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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
Date of Report (Date of earliest event reported):
November 9, 1998
PDG ENVIRONMENTAL, INC.
(Exact name of registrant as specified in this charter)
Delaware 0-13667 22-2677298
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
300 Oxford Drive, Monroeville, PA 15146
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: (412) 856-2200
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ITEM 2 - ACQUISITION OR DISPOSITION OF ASSETS
Effective October 31, 1998, PDG Environmental, Inc. and subsidiaries (the
"Corporation") entered into an agreement (the "Agreement") with Environmental
Control & Abatement, Inc. ("EC&A"), Environmental Remediation Services, Inc.
("ERS") collectively (the "Businesses") and William A. Lemire ("Lemire") for the
purchase of selected assets and assumption of contracts of the Businesses. EC&A
owned and operated a business which conducted environmental remediation and
asbestos abatement, and ERS owned and operated a business which provides
environmental consulting.
As consideration for the purchase, the Corporation paid the Businesses $221,000
in cash and 177,500 shares of the Corporation and entered into a three-year
employment agreement with Lemire that provides for additional compensation in
addition to an annual salary. Additional compensation consists of 50% of the
operating cash flows generated by the Businesses for the period November 1, 1998
through October 31, 2001. The additional compensation is payable annually to
Lemire on January 31 of each year.
Additionally, the Corporation has agreed to pay up to $50,000 to compensate the
Businesses for any decline in value of the Corporation's stock from November 9,
1998 until November 9, 1999.
ITEM 7 - FINANCIAL STATEMENTS & EXHIBITS
(a) Financial Statements of Businesses Acquired
(b) Pro Forma Financial Information:
The Corporate notes that is impracticable to provide the
financial statements of the businesses acquired and
restated pro forma financial information at this time. It
expects to file the September 30, 1998 financial
statements of EC&A and ERS by January 20, 1999 along with
the related pro forma financial information.
(c) Exhibits
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PAGES OF
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(2) Asset Purchase Agreement, dated as of November 1, 1998 by
and among Environmental Control & Abatement, Inc.,
Environmental Remediation Services, Inc. and William A.
Lemire and Project Development Group, Inc. and PDG
Environmental, Inc.
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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 thereunto duly authorized.
PDG ENVIRONMENTAL, INC.
By /s/ John C. Regan
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John C. Regan
Chairman and Chief Executive Officer
Date: November 20, 1998
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Exhibit 2
ASSET PURCHASE AGREEMENT
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Asset Purchase Agreement ("Agreement"), dated as of the 1st
day of November 1998, by and among Environmental Control & Abatement, Inc., a
Missouri corporation ("EC&A"), Environmental Remediation Service, Inc., a
Missouri corporation ("ERS") (EC&A and ERS are collectively referred to herein
as "Sellers"), and William A. Lemire, an individual ("Lemire"), and Project
Development Group, Inc., a Pennsylvania corporation ("Project Development"),
PDG, Inc., a Pennsylvania corporation ("PDG") (Project Development and PDG are
collectively referred to herein as "Purchasers") and PDG Environmental, Inc.
("PDGE").
W I T N E S S E T H :
WHEREAS, EC&A owns and operates a business which conducts
environmental remediation and asbestos abatement and ERS owns and operates a
business which provides environmental consulting (collectively, the
"Businesses"); and
WHEREAS, Lemire is the principal and sole shareholder of both
EC&A and ERS; and
WHEREAS, Project Development desires to purchase and acquire
from EC&A and PDG desires to purchase and acquire from ERS, and EC&A and ERS
desire to sell and transfer to Project Development and PDG respectively, in
exchange for the consideration hereinafter specifically set forth, certain of
the assets related to the Businesses, upon the terms and conditions hereinafter
set forth.
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NOW, THEREFORE, in consideration of, and subject to, the
premises and mutual agreements contained herein, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE I
SALE AND PURCHASE
1.1 ASSETS. Sellers hereby agree to sell, transfer, assign,
convey and deliver to Purchasers, and Purchasers hereby agree to purchase,
acquire and accept from Sellers, certain of the assets of Sellers related to or
used in connection with the Businesses (all of such assets, property and
business are hereinafter collectively referred to as the "Assets"), upon the
terms and subject to the conditions hereinafter set forth. The Assets include
all fixed properties and assets of every kind, nature and description, tangible
and intangible, used in connection with the Businesses that are owned by Sellers
and in which Sellers have any right or interest (to the extent of such right or
interest), including, without limiting the generality of the foregoing, the
following (but excluding those assets described in Section 1.2 hereof):
(a) all of the property and equipment, including,
furniture and fixtures, inventory, leasehold improvements and computer equipment
related to and used in connection with the Businesses, including, without
limitation, the items listed on Schedule 1.1(a) attached hereto and made a part
hereof (the "Equipment and Supplies");
(b) all customer lists, supplier lists, engineering
data, customer records, licenses, permits, patents, tradenames (including, but
not limited to, "Environmental Control & Abatement, Inc." and "Environmental
Remediation Services, Inc."), trademarks, intellectual property, assignable or
transferable computer software, including the computer
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software listed on Schedule 1.1(b)(i) (any of Sellers' computer software which
is not assignable or transferable is listed on Schedule 1.1(b)(ii) hereto),
including, but not limited to, all versions of source code, including
annotations and comments, object code, documentation, specifications,
flowcharts, logic diagrams and any other information or material used or
prepared by programmers or software engineers for internal use in developing,
debugging, testing, using or documenting the software and all other intangible
assets related to or used in connection with the Businesses, including, without
limitation, the items listed on Schedule 1.1(b)(iii) attached hereto and made a
part hereof (the "Intangible Assets"); and
(c) except as expressly specified in Section 1. 2 or
listed on Schedule 1.2(b)(ii), all (i) customer contracts, (ii) open orders,
(iii) unbilled work in progress and (iv) other agreements, including, without
limitation, the items listed on Schedule 1.1(c) attached hereto and made a part
hereof and all other customer contracts arising in the normal course of business
from the date hereof to the Closing Date (as hereinafter defined) (the
"Contracts").
1.2 RETAINED ASSETS. Notwithstanding anything to the contrary
contained in this Agreement, Purchasers shall not purchase, and Sellers shall
retain, Sellers' right, title and interest in and to the following:
(a) all of Sellers' cash on hand and other cash
equivalents, overpayments, security deposits, other deposits, retroactive
product liability insurance or workmen's compensation insurance premium
adjustments and prepaid expenses; and
(b) except as set forth on Schedule 1.2(b)(i), all of
Sellers' accounts receivable existing as of the Closing Date, i.e., all amounts
owing for services, equipment or licenses which have been fully delivered or
requests for reimbursements which have been billed,
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all amounts for services which have been fully performed but not yet billed and
all license fees under written Contracts not yet billed including, without
limitation, those listed on Schedule 1.2(b)(ii) (collectively, the "Closing Date
Accounts"). Purchasers hereby covenant and agree to forward immediately to
Sellers any and all amounts received by Purchasers after the Closing Date from
or on behalf of the Closing Date Accounts debtors that are attributable to the
Closing Date Accounts, not to exceed ten (10) days after receipt by Purchasers
of such amounts. Notwithstanding the provisions set forth in Section 1.1(b) to
the contrary, for a period of one year following the Closing Date (or such
longer period as Sellers may reasonably require for such purposes), the Sellers
and Lemire shall be permitted to use their respective former corporate names
"Environmental Control & Abatement, Inc." or "Environmental Remediation
Services, Inc." solely in connection with (i) tax matters with local, state and
federal governmental agencies; (ii) collection of the Closing Date Accounts,
subject to prior written approval of Purchasers, which approval will not be
unreasonably withheld; and (iii) the negotiation of any checks properly
belonging to Sellers; and
(c) the claims set forth on Schedule 1.2(c) attached
hereto and made a part hereof.
1.3 LIABILITIES ASSUMED BY PURCHASERS; EXCLUDED LIABILITIES.
Purchasers agree to assume and discharge in accordance with their terms only the
following liabilities of Sellers (hereinafter collectively referred to as the
"Assumed Liabilities").
(a) all liabilities and obligations arising from
events occurring from and after the Closing Date under EC&A's lease (the "Office
Lease"), for the office space located at 520 Laverne Avenue, Hillside, Illinois
("Chicago Office");
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(b) all liabilities and obligations (including
support obligations) from and after the Closing Date under the Contracts
including without limitation all record-keeping obligations related thereto; and
(c) all liabilities and obligations from and after
the Closing Date under the agreements, if any, listed on Schedule 1.3(c).
Other than the Assumed Liabilities, Purchasers are not
assuming and shall not otherwise become liable for any debts, liabilities or
obligations of Sellers or the Businesses, whether now asserted or unasserted,
known or unknown, fixed or contingent including, without limitation, those
liabilities listed on Schedule 1.3(x), (collectively, the "Excluded
Liabilities").
1.4 PURCHASE PRICE. The purchase price for the Assets
("Purchase Price") shall be the sum of the following:
(a) The sum of One Hundred Fifty Thousand and 00/100
Dollars ($150,000.00), subject to the adjustments described in Section 1.6
hereof (the "Closing Date Purchase Price");
(b) Cash equal to the net book value of the Assets
(i.e., Sellers' fixed assets, inventory and unbilled work in progress) as of the
Closing Date and as determined in accordance with generally accepted accounting
principles (the "Cash Purchase Price"); and
(c) The value of the Assumed Liabilities as of the
Closing Date (as hereinafter defined).
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1.5 PAYMENT OF PURCHASE PRICE. The Closing Date Purchase Price
shall be paid to Sellers on the Closing Date in the form of cash or fully paid
and non-assessable shares of PDGE common stock or a combination thereof. Any
such allocation of the Closing Date Purchase Price between cash and PDGE common
stock shall be determined in the sole discretion of Purchasers and PDGE and set
forth in Schedule 1.5. If any portion of the Closing Date Purchase Price is to
be paid in the form of PDGE common stock, the per share price shall be
determined on the basis of the average of the bid and ask closing price per
share of PDGE common stock for the ten (10) business days immediately preceding
the Closing Date. The Cash Purchase Price shall be paid on the Closing Date;
provided, however, that the unbilled work in progress as of the Closing Date
shall be paid within ten (10) days of Purchasers collecting such amounts; and
provided, further, that the certificates representing any shares of PDGE common
stock shall be delivered within twenty (20) days following the Closing Date.
1.6 ADJUSTMENTS. If the average of the bid and ask per share
closing price of the PDGE common stock over the ten (10) business days
immediately prior to the first anniversary of the Closing Date (the "First
Anniversary Per Share Price") is less than the per share price of any PDGE
common stock issued in accordance with Sections 1.4(a) and 1.5 hereof (the
"Closing Date Per Share Price"), Purchasers shall pay to Sellers in cash the
difference between the First Anniversary Per Share Price and the Closing Date
Per Share Price times the number of shares received by Sellers under Section 1.5
hereof (the "Share Price Adjustment"); provided that the Share Price Adjustment
shall under no circumstances exceed in the aggregate one third of that portion
of the Closing Date Purchase Price which was paid in the form of PDGE common
stock and; provided, further, that the calculation of the First Anniversary Per
Share
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Price shall take into consideration any and all stock splits, dividends,
combinations, reclassifications, exchanges or substitutions with respect to PDGE
common stock.
1.7 ALLOCATION OF ASSETS AND PURCHASE PRICE. The Purchase
Price shall be allocated among the Assets in accordance with the allocations set
forth on Schedule 1.7, in compliance with the requirements of Section 1060 of
the Internal Revenue Code of 1986, as amended. Sellers and Purchasers each
hereby covenant and agree to file all income tax returns or reports, including,
without limitation, IRS Form 8594, for their respective taxable years in which
the Closing (as hereinafter defined) occurs to reflect such allocation of the
Purchase Price and further that each will not take a position on any income tax
return, before any governmental agency charged with the collection of any income
tax, or in any judicial proceeding that is in any way inconsistent with the
terms of this Section 1.7.
1.8 ADDITIONAL COMPENSATION TO LEMIRE. Purchasers shall, each
year for three (3) full years (years ending October 31, 1999, 2000 and 2001)
following the Closing, pay to Lemire as additional compensation fifty percent
(50%) of the Cash Flow (as defined herein) minus any Previous Year's Cash Flow
Deficiencies (as hereinafter defined) for the St. Louis Office (as hereinafter
defined) and the Chicago Offices. "Cash Flow " for the purposes of this section
shall mean the cash flow provided (used) by the operating activities of the St.
Louis and Chicago Offices less direct costs of operation, in the ordinary course
of business, of the St. Louis and Chicago Offices as determined in accordance
with generally accepted accounting principles including, but not limited to, all
contract costs including insurance and bonding costs and other expenses directly
associated with the operation of the St. Louis and Chicago Offices including
salaries, wages and benefits paid to employees in the St. Louis and Chicago
Offices but excluding Purchasers' and PDGE's overhead expenses for the St. Louis
and Chicago Offices.
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"Previous Year's Cash Flow Deficiencies" for purposes of this section shall mean
the aggregate negative Cash Flow. Such additional compensation shall be paid
within three (3) months of the end of such fiscal year. PDGE and Purchasers
agree that direct costs attributable to the St. Louis and Chicago Offices will
be determined consistent with Sellers' historical practices. An example of the
Cash Flow computation is attached as Schedule 1.8.
ARTICLE II
CLOSING; EFFECTIVE TIME
The Closing shall take place at the offices of Thorp Reed &
Armstrong, One Riverfront Center, Pittsburgh, Pennsylvania 15222, or at such
other location as may be agreed upon by the parties, on or before November __,
1998, at 10:00 a.m. (EST), or on such other date and time as may be agreed upon
between Purchasers and Sellers (herein referred to as the "Closing" or the
"Closing Date") and shall be effective as of October 31, 1998. Purchasers and
Sellers acknowledge and agree that all transactions entered into on the Closing
Date pursuant to this Agreement shall be deemed to have occurred simultaneously
and shall become effective as of 12:01 a.m. on the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS AND LEMIRE
Sellers and Lemire hereby jointly and severally represent and
warrant to Purchasers and PDGE the following, which shall remain true and
accurate as of the Closing Date and shall survive the Closing Date as set forth
in Section 11.5 hereof:
3.1 INCORPORATION; QUALIFICATION. Sellers are corporations
duly organized, validly existing and in good standing under the laws of the
States of Missouri and have the
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corporate power to own, lease and operate its assets, properties and business
and to carry on the Businesses as now being conducted. Sellers are duly licensed
or qualified to do business as a foreign corporation and are in good standing in
all jurisdictions in which the character of the property or assets now owned or
leased by Sellers or the nature of the Businesses require them to be so licensed
and qualified. Attached hereto and made a part hereof as Schedule 3.1 are true
and complete copies of the articles of incorporation and by-laws of Sellers as
in effect on the date hereof, and there are no dissolution, liquidation or
bankruptcy proceedings pending, contemplated by or threatened against Sellers.
3.2 AUTHORITY TO EXECUTE AND PERFORM THE AGREEMENT; NO BREACH
BY SELLERS. Sellers have the corporate power and authority, and have received
such approvals and taken such actions as are required, to enter into, execute
and deliver this Agreement. This Agreement, when duly executed and delivered,
will be the valid and binding obligation of Sellers enforceable in accordance
with its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency or other laws affecting the enforcement of
creditors' rights generally or by general principles of equity. Except as
provided in Schedule 3.2, the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the performance by
Sellers of this Agreement in accordance with its terms and conditions will not
(i) require the approval or consent of any federal, state, county, local or
other governmental or regulatory body; (ii) violate any provision of the
articles of incorporation or by-laws of Sellers; or (iii) conflict with, result
in a breach of or constitute an event of default under any mortgage, lien,
lease, agreement or instrument to which Sellers are a party or by which Sellers
may be bound.
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3.3 ASSETS. Except as provided in Schedule 3.3(i), Sellers
have, and shall have as of the Closing, good, valid and marketable title to all
of the Assets, free and clear of all liens, encumbrances and claims of third
parties. Sellers further represent and warrant that there are no options,
conditional rights or other agreements or arrangements of any kind to purchase
or acquire from Sellers any of the Assets. The Assets are those properties and
assets used by Sellers in the operation of the Businesses, and no other assets
are used by Sellers to operate the Businesses as currently conducted by Sellers.
Except as set forth on Schedule 3.3(ii), to the best of Sellers' knowledge after
due inquiry, the Equipment and Supplies are, taken as a whole, in commercially
reasonable operating condition and repair (subject to normal wear and tear) in
order to permit the same to be used for the same purposes for which they are
currently being used. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 3.3, NEITHER
SELLERS NOR LEMIRE MAKES ANY EXPRESS OR IMPLIED WARRANTY WITH RESPECT TO THE
EQUIPMENT AND SUPPLIES OR OTHER FIXED ASSETS, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; AND
THE EQUIPMENT AND SUPPLIES AND OTHER FIXED ASSETS ARE BEING SOLD AS-IS,
WHERE-IS. Notwithstanding the foregoing Sellers and Lemire agree to assign to
Purchasers any and all third-party warranties, express or implied, which exist
as of the date of this Agreement with respect to any Asset.
3.4 CONTRACTS. Other than as listed on Schedule 3.4(i) and
purchase, sale and service contracts entered into in the ordinary course of
business, Sellers are not party to any material written or oral contract with
respect to the Businesses (a) for the future purchase of equipment, materials,
supplies or services or (b) for the sale or use of any Assets or other
properties of Sellers relating to the Businesses. Sellers have performed all
material obligations
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required to be performed by it to date under all the agreements to which Sellers
are a party or pursuant to the terms of which Sellers may be bound. All of the
Contracts are in full force and effect and there is no material default, nor any
event under any Contract which, with notice or lapse of time, or both, will
become a material default, by Sellers or, to the best of Sellers' knowledge, by
any other party to such Contract. To the knowledge of Sellers, after due
inquiry, all of such Contracts are fully assignable by Sellers, except as set
forth on Schedule 3.4(ii), and Sellers shall use all reasonable efforts to
obtain assignments of the Contracts listed on Schedule 3.4(ii) as soon as
possible after the Closing Date. If any such consents or assignments are not
obtained for any reason, Sellers shall cooperate with Purchasers in any
reasonable arrangement requested by Purchasers to provide Purchasers with the
benefits under any such Contracts.
3.5 REAL PROPERTY. Schedule 3.5 contains a complete and
correct list and legal description of all real properties, buildings and
structures leased, in whole or in part, by the Sellers. All leases for real
property leased by or to the Sellers are valid and enforceable (and a correct
and complete copy of each has either been made available to Purchasers or has
been delivered to the Purchasers). Except as otherwise made available to
Purchasers, such leases have not been amended or modified and neither the
Sellers, nor, to the knowledge of the Sellers, the other party or parties to
such leases are in default with respect thereto, nor has any event which, with
the passage of time or giving of notice, or both, could constitute such a
default occurred. The Sellers own no real property.
3.6 CUSTOMERS AND SUPPLIERS. Sellers are not aware of any
material change, or threat of any material change, in the relations of Sellers
with any sales agent, sales representative, sales distributor or salaried
employee of Sellers. Sellers have not received any written notice or, to the
knowledge of Sellers, any other notice, of any material dispute, of any
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kind, between Sellers and any of their significant suppliers or any written
notice of any material dispute between Sellers and any of their significant
customers and none of its significant suppliers or significant customers have,
either in writing or otherwise, advised Sellers that it intends to cease its
purchases from or sales to Sellers. For purposes of this Section 3.6,
"significant customers" and "significant suppliers" shall mean the five largest
customers or suppliers based on revenues from products sold to, or purchased
from, each Seller.
3.7 COMPLIANCE WITH LAWS. To the best of Sellers' knowledge
after due inquiry, except as set forth on Schedule 3.7, Sellers are in
compliance, in all material respects, with all laws, regulations, orders,
judgements, ordinances and decrees of federal, state and local courts, and
governmental authorities, relating to the ownership and operation of the
Businesses.
3.8 PERMITS AND LICENSES. Schedule 3.8 attached hereto and
made a part hereof identifies all material permits, licenses, approvals,
clearances, stipulations, consents and other governmental authorizations held by
Sellers with respect to the Businesses (collectively, the "Permits"). Except as
set forth on Schedule 3.8, all of such Permits are valid and in full force and
effect with respect to the Businesses. Sellers have no knowledge of any
additional Permits, or modifications to existing Permits, necessary for Sellers
to operate the Businesses as currently conducted including, but not limited to,
those relating to environmental compliance. To the best of Sellers' knowledge
after due inquiry, except as set forth on Schedule 3.8, Sellers are now in
compliance, in all material respects, with the terms of all such Permits.
3.9 ACTIONS AND PROCEEDINGS. To the best of Sellers' knowledge
after due inquiry, there are no outstanding orders, judgments, injunctions,
awards or decrees of any court, governmental or regulatory body or arbitration
tribunal against or involving Sellers which would
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have material adverse effect upon any of the Assets or the Businesses. There are
no actions, suits, claims or legal, administrative or arbitration proceedings
pending, or to Sellers' knowledge, threatened, against or involving Sellers, the
Businesses or the Assets which would have a material adverse effect upon the
Assets or the Businesses.
3.10 MATERIAL CHANGES. Except as set forth on Schedule 3.10,
between the date of the unaudited financial statements of Sellers dated August
31, 1998 and the date of this Agreement, there has not been any material adverse
change in either Sellers' financial condition or results of operations nor any
(a) material destruction, damage to or loss of any Asset of the Businesses
(whether or not covered by insurance), (b) material change in accounting methods
or practices of the Businesses including, but not limited to, any change in
depreciation or amortization policies or rates, (c) material write-down of the
value of any of the Assets, (d) material sale or transfer of any Asset other
than in the ordinary course of the Businesses as previously conducted or (e)
capital expenditure by Sellers with respect to the Businesses in excess of
$1,000 for any individual item or $5,000 in the aggregate.
3.11 PATENTS AND TRADEMARKS. To the knowledge of Sellers,
after due inquiry, Sellers own, or are licensed to use, all patents, patent
applications, trademarks, service marks, tradenames, copy-rights, know-how or
trade secrets, applications for registration thereof, licenses and rights which
are necessary to the present conduct of the Businesses. Schedule 3.11(a)
attached hereto and made a part hereof identifies all patents, registered
trademarks, service marks and registered tradenames and business names and
copyrights and all pending applications for patents and currently used
trademarks, tradenames and business names owned by Sellers with and all license
agreements to which Sellers are a party or pursuant to which Sellers are
entitled to make use of "intellectual property."
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To the knowledge of Sellers, the Businesses are being
carried on without conflict with trade secrets, registered patents, patent
applications, licenses, trademarks, service marks, copyrights, business names or
tradenames of others. There is no claim or, to the knowledge of Sellers,
threatened claim alleging any violation of Sellers in the course of conducting
the Businesses of any trade secrets or secrets of others, nor have Sellers
misappropriated trade secrets of any other person or entity in connection with
or in any way related to the Businesses. To the knowledge of Sellers, after due
inquiry, no employee of Sellers is obligated pursuant to the terms of any
contract, agreement or understanding or subject to any other obligation,
judgment, decree or order of any court or administrative agency that would
interfere with the use of the technology included in the current products and
processes of Sellers or the Businesses. Schedule 3.11(b) attached hereto and
made a part hereof lists each employee of each Business who has executed a
proprietary information, secrecy, non-disclosure, confidentiality or like
agreement with the Sellers, and a copy of the standard form of such agreement is
attached to said Schedule 3.11(b).
3.12 ENVIRONMENTAL. There are no civil or criminal actions,
notices of violation or administrative proceedings relating to laws, rules and
regulations regulating the environment or human health and safety pending or, to
the knowledge of Sellers, threatened, by governmental officials or otherwise
with respect to either the Businesses or Sellers.
3.13 TAX MATTERS. All federal, state, county, foreign and
other taxes including, without limitation, income, estimated, excise, sales,
use, gross receipts, franchise, employment and payroll and property taxes,
whether or not measured in whole or in part by net income, payable by Sellers
and with respect to which Sellers may have liability which has become due on or
before the date hereof have been paid or are being diligently contested in good
faith and
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appropriate proceedings or have been accrued for by Sellers. All tax returns of
Sellers have been filed timely or are subject to a valid extension of the filing
date and all such tax returns are true, correct and complete in all material
respects.
3.14 EMPLOYEES. Schedule 3.14 attached hereto and made a part
hereof is a list of all employment, compensation (including any "golden
parachute," severance or similar agreements), confidentiality, non-competition,
assignment of invention and consulting agreements or arrangements currently in
effect by and between either Seller and any person who is now employed or
engaged by such Seller, whether written or oral, and a list of each current
employee of each Seller. Sellers are not in default with respect to any
obligation to any of its employees, including but not limited to those under the
instruments or arrangements noted on Schedule 3.14. Except for the unwritten,
historical wage and salary annual increases made by Sellers, Sellers have no
outstanding commitment or agreement to effect any general wage or salary
increase or bonus or any increase in fringe benefits for any of its employees.
Sellers have not made any agreement or arrangement with, or promise to, any
director, officer, employee or shareholder of Sellers regarding future
compensation or payments or fringe benefits of any kind except as specifically
noted on Schedule 3.14.
3.15 EMPLOYEE BENEFIT PLANS. Schedule 3.15(a) attached hereto
and made a part hereof sets forth a correct and complete list of every employee
welfare benefit plan and employee pension benefit plan (as defined in Sections
3(1) and 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) of Sellers (and of each trade or business, whether or not
incorporated, which together with Sellers would be treated as a single employer
under Section 4001 of ERISA ("ERISA Affiliate")) in which employees of Sellers
or an ERISA Affiliate participate. Schedule 3.15(b) attached hereto and made a
part hereof sets forth a correct
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and complete list of every bonus, deferred compensation, profit sharing, stock
option, stock purchase or other employee benefit plan of Sellers and an ERISA
Affiliate not subject to ERISA in which employees of Sellers or an ERISA
Affiliate participate. Each plan subject to the requirements of ERISA is in
substantial compliance with all material reporting, disclosure and other
requirements of ERISA, and a current, accurate and complete copy of each such
plan has been made available to Purchasers. Each of the employee benefit plans
listed in Schedule 3.15(a) which is intended to qualify under Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code") and the respective
trust forming a part thereof are currently so qualified and Sellers have not
received any notice from the Internal Revenue Service which disqualifies any
such plan or the trust related thereto. No employee welfare plan or employee
pension benefit plan maintained by Sellers or an ERISA Affiliate which is
subject to Title IV of ERISA has been terminated by the plan administrator
thereof; no proceedings to terminate any such plan have been instituted; no
reportable event within the meaning of Title IV for which a 30-day notice is
required has occurred with respect to any such plan; no such plan or the trust
thereunder has engaged in any "prohibited transaction" within the meaning of
ERISA or the Code for which no statutory or administrative exemption exists
under ERISA; no accumulated funding deficiency (as defined by Section 302 of
ERISA and Section 412 of the Code) exists with respect to any such plan, whether
or not waived; no condition exists which could subject Purchasers or Sellers to
penalty under Section 4071 of ERISA; all required premium payments have been
made, when due, to the Pension Benefit Guaranty Corporation with respect to any
such plan; and all contributions required to be made with respect to any such
plan have been made. Sellers have not been a party to nor contributed to any
"multiemployer plan" (as defined in Section 3(37) of ERISA), and no liabilities
exist with respect to any withdrawals from any multiemployer plans
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which could subject Sellers to controlled group liability under Section
4001(b)(1) of ERISA. With respect to each plan listed in Schedule 3.15(a) or
Schedule 3.15(b), there are no material actions, suits or claims (other than
routine claims for benefits in the ordinary course) pending or, to the best of
Sellers' knowledge, threatened against Sellers. With respect to each welfare
benefit plan to which Sellers are a party which constitutes a group health plan
subject to Section 4980B of the Code, Sellers have no liability for tax under
Section 4980B of the Code.
3.16 INSURANCE. Schedule 3.16 attached hereto and made a part
hereof is a complete and correct list of each insurance policy (including
policies providing property, casualty, liability, workers' compensation and bond
and surety arrangements) of Sellers with respect to the Businesses. All of such
policies are presently in full force and effect.
3.17 LABOR MATTERS. Except as set forth on Schedule 3.17
attached hereto and made a part hereof, Sellers are not a party to any
collective bargaining agreements pertaining to the Businesses. Sellers are in
material compliance with all federal, state and local laws respecting employment
and employment practices, terms and conditions of employment, wages and hours
and nondiscrimination in employment, and Sellers are not engaged in any unfair
labor practice. With respect to the Businesses, Sellers do not have any pending
labor grievances, arbitration cases, or civil rights or equal employment
opportunity charges or cases, and Sellers are not bound by any settlements,
consent orders or prior decrees of any court or governmental body requiring any
continued observance.
3.18 NO DEFAULT. There is no claimed or purported or alleged
default, or state of facts which, with notice or lapse of time, or both, would
constitute a default, in any material obligation on the part of Sellers to be
performed under any instrument, lease, contract, plan or
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other arrangement to which the Sellers are a party or with respect to the
Businesses, or evidencing an Assumed Liability or Asset. Sellers have no
knowledge of any default or claimed or purported or alleged default, or state of
facts which with notice or lapse of time, or both, would constitute a material
default, in any obligation on the part of any third party to be performed under
any instrument, lease, contract, plan or other arrangement included in any
schedule hereto or evidencing an Assumed Liability or Asset.
3.19 NO MISREPRESENTATIONS. Sellers have not made any
intentionally or knowingly untrue statement of material fact, in this Agreement
or otherwise, to Purchasers regarding the Businesses, the Assets or the Assumed
Liabilities, nor have Sellers intentionally or knowingly omitted to state any
material facts required to be stated herein or therein or necessary to make such
statements, in light of the circumstances under which they were made, not
misleading.
3.20 BROKERS OR FINDERS. Except as set forth on Schedule 3.20,
Sellers are not obligated, directly or indirectly, to any person for brokerage
or finders' fees, agents' commissions or any similar charges in connection with
the Agreement or the transaction contemplated hereby.
3.21 WARRANTIES.
(a) Schedule 3.21(a) sets forth the complete text, including
all disclaimers and exclusions of the warranty or warranties offered currently
by the Sellers in connection with the sale of any product manufactured, marketed
or distributed by the Businesses at anytime during the three-year period prior
to the date of this Agreement.
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(b) Schedule 3.21(b) sets forth a summary description
of all individual claims in excess of $1,000 in all claims which in the
aggregate exceed $5,000 asserted or, to the best of Sellers' knowledge,
threatened against Sellers at anytime during the three year period prior to the
date of this Agreement, alleging a breach of any warranty given by Sellers in
connection with the sale of any product manufactured or service rendered,
marketed or distributed by the Businesses, together with a description of the
status or disposition of such claims.
(c) Schedule 3.21(c) sets forth a summary description
of all claims in excess of $5,000 asserted or, to the best of Sellers'
knowledge, threatened against Sellers at any time during the three-year period
prior to the date of this Agreement in respect of personal injury or property
damage alleged to have resulted from any product manufactured, marketed or
distributed by the Businesses, together with a description of the status or
disposition of such claims.
3.22 SURETY BONDS. Schedule 3.22 sets forth the complete list
of all surety bonds issued on behalf of each Seller within the last three (3)
years or that otherwise remain outstanding and the status of each including, but
not limited to, whether any claim has been made upon such surety bond.
3.23 SHAREHOLDERS OF EACH SELLER. Schedule 3.23 sets forth
each and every shareholder or interest holder in each Seller (collectively, the
"Shareholders") as well as his or her number of shares owned and percentage
interest in each Seller.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS AND PDGE
Purchasers and PDGE hereby jointly and severally represent and
warrant to Sellers and Lemire as follows, which shall remain true and accurate
as of the Closing Date and shall survive the Closing Date as set forth in
Section 11.5 hereof:
4.1 ORGANIZATION. Purchasers and PDGE are corporations duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and the State of Delaware, respectively.
4.2 AUTHORITY TO EXECUTE AND PERFORM THE AGREEMENT; NO BREACH
BY PURCHASERS. Purchasers and PDGE each has the power and authority, and has
received such approvals and taken such actions as are required, to enter into,
execute and deliver this Agreement. This Agreement, when duly executed and
delivered, will be the valid and binding obligation of the Purchasers and PDGE
enforceable in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights generally or by general
principles of equity. The execution and delivery of this Agreement, the
consummation by Purchasers and PDGE of the transactions contemplated hereby and
the performance by Purchasers and PDGE of this Agreement in accordance with its
terms and conditions will not (i) require the approval or consent of any
federal, state, county, local or other governmental or regulatory body; (ii)
violate any provision of the constituent documents of Purchasers or PDGE; or
(iii) conflict with, result in a breach of or constitute an event of default
under, any mortgage, lien, lease, agreement or
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instrument to which Purchasers or PDGE is a party or by which Purchasers or PDGE
may be bound.
4.3 BROKERS OR FINDERS. Purchasers and PDGE are not obligated,
directly or indirectly, to any person for investment banking, brokerage or
finders' fees, agents' commissions or any similar charges in connection with the
Agreement or the transactions contemplated hereby.
4.4 PDGE SHARES AND DISCLOSURE. Any shares of PDGE common
stock to be issued in payment of the Closing Date Purchase Price are fully paid
and non-assessable shares, have been duly authorized to be issued and are free
and clear of all liens and encumbrances. The shares have not been registered
under the Securities Act of 1933 and their transfer is subject only to the
restrictions on transferability set forth in applicable state and federal
securities laws. All disclosures made by PDGE in its filings with the Securities
Exchange Commission are true and accurate in all material respects and do not
omit to state a material fact necessary to make each statement therein not
misleading.
ARTICLE V
COVENANTS OF SELLERS
Sellers and Lemire jointly and severally covenant and agree as
follows:
5.1 NO ACTIONS TO MAKE REPRESENTATIONS UNTRUE. Sellers shall
not take any action which would cause any of the representations and warranties
of Sellers set forth in the Agreement to become untrue or any of the conditions
to the Closing to be unsatisfied.
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5.2 CERTAIN CHANGES.
(a) From and after the date of this Agreement, and
until the Closing Date, without the prior written consent of Purchasers, which
consent will not be unreasonably withheld, Sellers will not, other than as
required or permitted pursuant to the terms hereof:
(i) make any material change in the conduct
of the Businesses;
(ii) incur any indebtedness for borrowed
money, issue any notes, bonds, debentures or other securities or grant any
option, warrant or right to purchase any thereof, except in the usual and
ordinary course of business;
(iii) make any sale, assignment, transfer or
other conveyance of any of the Assets or any part thereof except in the usual
and ordinary course of business;
(iv) subject any of the Assets or any part
thereof to any mortgage, pledge, security interest, encumbrance or lien or
suffer such to be imposed, other than such security interests, encumbrances or
liens as may arise (i) by operation of law or (ii) to secure Assumed
Liabilities;
(v) authorize any capital expenditures
except in the usual ordinary course of business;
(vi) guaranty any indebtedness for borrowed
money or any material obligations of any other person; or
(vii) commit itself to do any of the
foregoing.
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(b) From the after the date of this Agreement and
until the Closing Date, Sellers will use all reasonable efforts to:
(i) continue to maintain, in all material
respects, the Assets in accordance with present practices in a condition
suitable for their current use;
(ii) file, when due or required, all
federal, state, foreign and other tax returns and reports required to be filed
and pay when due all taxes, assessments, fees and other charges lawfully levied
or assessed against it, unless the validity thereof is contested in good faith
and by appropriate proceedings diligently conducted;
(iii) continue to conduct the Businesses in
the ordinary course; and
(iv) keep its books of account, records and
files in the ordinary course and in accordance with existing practices.
5.3 ACCESS TO INFORMATION.
(a) From and after the date hereof and until the Closing Date
or earlier termination of this Agreement, Sellers will afford to Purchasers and
Purchasers' authorized representatives reasonable access during normal business
hours to the officers, employees, books and records of Sellers relating to the
Businesses and the Assets and make available to Purchasers or Purchasers'
authorized representatives such other information pertaining to the Businesses
and the Assets as Purchasers may reasonably request, including, without
limitation, the financial statements for Sellers as of September 30, 1998 and
for the nine (9) months then ended, so that
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Purchasers' accountants may perform an audit in order to properly prepare
documents or reports to be filed with governmental authorities.
(b) If after the Closing, in order to properly
prepare documents or reports required to be filed with governmental authorities,
or to prepare its financial statements, it is necessary that Purchasers be
furnished additional information relating to the Businesses, Sellers will use
their best efforts to promptly furnish this information to Purchasers, if
available.
5.4 CONSENTS AND APPROVALS. From and after the date of this
Agreement, Sellers shall use their best efforts to obtain all consents,
approvals, permits and licenses required to be obtained by Sellers to carry out
the transactions contemplated by this Agreement, including, but not limited to,
any consents or approvals required for the assignment of the Contracts. Sellers
shall, in a timely, accurate and complete manner, make or cause to be made such
required filings and prepare such required applications to any governmental
agency with which such filings or obligations are required to be made or whose
approval or consent is required for the consummation by Sellers of the
transactions contemplated by this Agreement and shall provide to Purchasers such
information concerning the Assets as Purchasers may require to make such filings
and prepare such applications as may be required for the consummation by
Purchasers of the transactions contemplated by this Agreement.
5.5 CONSUMMATION OF THE TRANSACTION. Sellers shall use their
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable, under applicable law and
regulation, to consummate and make effective the transactions contemplated by
the Agreement. Sellers will execute and deliver, or cause to be executed and
delivered, such assignments, consents or other instruments as Purchasers may
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reasonably request for the purpose of carrying out the transactions contemplated
by the Agreement.
ARTICLE VI
COVENANTS OF PURCHASERS
Purchasers and PDGE jointly and severally covenant and agree
as follows:
6.1 NO ACTIONS TO MAKE REPRESENTATIONS UNTRUE. Purchasers and
PDGE shall not take any action which would cause any of the representations and
warranties of the Purchasers and PDGE set forth in the Agreement to become
untrue or any of the conditions to the Closing to be unsatisfied.
6.2 POST-CLOSING ACCESS TO INFORMATION. If after the Closing,
in order properly to prepare documents or reports required to be filed with
governmental authorities or its financial statements, it is necessary that
Sellers be furnished additional information relating to the Businesses,
Purchasers and PDGE will use reasonable efforts to promptly furnish this
information to Sellers, if available.
6.3 CONSUMMATION OF THE TRANSACTION. Purchasers and PDGE shall
use their best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable, under applicable
law and regulation, to consummate and make effective the transactions
contemplated by this Agreement. Purchasers and PDGE will execute and deliver, or
cause to be executed and delivered, such instruments as Sellers may reasonably
request for the purpose of carrying out the transactions contemplated by the
Agreement.
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ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. NOTIFICATION OF CERTAIN MATTERS. Each of Sellers and
Purchasers agree to give prompt notice to the other of, and to use their
respective best efforts to prevent or promptly remedy: (a) the occurrence or
failure to occur or the impending or threatened occurrence or failure to occur,
of any event which occurrence or failure to occur would be likely to cause any
of its representations or warranties in this Agreement to be untrue or
inaccurate in any material respect at any from the date hereof to the Closing
Date and (b) any material failure on its part to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 7.1 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
7.2 PUBLIC STATEMENTS. The parties shall consult with each
other prior to issuing any press release or any public statement with respect to
this Agreement or the transactions contemplated hereby and shall not issue any
such press release or public statement prior to such consultation.
7.3 ASSIGNMENT OF LEASE. As of the Closing Date, Sellers shall
assign to Purchasers all of their rights (including, but not limited to, rights
with respect to any deposits or credits) pursuant to the Office Lease. Sellers
shall deliver to Purchasers at the Closing certifications from the owner of the
property subject to the Office Lease which confirms that (a) the Office Lease is
in full force and effect as of the Closing Date, (b) there are not defaults or
conditions which would cause an event of default to exist under the Office Lease
as of the
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Closing Date and (c) Sellers have the consent of such owner and the right to
assign the Office Lease to Project Development.
7.4 EMPLOYEE BENEFITS. Except as set forth on Schedule 7.4,
Purchasers hereby agrees to employ all existing employees of Sellers upon the
terms and conditions as determined by Purchasers in its sole discretion.
Purchasers shall cause all employees of Sellers as of the Closing who are
employed by Purchasers on the day after the Closing to be eligible to
participate in all "employee pension benefit plans" (within the meaning of
Section 3(2) of ERISA) maintained by Purchasers on the day after the Closing on
the same terms as similarly situated employees of Purchasers, provided that
nothing herein shall prevent Purchasers from (a) terminating the employment of
any such employee or (b) amending or terminating such employee pension benefit
plans from time to time. For purposes of any length of service requirements for
vacation, sick pay or eligibility to participate or vesting, but not for
purposes of benefit accrual, in any such employee pension benefit plan,
"service" for any employee of Sellers as of the Closing who is employed by
Purchasers on the day after the Closing shall include service with the Sellers
and any member of the Sellers' controlled group of corporations or trades or
businesses under common control (within the meaning of Sections 414(b) and (c)
of the Code).
7.5 AUDIT. In accordance with Section 5.3(a) hereof, Sellers
shall provide Purchasers or its authorized representatives access to all
material and information, financial or otherwise, pertaining to the Business
and/or Assets, as Purchasers reasonably requests in connection with the
preparation of an audit. The reasonable and ordinary cost and expense associated
with such audit shall be paid by Purchasers; provided, however, to the extent
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additional cost and expense is incurred solely as the result of Sellers'
misconduct in failing to provide reasonably requested information or documents
in a timely manner or in providing false or misleading information or documents,
any such amounts shall be paid by Sellers in the form of an adjustment to the
Cash Purchase Price.
7.6 INSURANCE. On the Closing Date, Purchasers shall provide
insurance in substantially equivalent amounts and from comparable carriers to
replace all insurances currently procured by Sellers, and Sellers shall have the
right to terminate all of its insurances effective as of the Closing Date.
7.7 BONDS. On the Closing Date, Purchasers shall reimburse
Sellers for a portion of the cost of surety and performance bonds posted by
Sellers prior to the Closing Date with respect to Contracts to be completed
after the Closing Date, such portion to be determined based on a linear
prorating of the cost of such bonds with Sellers bearing the cost with respect
to the portion of the Contracts performed prior to the Closing Date and
Purchasers bearing the cost with respect to the portion of the Contracts to be
performed on or after the Closing Date.
ARTICLE VIII
NO COMPETE
8.1 TRADE SENSITIVE INFORMATION. Lemire acknowledges that as
the shareholder of the Sellers he has become aware of "trade sensitive"
information of the Sellers, that such information has been kept confidential by
the Sellers and that the scope of the Businesses of the Sellers are extensive
and, therefore, during his association with the Sellers, and for the next
succeeding period of two (2) years after the expiration or termination of his
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employment by either Seller (the "Restricted Period"), Lemire shall not,
directly or indirectly (whether as an employee, director, owner, stockholder,
consultant, representative, distributor or partner [limited or general] or
otherwise), except in his capacity as an employee of Purchasers, engage in any
business or activity, within a 250 mile radius of the St. Louis or Chicago
Offices, which is the minimal geographic region and Restricted Period which
would afford the Sellers reasonable protection, that is directly or indirectly
engaged in either Business in any capacity including, but not limited to, as a
partner, shareholder, principal, agent, distributor, representative, supplier,
trustee, employee or consultant. Lemire acknowledges that his training enables
him to obtain employment in many different areas of endeavor and to work for
different types of employers, so it will not be necessary for him to violate the
provisions of this instrument in order to secure other employment satisfactory
to him and earn a living.
8.2 NON-SOLICITATION. Lemire agrees that during the Restricted
Period (notwithstanding whether the scope of such obligation has been shortened
or such obligation has been otherwise found to be unenforceable), he will not,
either directly or indirectly, for himself or for any other person or entity,
call on, solicit, or take away, or attempt to call on, solicit or take away, any
past, present or prospective employee or customer of the Purchasers or the
Sellers or any of their respective affiliates. Lemire recognizes and affirms
that he has received and will receive and may generate information not available
to the public or competitors relating to the inventions, improvements, designs,
sketches, drawings, formulas, compilations, know-how, computer software, ideas,
engineering tolerances, corporate opportunities, technical data, trade secrets
and industrial secrets of the Purchasers and the suppliers to and clients and
customers of the Purchasers including, but not limited to, past, present and
prospective costs and prices, terms and conditions of sale and practices, actual
and prospective customers, suppliers and clients of
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the Purchasers including, but not limited to, past, present and prospective
costs and prices, terms and condition of sale and practices and customer contact
persons, plans of the Purchasers, business, research, development, marketing or
industrial plans and projects of the Purchasers, other Purchasers' information
which is of a confidential nature, confidential information with respect to
persons, firms or corporations with whom the Purchasers are affiliated or of
actual and prospective customers, employees, representatives, clients and
distributors of the Purchasers, internal budgets, profit and loss and other
financial data, manufacturing plans and procedures and information storage and
retrieval systems. Lemire covenants to keep any and all such knowledge and
information in confidence and shall not, at any time, during or after his
employment with the Purchasers, except as required by law or in the conduct of
the Purchasers' business or authorized specifically, in writing, by the
Purchasers, publish, disclose or use or authorize anyone else to publish,
disclose or use any of such knowledge or information. Lemire further agrees that
compliance with the restriction covenants contained in Section 8.1 and 8.2
hereof are conditions precedent to the receipt of any and all payments from the
Purchasers to which Lemire would otherwise be entitled pursuant to section 1.4
hereof.
8.3 REMEDIES. Lemire agrees that any breach or threatened
breach of any of the covenants contained in the Agreement would cause immediate,
material and irreparable harm to the Purchasers and that money damages would
not, alone, provide an adequate remedy to the Purchasers. The Purchasers shall
have all of the rights and remedies available under law, or in equity,
including, but not limited to, injunctive relief, to a party enforcing any such
covenants, each of such rights and remedies to be independent of the other and
severally enforceable including, but not limited to, the right to have such
covenants specifically enforced by any court of competent jurisdiction and the
right to require any violating party to account for, and pay over
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to, the Purchasers, all net benefits derived or received by such violating
party, or any of its subsidiaries or affiliates, as a result of any such breach
of the covenants herein together with interest thereon, from the date of receipt
of any such net benefit, until such sums are received by the Purchasers, at that
interest rate equal to the lesser of (A) the highest rate permitted by
applicable law or (B) the interest rate per annum announced, from time to time,
by Mellon Bank, N.A., Pittsburgh, Pennsylvania office, as its "prime rate", and
no violating party, nor any subsidiary or affiliate thereof, shall raise as a
defense to the granting of any such relief that the person requesting such
relief has an adequate remedy at law.
8.4 ENFORCEMENT. If any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth in this
Article VIII are unreasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent which the court deems reasonable,
and this Article VIII shall thereby be reformed.
ARTICLE IX
ITEMS DELIVERED AT CLOSING
9.1 ITEMS DELIVERED BY SELLERS. In addition to, and without
limiting any of the other provisions of the Agreement, Sellers agree to deliver
or cause to be delivered to Purchasers at the Closing contemporaneously with the
execution and delivery of this Agreement:
(a) a bill of sale for the Assets, and the Sellers
agree to deliver such other instruments of transfer of title as may be necessary
and desirable in order to effect transfer of the Assets to Purchasers, duly
executed by Sellers;
(b) certificates signed on behalf of each Seller by
an authorized officer of each Seller certifying as to (i) true and correct
copies of all corporate action taken by each
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Seller in connection with the Agreement, and (ii) the names, true signatures and
incumbency of the officer or officers of each Seller authorized to execute and
deliver this Agreement;
(c) an assignment and assumption agreement in the
form attached hereto as Exhibit A relating to the assignment by Sellers and the
assumption by Purchasers of the Assumed Liabilities (the "Assignment and
Assumption Agreement"), duly executed by Sellers;
(d) employment agreements in the form attached hereto
as Exhibit B, duly executed by the within named employer, which shall include a
covenant not to compete acceptable in form to Purchasers (the "Employment
Agreements"); and
(e) a true and complete list of all Closing Date
Accounts (the "Closing Date Accounts Statement");
(f) the assignments and certifications with respect
to the Office Lease as described in Section 7.3 hereof, to be delivered as soon
as possible following the Closing; and
(g) a lease agreement in the form attached hereto as
Exhibit C, duly executed by the within named lessor (the "Lease Agreement") with
respect to the premises located at 8410-8412 Manchester Road, Brentwood,
Illinois (the "St. Louis Office").
9.2 ITEMS DELIVERED BY PURCHASERS. In addition to, and without
limiting any of the other provisions of the Agreement, Purchasers agree to
deliver or cause to be delivered to Sellers at the Closing contemporaneously
with the execution and delivery of this Agreement:
(a) the Closing Date Purchase Price and the Cash
Purchase Price;
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(b) the Assignment and Assumption Agreement in the
form attached hereto as Exhibit A, duly executed by Purchasers;
(c) a certificate signed on behalf of Purchasers by
an authorized officer of Purchasers certifying as to (i) true and correct copies
of all corporate action taken by Purchasers in connection with this Agreement,
and (ii) the name, true signatures and incumbency of the officer or officers of
the Purchasers authorized to execute and deliver this Agreement; and
(d) the Employment Agreements in the form attached
hereto as Exhibit B duly executed by Purchasers.
(e) the Lease Agreement in the form attached hereto
as Exhibit C, duly executed by Purchasers.
9.3 OTHER ITEMS TO BE DELIVERED FOLLOWING CLOSING. Purchasers
and Sellers each agree to deliver at or after the Closing such other
instruments, certificates or documents as may reasonably be requested by Sellers
or Purchasers, as the case may be, or their respective counsel, in connection
with the transactions contemplated by this Agreement.
ARTICLE X
INDEMNIFICATION
10.1 GENERAL INDEMNIFICATION.
(a) Sellers and Lemire, on the one hand, and
Purchasers and PDGE, on the other hand, shall each indemnify, defend, and hold
the other and its successors and assigns harmless from and against all damages,
losses and expenses suffered or paid as a result of any
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and all claims, demands, suits, penalties, causes of action, proceedings,
judgments, administrative and judicial orders and liabilities (including
reasonable counsel fees incurred in litigation or otherwise) assessed, incurred
or sustained by or against such other party and its successors, assigns,
employees, contractors and agents with respect to or arising out of any breach
by the indemnifying party of its warranties, representations, covenants or
agreements hereunder.
(b) Purchasers and PDGE jointly and severally agree
to save and hold harmless and indemnify Sellers and Lemire from and against all
obligations, liabilities, claims, and expenses arising out of Purchasers'
possession, ownership, or operation of the Assets from and after it receives
possession of the Assets on the date of Closing or arising out of the Assumed
Liabilities.
(c) Sellers and Lemire jointly and severally agree to
save and hold harmless and indemnify Purchasers and PDGE from and against all
obligations, liabilities, claims, and expenses arising out of Sellers'
possession, ownership, or operation of the Assets and the Businesses at all
times prior to the time at which Purchasers receives possession of the Assets on
the date of Closing including, but not limited to, the Excluded Liabilities.
10.2 OBLIGATIONS OF THE INDEMNITOR AND INDEMNITEE. Any party
that proposes to assert the right to be indemnified under this Article X with
respect to any claim, action, suit or proceeding (for purposes of this Article
X, the "Indemnitee") shall, promptly after receipt of notice of any such claim
or commencement of any such action, suit or proceeding, notify the other party
(for purposes of this Article X, the "Indemnitor") in writing of the assertion
of such claim or commencement of such action, suit or proceeding, enclosing
copies of all
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applicable papers received; provided, however, that the failure to so notify the
Indemnitor shall not relieve a party from any obligation to indemnify under this
Article X except to the extent the Indemnitor is actually materially
disadvantaged by such failure to give notice. The Indemnitor shall have the
right and obligation to assume the defense of any claim, action, suit or
proceeding with respect to which indemnification is being sought under this
Article X with counsel reasonably satisfactory to the Indemnitee. The Indemnitee
shall have the right to employ its own counsel, but the fees and expenses of
such counsel shall be at the sole expense of the Indemnitee; provided, however,
that if the Indemnitee reasonably concludes that there are legal defenses
available to it that are different from or inconsistent with the defenses
available to the Indemnitor and which Indemnitor refuses to assert on
Indemnitee's behalf after request is made by Indemnitee, then Indemnitee's
separate counsel may participate in the defense of the action at the
Indemnitor's expense. The Indemnitor shall not be liable for any settlement
effected without its prior written consent, which consent shall not be
unreasonably withheld, conditioned, or delayed. The Indemnitee shall cooperate
with the Indemnitor in the defense of any such claim, action, suit or proceeding
to the extent reasonably requested by the Indemnitor, and shall provide all
information, evidence, assistance and authority necessary to enable the
Indemnitor to conduct a proper defense. Both parties agree to make witnesses
available and to provide any reasonably requested technical assistance to the
other party to pursue or defend any litigation against third parties arising out
of or relating to this Agreement, whether or not the party upon which such
request is made is a party to such litigation.
10.3 FAILURE TO DEFEND ACTION. Should a party be entitled to
indemnification under Section 10.1 hereof as a result of a claim by a third
party and, after the Indemnitee has complied with the provisions of Section
10.2, the Indemnitor fails to assume the defense of such
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claim, the Indemnitee shall, at the expense of the Indemnitor, contest or settle
such claim. No such contest need be made, and settlement or full payment of any
such claim may be made (with such Indemnitor remaining obligated to indemnify
the Indemnitee under Section 10.1 hereof), if, in the written opinion of the
Indemnitee's counsel, such claim is meritorious.
10.4 LIMITATION. The obligations of each party to indemnify
the other hereunder are subject to the following limitations:
(a) In case any event shall occur that would
otherwise entitle a party to assert a claim for indemnification under Section
10.1 hereof, no losses shall be deemed to have been sustained by such party to
the extent of any proceeds (net of taxes and collection costs) received by such
party from any insurance policies maintained by or on behalf of such party with
respect to such losses. The parties agree to submit a claim or claims under such
insurance policies prior to making a request for indemnification hereunder.
Further, the parties, to the fullest extent possible to do so, waive any right
of subrogation against the other with respect to any such claim or loss; and
(b) A party shall not be entitled to indemnification
hereunder until the sum of all losses to which indemnification shall apply
exceeds Ten Thousand and 00/100 Dollars ($10,000.00); once losses exceed such
amount, such party shall be entitled to indemnification for only the losses in
excess of $10,000.
10.5 SURVIVAL OF INDEMNITY. The provisions of this Article X
shall survive completion of the transactions hereunder or termination,
cancellation, or expiration of this Agreement for a period of three (3) years
from the Closing Date; provided, however, that the provisions of Section 10.1(a)
shall survive for a period equal to the survival periods set forth in
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Section 11.5 hereof for the representations and warranties of Sellers and
Purchasers for a period of three (3) years from the Closing Date. All such
provisions shall apply to the full extent permitted by law.
ARTICLE XI
MISCELLANEOUS
11.1 TERMINATION. The Agreement may be terminated by (a) the
mutual written agreement of Purchasers and Sellers at any time prior to Closing;
(b) by Purchasers if there has been (i) a material misrepresentation or breach
of warranty of Sellers contained in this Agreement, or (ii) a material breach by
Sellers of a covenant of Sellers contained in this Agreement; (c) by Sellers if
there has been (i) a material misrepresentation or breach of warranty on the
part of Purchasers contained in this Agreement, or (ii) a material breach by
Purchasers of a covenant of Purchasers contained in the Agreement.
11.2 EXPENSES. Sellers will pay all costs and expenses
attributable to the performance of and compliance with all agreements and
conditions contained in the Agreement to be performed or complied with by
Sellers. Purchasers will pay all costs and expenses attributable to the
performance of and compliance with all agreements and conditions contained in
the Agreement to be performed or complied with by Purchasers.
11.3 GOVERNING LAW. The Agreement shall be governed by, and
construed in accordance with, the internal laws, and not the law of conflicts,
of the Commonwealth of Pennsylvania.
11.4 ENTIRE AGREEMENT; MODIFICATION, WAIVER. The Agreement,
including the exhibits and schedules hereto, constitutes the entire agreement
between Sellers and
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Purchasers pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties and there are no warranties, representations or other
agreements, express or implied, made to any party by any other party in
connection with the subject matter hereof except as may be set forth herein or
in documents delivered pursuant hereto. To the fullest extent permitted by
applicable law, unless otherwise expressly provided herein, no supplement,
modification, waiver or termination of the Agreement shall be binding unless
executed, in writing, by the parties to be bound thereby. No waiver of any
provision of the Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
11.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Sellers and Lemire, on the one hand, and
Purchasers and PDGE, on the other hand, contained in this Agreement and all
Schedules hereto and in any documents, statements or certificates furnished or
to be furnished to either party in connection therewith, shall survive for a
period of three (3) years following the Closing Date, other than with respect to
claims asserted in writing prior to such three (3) year anniversary of the
Closing Date. Notwithstanding the foregoing, (a) Sellers' representations and
warranties as to title contained in Section 3.3 shall survive forever and (b)
Sellers' representations and warranties with respect to tax matters contained in
Section 3.14 shall survive the Closing Date until the applicable statute of
limitations period.
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11.6 COLLECTION OF ACCOUNTS RECEIVABLE.
(a) For a period of not to exceed eighteen (18)
months following the Closing (the "Collection Period") Purchasers agrees to use
its best efforts to collect all Closing Date Accounts reflected on the Closing
Date Accounts Statement in a manner consistent with collection practices of
Sellers prior to the Closing Date but shall not be required to (i) initiate any
litigation against any account debtor or (ii) refer any such Closing Date
Accounts to a collection agency.
(b) Purchasers shall deliver to Sellers within a
reasonable period of time after the receipt thereof not to exceed ten (10) days
during the Collection Period any and all amounts collected by Purchasers in
respect of the Closing Date Accounts.
(c) For purposes of determining collection of any
Closing Date Accounts from account debtors with whom Purchasers shall do
business after the Closing Date, any amounts paid by such account debtors to
Purchasers shall be deemed to be for the oldest outstanding Closing Date
Accounts of such debtor.
11.7 NOTICES. All notices, consents, requests, reports,
demands or other communications hereunder shall be in writing and may be
delivered personally, by registered or certified mail, return receipt requested,
by nationally recognized air courier service, by telegram or by facsimile
transmission, to the addresses indicated below:
If to Sellers:
c/o William A. Lemire
8412 Manchester Road
Brentwood, MO 63144
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<PAGE> 40
with copies to:
Alan R. Blank, Esquire
Stoel Rives LLP
700 N.E. Multnomah, Suite 950
Portland, OR 97232
and
Kevin M. Short
Douglas Group
731 Old Frontenac Square
St. Louis, MO 63131
If to Purchasers:
Project Development Group
c/o PDG Environmental, Inc.
300 Oxford Drive
Monroeville, Pennsylvania 15146
Attention: John C. Regan
Fax No.: 412-856-6914
or to such other address or such other person as the addressee party shall have
last designated by prior written notice to the other party. Notices given by
registered or certified mail shall be deemed to have been given four (4)
business days following deposit in the mail with postage pre-paid. All other
notices shall be deemed to have been given when received. Notices given by
facsimile transmission shall be followed by a copy thereof deposited in the mail
within twenty-four (24) hours following facsimile transmission.
11.8 COUNTERPARTS. The Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute but one and
the same instrument.
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11.9 HEADINGS. The article and section headings in the
Agreement are for convenience of reference only and shall not be deemed to alter
or affect the meaning or interpretation of any provision hereof.
11.10 RECORD RETENTION. The parties hereto agree to retain,
for a period of three (3) years from and after the Closing Date (or such longer
period as may be required by applicable law or contract), and to make available
to each other and their respective agents, counsel, employees or
representatives, upon reasonable notice, all the books, records and documents
(including records with respect to accounts receivable, accounts payable and the
general ledger maintained on magnetic tape or any other electronic medium)
relating to the Businesses which existed on the date preceding the Closing Date
and which were in its possession. During said three (3) year (or longer) period
and for the next succeeding one (1) year period, Sellers and Purchasers shall
furnish each other not less than thirty (30) days' prior written notice of the
planned destruction of any such records so that such party may assume, upon
request, ownership of such records which would otherwise have been destroyed.
11.11 GENDER AND NUMBER. Any personal pronouns used in the
Agreement shall include the other gender, whether used in the masculine,
feminine or neuter gender, and the singular shall include the plural and vice
versa, whenever and as often as may be appropriate.
11.12 SEVERABILITY. If any provision of the Agreement or the
application thereof shall be held to be invalid, illegal or unenforceable, the
remainder of the Agreement shall remain in full force and effect and each court
making any such determination is requested to amend such provision in order that
it may, in such amended version, be enforceable.
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IN WITNESS WHEREOF, the parties have caused the Agreement to
be duly executed as of the date first above written.
Attest: Seller:
Environmental Control & Abatement, Inc.
By: /s/ BETSY KIRCHOFF By: /s/ WILLIAM A. LEMIRE
---------------------------- ---------------------------
Title: Secretary Title: President
------------------------- ------------------------
Attest: Seller:
Environmental Remediation Services, Inc.
By: /s/ WILLIAM A. LEMIRE By: /s/ BETSY KIRCHOFF
---------------------------- ---------------------------
Title: President Title: President
------------------------- ------------------------
Witness:
/s/ KEVIN M. SHORT /s/ WILLIAM A. LEMIRE
- ------------------------------- ------------------------------
William A. Lemire
Attest: Purchasers:
Project Development Group, Inc.
By: /s/ TODD B. FORTIER By: /s/ JOHN C. REGAN
---------------------------- ---------------------------
Title: Chief Financial Officer Title: President & CEO
------------------------- ------------------------
Attest: Purchaser:
PDG, Inc.
By: /s/ TODD B. FORTIER By: /s/ JOHN C. REGAN
---------------------------- ---------------------------
Title: Chief Financial Officer Title: President & CEO
------------------------- ------------------------
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Attest: PDG Environmental, Inc.
By: /s/ TODD B. FORTIER By: /s/ JOHN C. REGAN
---------------------------- ---------------------------
Title: Chief Financial Officer Title: President & CEO
------------------------- ------------------------
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