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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
Date of Report (Date of earliest event reported): July 22, 1996
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Commission File No. 0-24300
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NORRELL CORPORATION
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(Exact name of registrant as specified in its charter)
GEORGIA 58-0953709
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(State or other jurisdiction or (I.R.S. Employer
incorporation or organization) Identification No.)
3535 Piedmont Road, NE, Atlanta, GA 30305
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404)240-3000
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Not Applicable
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Former name, former address and former fiscal year, if changed since last
report.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 22, 1996, Norrell Corporation and its affiliates Norrell Technical
Services, Inc. and Norrell Services, Ltd. (collectively "Norrell"), entered
into an Asset Purchase Agreement that was effective at the close of business on
July 15, 1996, with Analytical Technologies, Inc. and ANATEC Canada, Inc.
(collectively, "Anatec"). The agreement was for the purchase of all the
assets and assumption of certain liabilities of Anatec for a cash purchase
price of $30 million payable at closing and the right to receive a contingent
payment based upon gross margin for the twelve-month period ending on December
31, 1996.
The purchase price was financed by borrowings under Norrell's revolving credit
facility. Effective July 1996, the revolving credit facility which consisted
of a $25 million overnight loan facility and a $55 million revolving credit
facility was increased to a $40 million overnight loan facility and a $55
million revolving credit facility for a total facility of $95 million. The
lenders under the revolving credit facility are Bank of America National Trust
and Savings Association as agent, First Union National Bank of Georgia and Sun
Trust Bank, Atlanta.
Anatec is a software services and technology organization servicing primarily
Fortune 500 companies in the midwestern United States. Services include
consulting, project management, software development, training and software
systems integration services.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
It is impractical to provide the required financial statements for
Analytical Technologies, Inc. within the time this Current Report
is required to be filed. Such financial statements will be filed
as soon as practicable, but not more than 60 days after this
Current Report is required to be filed.
(b) Pro forma financial information.
It is impractical to provide the pro forma financial statements
required by this Item within the time this Current Report is
required to be filed. Such pro forma financial statements will be
filed as soon as practicable, but not more than 60 days after this
Current Report is required to be filed.
(c) Exhibits
99. Asset Purchase Agreement dated July 22, 1996, by and among
Analytical Technologies Inc., ANATEC Canada, Inc., Albert G.
Schornberg, James A. Barbour, Timothy E. Tindle, David H. Cleland
and Norrell Corporation, Norrell Technical Services, Inc., Norrell
Services, Ltd.
SIGNATURE
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, thereto duly authorized.
NORRELL CORPORATION
(REGISTRANT)
Date: August 2, 1996 By: /s/ C. Kent Garner
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C. Kent Garner
Vice President and Chief Financial Officer
(On behalf of the Registrant and as Chief
Accounting Officer)
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EXHIBIT 99
ASSET PURCHASE AGREEMENT
AMONG
ANALYTICAL TECHNOLOGIES, INC.,
ANATEC CANADA, INC.,
ALBERT G. SCHORNBERG, JAMES A. BARBOUR,
TIMOTHY E. TINDLE, DAVID H. CLELAND
AND
NORRELL CORPORATION,
NORRELL TECHNICAL SERVICES, INC.
NORRELL SERVICES, LTD.
JULY 22, 1996
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TABLE OF CONTENTS
<TABLE>
<S> <C>
1.0 Definitions.
2.0 Basic Transaction
2.01 Purchase and Sale of Assets
2.02 Assumption of Liabilities
2.03 Purchase Price and Payment
2.04 The Closing
2.05 Deliveries at the Closing
3.0 Representations and Warranties of the Asset Sellers
3.01 Organization of the Asset Sellers
3.02 Authorization of Transaction
3.03 Non-contravention
3.04 Brokers' Fees
3.05 Title to Assets
3.06 Subsidiaries
3.07 Financial Statements
3.08 Events Subsequent to Most Recent Fiscal Year End
3.09 Undisclosed Liabilities
3.10 Legal Compliance
3.11 Tax Matters
3.12 Real Property
3.13 Intellectual Property
3.14 Tangible Assets
3.15 [Intentionally left blank]
3.16 Contracts
3.17 Notes and Accounts Receivable
3.18 Powers of Attorney
3.19 Insurance
3.20 Litigation
3.21 Product and Services Warranty
3.22 Product Liability
3.23 Employees
3.24 Employee Benefits
3.25 Guaranties
3.26 Environment, Health, and Safety
3.27 Certain Business Relationships with the Asset Sellers
3.28 Adequacy of Acquired Assets
3.29 Customers
3.30 Disclosure
4.0 Representations and Warranties of the Purchaser
4.01 Organization of the Purchaser
4.02 Authorization of Transaction
</TABLE>
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<TABLE>
<S> <C>
4.03 Non-contravention
4.04 Brokers' Fees
5.0 [Intentionally left blank]
6.0 Conditions to Obligation to Close
6.01 Conditions to Obligation of the Purchaser
6.02 Conditions to Obligation of the Asset Sellers
7.0 Termination
7.01 Termination of Agreement
7.02 Effect of Termination
8.0 Post-Closing Covenants
8.01 General
8.02 Litigation Support
8.03 Transition
8.04 Confidentiality
8.05 Covenant Not to Compete
8.06 Tax Matters
8.07 Intellectual Property Matters
8.08 Release of Guaranties
9.0 Remedies for Breaches of This Agreement
9.01 Survival of Representations, Warranties, Covenants and Agreements
9.02 Indemnification Provisions for Benefit of the Purchaser
9.03 Indemnification Provisions for Benefit of the Sellers
9.04 Matters Involving Third Parties
9.05 Other Indemnification Provisions
10.0 Miscellaneous
10.01 Press Releases and Public Announcements
10.02 No Third Party Beneficiaries
10.03 Entire Agreement
10.04 Succession and Assignment
10.05 Counterparts
10.06 Headings
10.07 Notices
10.08 Governing Law
10.09 Amendments and Waivers
10.10 Severability
10.11 Expenses
10.12 Construction
10.13 Incorporation of Exhibits and Schedules
10.14 Specific Performance
</TABLE>
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LIST OF EXHIBITS AND ATTACHMENTS
GLOSSARY OF TERMS
EXHIBIT A--FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT B--INTENTIONALLY LEFT BLANK
EXHIBIT C--FORM OF ESCROW AGREEMENT
EXHIBIT D--FORM OF EMPLOYMENT AGREEMENT
EXHIBIT E--SCHORNBERG AND BARBOUR EXPENSES
DISCLOSURE SCHEDULE
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ASSET PURCHASE AGREEMENT
This Agreement is entered into on July 22,1996, by and among Norrell
Corporation, a Georgia corporation, and its affiliates Norrell Technical
Services, Inc., a Georgia corporation, and Norrell Services, Ltd., a Canadian
corporation (collectively, the "Purchaser"), Analytical Technologies, Inc., a
Michigan corporation, and ANATEC Canada, Inc., a Canadian corporation
(collectively, the "Asset Sellers" and individually, an "Asset Seller"), and
Albert G. Schornberg, James A. Barbour, Timothy E. Tindle and David H. Cleland
(collectively, the "Shareholders" and individually a "Shareholder"). The
Purchaser, the Shareholders and the Asset Sellers are referred to individually
as a "Party" and collectively as the "Parties."
This Agreement contemplates a transaction in which the Purchaser will
purchase all of the assets (and assume certain of the liabilities) of the Asset
Sellers in return for cash.
Now, therefore, in consideration of the premises and the mutual
promises made in this Agreement, and in consideration of the representations,
warranties, and covenants contained in this Agreement, the Parties agree as
follows.
1.0 Definitions. For purposes of this Agreement and the
Acquisition Documents, the capitalized terms shall have the meanings set forth
in the attached Glossary of Terms.
2.0 Basic Transaction.
2.01 Purchase and Sale of Assets. On and subject to the
terms and conditions of this Agreement, the Purchaser agrees to purchase from
the Asset Sellers, and the Asset Sellers agree to sell, transfer, convey, and
deliver to the Purchaser, all of the Acquired Assets, at the Closing, free and
clear of all liens, claims, charges, Security Interests, and encumbrances of
any kind or nature, other than the Permitted Encumbrances.
2.02 Assumption of Liabilities. On and subject to the
terms and conditions of this Agreement, as of the Effective Date, the Purchaser
agrees to assume and become responsible for the performance and satisfaction of
the Assumed Liabilities. Under no circumstances will the Purchaser assume or
have any responsibility with respect to any of the Excluded Liabilities. The
Asset Sellers will remain responsible for the performance and satisfaction of
the Excluded Liabilities and will pay the Excluded Liabilities when due.
2.03 Purchase Price and Payment.
(a) At the Closing, the Purchaser shall pay the
Preliminary Purchase Price to the Asset Sellers by wire transfer or
other delivery of immediately available funds.
(b) Not later than February 15, 1997, the Purchaser shall
prepare or cause to be prepared (in accordance with the accounting
principles applied in the preparation of the Financial Statements as
at and for the fiscal year ended
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as of the Most Recent Fiscal Year End) a combined balance sheet of the
Asset Sellers as at the Closing Date (the "Closing Balance Sheet") and
a combined statement of income in respect of the Business for the
twelve (12)-month period ending December 31, 1996 (collectively the
"1996 Financial Statements"), together with the Purchaser's
calculation of the Contingent Purchase Price. Within fifteen (15) days
following the Asset Sellers' receipt of the 1996 Financial Statements
and the Purchaser's calculation of the Contingent Purchase Price, the
Asset Sellers shall notify the Purchaser in writing of any objections
thereto (the "Dispute Notice"). The Asset Sellers and the Purchaser
shall each use reasonable efforts to resolve any objections set forth
in the Dispute Notice themselves. If the Asset Sellers and the
Purchaser shall be unable to resolve any objections set forth in the
Dispute Notice themselves within thirty (30) days following the
Purchaser's receipt thereof, then the Asset Sellers and the Purchaser
will promptly select a firm of independent public accountants mutually
acceptable to the Asset Sellers and the Purchaser to resolve any
objections set forth therein. If the Asset Sellers and the Purchaser
shall be unable to promptly agree on the selection of a firm of
independent public accountants, then the Asset Sellers and the
Purchaser will select a nationally-recognized firm of independent
public accountants (other than Plante & Moran, L.L.P. or Ernst &
Young, L.L.P.) by lot. The resolution of any objections set forth in
the Dispute Notice by the firm of independent public accountants
(whether selected by mutual agreement or lot) shall be conclusive and
binding upon the Asset Sellers and the Purchaser.
(c) If, as finally determined by the firm of independent
public accountants, the Contingent Purchase Price shall be less than
or equal to the Contingent Purchase Price as calculated by the
Purchaser, then the Asset Sellers shall pay all fees and expenses of
such firm. If, as finally determined by the firm of independent public
accountants, the Contingent Purchase Price shall be greater than the
Contingent Purchase Price as calculated by the Purchaser, then the
Purchaser shall pay all fees and expenses of such firm.
(d) The Purchaser shall make available to the Asset
Sellers and the Asset Sellers' agents and representatives, and any
firm of independent public accountants selected to resolve any
objections set forth in the Dispute Notice, at reasonable times and
upon reasonable notice, the workpapers and other supporting
documentation used by the Purchaser in the preparation of the 1996
Financial Statements and the calculation of the Contingent Purchase
Price.
(e) Promptly following the determination of the
Contingent Purchase Price (whether by mutual agreement of the Asset
Sellers and the Purchaser or by a firm of independent public
accountants), the Purchaser shall pay (i) to the Escrow Agent by wire
transfer or other delivery of immediately available funds an amount
equal to ten percent (10%) of the Aggregate Purchase Price to be held,
administered and distributed in accordance with the Escrow Agreement
and (ii) to the Asset Sellers by wire transfer or other delivery of
immediately
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available funds the balance, if any, of the Contingent Purchase Price
(after giving effect to the payment contemplated by clause (i) of this
Section 2.03(e).
2.04 The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Howard & Howard Attorneys, P.C., in Bloomfield Hills, Michigan, or such
other place as the Parties shall agree to, commencing at 9:00 a.m. (local time)
on the second business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated in this Agreement (other than conditions with respect to actions
the respective Parties will take at the Closing itself) or such other date as
the Parties may mutually determine (the "Closing Date"); provided, however,
that the Closing Date shall be no later than August 30, 1996. The Effective
Date of the transaction shall be 11:59 p.m. (local time) on July 15,1996.
2.05 Deliveries at the Closing. At the Closing, (a) the
Sellers will deliver to the Purchaser the various certificates, instruments, and
documents referred to in Section 6.01; (b) the Purchaser will deliver to the
Sellers the various certificates, instruments, and documents referred to in
Section 6.02; (c) the Asset Sellers will execute, acknowledge (if appropriate),
and deliver to the Purchaser (i) assignments (including real property and
Intellectual Property transfer documents in form satisfactory to the Purchaser
and sufficient to transfer title to the Acquired Assets to the Purchaser and
(ii) such other instruments of sale, transfer, conveyance, and assignment as the
Purchaser and its counsel may reasonably request; (d) the Purchaser will
execute, acknowledge (if appropriate), and deliver to the Asset Sellers (i) an
Assignment and Assumption Agreement in the form attached as Exhibit A and (ii)
such other instruments of assumption as the Asset Sellers and their counsel may
reasonably request; and (e) the Purchaser will deliver to the Asset Sellers the
consideration specified in Section 2.03(a).
3.0 Representations and Warranties of the Sellers. The Sellers
represent and warrant to the Purchaser that, except as set forth in the
disclosure schedule attached and initialed by the Parties (the "Disclosure
Schedule"):
3.01 Organization of the Asset Sellers. Each Asset Seller
is a corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation.
3.02 Authorization of Transaction. Each Asset Seller has
full power and authority (including full corporate power and authority) to
execute and deliver the Acquisition Documents and to perform its obligations in
all respects as required by the Acquisition Documents. The board of directors
of each Asset Seller and the Shareholders, as applicable, have duly authorized
the execution, delivery, and performance of the Acquisition Documents by each
Asset Seller. The Acquisition Documents constitute valid and legally binding
obligations of each Asset Seller, enforceable in accordance with their terms
and conditions. Each Shareholder has full power and authority to execute and
deliver the Acquisition Documents and to perform his obligations thereunder.
The Acquisition Documents constitute the valid and legally binding obligation
of each of the Shareholders, enforceable in accordance with their terms and
conditions.
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3.03 Non-contravention. Neither the execution and the
delivery of the Acquisition Documents, nor the consummation or performance of
the transactions contemplated in the Acquisition Documents, will (a) violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which any of the Asset Sellers or a Shareholder is subject
or any provision of the charter or bylaws of either of the Asset Sellers or (b)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which any of the Asset Sellers or
Shareholders is a party or by which it is bound or to which any of its assets
is subject (or result in the imposition of any Security Interest upon any of
its assets). None of the Asset Sellers and the Shareholders needs to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated in the Acquisition Documents.
3.04 Brokers' Fees. The Sellers have no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated in the Acquisition Documents for which
the Purchaser could become liable or obligated.
3.05 Title to Assets. The Asset Sellers have good and
marketable title to, or a valid leasehold interest in, the properties and
assets used by them, located on their premises, or shown on the Most Recent
Balance Sheet or acquired after the date thereof, including all of the Acquired
Assets, free and clear of all Security Interests or restrictions on transfer,
except for properties and assets disposed of in the Ordinary Course of Business
since the date of the Most Recent Balance Sheet. The Asset Sellers have good
and marketable title to all of the Acquired Assets, free and clear of any
Security Interest or restriction on transfer.
3.06 Subsidiaries. Neither of the Asset Sellers has or
ever had any Subsidiaries.
3.07 Financial Statements. Attached as Section 3.07 of the
Disclosure Schedule are the following financial statements (collectively the
"Financial Statements"): (i) audited balance sheets and statements of income,
changes in stockholders' equity, and cash flow as of and for the fiscal years
ended December 31, 1993, December 31, 1994, and December 31, 1995 (the "Most
Recent Fiscal Year End") for Analytical Technologies, Inc.; and (ii) unaudited
consolidated balance sheets and statements of income, changes in stockholders'
equity, and cash flow (the "Most Recent Financial Statements") as of and for
the six (6) months ended June 30, 1996 (the "Most Recent Fiscal Month End") for
the Asset Sellers. The Financial Statements (including the notes thereto) have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby, present fairly the financial condition of the
Asset Sellers as of such dates and the results of operations of the Asset
Sellers for such periods, are correct and complete, and are consistent with the
books and records of the Asset Sellers (which books and records
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are correct and complete); provided, however, that the Most Recent Financial
Statements, are subject to normal year-end adjustments (which will not be
material individually or in the aggregate) and lack footnotes and other
presentation items. As of the dates of the Financial Statements, the Asset
Sellers did not have any material liabilities or obligations (secured or
unsecured, whether accrued, absolute, direct, indirect, contingent or
otherwise, and whether due or to become due) that are included in the Assumed
Liabilities which are not fully accrued or reserved against in the Financial
Statements in accordance with GAAP. The Financial Statements do not contain any
items of special or nonrecurring income, or other income not earned in the
Ordinary Course of Business, individually in excess of $1,000 and in the
aggregate in excess of $10,000. The Asset Sellers have not engaged in any
transaction, maintained any bank account, or used any of the funds of the Asset
Sellers, except for transactions, bank accounts, and funds which have been and
are reflected in the normally maintained books and records of the Asset
Sellers. The books, records, and accounts of the Asset Sellers accurately and
fairly reflect, in reasonable detail, the transactions and the assets and
liabilities of the Asset Sellers.
3.08 Events Subsequent to the Most Recent Fiscal Year End.
Since the Most Recent Fiscal Year End, there has not been any material adverse
change, singly or in the aggregate, in the business, financial condition,
operations, results of operations, liabilities, assets, earnings, or future
prospects of either of the Asset Sellers nor has there been any event which has
had or may reasonably be expected to have a material adverse effect on any of
the foregoing. Without limiting the generality of the foregoing, except as set
forth in Section 3.08 of the Disclosure Schedule, since the Most Recent Fiscal
Year End:
(a) Neither of the Asset Sellers has sold,
leased, transferred, or assigned any of its assets, tangible or
intangible, other than for a fair consideration in the Ordinary Course
of Business;
(b) Neither of the Asset Sellers has entered into
any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) either involving more
than $5,000 or outside the Ordinary Course of Business or where a
Shareholder, officer, director, employee or any Affiliate of any of
them is a party or has an interest;
(c) No party (including either of the Asset
Sellers) has accelerated, terminated, materially modified, or canceled
any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than
$5,000 to which either of the Asset Sellers is a party or by which
either of them is bound;
(d) Neither of the Asset Sellers has imposed any
Security Interest upon any of its assets, tangible or intangible;
(e) Neither of the Asset Sellers has made any
capital expenditure (or series of related capital expenditures) either
involving more than $3,000 or outside the Ordinary Course of Business;
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(f) Neither of the Asset Sellers has made any
capital investment in, any loan to, or any acquisition of the
Securities or assets of, any other Person (or series of related
capital investments, loans, and acquisitions);
(g) Neither of the Asset Sellers has issued any
note, bond, or other debt security or created, incurred, assumed, or
guaranteed any indebtedness or capitalized lease obligations either
involving more than $3,000 singly or $10,000 in the aggregate or
incurred any obligation or Liability of any nature except in the
Ordinary Course of Business;
(h) Neither of the Asset Sellers has delayed or
postponed the payment of accounts payable and other Liabilities other
than in the Ordinary Course of Business;
(i) Neither of the Asset Sellers has canceled,
compromised, waived, or released any right or claim (or series of
related rights and claims) either involving more than $3,000 or
outside the Ordinary Course of Business;
(j) Neither of the Asset Sellers has granted,
disposed of, or allowed to lapse any license or sublicense of any
rights under or with respect to any of its Intellectual Property;
(k) There has been no change made or authorized
in the charter or bylaws of either of the Asset Sellers;
(l) Neither of the Asset Sellers has issued,
sold, or otherwise disposed of any of its capital stock, or granted
any options, warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or exercise) any of its capital
stock;
(m) Neither of the Asset Sellers has declared,
set aside, or paid any dividend or made any distribution with respect
to its capital stock (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its capital stock;
(n) Neither of the Asset Sellers has experienced
any material damage, destruction, or loss (whether or not covered by
insurance) to its property;
(o) Neither of the Asset Sellers has made any
loan or payment to, or entered into any other transaction with, any of
its directors, officers, and employees outside the Ordinary Course of
Business or with any Shareholder or Affiliate of a Shareholder in any
event;
(p) Neither of the Asset Sellers has entered into
any employment contract or collective bargaining agreement, written or
oral, or materially modified
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the terms of any existing such contract or agreement or experienced
any organized slowdown, work interruption, strike or work stoppage;
(q) Neither of the Asset Sellers has granted any
increase in the base compensation of any of its directors, officers,
and employees outside the Ordinary Course of Business;
(r) Neither of the Asset Sellers has adopted,
amended, modified (outside the Ordinary Course of Business) or
terminated any bonus, profit-sharing, incentive, severance, or other
plan, contract, or commitment for the benefit of any of its employees
(or taken any such action with respect to any other Employee Benefit
Plan); nor has either of the Asset Sellers adopted, amended, modified
or terminated any bonus, profit-sharing, incentive, severance, or
other plan, contract, or commitment, including any Employee Benefit
Plan, with respect to any officer or director of the Asset Sellers;
(s) Neither of the Asset Sellers has made (i) any
change in employment terms for any of its employees outside the
Ordinary Course of Business; or (ii) any change in employment terms
for any of its directors or officers;
(t) Neither of the Asset Sellers has made or
pledged to make any charitable or other contribution outside the
Ordinary Course of Business or in excess of $3,000;
(u) Neither of the Asset Sellers has paid any
amount to any third party with respect to any Liability or obligation
(including any costs and expenses either Asset Seller has incurred or
may incur in connection with this Agreement and the transactions
contemplated hereby) other than those paid and incurred in the
Ordinary Course of Business;
(v) There has not been any other occurrence,
event, incident, action, failure to act, or transaction outside the
Ordinary Course of Business and exceeding $5,000 involving either of
the Asset Sellers;
(w) Neither of the Asset Sellers has made any
material change in any method of accounting, or accounting principle,
practice or policy; and
(x) Neither of the Asset Sellers has committed to
any of the foregoing.
3.09 Undisclosed Liabilities. Neither of the Asset Sellers
has any Liability (and, to the Sellers' Knowledge, there is no Basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them giving rise to any Liability),
except for (i) Liabilities set forth on the face of the Most Recent Balance
Sheet (rather than in any notes thereto), (ii) Liabilities which have arisen
after the Most Recent Fiscal Month End in the Ordinary Course of Business (none
of which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of
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contract, breach of warranty, tort, infringement, or violation of law), and
(iii) Liabilities listed in Section 3.09 of the Disclosure Schedule.
3.10 Legal Compliance. Each of the Asset Sellers and their
predecessors and Affiliates has complied with all applicable laws (including
rules, regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced or threatened against any of them alleging any failure so to
comply and, to the Sellers' Knowledge, there is no Basis for any such action.
3.11 Tax Matters.
3.11.1 Each of the Asset Sellers has filed all Tax
Returns that it was required to file. All such Tax Returns were correct and
complete in all respects. All Taxes owed by each of the Asset Sellers (whether
or not shown on any Tax Return) have been paid. Neither of the Asset Sellers
currently is the beneficiary of any extension of time within which to file any
Tax Return. No claim has ever been made by an authority in a jurisdiction where
either of the Asset Sellers does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no Security Interests on
any of the assets of either of the Asset Sellers that arose in connection with
any failure (or alleged failure) to pay any Tax.
3.11.2 Each of the Asset Sellers has withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party as of the Effective Date.
3.11.3 No Shareholder or director or officer (or
employee responsible for Tax matters) of either of the Asset Sellers expects
any authority to assess any additional Taxes for any period for which Tax
Returns have been filed. There is no dispute or claim concerning any Tax
Liability of either of the Asset Sellers either (a) claimed or raised by any
authority in writing or (b) as to which any of the Shareholders and the
directors and officers (and employees responsible for Tax matters) of the Asset
Sellers has Knowledge. Section 3.11.3 of the Disclosure Schedule lists all
federal, state, local, and foreign income Tax Returns filed with respect to the
Asset Sellers for taxable periods ended on or after December 31, 1989,
indicates those Tax Returns that have been audited, and indicates those Tax
Returns that currently are the subject of audit. The Asset Sellers have
delivered to the Purchaser correct and complete copies of all federal income
Tax Returns, examination reports, and statements of deficiencies assessed
against or agreed to by either of the Asset Sellers since December 31, 1989.
3.11.4 Neither of the Asset Sellers has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.
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3.11.5 The unpaid Taxes of the Asset Sellers (a)
did not, as of the Most Recent Fiscal Month End, exceed the reserve for Tax
Liability (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) and (b) do not
exceed that reserve as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of the Asset Sellers in
filing their Tax Returns.
3.11.6 Neither of the Asset Sellers has filed a
consent under Code Section 341(f) concerning collapsible corporations. Neither
of the Asset Sellers has made any payments, is obligated to make any payments,
or is a party to any agreement that under certain circumstances could obligate
it to make any payments that will not be deductible under Code Section 280G.
Neither of the Asset Sellers has been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the applicable
period specified in Code Section 897(c)(1)(A)(ii). Each of the Asset Sellers
has disclosed on its federal income Tax Returns all positions taken that could
give rise to an understatement of federal income Tax within the meaning of Code
Section 6662. Neither of the Asset Sellers is a party to any Tax allocation or
sharing agreement. Neither of the Asset Sellers (a) has been a member of an
Affiliated Group filing a consolidated federal income Tax Return (other than a
group the common parent of which was the Asset Seller) or (b) has any Liability
for the Taxes of any Person (other than any of the Asset Sellers) under Treas.
Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.
3.11.7 Section 3.11.7 of the Disclosure Schedule
sets forth the following information with respect to each of the Asset Sellers
as of the most recent practicable date (as well as on an estimated pro forma
basis as of the Closing Date giving effect to the consummation of the
transactions contemplated herein): (a) the basis of the Asset Sellers in the
Acquired Assets; (b) the amount of any net operating loss, net capital loss,
unused investment or other credit, unused foreign tax credit, or excess
charitable contribution allocable to the Asset Sellers; and (c) the amount of
any deferred gain or loss allocable to the Asset Sellers arising out of any
Deferred Intercompany Transaction.
3.12 Real Property.
3.12.1 Section 3.12.1 of the Disclosure Schedule
lists and describes briefly all real property that either of the Asset Sellers
owns. With respect to each such parcel of owned real property:
(a) the identified owner has good and marketable
title to the parcel of real property, free and clear of any Security
Interest, easement, covenant, or other restriction, except for
installments of special assessments not yet delinquent and reflected
in the Most Recent Financial Statements and notes thereto and recorded
easements, covenants, and other restrictions which do not impair
adversely or affect the current use, occupancy, or value, or the
marketability of title, of the property subject thereto;
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(b) there are no pending or, to the Knowledge of
any of the Shareholders and the directors and officers (and employees
with responsibility for real estate matters) of the Asset Sellers,
threatened condemnation proceedings, lawsuits, or administrative
actions relating to the property or other matters affecting adversely
the current use, occupancy, or value thereof;
(c) the legal description for the parcel
contained in the deed describes such parcel fully and adequately, the
buildings and improvements are located within the boundary lines of
the described parcels of land, are not in violation of applicable
setback requirements, zoning laws, and ordinances (and none of the
properties or buildings or improvements thereon are subject to
"permitted non-conforming use" or "permitted non-conforming structure"
classifications), and do not encroach on any easement, and the land
does not serve any adjoining property for any purpose inconsistent
with the use of the land, and the property is not located within any
flood plain or subject to any similar type restriction for which any
permits or licenses necessary to the use thereof have not been
obtained;
(d) all facilities have received all approvals of
governmental authorities (including licenses and permits) required in
connection with the ownership or operation thereof and have been
operated and maintained in accordance with applicable laws, rules, and
regulations;
(e) there are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to any
party or parties the right of use or occupancy of any portion of the
parcel of real property;
(f) there are no outstanding options or rights of
first refusal to purchase the parcel of real property, or any portion
thereof or interest therein;
(g) there are no parties (other than the Asset
Seller) in possession of the parcel of real property, other than
tenants under any leases disclosed in Section 3.12.2 of the Disclosure
Schedule who are in possession of space to which they are entitled;
(h) all facilities located on the parcel of real
property are, to the Sellers' Knowledge, supplied with utilities and
other services necessary for the operation of such facilities,
including gas, electricity, water, telephone, sanitary sewer, and
storm sewer, all of which services are adequate, in accordance with
all applicable laws, ordinances, rules, and regulations and are
provided via public roads or via permanent, irrevocable, appurtenant
easements benefiting the parcel of real property; and
(i) each parcel of real property abuts on and has
direct vehicular access to a public road, or has access to a public
road via a permanent, irrevocable, easement benefiting the parcel of
real property, and access to the property is provided by paved public
right-of-way.
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3.12.2 Section 3.12.2 of the Disclosure Schedule lists
and describes briefly all real property leased or subleased by or to
either of the Asset Sellers. The Asset Sellers have delivered to the Purchaser
correct and complete copies of the leases and subleases (as amended to date)
listed in Section 3.12.2 of the Disclosure Schedule. With respect to each
lease and sublease listed in Section 3.12.2 of the Disclosure Schedule as to
the Asset Sellers and, to the Knowledge of any of the Asset Sellers, its
officers or directors, and the Shareholders, as to any other party:
(a) the lease or sublease is legal, valid,
binding, enforceable, and in full force and effect;
(b) the lease or sublease will continue to be
legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated in the Acquisition Documents;
(c) no Party to the lease or sublease is in
breach or default, and no event has occurred which, with notice or
lapse of time, would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(d) no Party to the lease or sublease has
repudiated any provision thereof;
(e) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(f) with respect to each sublease, the
representations and warranties set forth in subsections (a) through
(e) above are true and correct with respect to the underlying lease;
(g) neither of the Asset Sellers has assigned,
transferred, conveyed, mortgaged, deeded in trust, or encumbered any
interest in the leasehold or subleasehold;
(h) all facilities leased or subleased thereunder
have been and are being operated and maintained in accordance with
applicable laws, rules, and regulations; and
(i) all facilities leased or subleased thereunder
are supplied with utilities and other services reasonably necessary
for the operation of said facilities.
3.13 Intellectual Property.
3.13.1 The Asset Sellers own or have the right to
use pursuant to license, sublicense, agreement, or permission all Intellectual
Property necessary or desirable for the operation of the businesses of the
Asset Sellers as presently conducted and as presently proposed to be conducted.
Each item of Intellectual Property owned or
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used by either of the Asset Sellers immediately prior to the Closing will be
owned or available for use by the Purchaser on identical terms and conditions
immediately subsequent to the Closing. Each of the Asset Sellers has taken all
necessary and desirable action to maintain and protect each item of
Intellectual Property that it owns or uses.
3.13.2 Neither of the Asset Sellers has interfered
with, infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and none of the Shareholders and
the directors and officers (and employees with responsibility for Intellectual
Property matters) of the Asset Sellers has ever received, or has Knowledge of,
any charge, complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that either
of the Asset Sellers must license or refrain from using any Intellectual
Property rights of any third party). To the Knowledge of any of the
Shareholders and the directors and officers (and employees with responsibility
for Intellectual Property matters) of the Asset Sellers, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of either of the Asset Sellers.
3.13.3 Section 3.13.3 of the Disclosure Schedule
identifies each patent or registration which has been issued to either of the
Asset Sellers with respect to any of its Intellectual Property, identifies each
pending patent application or application for registration which either of the
Asset Sellers has made with respect to any of its Intellectual Property, and
identifies each license, agreement, or other permission which any of the Asset
Sellers has granted to any third party with respect to any of its Intellectual
Property (together with any exceptions). The Asset Sellers have delivered to
the Purchaser correct and complete copies of all such patents, registrations,
applications, licenses, agreements, and permissions (as amended to date) and
has made available to the Purchaser correct and complete copies of all other
written documentation evidencing ownership and prosecution (if applicable) of
each such item. Section 3.13.3 of the Disclosure Schedule also identifies each
trade name or unregistered trademark used by any of the Asset Sellers in
connection with any of its businesses and any address at which each name or
mark was or is used. With respect to each item of Intellectual Property
required to be identified in Section 3.13.3 of the Disclosure Schedule:
(a) the Asset Sellers possess all right,
title, and interest in and to the item, free and clear of any Security
Interest, license, or other restriction;
(b) the item is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge;
(c) no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of any of the Shareholders and the directors and
officers (and employees with responsibility for Intellectual Property
matters) of the Asset Sellers, is threatened which challenges the
legality, validity, enforceability, use, or ownership of the item; and
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(d) neither of the Asset Sellers has
ever agreed to indemnify any Person for or against any interference,
infringement, misappropriation, or other conflict with respect to the
item.
3.13.4 Section 3.13.4 of the Disclosure Schedule
identifies each item of Intellectual Property that any third party owns and
that either of the Asset Sellers uses and no Intellectual Property of a third
party is used except pursuant to license, sublicense, agreement, or permission.
The Asset Sellers have delivered to the Purchaser correct and complete copies
of any licenses, sublicenses, agreements, and permissions (as amended to date).
With respect to each item of Intellectual Property required to be identified in
Section 3.13.4 of the Disclosure Schedule:
(a) the license, sublicense, agreement,
or permission covering the item is legal, valid, binding, enforceable,
and in full force and effect;
(b) the license, sublicense, agreement,
or permission will continue to be legal, valid, binding, enforceable,
and in full force and effect on identical terms following the
consummation of the transactions contemplated by the Acquisition
Documents;
(c) no party to the license, sublicense,
agreement, or permission is in breach or default, and no event has
occurred which with notice or lapse of time would constitute a breach
or default or permit termination, modification, or acceleration
thereunder;
(d) no party to the license, sublicense,
agreement, or permission has repudiated any provision thereof;
(e) with respect to each sublicense, the
representations and warranties set forth in subsections (a) through
(d) above are true and correct with respect to the underlying license;
(f) the underlying item of Intellectual
Property is not subject to any outstanding injunction, judgment,
order, decree, ruling, or charge;
(g) no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of any of the Shareholders and the directors and
officers (and employees with responsibility for Intellectual Property
matters) of the Asset Sellers, is threatened which challenges the
legality, validity, or enforceability of the underlying item of
Intellectual Property; and
(h) neither of the Asset Sellers has
granted any sublicense or similar right with respect to the license,
sublicense, agreement, or permission.
3.13.5 To the Knowledge of any of the Shareholders
and the directors and officers (and employees with responsibility for
Intellectual Property matters) of the
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Asset Sellers, none of the Purchaser or its subsidiaries will interfere with,
infringe upon, misappropriate, or otherwise come into conflict with, any
Intellectual Property rights of third parties as a result of the continued
operation of the Asset Sellers' businesses as presently conducted and as
presently proposed to be conducted.
3.13.6 None of the Shareholders and the directors
and officers (and employees with responsibility for Intellectual Property
matters) of the Asset Sellers has any Knowledge of any new products,
inventions, procedures, services, or methods of manufacturing or processing
that any competitors or other third parties have developed which reasonably
could be expected to supersede or make obsolete any product, service, or
process of any of the Asset Sellers.
3.14 Tangible Assets. The Asset Sellers own or lease all
buildings, machinery, equipment, and other tangible assets which, to the
Sellers' Knowledge, are reasonably necessary for the conduct of their
businesses as presently conducted and as presently proposed to be conducted.
Each such tangible asset is free from defects (patent and latent), has been
maintained in accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear), and is suitable for the
purposes for which it presently is used and presently is proposed to be used.
Section 3.14 of the Disclosure Schedule lists all Vehicles, Equipment and
Furniture and Fixtures owned, leased or used in the Asset Sellers' businesses
and indicates the owner of each such listed item. Section 3.14 of the
Disclosure Schedule lists all bank accounts maintained by the Asset Sellers.
3.15 Intentionally left blank.
3.16 Contracts. Section 3.16 of the Disclosure Schedule
lists the following contracts and other agreements to which either of the Asset
Sellers is a party:
(a) any agreement (or group of related
agreements) for the lease of personal property to or from any Person
providing for lease payments in excess of $3,000 per annum;
(b) any agreement (or group of related
agreements) for the purchase or sale of raw materials, commodities,
supplies, products, or other personal property, or for the furnishing
or receipt of services, the performance of which will extend over a
period of more than one year, or cannot be terminated on 30 days'
notice, or which is expected to result in a loss to either of the
Asset Sellers, or involves consideration in excess of $25,000;
(c) any agreement concerning a partnership or
joint venture, and any distribution, dealer, representative, agent,
franchise, commission or other sales agreement;
(d) any agreement (or group of related
agreements) under which either of the Asset Sellers has created,
incurred, assumed, or guaranteed any
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indebtedness, or any capitalized lease obligation, in excess of $5,000
or under which it has imposed a Security Interest on any of its
assets, tangible or intangible;
(e) any agreement concerning confidentiality,
non-solicitation or non-competition;
(f) any agreement involving any of the
Shareholders and their Affiliates;
(g) any profit sharing, phantom stock, stock
option, stock purchase, stock appreciation, deferred compensation,
severance, or other plan or arrangement for the benefit of its current
or former directors, officers, and employees;
(h) any collective bargaining agreement;
(i) any agreement for the employment of any
individual on a full-time, part-time, consulting, or other basis
providing annual compensation in excess of $40,000 or providing
severance benefits;
(j) any agreement under which either of the Asset
Sellers has advanced or loaned any amount to any of its directors,
officers, and employees or any of their Affiliates;
(k) any agreement under which the consequences of
a default or termination could have a material adverse effect on the
business, financial condition, operations, results of operations, or
future prospects of either of the Asset Sellers;
(l) any agreement or commitment for any charitable
or political contribution;
(m) any agreement not in the Ordinary Course of
Business; and
(n) any other agreement (or group of related
agreements) the performance of which involves consideration in excess
of $100,000.
The Asset Sellers have delivered to the Purchaser a correct and complete copy
of each written agreement listed in Section 3.16 of the Disclosure Schedule (as
amended to date) and a written summary setting forth the terms and conditions
of each oral agreement referred to in Section 3.16 of the Disclosure Schedule.
With respect to each such agreement, as to the Asset Sellers, and to the
Knowledge of any of the Asset Sellers, officers, directors and the
Shareholders, as to any other Person: (i) the agreement is legal, valid,
binding, enforceable, and in full force and effect; (ii) the agreement will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
in the Acquisition Documents; (iii) no Person is in breach or default, and no
event has occurred which with notice or lapse of time
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would constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (iv) no Person has repudiated any
provision of the agreement.
3.17 Notes and Accounts Receivable. All notes and accounts
receivable of the Asset Sellers are reflected properly on the Books and
Records, are valid receivables for sales actually made or services actually
rendered in the Ordinary Course of Business, subject to no defenses, setoffs,
or counterclaims, are current and collectible, and will be collected in
accordance with their terms at their recorded amounts, subject only to the
reserve for bad debts in the Most Recent Balance Sheet (rather than in any
notes thereto) as adjusted for the passage of time through the Effective Date
in accordance with the past custom and practice of the Asset Sellers.
3.18 Powers of Attorney. There are no outstanding powers
of attorney executed on behalf of either of the Asset Sellers.
3.19 Insurance. Section 3.19 of the Disclosure Schedule
sets forth the following information with respect to each insurance policy
(including policies providing property, casualty, liability, errors and
omissions, and workers' compensation coverage and bond and surety arrangements)
to which either of the Asset Sellers has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past 5 years:
(a) the name, address, and telephone number of the agent;
(b) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(c) the policy number and the period of coverage;
(d) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and amount
(including a description of how deductibles and ceilings are calculated and
operate) of coverage; and
(e) a description of any retroactive premium adjustments
or other loss-sharing arrangements.
With respect to each such insurance policy, except as set forth in Section 3.19
of the Disclosure Schedule: (i) the policy is legal, valid, binding,
enforceable, and in full force and effect; (ii) the policy will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions in the Acquisition
Documents; (iii) neither the Asset Sellers nor any other party to the policy is
in breach or default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred which, with notice or the lapse
of time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (iv) no party to the
policy has repudiated any provision thereof. Each of the Asset Sellers has
been covered during the past 10 years by insurance in scope and amount
customary and reasonable for the businesses in which it has engaged. Section
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3.19 of the Disclosure Schedule describes any self-insurance arrangements
affecting each of the Asset Sellers.
3.20 Litigation. Section 3.20 of the Disclosure Schedule
sets forth each instance in which either of the Asset Sellers (a) is subject to
any outstanding injunction, judgment, order, decree, ruling, or charge or (b)
is a party or, to the Knowledge of any of the Shareholders and the directors
and officers (and employees with responsibility for litigation matters) of the
Asset Sellers, is threatened to be made a party, to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator. None of the actions, suits,
proceedings, hearings, and investigations set forth in Section 3.20 of the
Disclosure Schedule could have a material adverse effect on the business,
financial condition, operations, results of operations, or future prospects of
any of the Asset Sellers. None of the Shareholders and the directors and
officers (and employees with responsibility for litigation matters) of the
Asset Sellers has any reason to believe that any such action, suit, proceeding,
hearing, or investigation may be brought or threatened against any of the Asset
Sellers.
3.21 Product and Service Warranty. Each product
manufactured, sold, leased, or delivered or service provided by either of the
Asset Sellers has been in conformity with all applicable contractual
commitments and all express and implied warranties, and neither of the Asset
Sellers has any Liability, (and there is no Basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rise to any Liability) for replacement or
repair thereof or other damages in connection therewith, subject only to the
reserve for product or service warranty claims in the Most Recent Balance Sheet
(rather than in any notes thereto) as adjusted for the passage of time through
the Effective Date in accordance with the past custom and practice of the Asset
Sellers. No products manufactured, sold, leased, or delivered or service
provided by either of the Asset Sellers are subject to any guaranty, warranty,
or other indemnity beyond the standard terms and conditions. Section 3.21 of
the Disclosure Schedule includes a copy of the standard terms and conditions
for each of the Asset Sellers containing applicable guaranty, warranty, and
indemnity provisions.
3.22 Product Liability. Neither of the Asset Sellers has
any Liability (and, to the Sellers' Knowledge, there is no Basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them giving rise to any Liability)
arising out of any injury to individuals or property as a result of the
ownership, possession, or use of any product manufactured, sold, leased, or
delivered by either of the Asset Sellers.
3.23 Employees.
3.23.1 To the Knowledge of any of the Shareholders
and the directors and officers (and employees with responsibility for
employment matters) of the Asset Sellers, except as set forth in Section 3.23.1
of the Disclosure Schedule, no executive, key employee, or group of employees
has any plans to terminate employment with either of the Asset Sellers. Neither
of the Asset Sellers is a party to or bound by any collective
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bargaining agreement, nor has any of them experienced any strikes, grievances,
claims of unfair labor practices, or other collective bargaining disputes.
Neither of the Asset Sellers has committed or been charged or threatened with a
charge in the last three (3) years of any unfair labor practice. None of the
Shareholders and the directors and officers (and employees with responsibility
for employment matters) of the Asset Sellers has any Knowledge of any
organizational effort presently being made or threatened in the last three (3)
years by or on behalf of any labor union with respect to employees of either of
the Asset Sellers. Section 3.23.1 of the Disclosure Schedule lists all
employees and consultants receiving wages from either of the Asset Sellers for
the three months ended on Most Recent Month End.
3.23.2 The Asset Sellers are in compliance with all
applicable federal, state, local and foreign laws and regulations concerning
the employer-employee relationship and with all agreements relating to the
employment of their employees, including applicable wage and hour laws, fair
employment laws, safety laws, worker compensation statutes, unemployment laws,
and social security laws. Except as described on Section 3.23.2 of the
Disclosure Schedule, with respect to the Asset Sellers, there are no pending
or, to the Sellers' Knowledge, threatened, claims, investigations, charges,
citations, hearings, consent decrees, or litigation concerning: wages,
compensation, bonuses, commissions, awards, or payroll deductions, equal
employment or human rights violations regarding race, color, religion, sex,
national origin, age, handicap, veteran's status, marital status, disability,
or any other recognized class, status, or attribute under any federal, state,
local or foreign equal employment law prohibiting discrimination;
representation petitions or unfair labor practices; grievances or arbitrations
pursuant to current or expired collective bargaining agreements; occupational
safety and health; workers compensation; wrongful termination, negligent
hiring, invasion of privacy or defamation; immigration or any other claim based
on the employment relationship or termination of the employment relationship
(collectively "Labor Claims"). Neither Asset Seller is liable for any unpaid
wages, bonuses, or commissions (other than those not yet due) or any tax,
penalty, assessment, or forfeiture for failure to comply with any of the
foregoing. Except as described on Section 3.23.2 of the Disclosure Schedule,
there is no outstanding agreement or arrangement with respect to severance
payments with respect to any employee of either of the Asset Sellers.
3.24 Employee Benefits.
3.24.1 Section 3.24.1 of the Disclosure Schedule
lists each Employee Benefit Plan that either of the Asset Sellers maintains or
to which either of the Asset Sellers contributes.
3.24.2 Each such Employee Benefit Plan (and each
related trust, insurance contract, or fund) complies in form and in operation
with the applicable requirements of ERISA, the Code, and other applicable laws.
3.24.3 All required reports and descriptions
(including Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's, and
Summary Plan Descriptions) have been filed or distributed with respect to each
such Employee Benefit Plan. The
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requirements of Part 6 of Subtitle B of Title I of ERISA and of Code Section
4980B have been met with respect to each such Employee Benefit Plan which is an
Employee Welfare Benefit Plan.
3.24.4 All contributions (including all employer
contributions and employee salary reduction contributions) which are due have
been paid to each such Employee Benefit Plan (including an Employee Pension
Benefit Plan) and all contributions for any period ending on or before the
Effective Date which are not yet due have been paid to each such Employee
Benefit Plan (including an Employee Pension Benefit Plan) or accrued in
accordance with the past custom and practice of each of the Asset Sellers. All
premiums or other payments for all periods ending on or before the Effective
Date have been paid with respect to each such Employee Benefit Plan (including
an Employee Welfare Benefit Plan).
3.24.5 Each such Employee Benefit Plan which is
classified as a qualified plan (including an Employee Pension Benefit Plan)
meets the requirements of a "qualified plan" under Code Section 401(a) and has
received, within the last two years, a favorable determination letter from the
Internal Revenue Service.
3.24.6 The market value of assets under each such
Employee Benefit Plan (including an Employee Pension Benefit Plan) equals or
exceeds the present value of all vested and non-vested Liabilities thereunder
determined in accordance with PBGC methods, factors, and assumptions applicable
to an Employee Benefit Plan (including an Employee Pension Benefit Plan
terminating on the date for determination.
3.24.7 Each Asset Seller has delivered to the
Purchaser correct and complete copies of the plan documents and summary plan
descriptions, the most recent determination letter received from the Internal
Revenue Service, the most recent Form 5500 Annual Report, and all related trust
agreements, insurance contracts, and other funding agreements which implement
each such Employee Benefit Plan.
3.24.8 With respect to each Employee Benefit Plan
that either of the Asset Sellers, and the Controlled Group of Corporations
which includes the Asset Sellers maintains or ever has maintained or to which
any of them contributes, ever has contributed, or ever has been required to
contribute:
(a) No such Employee Benefit Plan which
is an Employee Pension Benefit Plan (other than any Multi-employer
Plan) has been completely or partially terminated or been the subject
of a Reportable Event as to which notices would be required to be
filed with the PBGC. No proceeding by the PBGC to terminate any such
Employee Pension Benefit Plan (other than any Multi-employer Plan) has
been instituted or, to the Knowledge of any of the Shareholders and
the directors and officers (and employees with responsibility for
employee benefits matters) of the Asset Sellers, threatened.
(b) There have been no Prohibited
Transactions with respect to any such Employee Benefit Plan. No
Fiduciary has any Liability for
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breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of any
such Employee Benefit Plan. No action, suit, proceeding, hearing, or
investigation with respect to the administration or the investment of
the assets of any such Employee Benefit Plan (other than routine
claims for benefits) is pending or, to the Knowledge of any of the
Shareholders and the directors and officers (and employees with
responsibility for employee benefits matters) of the Asset Sellers,
threatened. None of the Shareholders and the directors and officers
(and employees with responsibility for employee benefits matters) of
the Asset Sellers has any Knowledge of any Basis for any such action,
suit, proceeding, hearing, or investigation.
(c) Neither of the Asset Sellers has
incurred, and none of the Shareholders and the directors and officers
(and employees with responsibility for employee benefits matters) of
the Asset Seller and its Subsidiaries has any reason to expect that
any of the Asset Sellers will incur any Liability to the PBGC (other
than PBGC premium payments) or otherwise under Title IV of ERISA
(including any withdrawal Liability) or under the Code with respect to
any such Employee Benefit Plan.
3.24.9 Neither of the Asset Sellers, and the other
members of the Controlled Group of Corporations that includes the Asset
Sellers, contributes to, ever has contributed to, or ever has been required to
contribute to any Multi-employer Plan or has any Liability (including
withdrawal Liability) under any Multi-employer Plan.
3.24.10 Neither of the Asset Sellers maintains or
ever has maintained or contributes, ever has contributed, or ever has been
required to contribute to any Employee Welfare Benefit Plan providing medical,
health, or life insurance or other welfare-type benefits for current or future
retired or terminated employees, their spouses, or their dependents other than
in accordance with the continuation of coverage requirements of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and
Sections 601 through 608 of ERISA, all of which have been complied with in all
material respects.
3.25 Guaranties. Neither of the Asset Sellers is a
guarantor or otherwise is liable for any Liability or obligation (including
indebtedness) of any other Person.
3.26 Environment, Health, and Safety.
3.26.1 Each of the Asset Sellers, and their
respective predecessors and Affiliates, has complied with all Environmental,
Health, and Safety Laws, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been filed or
commenced against any of them alleging any failure so to comply. Without
limiting the generality of the preceding sentence, each of the Asset Sellers,
and their respective predecessors and Affiliates has obtained and been in
compliance with all of the terms and conditions of all permits, licenses, and
other authorizations which are required under, and has complied with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in, all
Environmental, Health, and Safety Laws.
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3.26.2 Neither of the Asset Sellers has any
Liability (and neither of the Asset Sellers, and their respective predecessors
and Affiliates, has handled or disposed of any substance, arranged for the
disposal of any substance, exposed any employee or other individual to any
substance or condition, or owned or operated any property or facility in any
manner that could form the Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
either of the Asset Sellers giving rise to any Liability) for damage to any
site, location, or body of water (surface or subsurface), for any illness of or
personal injury to any employee or other individual, or for any reason under
any Environmental, Health, and Safety Law.
3.26.3 All properties and equipment used in the
businesses of the Asset Sellers, and their respective predecessors and
Affiliates have been free of asbestos, PCB's, methylene chloride,
trichloroethylene, 1,2-trans-dichloroethylene, dioxins, dibenzofurans, and
Extremely Hazardous Substances.
3.27 Certain Business Relationships With the Asset
Sellers. Except as described in Section 3.27 of the Disclosure Schedule, none
of the Shareholders and their Affiliates has been involved in any business
arrangement, contract, agreement or relationship with either of the Asset
Sellers within the past twelve (12) months or received any payments or benefits
from the Asset Sellers, and none of the Shareholders and their Affiliates owns
any asset, tangible or intangible, which is used in the business of either of
the Asset Sellers.
3.28 Adequacy of Acquired Assets. The Acquired Assets
include all rights, properties, and assets reasonably necessary to permit the
Purchaser to carry on the businesses of the Asset Sellers as presently
conducted and presently proposed to be conducted.
3.29 Customers. Section 3.29 of the Disclosure Schedule
contains a list of all customers of the Asset Sellers as of June 30, 1996.
Sellers have not received any notice and have no Knowledge that any customer
with annual billings exceeding $50,000 has taken or indicated an intent to take
any steps which could result in any loss of sales.
3.30 Disclosure. No representation or warranty of the
Sellers in this Agreement or in any statement, certificate or Schedule
furnished by the Sellers, or in connection with the transactions contemplated
herein, contains any untrue statement of fact or omits to state any fact
necessary in order to make the statements contained therein not misleading, and
all such statements, representations, warranties, certificates and Schedules
are true and complete. Nothing in the Disclosure Schedule shall be deemed
adequate to disclose an exception to a representation or warranty unless the
Disclosure Schedule identifies the exception with reasonable particularity and
describes the relevant facts in reasonable detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be deemed adequate to disclose an exception to
a representation or warranty unless the representation or warranty has to do
with the existence of the document or other item itself. The Disclosure
Schedule
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will be arranged in paragraphs corresponding to the numbered paragraphs
contained in this Article 3.
4.0 Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Sellers that:
4.01 Organization of the Purchaser. The Purchaser is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation.
4.02 Authorization of Transaction. The Purchaser has full
power and authority (including full corporate power and authority) to execute
and deliver the Acquisition Documents and to perform its obligations
thereunder. The Acquisition Documents constitute the valid and legally binding
obligations of the Purchaser, enforceable in accordance with their terms and
conditions.
4.03 Non-contravention. Neither the execution and the
delivery of the Acquisition Documents, nor the consummation of the transactions
contemplated in the Acquisition Documents, will (a) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to which
the Purchaser is subject or any provision of its charter or bylaws, or (b)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Purchaser is a party or
by which it is bound or to which any of its assets is subject. The Purchaser
does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by the
Acquisition Documents.
4.04 Brokers' Fees. The Purchaser has no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the
Sellers could become liable or obligated.
5.0 Intentionally left blank.
6.0 Conditions to Obligation to Close.
6.01 Conditions to Obligation of the Purchaser. The
obligation of the Purchaser to consummate the transactions to be performed by
it in connection with the Closing is subject to satisfaction of the following
conditions:
(a) the representations and warranties set forth
in Article 3 shall be true and correct in all material respects at and
as of the Closing Date;
(b) the Sellers shall have performed and complied
with all of its covenants and agreements in all material respects
through the Closing;
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(c) no action, suit, or proceeding shall be
pending before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction in which an
unfavorable injunction, judgment, order, decree, ruling, or charge
would (i) prevent consummation of any of the transactions contemplated
in this Agreement, (ii) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation, (iii) affect
materially and adversely the right of the Purchaser to own the
Acquired Assets, to operate the former businesses of the Asset
Sellers;
(d) the Sellers shall have delivered to the
Purchaser a certificate to the effect that each of the conditions
specified in Section 6.01(a)-(c) is satisfied in all respects;
(e) the Purchaser shall have received all other
authorizations, consents, and approvals of governments and
governmental agencies referred to in Section 3.03 and Section 4.03;
(f) the relevant parties shall have entered into
the agreements in form and substance as set forth in Exhibits A and C
and the same shall be in full force and effect;
(g) the Purchaser shall have received from
counsel to the Sellers an opinion in form and substance reasonably
acceptable to the Purchaser, addressed to the Purchaser, and dated as
of the Closing Date;
(h) Timothy E. Tindle and David H. Cleland shall
have executed and delivered to the Purchaser Employment Agreements in
form and substance as attached on Exhibit D;
(i) each Asset Seller shall have executed and
delivered to the Purchaser the transfer and assignment documents
required by Section 2.05;
(j) all loans or advances between or among either
of the Asset Sellers, the Shareholders and their respective Affiliates
must be repaid on or before the Closing Date and any agreements,
arrangements or undertakings (other than those contemplated in the
Acquisition Documents) shall have been canceled, terminated or
otherwise discontinued without cost or expense to the Asset Sellers;
(k) Albert G. Schornberg and James A. Barbour,
their families and their affiliates shall pay the Purchaser for all
unpaid interest amounts on promissory notes made by them in favor of
either of the Asset Sellers, and all expenses incurred by, or advances
or payments to, them and paid by the Asset Sellers from and after June
12, 1996, including those expenses set forth on Exhibit E hereto and
all other such expenses, advances, or payments within seven (7) days
of presentation by the Purchaser of evidence thereof.
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(l) all actions to be taken by the Sellers in
connection with consummation of the transactions contemplated herein
and all certificates, opinions, instruments, and other documents
required to effect the transactions contemplated herein will be
reasonably satisfactory in form and substance to the Purchaser; and
(m) before the Closing Date, Analytical
Technologies, Inc. shall, by corporation resolution, adopt the Anatec
401(k) Retirement Savings Plan which shall be effective as of July 15,
1996 (the "Savings Plan") in the form approved by the Purchaser, and:
(i) Effective as of the Closing Date,
the Purchaser and the Sellers shall take such action as may be
necessary to cause Purchaser to assume sponsorship of the
Savings Plan, including execution of a trust substitution
agreement for its related trust to reflect Purchaser as sole
sponsor of the Savings Plan and sole settlor of any
corresponding (whether existing or substituted) trust. The
Sellers shall transfer to the Purchaser all documents relating
to the Savings Plan, including all plan documents, trust
agreements, completed administrative forms, correspondence,
and all material employee communications with respect to the
Savings Plan;
(ii) Effective as of the Closing Date, the Purchaser
shall succeed to all obligations and liabilities of Analytical
Technologies, Inc. under or arising with respect to the
Savings Plan; the Purchaser shall have no obligations or
liabilities whatsoever with respect to any other employee
benefit plans, other than the Savings Plan, and the Sellers
shall indemnify and hold the Purchaser harmless from any such
obligations or liabilities; and
(iii) Effective as of the Closing Date, the Sellers
shall afford the Purchaser reasonable access to such
documentation, including (without limitation) plan coverage
information, as the Purchaser may request to prepare and
complete all governmental filings (including Forms 5300 and
5500 required with respect to the Savings Plan for plan years
ending before the Closing Date.
The Purchaser may waive any condition specified in this Section 6.01 if it
executes a writing so stating at or prior to the Closing.
6.02 Conditions to Obligation of the Sellers. The
obligation of the Sellers to consummate the transactions to be performed by
them in connection with the Closing is subject to satisfaction of the following
conditions:
(a) the representations and warranties set forth
in Article 4 above shall be true and correct in all material respects
at and as of the Closing Date;
(b) the Purchaser shall have performed and
complied with all of its covenants and agreements in all material
respects through the Closing;
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(c) no action, suit, or proceeding shall be
pending before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge
would (i) prevent consummation of any of the transactions contemplated
by this Agreement or (ii) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation (and no such
injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(d) the Purchaser shall have delivered to the
Sellers a certificate to the effect that each of the conditions
specified in Section 6.02(a)-(c) is satisfied in all respects;
(e) the Purchaser shall have received all other
authorizations, consents, and approvals of governments and
governmental agencies referred to in Section 3.03 and Section 4.03;
(f) the relevant parties shall have entered into
the agreements in form and substance as set forth in Exhibits A and C
and the same shall be in full force and effect;
(g) the Sellers shall have received from counsel
to the Purchaser an opinion in form and substance reasonably
acceptable to the Sellers, addressed to the Sellers, and dated as of
the Closing Date; and
(h) all actions to be taken by the Purchaser in
connection with consummation of the transactions contemplated herein
and all certificates, opinions, instruments, and other documents
required to effect the transactions contemplated herein will be
reasonably satisfactory in form and substance to the Sellers.
The Sellers may waive any condition specified in this Section 6.02 if they
execute a writing so stating at or prior to the Closing.
7.0 Termination.
7.01 Termination of Agreement. Certain of the Parties may
terminate this Agreement as follows:
(a) the Purchaser and the Asset Seller may
terminate this Agreement by mutual written consent at any time prior
to the Closing;
(b) the Purchaser may terminate this Agreement by
giving written notice to the Asset Seller at any time prior to the
Closing (i) in the event the Sellers have breached any representation,
warranty, or covenant contained in this Agreement in any material
respect, the Purchaser has notified the Sellers of the breach, and the
breach has continued without cure for a period of 10 calendar days
after the notice of breach, or (ii) if the Closing shall not have
occurred on or before August 30, 1996, by reason of the failure of any
condition precedent under Section
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6.01 (unless the failure results primarily from the Purchaser itself
breaching any representation, warranty, or covenant contained in this
Agreement); and
(c) the Sellers may terminate this Agreement by
giving written notice to the Purchaser at any time prior to the
Closing (i) in the event the Purchaser has breached any
representation, warranty, or covenant contained in this Agreement in
any material respect, the Sellers have notified the Purchaser of the
breach, and the breach has continued without cure for a period of 10
calendar days after the notice of breach, or (ii) if the Closing shall
not have occurred on or before August 30, 1996, by reason of the
failure of any condition precedent under Section 6.02 hereof (unless
the failure results primarily from the Sellers themselves breaching
any representation, warranty, or covenant contained in this
Agreement).
7.02 Effect of Termination. If any Party terminates this
Agreement pursuant to Section 7.01, all rights and obligations of the Parties
shall terminate without any Liability of any Party to any other Party (except
for any Liability of any Party then in breach). Upon request therefor, each
Party will return all documents, workpapers, and other material of any other
Party relating to the transactions contemplated herein, whether obtained before
or after the date hereof, to the Party that furnished same.
8.0 Post-Closing Covenants. The Parties agree with respect to the
period following the Closing:
8.01 General. If at any time after the Closing, any
further action is necessary or desirable to carry out the purposes of the
Acquisition Documents, each of the Parties will take such further action
(including the execution and delivery of such further instruments and
documents) as any other Party may reasonably request, all at the sole cost and
expense of the requesting Party (unless the requesting Party is entitled to
indemnification therefor). The Sellers acknowledge and agree that from and
after the Closing, the Purchaser will be entitled to possession of all
documents, books, records (including Tax records), agreements, and financial
data of any sort except the Excluded Assets.
8.02 Litigation Support. In the event and for so long as
any Party actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under the Acquisition
Documents or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction occurring on or prior to the Closing Date involving either of
the Asset Sellers, each of the other Parties will cooperate with each other and
their counsel in the contest or defense, make available their personnel, and
provide such testimony and access to their books and records as shall be
reasonably necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor).
8.03 Transition. None of the Sellers will take any action
that is designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier,
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employee, temporary employee, consultant employee or other business associate
of either of the Asset Sellers from maintaining the same business relationships
with the Purchaser after the Closing as it maintained with the Asset Sellers
prior to the Closing. Each of the Sellers will refer all customer inquiries
relating to the businesses of the Asset Sellers to the Purchaser from and after
the Closing Date. Each Party shall deliver to the other (within five (5)
business day of receipt) any money or document it receives that belongs to any
other Party. The Sellers shall cooperate with and assist the Purchaser in
obtaining consents of other parties (e.g. lessors, customers) to assignments of
Contracts, leases of Leased Real Property, and any other Acquired Assets.
8.04 Confidentiality. Each of the Sellers will treat and
hold as confidential all of the Confidential Information, refrain from using or
disclosing any of the Confidential Information except in connection with this
Agreement, and deliver promptly to the Purchaser or destroy, at the request and
option of the Purchaser, all tangible embodiments (and all copies) of the
Confidential Information which are in their possession. In the event that any
of the Sellers is requested or required by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena,
civil investigative demand, or similar process to disclose any Confidential
Information, such Seller will notify the Purchaser promptly of the request or
requirement so that the Purchaser may seek an appropriate protective order or
waive compliance with the provisions of this Section. If, in the absence of a
protective order or the receipt of a waiver hereunder, any of the Sellers is,
on the advice of counsel, compelled to disclose any Confidential Information to
any tribunal or else stand liable for contempt, that Seller may disclose the
Confidential Information to the tribunal; provided, however, that the
disclosing Seller shall use their reasonable efforts to obtain, at the
reasonable request of the Purchaser, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as the Purchaser shall designate. The
foregoing provisions shall not apply to any Confidential Information which is
generally available to the public immediately prior to the time of disclosure.
8.05 Covenant Not to Compete. For a period of five years
from and after the Closing Date, Albert G. Schornberg, James A. Barbour,
Timothy E. Tindle, and David H. Cleland agree, severally, that each will not in
the United States or Canada (i) engage, directly or indirectly, in any business
that either of the Asset Sellers conducts as of the Closing Date; provided,
however, that no owner of less than 1% of the outstanding stock of any publicly
traded corporation shall be deemed to engage solely by reason thereof in any of
its businesses; (ii) solicit or attempt to solicit, directly or indirectly, any
customer for the purpose of providing any service competitive with the
businesses of the Asset Sellers; or (iii) solicit or attempt to solicit or hire
away any employee of either of the Asset Sellers immediately prior to the
Closing Date who is an Employee of the Purchaser immediately after the Closing
Date. If final judgment of a court of competent jurisdiction declares that any
term or provision of this Section is invalid or unenforceable, the Parties
agree that the court making the determination of invalidity or unenforceability
shall have the power to reduce the scope, duration, or area, to delete specific
words or phrases, or to replace any invalid or unenforceable term or provision
with a term or provision that is valid and enforceable and that comes closest
to expressing the intention of the invalid or unenforceable term or provision,
and this Agreement shall be enforceable as so modified.
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8.06 Tax Matters. The following provisions shall govern
the allocation of responsibility as between the Purchaser and the Sellers for
certain tax matters following the Effective Date:
(a) The Purchaser and the Asset Sellers shall cooperate
fully, as and to the extent reasonably requested by the other, in connection
with the filing of Tax Returns and any audit, litigation or other proceeding
with respect to Taxes. Such cooperation shall include the retention and (upon
the other's reasonable request) the provision of records and information which
are reasonably relevant to any such audit, litigation or other proceeding and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided. The Asset Sellers and the
Purchaser agree (i) to retain all books and records with respect to Tax matters
relating to any taxable period beginning before the Effective Date until the
expiration of the statute of limitations (and, to the extent notified by the
Purchaser or either Asset Seller, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority, and (ii) to give the other reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the party so requests, to allow the other party to take possession of such
books and records.
(b) The Purchaser and the Asset Sellers further agree,
upon reasonable request, to use their reasonable best efforts to obtain any
certificate or other document from any governmental authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax imposed
(including, but not limited to, with respect to the transactions contemplated
herein).
8.07 Intellectual Property Matters. The Sellers shall
cease and desist use of all Intellectual Property, including but not limited to
the names "Analytical Technologies, Inc." and "ANATEC," and, within seven (7)
days after the Closing Date, shall file all documents necessary to change the
corporate names of the Asset Sellers accordingly.
8.08 Release of Guaranties. The Purchaser shall obtain
releases or terminations of the personal guaranties by Albert G. Schornberg of
automobile leases and corporate credit card obligations which are included in
the Assumed Liabilities.
9.0 Remedies for Breaches of This Agreement.
9.01 Survival of Representations, Warranties, Covenants
and Agreements. All of the representations and warranties of the Asset Sellers
contained in Sections 3.07 through 3.10 and Sections 3.12 through 3.30 shall
survive the Closing (even if the Purchaser knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue in
full force and effect until the third anniversary of this Agreement (at which
time the survival period of such representations and warranties, together with
the associated right of Indemnification hereunder, shall expire); provided,
however, that the representations and warranties contained in Section 3.26
shall survive the Closing (even if the Purchaser knew or had reason to know of
any misrepresentation or
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breach of warranty at the time of Closing) and continue in full force and
effect for a period of ten years thereafter (at which time the survival period
of such representations and warranties, together with the associated right of
Indemnification hereunder, shall expire). All of the other representations and
warranties of the Purchaser, the Asset Sellers and the Shareholders (including
the representations and warranties contained in Sections 3.01 through 3.06 and
Section 3.11) shall survive the Closing (even if the damaged Party knew or had
reason to know of any misrepresentation or breach of warranty at the time of
Closing) and continue in full force and effect forever thereafter, (subject to
any applicable statutes of limitations) (at which time the survival period of
such representations and warranties, together with the associated right of
indemnification hereunder, shall expire).
9.02 Indemnification Provisions for Benefit of the Purchaser.
(a) In the event any of the Sellers breaches (or
in the event any third party alleges facts that, if true, would mean the
Sellers have breached) any of their representations, warranties, covenants and
agreements contained in this Agreement, and, provided that the Purchaser makes
a written claim for indemnification against any of the Sellers, then each of
the Sellers shall indemnify the Purchaser from and against his or its
Proportionate Allocation of the entirety of any Adverse Consequences the
Purchaser may suffer resulting from, arising out of, relating to, or in the
nature of, and proximately or in fact caused by, the breach (or the alleged
breach); provided, however, that the Sellers shall not have any obligation to
indemnify the Purchaser from and against any Adverse Consequences resulting
from, arising out of, relating to, or in the nature of, and proximately or in
fact caused by, the breach of any of the representations or warranties
contained in Section 3.07 through 3.30 until the Purchaser has suffered Adverse
Consequences by reason of all such breaches in the aggregate in excess of
$50,000 (after which point the Sellers will be obligated only to indemnify the
Purchaser from and against further such Adverse Consequences).
(b) Each of the Sellers shall indemnify the
Purchaser from and against his or its Proportionate Allocation of the entirety
of any Adverse Consequences the Purchaser may suffer resulting from, arising
out of, relating to, or in the nature of, and proximately or in fact caused by:
(i) any Liability of the Asset Sellers
which is not an Assumed Liability (including any Liability of the
Asset Sellers that becomes a Liability of the Purchaser under any bulk
transfer or sales law of any jurisdiction, under any common law
doctrine of de facto merger or successor liability, or otherwise by
operation of law);
(ii) any Liability of any of the Asset
Sellers for unpaid Taxes with respect to any Tax year or portion
thereof ending on or before the Closing Date (or for any Tax year
beginning before and ending after the Closing Date to the extent
allocable to the portion of such period beginning before and ending on
the Closing Date), to the extent such Taxes are not reflected in the
reserve for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing
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differences between book and Tax income) reflected in the Most Recent
Financial Statement; or
(iii) any Excluded Liability, Excluded Asset, or
act, event, occurrence or circumstances arising from the businesses of
the Asset Sellers prior to the Closing Date; provided, however, that
the Sellers shall not have any obligation to indemnify the Purchaser
from and against any Adverse Consequences resulting from, arising out
of, relating to or in the nature of, and proximately or in fact caused
by, any of the items contemplated in this Section 9.02 (b) unless the
Purchaser shall have made a claim for indemnification therefor on or
before the seventh anniversary hereof (at which time the right of
indemnification hereunder shall expire).
9.03 Indemnification Provisions for Benefit of the Sellers.
(a) In the event the Purchaser breaches (or in
the event any third party alleges facts that, if true, would mean the Purchaser
has breached) any of its representations, warranties, covenants and agreements
contained in this Agreement and provided that any of the Sellers makes a
written claim for indemnification against the Purchaser, then the Purchaser
shall indemnify the Sellers from and against the entirety of any Adverse
Consequences the Sellers may suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to, or in the nature
of, and proximately or in fact caused by the breach (or the alleged breach).
(b) The Purchaser shall indemnify the Sellers
from and against the entirety of any Adverse Consequences the Sellers may
suffer resulting from, arising out of, relating to, or in the nature of, and
proximately or in fact caused after the Closing Date by, any Assumed Liability,
Acquired Asset, or act, event, occurrence or circumstance arising from the
businesses of the Purchaser (which were formerly the businesses of the Asset
Sellers) after the Closing Date.
9.04 Matters Involving Third Parties.
(a) If any third party shall notify any Party
(the "Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against any other Party (the
"Indemnifying Party"), then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; provided, however, that no delay on the
part of the Indemnified Party in notifying any Indemnifying Party shall relieve
the Indemnifying Party from any obligation hereunder unless (and then solely to
the extent) the Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (i) the
Indemnifying Party notifies the Indemnified Party in writing within 15 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party
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Claim, (ii) the Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying Party will
have the financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations, (iii) the Third Party Claim involves
only money damages and does not seek an injunction or other equitable relief,
(iv) settlement of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice adverse to the continuing business
interests of the Indemnified Party, and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is
conducting the defense of the Third Party Claim, (i) the Indemnified Party may
retain separate co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim, (ii) the Indemnified Party will not consent
to the entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnifying Party
(not to be withheld unreasonably), and (iii) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnified
Party (not to be withheld unreasonably).
(d) In the event any of the conditions in
Subparagraph 9.04(b) is or becomes unsatisfied, (i) the Indemnified Party may
defend against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it reasonably
may deem appropriate (and the Indemnified Party need not consult with, or
obtain any consent from, any Indemnifying Party in connection therewith), (ii)
the Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for any Adverse Consequences suffered by the Indemnified Party in
defending against the Third Party Claim, and (iii) the Indemnifying Parties
will remain responsible for any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or caused
by the Third Party Claim to the fullest extent.
9.05 Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy any Party may have for breach of
representation, warranty, or covenant; provided, however, that, except for
fraud, the foregoing indemnification provisions shall be the sole and exclusive
remedy of the Purchaser for any breach of the representations and warranties
contained in Sections 3.07 through 3.29. Each of the Sellers agrees that he or
it will not make any claim for indemnification against any of the Purchaser and
its Subsidiaries by reason of the fact that he or it was a director, officer,
employee, or agent of either of the Asset Sellers or was serving at the request
of any such entity as a partner, trustee, director, officer, employee, or agent
of another Person (whether such claim is for judgments, damages, penalties,
fines, costs, amounts paid in settlement, losses, expenses, or otherwise and
whether such claim is pursuant to any statute, charter document, bylaw,
agreement, or otherwise) with respect to any action, suit, proceeding,
complaint, claim, or demand brought by the Purchaser against such Shareholder
(whether such action, suit, proceeding, complaint, claim, or demand is pursuant
to this Agreement, applicable law, or otherwise).
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10.0 Miscellaneous.
10.01 Press Releases and Public Announcements. No Party
shall issue any press release or make any public announcement relating to the
subject matter of this Agreement prior to the Closing without the prior written
approval of the other Party; provided, however, that any Party may make any
public disclosure it believes in good faith is required by applicable law or
any listing or trading agreement concerning its publicly-traded securities (in
which case the disclosing Party will use its reasonable best efforts to advise
the other Party prior to making the disclosure).
10.02 No Third Party Beneficiaries. This Agreement shall
not confer any rights or remedies upon any Person other than the Parties and
their respective successors and permitted assigns.
10.03 Entire Agreement. This Agreement, and the other
Acquisition Documents (including the documents referred to herein), and the
Non-Disclosure Agreement constitute the entire agreement between the Parties
and supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they related in any way to
the subject matter hereof.
10.04 Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other Party; provided, however, that the Purchaser may
(i) assign any or all of its rights and interests hereunder to one or more of
its Affiliates, and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases the Purchaser nonetheless
shall remain responsible for the performance of all of its obligations
hereunder).
10.05 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
10.06 Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.07 Notices. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
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If to the Asset Seller:
Analytical Technologies, Inc.
50 W. Big Beaver Road, Suite 245
Troy, MI 48084
Copy to:
Peter J. Livingston, Esq.
Howard & Howard Attys, PC
107 W. Michigan Avenue
Suite 400
Kalamazoo, MI 49007
(616) 382-1483
(616) 382-1568 (fax)
If to the Purchaser:
Norrell Corporation
Norrell Technical Services, Inc.
Norrell Services, Ltd.
3535 Piedmont Road, N.E.
Atlanta, GA 30305
Attn: President
(404) 240-3135
(404) 240-3029 (fax)
Copy to:
Norrell Corporation
3535 Piedmont Road, N.E.
Atlanta, GA 30305
Attn: General Counsel
(404) 240-3158
(404) 240-3312 (fax)
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended recipient.
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Party notice in the manner herein set forth.
10.08 Governing Law. This Agreement shall be governed by
and construed in accordance with the domestic laws of the State of Michigan
without giving effect to any
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choice or conflict of law provision or rule (whether of the State of Michigan
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Michigan.
10.09 Amendments and Waivers. No amendment of any provision
of this Agreement shall be valid unless the same shall be in writing and signed
by the Purchaser and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
10.10 Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
10.11 Expenses. Each of the Purchaser, the Asset Sellers,
and the Shareholders will bear his or its own costs and expenses (including
legal and accounting fees and expenses) incurred in connection with this
Agreement and the transactions contemplated herein. The Asset Sellers also
agree that they have not paid any amount to any third party, and will not pay
any amount to any third party until after the Closing, with respect to any of
the costs and expenses of the Asset Sellers and the Shareholders (including any
of their legal and accounting fees and expenses) in connection with this
Agreement or any of the transactions contemplated hereby.
10.12 Construction. The Parties have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
References to the singular shall include the plurals and vice versa.
10.13 Incorporation of Exhibits and Schedules. The
Exhibits, Glossary of Terms, and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
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10.14 Specific Performance. Each of the Parties
acknowledges and agrees that the other Party would be damaged irreparably in
the event any of the provisions of this Agreement are not performed in
accordance with their specific terms or otherwise are breached. Accordingly,
each of the Parties agrees that the other Party shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the Parties and the matter, in
addition to any other remedy to which it may be entitled, at law or in equity.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
NORRELL CORPORATION
By: /s/ Mark H. Hain
------------------------------
Mark H. Hain
Vice President
NORRELL TECHNICAL SERVICES, INC.
By: /s/ Mark H. Hain
------------------------------
Mark H. Hain
Vice President
NORRELL SERVICES, LTD.
By: /s/ Mark H. Hain
------------------------------
Mark H. Hain
Vice President
ANALYTICAL TECHNOLOGIES, INC.
By: /s/ Albert G. Schornberg
------------------------------
Albert G. Schornberg
Title: Chairman
ANATEC CANADA, INC.
By: /s/ Albert G. Schornberg
------------------------------
Albert G. Schornberg
Title: Chairman
SHAREHOLDERS
By: /s/ Albert G. Schornberg
------------------------------
Albert G. Schornberg
By: /s/ James A. Barbour
------------------------------
James A. Barbour
By: /s/ Timothy E. Tindle
------------------------------
Timothy E. Tindle
By: /s/ David H. Cleland
------------------------------
David H. Cleland
36
