any criminal charge;
nor shall the indemnifying party, if controlling the defense of a matter, have
any right to compromise or settle any action for a consideration other than the
payment of money damages by the indemnifying party, except with the consent of
the indemnified party (which the indemnified party may withhold in its sole
discretion if such compromise or settlement would impose any restriction on the
business or operations of such indemnified party). A Party which is not
controlling the defense of a claim pursuant to this Section 9.4 shall not settle
such claim without the consent of the Party controlling the defense, which
consent shall not be unreasonably withheld. The indemnified party shall have the
right to employ counsel for and participate in the defense of any indemnifiable
claim, the defense of which is assumed by the indemnifying party, but the fees
and expenses of such counsel shall be at the expense of the indemnified party.
The parties shall cooperate reasonably in the defense of all third party claims
which may give rise to indemnifiable claims hereunder. In connection with the
defense of any claim, each party shall make available to the Party controlling
such defense, any books, records or other documents not protected by
attorney-client privilege within its control that are necessary or appropriate
for such defense.
9.5. Limits on and Conditions of Indemnification.
9.5.1. Threshold Amount and Limitation. Seller shall not be liable to
any member of the Buyer Group (for Damages, for indemnification under Section
9.1, or otherwise) with respect to the breach of any representation, warranty,
covenant or agreement contained in this Agreement unless and until the aggregate
liability of Seller with respect to any such breach or breaches would, but for
this Section 9.5, exceed $25,000.
9.5.2. Limit of Liability. The aggregate liability of Seller (for
Damages, for indemnification, under Section 9.1, or otherwise), relating to this
Agreement, the Assets or the Business, including without limitation, for
breaches of representations and warranties under this Agreement, shall not
exceed Two Hundred Fifty Thousand Dollars ($250,000.00), except that to the
extent that Damages arise as a result of the breach of Seller's representations
and warranties in Sections 5.9, 5.13, 5.14, or 5.15, and to the extent that such
Damages together with all other Damages are in excess of Two Hundred
Seventy-Five Thousand Dollars ($275,000.00), then the amount of such Damages in
excess of Two Hundred Seventy-Five Thousand Dollars ($275,000.00), that are
attibutable to the breach of the representations and warranties contained in
Sections 5.9, 5.13, 5.14, or 5.15, shall be subject to indemnification by
Seller, but only in an amount equal to the lesser of: (i) fifty percent (50%) of
such excess Damages, or (ii) Two Hundred Fifty Thousand Dollars ($250,000.00).
9.5.3. Consequential Damages. No party shall be liable to any Person
under this Agreement, and no party shall be entitled to indemnification, for
Damages arising out of any lost profits, loss or interruption of business, loss
of business opportunities or goodwill, cost of capital, or any indirect,
special, incidental or consequential Damages or any cost or expense related to
such Damages. The limitations against liability contained in this Agreement
shall apply whether the action in which recovery of Damages is sought is based
on contract, tort (including sole, concurrent or other negligence and strict
liability), statute or otherwise. To the extent permitted by law, any statutory
remedies which are inconsistent with the provisions of these terms are hereby
waived.
9.5.4. Other Limitations. (a) No Party shall be liable to or required
to indemnify any Person under this Agreement for Damages to the extent that the
same are (i) caused, contributed to or exacerbated by the other Party, or its
employees, agents, contractors, subcontractors, or tenants, on or after the
Closing Date; or (ii) recovered from or against any third party (including any
insurance proceeds); and (b) Seller's indemnity is conditioned upon Seller
having sole and exclusive responsibility to communicate and to negotiate with
third-party claimants (including cognizant regulatory agency(ies) in order to
settle such claims. If any remediation or corrective action is required on any
Real Property, Seller shall have a reasonable opportunity to perform such
remediation or corrective action, and Buyer grants to Seller a continuing right
of reasonable access to such properties for the purpose of Seller's undertaking
such remediation or corrective action. Buyer agrees to use reasonable efforts to
obtain a similar right of access from Buyer's tenants, if any, and if required.
Furthermore, Buyer shall cooperate in a reasonable manner with Seller towards
effecting such remediation or corrective action; Buyer shall provide Seller with
reasonable access to any of its employees and shall provide Seller with copies
of any studies, analytical test results or reports in Buyer's possession with
respect to environmental conditions on any of the Real Properties.
9.5.5. Exclusive Remedy. The remedies provided for under this Article
shall in the absence of fraud or intentional misrepresentation, be the sole and
exclusive remedies of the Parties with respect to a breach of this Agreement,
the Assets, the Assumed Liabilities, the Business, the Business Employees and
the transactions contemplated herein. Without limiting the generality or effect
of the foregoing, as a material inducement to the other party to enter into this
Agreement, except for the remedies set forth in this Article (including without
limitation the remedies set forth in Sections 9.1 and 9.2), each of the Parties
hereby waives, to the maximum extent permitted by law, any claim or cause of
action which it might assert, including under the common law, federal, state or
foreign securities, trade regulation, environmental or other law, including, but
not limited to, CERCLA, TSCA, RCRA, and any comparable state or local laws, by
reason of any alleged breach of representations and warranties contained herein,
this Agreement, the matters covered hereby, the events giving rise to this
Agreement, the Assets or the Business. Buyer shall not be entitled to rescission
of this Agreement. Notwithstanding the foregoing, for a period of five (5) years
after the date of this Agreement, in addition to any rights which Buyer may have
under this Agreement, Buyer may assert against Seller any claims for
contribution which Buyer may have under CERCLA, TSCA, RCRA, or any comparable
state and/or local environmental laws, arising out of claims against Buyer.
10. Miscellaneous.
10.1. Severability. If any provision of this Agreement as applied to
any party or to any circumstance shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of such provision in any other circumstances, or the
validity or enforceability of this Agreement.
10.2. Successors and Assigns, Third Party Beneficiaries. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the Parties hereto. This Agreement may
not be assigned by any Party without the express written consent of the other
Party, except Buyer may, at its sole election, assign to a wholly owned
subsidiary its rights to purchase the Assets hereunder, but in that event Buyer
shall not be relieved of its obligations to perform hereunder. This Agreement is
for the sole benefit of the Parties and no other person is intended to have any
legal or equitable rights hereunder, except as expressly provided in this
Agreement.
10.3. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which when taken together shall constitute the same instrument.
10.4. Waiver. Any of the terms or conditions of this Agreement may be
waived in writing at any time by the Party which is entitled to the benefits
thereof. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of such provision at any time in the future or a
waiver of any other provision hereof.
10.5. Expenses. Except as otherwise expressly provided for herein,
each Party shall pay all costs and expenses incurred by it or on its behalf in
connection with this Agreement and the transactions contemplated hereby.
10.6. Notices. Any notice, request, instruction, consent or other
document to be given hereunder by either Party to the other Party shall be in
writing and delivered as follows:
(a) If to Seller:
Westinghouse Landmark GIS, Inc.
c/o Westinghouse Electric Corporation
Science & Technology Center
1310 Beulah Road
Pittsburgh, PA 15235
Attn.: Allan Casanova
Director, Strategic Marketing
With copy to:
Office of the General Counsel
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, PA 15222
<PAGE>
(b) If to Buyer:
ASI Landmark, Inc.
1935 Jamboree Drive
Suite 100
Colorado Springs, CO 80920
Attn.: President
With copy to:
James F. Wood, Esq.
Sherman & Howard LLC
633 17th Street
Suite 3000
Denver, CO 80202
or at such other address for a Party as shall be specified in writing by that
Party. Any notice which is delivered to the addresses provided herein shall be
deemed to have been duly given to the Party to whom it is directed upon actual
receipt by such Party (or its agent for notices hereunder).
10.7. Bulk Sales Laws. Buyer waives compliance by Seller with the
requirements of all applicable laws, if any, relating to sales in bulk. If Buyer
wishes to provide notice to creditors, Seller shall assist Buyer with such
notices. Buyer and Seller shall agree on the form of any such notices.
10.8. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware applicable to agreements
made and to be performed wholly within such jurisdiction.
10.9. Arbitration and Governing Law.
(a) Either Party may seek recourse against the other Party in
any court of competent jurisdiction for temporary injunctive relief in order to
prevent an imminent breach of this Agreement by the other Party, to temporarily
enjoin an existing breach, or to enforce an arbitration award, but the merits of
any dispute between the Parties (including the awarding of permanent injunctive
relief) otherwise will be determined by binding arbitration in accordance with
the provision of this Section.
(b) Except as set forth in (a), all disputes arising out of or
related to this Agreement, and the exhibits to this Agreement, including any
claims that all or any part of any such agreements is invalid, illegal,
voidable, or void, will be settled by arbitration, to be conducted in accordance
with the provisions of this Section. Either Party may compel arbitration by
notice to the other Party. The Parties' duty to arbitrate under this Agreement
will survive the cancellation or termination of this Agreement.
(c) The arbitration proceedings will be conducted by one
arbitrator in Chicago, Illinois, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA") as then in effect.
Applicable substantive law will be the law of the State of Delaware. Within five
days after the notice compelling arbitration, the parties will select the
arbitrator; if they fail to agree within such five-day period, then the
arbitrator will be selected by the AAA in Chicago, Illinois. The arbitrator will
establish a schedule for the proceedings, which will include a discovery period
not to exceed 30 days, and will issue a final decision in writing.
(d) The arbitrator's decision will be final and binding on the
parties and may be enforced in any court having jurisdiction. If a party to this
Agreement does not act in a timely fashion in accordance with the terms of this
Agreement then, without further notice, the arbitrator may enter any relief
against such party as the arbitrator deems proper.
(e) Each party will advance an equal share of the arbitrator's
fees and administrative fees of arbitration. However, the arbitrator will award
to the prevailing party, if any, as determined by the arbitrator, all of the
prevailing party's costs and fees. "Costs and fees" means all reasonable pre-
and post-award expenses of the arbitration, including the arbitrator's fees,
administrative fees of arbitration, travel expenses, out-of-pocket expenses
(such as copying and telephone), court costs, witness fees, and attorneys' fees.
In addition, in the event of any action or proceeding to enforce an award or
determination made under this Agreement, the prevailing party will be entitled
to recover from the other party its reasonable attorneys' fees, costs and
expenses incurred in connection with such action or proceeding.
10.10. Public Announcements. The Parties shall consult with each other
before issuing any press releases or otherwise making any public statements with
respect to this Agreement and the transactions contemplated hereby and shall not
issue or cause or permit the issuance of any such press release or make any
public statement without the consent of the other (such consent not to be
unreasonably withheld), except as may be required by law or the rules of any
securities exchange to which a Party is subject.
10.11. Schedules. Disclosure of an item in any Schedule referenced by a
particular Section, to the extent that the existence of such item or its
contents be relevant to any other Section, shall be deemed to be disclosed for
the purpose of such other Section, whether or not an explicit cross-reference
appears. Disclosure of items that may or may not strictly be required to be
disclosed by this Agreement shall not be deemed to imply that such items are
material or that the inclusion of such items creates a standard of materiality.
10.12. Survival and Exclusivity of Respresentations. The
representations and warranties made in this Agreement, together with the
schedules referred to in this Agreement, are the exclusive representations and
warranties made by the parties with respect to the subject matter hereof. Such
representations and warranties shall survive the Closing Date for a period of
one (1) year from the Closing Date, except that the representations and
warranties of Seller in Sections 5.1 and 5.2 will survive forever and the
representations and warranties of Seller in Sections 5.7, 5.9, and 5.17 will
survive for a period of three (3) years. No Party shall have any obligation to
indemnify any person pursuant to this Agreement with respect to any breach of a
representation or warranty unless a specific claim shall have been validly made
hereunder on or prior to the applicable period set forth above, except that, if
a Party has a reasonable basis to believe that an indemnifiable claim will arise
and gives notice to the other Party concerning such matter within the applicable
period set forth above, then all rights of such Party to seek indemnification
with respect to such matter will survive.
10.13. Brokers; Indemnification. Buyer represents and warrants to
Seller, and Seller represents and warrants to Buyer, that neither of them has
employed any broker or finder in connection with the transactions contemplated
by this Agreement. Seller hereby agrees that it will indemnify and save Buyer
harmless, and Buyer hereby agrees it will indemnify and save Seller harmless,
from any claim for a commission, finder's fee or other obligation as a result of
anyone claiming a commission as a broker or finder for the transactions
contemplated by this Agreement, based on the respective acts of the other.
10.14. Entire Agreement; Amendment. This Agreement, constitutes the
sole understanding of the Parties, and supersedes all prior understandings,
agreements, and commitments, with respect to the subject matter hereof. No
amendment, modification or alteration of the terms or provisions of this
Agreement shall be binding unless the same shall be in writing and duly executed
by the Parties.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf as of the date first above written.
WESTINGHOUSE LANDMARK GIS, INC. ASI LANDMARK, INC.
By: /s/ Allan Casanova By: /s/ Sidney V. Corder
Title: Director of Strategic Marketing Title: President and Chief
and Development Executive Officer
<PAGE>
GUARANTY AND ACKNOWLEDGMENT
By this Guaranty and Acknowledgment (this "Guaranty"), Westinghouse
Electric Corporation, a Pennsylvania corporation ("WEC"), for the benefit of ASI
Landmark, Inc. and its assigns ("Buyer"), (a) guarantees performance by
Westinghouse Landmark GIS, Inc. ("Seller") of each of the obligations,
covenants, undertakings, and agreements of Seller in the Purchase Agreement set
forth above (the "Agreement"), and (b) agrees, on its own behalf, to the
provisions of Sections 7.4 and 7.7 of the Agreement. The foregoing obligations
in clause (a) of the preceding sentence (the "Obligations") are in all respects
continuing, absolute, and unconditional, and constitute a "guaranty of
performance" and not a "guaranty of collection." WEC waives all rights of
discharge with respect to the Obligations, except for full performance by
Seller, including, without limitation, any rights of discharge that might
otherwise be caused by reason of any action on the part of Buyer to release,
compromise, extend, alter, or modify any of the Obligations; or to release,
compromise, extend, alter, or modify any obligation of any nature of any other
obligor (including WEC) with respect to any of the Obligations. Buyer may resort
to or proceed against WEC for performance or payment regarding any of the
Obligations whether or not Buyer has proceeded against Seller or any other
obligor primarily or secondarily obligated with respect to any of the
Obligations, or has resorted to any properties securing any of the Obligations
or has pursued any other remedy. WEC expressly waives notice of the existence,
creation, release, compromise, extension, alteration, modification,
non-performance, or non-payment of any or all of the Obligations, and waives
presentment, demand, notice of dishonor, protest, and all other notices (except
the notices required to be given to Seller under the Agreement), and waives all
diligence in collection of or realization upon any payments on, or assurance of
performance of, any of the Obligations.
Dated as of this 15th day of July, 1996.
Westinghouse Electric Corporation
By: /s/ Allan Casanova
Title: Director of Strategic Marketing
and Development
