EXHIBIT 10.45
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ACQUISITION AGREEMENT
BY AND AMONG
AMT/▇▇▇▇▇▇ CORPORATION
AS "PURCHASER"
AND
AMERICAN MODULAR TECHNOLOGIES, LLC
AND
▇▇▇▇▇▇ CORPORATION
COLLECTIVELY, AS "SELLER"
DATED AS OF NOVEMBER 26, 1996
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TABLE OF CONTENTS
Page
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I. DEFINITIONS .......................................................... 1
II. PURCHASE AND SALE OF ASSETS .......................................... 4
Section 2.1. Purchase and Sale of the Assets ..................... 4
Section 2.2. Excluded Assets ..................................... 5
Section 2.3. Assumption of Liabilities ........................... 6
Section 2.4. Excluded Liabilities ................................ 6
Section 2.5. Closing ............................................. 8
Section 2.6. Purchase Price ...................................... 8
Section 2.7. Post Closing Adjustments ............................ 9
Section 2.8. Delivery of Purchase Price and Transfer of Assets ... 10
Section 2.9. Allocation of Purchase Price ........................ 12
Section 2.10. Third Party Consents ................................ 12
Section 2.11. Further Assurances, Etc. ............................ 12
III. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER .................... 13
Section 3.1. Representations and Warranties Accurate ............. 13
Section 3.2. Performance by Seller ............................... 13
Section 3.3. Authorization ....................................... 13
Section 3.4. Certificate ......................................... 13
Section 3.5. Opinion of Counsel .................................. 13
Section 3.6. Legal Prohibition ................................... 13
Section 3.7. Legislation ......................................... 14
Section 3.8. Consents and Approvals .............................. 14
Section 3.9. No Material Adverse Change .......................... 14
Section 3.10. Governmental Licenses ............................... 14
Section 3.11. Closing Matters ..................................... 15
Section 3.12. Instruments of Transfer, Conveyance and Assignment .. 15
Section 3.13. Title ............................................... 15
Section 3.14. Lender Approval ..................................... 16
Section 3.15. [Deleted] ........................................... 16
Section 3.16. Accounts Payable Aging Report ....................... 16
Section 3.17. Delivery of Secretary's Certificate ................. 17
Section 3.18. Account Receivable Schedule ......................... 17
IV. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER ........................ 17
Section 4.1. Representations and Warranties Accurate ............. 17
Section 4.2. Performance by Purchaser ............................ 17
Section 4.3. Authorization ....................................... 17
Section 4.4. Certificate ......................................... 18
Section 4.5. Opinion of Counsel .................................. 18
Section 4.6. Legal Prohibition ................................... 18
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Section 4.7. Delivery of Secretary's Certificate ................. 18
V. REPRESENTATIONS AND WARRANTIES OF SELLER ............................. 18
Section 5.1. Organization and Qualification/Ownership of Seller .. 18
Section 5.2. Due Authorization ................................... 18
Section 5.3. No Conflict ......................................... 19
Section 5.4. Equity Investments .................................. 20
Section 5.5. Title to Properties ................................. 20
Section 5.6. Real Property; Encumbrances ......................... 20
Section 5.7. Environmental Matters ............................... 23
Section 5.8. Financial Statements and Related Matters ............ 25
Section 5.9. Absence of Undisclosed Liabilities .................. 26
Section 5.10. Absence of Certain Changes or Events ................ 26
Section 5.11. Insurance ........................................... 27
Section 5.12. Contracts, Obligations and Commitments .............. 28
Section 5.13. Litigation .......................................... 29
Section 5.14. Compliance with Law ................................. 30
Section 5.15. Licenses; Registrations; Permits; Etc. .............. 30
Section 5.16. Labor Matters ....................................... 31
Section 5.17. Personnel; Employee Plans ........................... 31
Section 5.18. Intellectual Property ............................... 32
Section 5.19. Property to Operate Business ........................ 33
Section 5.20. Related Transactions ................................ 33
Section 5.21. Brokers ............................................. 33
Section 5.22. AccountsEReceivable ................................. 33
Section 5.23. Product Warranties .................................. 33
Section 5.24. Taxes ............................................... 33
Section 5.25. Suppliers and Customers ............................. 34
Section 5.26. ▇▇▇▇▇▇ Corporation .................................. 35
Section 5.27. Disclosure .......................................... 35
VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER ......................... 35
Section 6.1. Organization ........................................ 35
Section 6.2. Due Authorization ................................... 35
Section 6.3. No Conflict ......................................... 36
Section 6.4. Disclosure .......................................... 36
VII. AGREEMENTS PENDING CLOSING .......................................... 37
Section 7.1. Conduct and Preservation of Business ................ 37
Section 7.2. Access to Information ............................... 37
Section 7.3. Filings and Authorizations .......................... 37
Section 7.4. Public Announcements ................................ 38
Section 7.5. Schedules ........................................... 38
Section 7.6. Notice of Developments .............................. 38
Section 7.7. Updated Financial Statements ........................ 38
Section 7.8. No Shopping ......................................... 38
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Section 7.9. Rally Buildings ..................................... 39
.................
VIII. POST-CLOSING MATTERS ............................................... 39
Section 8.1. Hiring of Employees ................................. 39
Section 8.2. Use of Name ......................................... 40
Section 8.3. Non-Competition/Non-Solicitation .................... 40
Section 8.4. Subrogation of Purchaser ............................ 40
Section 8.5. Payments Received ................................... 40
Section 8.6. Collection of Accounts Receivable/Payment of Trade
Payables .......................................... 41
Section 8.8. Payment of Liabilities .............................. 42
Section 8.9. Sharing of Data ..................................... 42
Section 8.10. Change in Name ...................................... 42
IX. INDEMNIFICATION ..................................................... 43
Section 9.1. Survival of Representations and Warranties .......... 43
Section 9.2. Seller's Indemnity .................................. 43
Section 9.3. Purchaser's Indemnity ............................... 44
Section 9.4. Limitations ......................................... 44
Section 9.5. Notice and Defense of Claims ........................ 44
Section 9.6. Payment/Reimbursement ............................... 45
X. TERMINATION .......................................................... 46
Section 10.1. Termination Events .................................. 46
Section 10.2. Effect of Termination ............................... 46
XI. MISCELLANEOUS ....................................................... 47
Section 11.1. Expenses ............................................ 47
Section 11.2. Risk of Loss ........................................ 47
Section 11.3. Brokers' and Finders' Fees .......................... 48
Section 11.4. Amendment ........................................... 48
Section 11.5. Entire Agreement; Assignment ........................ 48
Section 11.6. Headings ............................................ 48
Section 11.7. Notices ............................................. 49
Section 11.8. Severability ........................................ 50
Section 11.9. Waiver .............................................. 50
Section 11.10. Counterparts ........................................ 50
Section 11.11. Governing Law ....................................... 50
Section 11.12. Third Parties 50
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EXHIBITS
Exhibit 2.8 ▇▇▇▇ of Sale and Assumption Agreement
Exhibit 3.5 Opinion of Seller's Counsel
Exhibit 4.5 Opinion of Purchaser's Counsel
SCHEDULES
Schedule 2.1(a) Real Property
Schedule 2.1(b) Fixed Assets
Schedule 2.1(d) Asset Leases
Schedule 2.1(g) Intellectual Property
Schedule 2.1(h) Licenses/Permits
Schedule 2.1(i) Prepaid Expenses
Schedule 2.2(c) Rally's Buildings
Schedule 2.2(d) Trucks
Schedule 2.2(e) Causes of Action
Schedule 2.3(a) Accounts Payable Aging Report
Schedule 2.4(i) Liabilities
Schedule 2.9 Allocation of Purchase Price
Schedule 3.8 Material Assumed Contracts
Schedule 5.1 Foreign Qualifications
Schedule 5.3 Conflicts
Schedule 5.5 Permitted Liens
Schedule 5.6 Real Property
Schedule 5.7 Environmental Matters
Schedule 5.8 Financial Statements
Schedule 5.9 Undisclosed Liabilities
Schedule 5.10 Certain Changes or Events
Schedule 5.11 Insurance
Schedule 5.12 Contract Exceptions
Schedule 5.13 Litigation
Schedule 5.15 Licenses; Registrations; Permits; Etc.
Schedule 5.16 Labor Matters
Schedule 5.17 Personnel; Employee Plans
Schedule 5.18 Intellectual Property
Schedule 5.19 Property
Schedule 5.20 Related Transactions
Schedule 5.22 Accounts Receivable
Schedule 5.23 Product Warranties
Schedule 5.24 Taxes
Schedule 5.25 Suppliers and Customers
Schedule 5.26 ▇▇▇▇▇▇ Corporation
Schedule 6.3 Conflicts
Schedule 8.6 Trade Payables
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ACQUISITION AGREEMENT
Acquisition Agreement, dated as of November 26, 1996, by and among
AMT/▇▇▇▇▇▇ Corporation, a Delaware corporation ("Purchaser"), and American
Modular Technologies, LLC ("AMT"), a Texas limited liability company, and ▇▇▇▇▇▇
Corporation, a North Carolina corporation ("▇▇▇▇▇▇" and together with AMT,
"Seller").
WHEREAS, Purchaser desires to purchase, and Seller desires to sell, all of
the assets used or useful in connection with the conduct of the Business (as
defined herein); and
WHEREAS, in order to effectuate the sale and purchase of the Business as
described herein, Seller shall sell and Purchaser shall purchase substantially
all the assets, properties and rights of Seller used in the Business as a going
concern, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in reliance upon the covenants and agreements set forth
herein, the parties hereto agree as follows:
I. DEFINITIONS
The following terms shall have the following respective meanings for all
purposes of this Agreement:
"Account" has the meaning set forth in Section 2.6(a).
"Accounts Receivable" has the meaning set forth in Section 3.18.
"Acquisition Transaction" has the meaning set forth in Section
7.8.
"Adjusted Net Book Value" has the meaning set forth in Section
2.7(f).
"Affiliate" of any specified Person shall mean any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes hereof, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings relative to the foregoing.
"Agreement" means this Acquisition Agreement, as it may be from
time to time amended.
"Assets" has the meaning set forth in Section 2.1.
"Assumed Contracts" has the meaning set forth in Section 5.12.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"▇▇▇▇ of Sale" has the meaning set forth in Section 2.8(b).
"Business" means the business conducted by Seller at its Liberty,
North Carolina manufacturing facility.
"Closing" means the completion of the acquisition of the Assets
pursuant to this Agreement.
"Closing Date" means the date the Closing takes place.
"Code" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.
"Employee Plan" has the meaning set forth in Section 5.17.
"Employees" has the meaning set forth in Section 8.1.
"Environmental Laws" has the meaning set forth in Section 5.7.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" has the meaning set forth in Section 5.17.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section 2.4.
"Fixed Assets" has the meaning set forth in Section 2.1(b).
"Governmental Entity" means any court, administrative agency or
commission or other governmental authority or instrumentality.
"Intellectual Property" means all industrial and intellectual
property rights, including without limitation patents, patent applications,
patent rights, trademarks, trademark applications, tradenames (including,
without limitation, "▇▇▇▇▇▇"), service marks, service ▇▇▇▇ applications,
copyrights, know-how, franchises, licenses, trade secrets, proprietary processes
and formulae, methods, plans, research data, marketing plans and strategies,
forecasts, product designs, fabrication data, research and development,
operating rights, software (including without limitation all
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source codes and object codes), permits and other similar intangible property
and rights relating to the Business.
"Interim Balance Sheet" has the meaning set forth in Section 5.8.
"Interim Balance Sheet Date" has the meaning set forth in Section
5.8.
"Inventory" has the meaning set forth in Section 2.1(c).
"Laws" has the meaning set forth in Section 5.6.
"Licenses" has the meaning set forth in Section 3.10.
"Material Assumed Contracts" means the Assumed Contracts set
forth in Section 3.8. hereto.
"Person" means an individual, partnership, corporation, limited
liability company, joint venture, unincorporated organization, trust, other
legal entity, cooperative or a governmental entity or agency thereof.
"Permitted Exceptions" has the meaning set forth in Section
3.13(a).
"Permitted Liens" has the meaning set forth in Section 5.5.
"Rally Buildings" has the meaning set forth in Section 2.2(c).
"Real Property" has the meaning set forth in Section 2.1(a).
"Taxes" has the meaning set forth in Section 5.24.
"Title Company" has the meaning set forth in Section 3.13(a).
"Title Exceptions" has the meaning set forth in Section 3.13(b).
"Trade Payables" has the meaning set forth in Section 2.4(b).
"Warranty Deed" has the meaning set forth in Section 2.8(b).
"Warranty Deposit" has the meaning set forth in Section 2.6(a).
"Warranty Liabilities" has the meaning set forth in Section
2.4(o).
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II. PURCHASE AND SALE OF ASSETS
Section 2.1. Purchase and Sale of the Assets. At the Closing, upon the
terms and subject to the terms and conditions contained herein, Seller shall
sell, transfer, convey, assign and deliver to Purchaser, effective as of the
Closing, and Purchaser shall purchase and acquire from Seller, all of the
properties, assets and rights of Seller used or useful in connection with the
Business, of every kind and description, real, personal and mixed, tangible and
intangible, wherever located, except the Excluded Assets, free and clear of all
liens, mortgages, pledges, encumbrances and charges of every kind other than the
Permitted Liens (collectively, the "Assets"). Without limiting the generality of
the definition of the Assets being purchased by Purchaser, the Assets shall
include the following:
(a) all real property and interests therein of Seller used or held
for use in the conduct of the Business and more fully described in Schedule
2.1(a) and all buildings, structures and improvements located thereon and
appurtenances attached thereto including, without limitation, all air rights,
subsurface rights, water rights, ▇▇▇▇▇ and all appurtenant development rights,
if any, or easements, licenses, privileges, variances and other agreements used
by Seller in the Business as presently conducted (the "Real Property");
(b) all machinery, equipment, inventory, molds, assembly machinery,
fixtures, computers, computer hardware and software, tools, supplies,
construction in progress, furniture, vehicles and other tangible personal
property and assets of Seller related to the Business, all of which are
described on Schedule 2.1(b), including without limitation Seller's rights under
warranties (expressed and implied) relating thereto (the "Fixed Assets");
(c) all Seller's inventories of raw material, work in progress,
finished products, supplies, catalogs and promotional and marketing materials
used in the conduct of the Business (the "Inventory");
(d) all the interest of, and the rights and benefits accruing to,
Seller as lessee under all leases or rental agreements covering machinery,
equipment (including office equipment), computer hardware, tools, supplies,
furniture and fixtures, vehicles and other tangible assets used in the Business
including, without limitation, those described in Schedule 2.1(d);
(e) all of the rights and benefits accruing to Seller under all
Assumed Contracts;
(f) all currently existing operating data and records of Seller
relating to the Business, including without limitation, lists of all currently
existing customers and all customer records, research and development reports
and records, production reports and records, standard operating procedures,
schematics, equipment logs, operating guides and manuals, part lists and
specifications, vendor lists, copies of
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personnel records of the Employees, correspondence and other similar documents
and records relating to the foregoing;
(g) all of the Intellectual Property of Seller, including, without
limitation, all such property and rights listed in Schedule 2.1(g);
(h) all licenses, permits, approvals, qualifications, consents and
other authorizations necessary for the lawful conduct, ownership and operation
of the Business including, without limitation, those listed on Schedule 2.1(h),
other than those licenses, permits, approvals, qualifications, consents and
other authorizations which by law are not transferable, as so indicated on
Schedule 2.1(h);
(i) all prepaid expenses, advances and deposits arising in the
conduct of the Business, other than prepaid premiums related to insurance
policies, all of which are listed on Schedule 2.1(i);
(j) all goodwill and going concern value of the Business, including
without limitation, the right to use, the names "▇▇▇▇▇▇" and "American Modular
Technologies" and any derivatives thereof used by Seller;
(k) all interests in and to telephone, telex and telecopier numbers
and all listings in all telephone books and directories;
(l) all stationery, forms, labels, catalogs, brochures, art work,
photographs and advertising material;
(m) all rights in and to insurance and indemnity claims, chooses in
action, judgments, claims, demands and other rights of the Business or Seller
(solely as it relates to the Business) against third parties (other than claims,
chooses in action, judgments, claims, demands and other rights which are
Excluded Assets or relate to Excluded Liabilities);
(n) all assignable federal, state and local governmental licenses,
permits, authorizations and approvals, if any, of, or relating to, the Business;
and
(o) lockbox account #___________________________________ at
NationsBank.
Section 2.2. Excluded Assets. Anything to the contrary in Section 2.1
notwithstanding, the Assets shall exclude and Purchaser shall not purchase the
following property and assets used by Seller in connection with the conduct of
the Business (collectively, the "Excluded Assets"):
(a) all Accounts Receivable and all cash or cash equivalents in
transit, in hand or in bank accounts arising in the conduct of the Business;
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(b) the corporate minute books, stock books, tax returns or other
records (other than the records relating to the Business included in the Assets
pursuant to Section 2.1(f) hereof) of Seller;
(c) all buildings constructed for Rally's Hamburgers, Inc. which are
located on the Real Property, as more fully described on Schedule 2.2(c) (the
"Rally Buildings"), it being understood that Seller does not own the Rally
Buildings;
(d) the trucks, and the leases related thereto, as more fully
described on Schedule 2.2(d);
(e) the causes of action against Seller's former employees, as set
forth on Schedule 2.2(e);
(f) all real property owned or leased by Seller which is located in
South Carolina or California;
(g) all prepaid expenses, advances and deposits arising in the
conduct of the Business, other than those set forth on Schedule 2.1(i); and
(h) the rights which accrue or will accrue to Seller under this
Agreement.
Section 2.3. Assumption of Liabilities. At the Closing, upon the terms and
subject to the conditions contained herein, simultaneously with the transfer,
conveyance and assignment to Purchaser of the Assets, Purchaser shall assume,
effective as of the Closing, and discharge in accordance with their terms, only
the obligations and liabilities of Seller under the Assumed Contracts to the
extent that they shall remain uncompleted and outstanding at the Closing Date;
provided, however, Purchaser expressly does not assume (i)Eany liabilities,
duties or obligations of Seller under any Assumed Contracts which are
performable or have arisen or may arise with respect to provisions of or any
breaches of such contracts or agreements occurring before the Closing Date, or
(ii)Eany damages or other sums that may be or become payable to third parties
resulting from acts, events or omissions of any party under the Assumed
Contracts occurring before the Closing Date. For convenience of reference, the
foregoing liabilities and obligations of Seller being assumed by Purchaser are
collectively referred to herein as the "Assumed Liabilities".
Section 2.4. Excluded Liabilities. Purchaser shall not assume, pay,
discharge, become liable for or perform when due, and Seller shall not cause
Purchaser so to assume, pay, discharge, become liable for or perform, any
liabilities (contingent or otherwise), debts, contracts, commitments and other
obligations of Seller of any nature whatsoever other than the Assumed
Liabilities. Without limitation of the foregoing, Purchaser shall not assume,
pay or discharge, and shall not be liable for any liability, commitment or
expense of Seller as a result of or arising from any of the following
(collectively, the "Excluded Liabilities"):
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(a) Seller's obligations and any liabilities arising under or
related to this Agreement;
(b) trade payables and similar liabilities incurred in the ordinary
course of the Business prior to the Closing Date (collectively, "Trade
Payables");
(c) any obligation of Seller for federal, state, local or foreign
tax liability (including interest, penalties or additions to tax relating
thereto) arising from the operation of the Business or ownership of the Assets
up to the Closing Date or arising out of the consummation of the transactions
contemplated hereby (including, without limitation, the sale by Seller of the
Assets pursuant hereto);
(d) any obligation of Seller for expenses incurred in connection
with the sale of the Assets pursuant hereto including, without limitation, the
fees and expenses of its counsel and independent auditors;
(e) any liability or obligation including, without limitation, any
liability for Seller's attorney's fees or expenses, relating to or arising out
of any action, suit, claim, investigation, legal or administrative or
arbitration proceeding or judgment, decree, injunction or order disclosed in
Schedule 5.13;
(f) any liability, contract, commitment or other obligation of
Seller, known or unknown, fixed or contingent, the existence of which
constitutes or will constitute a breach of any representation, warranty,
covenant or agreement of Seller contained in or made pursuant to this Agreement
or which Purchaser is not assuming hereunder;
(g) any liabilities or obligations of Seller under any contracts or
agreements relating to the Excluded Assets;
(h) any liabilities or obligations of Seller to any Affiliate
thereof;
(i) any liabilities or obligations of Seller for borrowed money and
guarantees of borrowed money or letters of credit, except as set forth on
Schedule 2.4(i);
(j) any liability, obligation, claim or demand of any nature
whatsoever (including, without limitation, any liability, obligation, claim or
demand in respect of personal injury, property damage, workers' or workmen's
compensation, grievance proceeding or actual or threatened litigation, suit,
claim, demand or governmental proceeding) arising out of the conduct of the
Business prior to the Closing Date including, without limitation, liabilities
and obligations arising out of transactions entered into prior to the Closing
Date, any action or inaction prior to the Closing Date or any state of facts
existing prior to the Closing Date (regardless of when asserted), not expressly
assumed by Purchaser pursuant to this Agreement;
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(k) any liability or obligation to any employee or former employee
of Seller or to any third party, under any pension, insurance, bonus,
profit-sharing or other employee benefit plan or arrangement or any obligation
relating to salaries, bonuses, vacation or severance pay, or any obligation
under any statute, rule or regulation, including without limitation, ERISA;
(l) any liability, contract, commitment or other obligation of
Seller, known or unknown, fixed or contingent, the existence of which
constitutes or will constitute a breach of any representation or warranty of
Seller contained in or made pursuant to this Agreement or which Purchaser is not
assuming hereunder;
(m) FICA and other employee withholding taxes;
(n) any liability or obligation to any broker, finder, consultant,
investment banker or other intermediary engaged by Seller in connection with the
sale of all or any portion of the Business; and
(o) liabilities and obligations of Seller under warranties given in
respect of products manufactured or sold prior to the Closing Date ("Warranty
Liabilities")
Section 2.5. Closing. Subject to the provisions of Articles III and IV
hereof, the Closing shall take place at 10:00 a.m., New York time, at the
offices of Fulbright & ▇▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, no later than the second business day after satisfaction of the latest to
occur of the conditions set forth in Articles III and IV hereof (other than the
delivery of the officers' certificates and opinions referred to therein and
other than any conditions which are waived in accordance with said Articles) or
such other time, place or date as the Seller and Purchaser may mutually agree.
Failure to consummate the transactions provided for in this Agreement on the
date and time selected pursuant to this Section 2.5 shall not, except as
permitted by Article X hereof, result in the termination of this Agreement and
shall not relieve any party to this Agreement of any obligation hereunder.
Section 2.6. Purchase Price. The aggregate purchase price for the
Assets shall be as follows:
(a) $1,800,000, of which $1,700,000 shall be paid by Purchaser
to Seller at the Closing (the "Fixed Payment") and $100,000 (the
"Warranty Deposit") shall be deposited in a bank account to be
established by Seller at Eufaula Bank and Trust Company (the
"Account");
(b) an amount in cash equal to the Adjusted Net Book Value of
the Inventory; and
(c) Purchaser's assumption of the Assumed Liabilities.
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The amount of cash to be paid to Seller at Closing shall be reduced by the
amount set forth on Schedule 2.4(i).
Section 2.7. Post Closing Adjustments. (a) At least five (5) business days
prior to the Closing Date, Seller shall prepare and deliver to Purchaser a good
faith estimate, prepared in accordance with United States generally accepted
accounting principles ("GAAP"), applied in a manner consistent with the
preparation of the financial statements referred to in Section 5.8 hereof,
except as otherwise expressly provided below, and accompanied by a certificate
of the chief financial officer of Seller to that effect, of the aggregate amount
of the Adjusted Net Book Value of the Inventory determined in accordance with
clause (f) below (the "Estimated Amount") as of the Closing Date.
(b) At Closing, Purchaser shall (i) deliver to Seller an amount
equal to 80% of the Estimated Amount (the "Initial Payment Amount") and (ii)
cause the Account to be credited with an amount equal to 20% of the Estimated
Amount (the "Remaining Amount").
(c) On or about the Closing Date, Seller and Purchaser shall jointly
conduct a physical count of all Inventory as of such date. The physical count of
the Inventory shall be conducted in accordance with procedures to be mutually
agreed upon by the parties. To the extent such count takes place on a day other
than the Closing Date, the physical count shall be adjusted for receipts and
usages of Inventory between the date of the physical count and the Closing Date.
As promptly as practicable thereafter, but in no event more than thirty (30)
days following the Closing Date, Purchaser shall prepare or cause to be prepared
and shall deliver to Seller a reasonably detailed statement setting forth the
Adjusted Net Book Value of the Inventory, determined in accordance with clause
(f) below (the "Purchaser Statement"). Unless within thirty (30) days after its
receipt of the Purchaser Statement Seller shall deliver to Purchaser a
reasonably detailed statement describing its objections to the Purchaser
Statement (a "Statement of Objection"), the amount of the Adjusted Net Book
Value of the Inventory determined in accordance with this clause (c) shall be
final and binding on the parties hereto and the Purchaser Statement shall be the
final statement hereunder (the "Closing Date Statement").
(d) If Seller shall deliver to Purchaser a timely Statement of
Objection, Purchaser and Seller shall negotiate in good faith and use reasonable
best efforts to resolve any disputes. If a resolution is reached, such
resolution shall be final and binding on the parties and Purchaser and Seller
shall set forth the Adjusted Net Book Value of the Inventory on a mutually
acceptable statement and such statement shall be the Closing Date Statement. If
a final resolution is not reached within fifteen (15) days after Seller has
submitted its Statement of Objection, any remaining disputes shall be resolved
by a firm of independent accountants (the "Reviewing Accountants") selected
jointly by the parties' independent accounting firms. The Reviewing Accountants
shall be instructed to resolve any matters in dispute as promptly as
practicable, but in no event more than thirty (30) days, and set forth their
resolution
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in a statement setting forth the Net Book Value of the Inventory (the
"Accountant Statement"). In such event, the determination of the Reviewing
Accountants shall be final and binding on the parties hereto and the Accountant
Statement shall be the Closing Date Statement.
(e) Seller and Purchaser each shall pay one-half of the fees and
expenses of the Reviewing Accountants. Seller and the Purchaser shall cooperate
with each other and the Reviewing Accountants in connection with the matters
contemplated by this Section 2.7, including Purchaser's preparation of and
Seller's review of the Closing Date Statement, including by furnishing such
information and access to books, records (including accountants' work papers),
personnel and properties as may be reasonably requested.
(f) The "Adjusted Net Book Value" shall be equal to the tangible net
book value of the Inventory, less mutually agreed upon reserves for slow moving,
obsolete and damaged goods, as set forth on the Closing Date Statement. The
Closing Date Statement shall be prepared in accordance with GAAP applied in a
manner consistent with the financial statements referred to in Section 5.8
hereof, except as otherwise expressly set forth in this Section 2.7.
(g) If the Adjusted Net Book Value set forth in the Closing Date
Statement exceeds the Initial Payment Amount, Seller and Purchaser shall
distribute to Seller in cash out of the Remaining Amount the amount of such
excess and to Purchaser the remainder, if any, of the Remaining Amount. Interest
earned on the Remaining Amount in the Account shall be distributed to Seller and
Purchaser in proportion to the amount of the Remaining Amount paid to each of
them, as the case may be.
(h) If the Adjusted Net Book Value set forth in the Closing Date
Statement is less than the Initial Payment Amount, Seller shall pay the
difference to Purchaser in immediately available funds, plus interest on such
amount from the Closing Date to the date of payment at the rate of 8% per annum.
In such event, Seller and Purchaser shall pay the Remaining Amount to Purchaser.
(i) If the Adjusted Net Book Value set forth in the Closing Date
Statement exceeds the Estimated Amount, then, in addition to distribution of the
Remaining Amount pursuant to clause (g) above, Purchaser shall pay the
difference to Seller in immediately available funds, plus interest on such
amount from the Closing Date to the date of payment at the rate of 8% per annum.
(j) The Remaining Amount may only be disbursed from the Account upon
the signature of one each of the Seller's Representatives and the Purchaser's
Representatives.
Section 2.8. Delivery of Purchase Price and Transfer of Assets. (a) On the
Closing Date, Purchaser shall deliver (i) to Seller the Fixed Payment and the
Initial
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Payment Amount by wire transfer of immediately available federal funds to an
account specified by Seller at least two business days prior to Closing and (ii)
the Warranty Deposit to the Account.
(b) At the Closing, Seller shall deliver to Purchaser (A) a ▇▇▇▇ of
Sale and Assumption Agreement, substantially in the form of Exhibit 2.8 hereof
(the "▇▇▇▇ of Sale"), (B) a special warranty deed to the Real Property, subject
to the exceptions permitted by this Agreement or otherwise approved by Purchaser
(the "Warranty Deed"), (C) duly executed title and transfer documents covering
any of the Assets for which there exists a certificate of title (provided,
however, that certificates of title for the vehicles set forth on Schedule
2.1(b) shall be delivered to Purchaser on, or prior to, December 6, 1996),
(D) duly executed assignments covering any of the Intellectual Property, in form
and substance reasonably acceptable to Purchaser and in recordable form as
appropriate, and (E) such other deeds, bills of sale, endorsements, assignments
and other instruments of sale, conveyance, transfer and assignment, reasonably
satisfactory in form and substance to Purchaser and its counsel, as shall be
necessary and effective to transfer and assign to, and vest in, Purchaser all of
Seller's right, title and interest in and to the Assets including, without
limitation, (i) good and valid title in and to all of the Assets owned by
Seller, (ii) good and valid leasehold interests in and to all of the Assets
leased by Seller as lessee, and (iii) subject to Section 2.10 hereof, all of
Seller's rights under all Assumed Contracts and, simultaneously with such
delivery, all such steps will be taken as may reasonably be required to put
Purchaser in actual possession and operating control of the Assets.
(c) At the Closing, closing costs shall be paid and prorations made
as follows:
(i) Closing Costs. Purchaser and Seller shall each pay their
own attorneys' fees. Seller shall pay documentary transfer taxes and
recording charges customarily paid by Seller. Purchaser shall pay
recording costs customarily paid by Purchaser and any costs for any
title insurance coverage desired by Purchaser.
(ii) Prorations.
(A) Taxes. Real and personal property taxes and general
and special assessments shall be prorated through the Closing
Date on the basis of the fiscal year for such taxes and
assessments. If the Closing Date shall occur before the real
or personal property tax rate for such fiscal year is fixed,
the apportionment of taxes shall be made on the basis of the
taxes assessed for the preceding fiscal year. After the real
and personal property taxes are finally fixed for the fiscal
year in which the Closing Date occurs, Seller and Purchaser
shall make a recalculation of the apportionment of such taxes,
and Seller or Purchaser, as the case may be, shall make an
appropriate payment to the other based on such recalculation.
The provisions of this clause shall survive the Closing.
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(B) Utilities. Charges and assessments for sewer and
water and other utilities, including charges for consumption
of electricity, steam and gas and any other receipts or
charges which Purchaser has accepted hereunder, as applicable,
and the value of fuel stored on the Real Property, at the
price charged by Seller's supplier including any taxes, shall
be apportioned by Purchaser and Seller as of the Closing Date.
(C) Lease and Contract Payments. Payments by Seller
under the leases and contracts set forth on Schedule 2.1(d)
shall be apportioned by Purchaser and Seller as of the Closing
Date.
Section 2.9. Allocation of Purchase Price. The Purchase Price shall be
allocated in its entirety among the Assets in accordance with Schedule 2.9
hereto and as required by Section 1060 of the Code. Seller and Purchaser shall
file all information and tax returns (and any amendments thereto) in a manner
consistent with this Section 2.9 and Section 1060 of the Code and comply with
the applicable information reporting requirements of Section 1060 of the Code.
If, contrary to the intent of the parties hereto as expressed in this
Section 2.9, any taxing authority makes or proposes an allocation different from
that contained in this Section 2.9, Seller and Purchaser shall cooperate with
each other in good faith to contest such taxing authority's allocation (or
proposed allocation); provided, however, that, after consultation with the party
adversely affected by such allocation (or proposed allocation), another party
hereto may file such protective claims or returns as may reasonably be required
to protect its interests.
Section 2.10. Third Party Consents. To the extent that Seller's rights
under any Assumed Contract, or with respect to any Asset to be assigned to
Purchaser hereunder, may not be assigned without the consent of another Person
which has not been obtained prior to the Closing, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment would
constitute a breach thereof or be unlawful, and Seller, at its expense, shall
use its reasonable best efforts to obtain any such required consent(s) as
promptly as possible after the Closing, but Seller shall not be obligated to pay
any amounts to such Person to obtain such consent. Until any such consent shall
be obtained or if any attempted assignment would be ineffective or would impair
Purchaser's rights with respect to the Asset in question so that Purchaser would
not in effect acquire the benefit of all such rights, Seller, to the maximum
extent permitted by law and the Asset, shall act after the Closing as
Purchaser's agent in order to obtain for it the benefits thereunder and shall
cooperate, to the maximum extent permitted by law and the Asset, with Purchaser
in any other reasonable arrangement designed to provide such benefits to
Purchaser.
Section 2.11. Further Assurances, Etc. Seller shall, at any time and from
time to time after the Closing, upon the request of Purchaser and at the expense
of Purchaser, do, execute, acknowledge and deliver, and cause to be done,
executed, acknowledged or delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney or assurances as may be reasonably
required for the
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better transferring, assigning, conveying, granting, assuring and confirming to
Purchaser, or for aiding and assisting in the collection, or reducing to
possession by Purchaser, of the Assets, or to vest in Purchaser good and
marketable title to the Assets. Each of the parties hereto will cooperate with
the other and execute and deliver to the other such other instruments and
documents and take such other actions as may be reasonably requested from time
to time by the other party hereto as necessary to carry out, evidence and
confirm the intended purposes of this Agreement.
III. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser under this Agreement to consummate the
purchase of the Assets at the Closing shall be subject to the satisfaction, at
or prior to the Closing, of all of the following conditions, to the satisfaction
of Purchaser (any of which may be waived in writing in whole or in part by
Purchaser):
Section 3.1. Representations and Warranties Accurate. All representations
and warranties of Seller contained in this Agreement (including the Schedules
hereto), qualified as to materiality shall be true, complete and correct in all
respects, and those not so qualified shall be true, complete and correct in all
material respects, as of the date when made and on and as of the Closing Date
with the same force and effect as though such representations and warranties
were made on and as of the Closing Date.
Section 3.2. Performance by Seller. Seller shall have performed and
complied in all material respects with all agreements, covenants and conditions
required by this Agreement to be performed and complied with by Seller prior to
or on the Closing Date.
Section 3.3. Authorization. All action necessary to authorize the
execution, delivery and performance of this Agreement by Seller and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken, and Seller shall have full power and right to sell the Assets as
contemplated hereby.
Section 3.4. Certificate. Purchaser shall have received a certificate,
dated as of the Closing Date, signed by an authorized officer of AMT, to the
effect that the conditions set forth in Sections 3.1, 3.2, 3.3 and 3.9
(excluding the Real Property) have been satisfied and a certificate, dated as of
the Closing Date, signed by an authorized officer of ▇▇▇▇▇▇, to the effect that
the conditions set forth in Sections 3.1, 3.2, 3.3 and 3.9 (with respect to the
Real Property) have been satisfied.
Section 3.5. Opinion of Counsel. Purchaser shall have received from
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to Seller, a written opinion, dated the Closing
Date, substantially in the form attached hereto as Exhibit 3.5.
Section 3.6. Legal Prohibition. On the Closing Date, no injunction or
order shall be in effect prohibiting consummation of the transactions
contemplated hereby or
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which would make the consummation of such transactions unlawful and no action or
proceeding shall have been instituted and remain pending or threatened before a
Governmental Entity to restrain or prohibit the transactions contemplated by
this Agreement.
Section 3.7. Legislation. No federal, state or local statute, rule or
regulation shall have been enacted the effect of which would be to prohibit,
restrict, impair or delay in any material respect the consummation of the
transactions contemplated hereby or any of the conditions to the consummation of
such transactions or restrict or impair in any material respect the ability of
Purchaser to own or conduct the Business as currently conducted.
Section 3.8. Consents and Approvals. All authorizations, consents,
waivers, approvals, orders, registrations, qualifications, designations,
declarations, filings or other action required with or from any federal, state
or local Governmental Entity or third party (including, without limitation, all
parties to each of the Assumed Contracts) in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly obtained and shall be
reasonably satisfactory to Purchaser and its counsel, and copies thereof shall
have been delivered to the Purchaser no later than three (3) days prior to the
Closing. No such consent or approval (a)Eshall be conditioned on the
modification, cancellation or termination of any Assumed Contract, or (b)Eshall
impose on Purchaser any material condition or provision or requirement with
respect to the Business or its operation, as currently conducted by Seller, that
is more restrictive than or different from the conditions imposed upon such
operation prior to Closing, unless Purchaser gives its prior written approval.
With respect to any Assumed Contract, the assignment of which by its terms
requires prior consent of the parties thereto, if such consent is not obtained
prior to the Closing Date, Seller may satisfy this condition by delivering to
Purchaser written documentation setting forth arrangements for the transfer of
the economic benefits of such Assumed Contract(s) to Purchaser as of the Closing
Date under terms and conditions reasonably acceptable to Purchaser.
Notwithstanding anything to the contrary contained in this Section 3.8, if
Seller is unable to deliver to Purchaser prior to the Closing Date a consent to
the assignment of any of the Assumed Contracts that Purchaser deems to be
material to the Business and has listed on Schedule 3.8 hereto (the "Material
Assumed Contracts"), then this Section 3.8 shall not be deemed to be satisfied
and Purchaser shall have the right to terminate this Agreement in accordance
with Section 10.1 hereof.
Section 3.9. No Material Adverse Change. There shall have been no material
adverse change in the condition of the Assets or the operations of the Business
from the date hereof to the Closing Date.
Section 3.10. Governmental Licenses. Purchaser shall have obtained from
all applicable Governmental Entities all approvals, authorizations, permits,
licenses and consents necessary to conduct the Business as conducted on the date
hereof (the "Licenses").
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Section 3.11. Closing Matters. All proceedings to be taken by the Seller
in connection with the consummation of the transactions contemplated hereby and
all certificates, opinions, instruments and other documents required to effect
the transactions contemplated hereby shall be reasonably satisfactory in form
and substance to Purchaser and its counsel.
Section 3.12. Instruments of Transfer, Conveyance and Assignment.
Purchaser shall have received a duly executed ▇▇▇▇ of Sale and such other
instruments of transfer, conveyance and assignment as are reasonably required to
effect the sale, transfer, conveyance and assignment of the Assets to Purchaser
in accordance herewith.
Section 3.13. Title. (a) Purchaser shall have obtained a commitment for
the issuance of a standard ALTA fee owner's title insurance policy, in an amount
of coverage equal to the allocated value of the Real Property and all
improvements thereon, from a nationally recognized title insurance company
qualified to conduct title insurance business in the State of North Carolina
(the "Title Company"), insuring that title to each parcel of the Real Property
and improvements thereon shall be free and clear of all liens, assessments,
restrictions, encumbrances, easements, leases, tenancies, claims or rights of
use or possession and other title objections, except for (i) the standard
exceptions normally contained in the ALTA owner's title insurance policy and any
exceptions that are standard in the State of North Carolina, (ii) building and
zoning laws, ordinances, state and federal regulations, (iii) restrictions of
record relating to use or improvement of the premises without effective
forfeiture provisions, and (iv) utility and other easements that do not
materially adversely affect the intended use or the value of the Real Property
in its current use (collectively, the "Permitted Exceptions"); provided,
however, that Seller, at Purchaser's request, shall provide such affidavits to
the Title Company or take such other actions as may be reasonably requested that
would enable the Title Company to remove any of such standard exceptions.
Purchaser shall also have obtained surveys of the Real Property made by a
registered land surveyor bearing a certificate addressed to Purchaser and
Purchaser's title insurance company, signed by the surveyor, certifying that the
survey was actually made on the ground and that there are no encumbrances except
as shown, and complying with the minimum detail requirements for land title
surveys as adopted by the Land Title Association. Purchaser shall pay all
premiums and other expenses relating to such surveys and title insurance policy
commitment including, without limitation, the title insurance premium.
(b) Seller shall have the right, but not the obligation, to remove
any title exception ("Title Exception") which is not a Permitted Exception if so
requested by Purchaser. In the event of Seller's election to take action to
remove such Title Exception, Seller shall be entitled to one adjournment of the
Closing Date for a period not to exceed sixty (60) days or such longer period as
may be reasonably needed to cure such Title Exceptions, and such Closing Date
shall be adjourned to such date as may be specified by Seller. If (i) for any
reason whatsoever Seller shall not have succeeded in removing such Title
Exceptions at the expiration of such adjourned period, or (ii) at such time
prior thereto as Seller determines that it will not be able to satisfy the same,
15
Seller shall give Purchaser written notice thereof and Purchaser shall have five
(5) business days from the expiration of such adjourned period or the receipt of
such notice, as the case may be, to elect by written notice to Seller to
purchase the Real Property subject to such Title Exceptions without abatement or
reduction of the Purchase Price or any other liability of Seller. If Purchaser
fails to make such election or shall otherwise be unwilling to waive the same
and to close this transaction without abatement of the Purchase Price or
allowance of any kind, this Agreement shall be and be deemed to be terminated in
accordance with Section 10.1(d), and Seller shall reimburse Purchaser for all
out of pocket expenses incurred by Purchaser in connection with the transactions
contemplated hereby. Nothing herein contained shall obligate Seller to bring any
action or proceeding or otherwise incur any expense in order to cure or remedy
any defect in title.
If on the Closing Date there may be any liens or encumbrances which Seller
is obligated to pay or discharge in order to convey to Purchaser such title as
is herein provided to be conveyed, Seller may use any portion of the Fixed
Payment to satisfy the same, provided (i) Seller shall deliver to Purchaser on
the Closing Date instruments in recordable form and sufficient to satisfy such
liens or encumbrances of record, together with the cost of recording or filing
said instruments or (ii) Seller, having made arrangements with the Title
Company, shall deposit with the Title Company sufficient monies to insure the
obtaining and the recording of such satisfaction(s) and removal of said liens or
encumbrances as exceptions to the coverage of the policy of insurance issued by
the Title Company. The existence of any such liens or encumbrances shall not be
deemed objections to title if Seller shall comply with the foregoing
requirements.
(c) The acceptance of the deeds by Purchaser shall be deemed to be
full performance and discharge of every agreement and obligation on the part of
the ▇▇▇▇▇▇ to be performed herein pursuant to the terms of this Agreement with
respect to the Real Property, except as to those which are specifically stated
herein to survive the Closing, and except that nothing herein is intended to
limit any obligation of Seller hereunder which is to be performed in whole or in
part after the Closing.
Section 3.14. Lender Approval. Purchaser shall have received the written
approval of the senior lender(s) of American Buildings Company, Purchaser's
parent company, authorizing Purchaser to consummate this Agreement and the
transactions contemplated hereby. Purchaser agrees to use its reasonable best
efforts to obtain such consent and to keep Seller informed with respect to the
status of obtaining such consent.
Section 3.15. [Deleted]
Section 3.16. Accounts Payable Aging Report. Seller shall have delivered
to Purchaser an Accounts Payable Aging Report that is dated the Closing Date and
certified as true and correct by the Chief Financial Officer of Seller which
lists the Trade Payables as of the Closing Date.
16
Section 3.17. Delivery of Secretary's Certificate. AMT shall have
delivered to Purchaser a certificate of its Secretary with attached to such
certificate (i) a copy of the Articles of Organization and Operating Agreement
of AMT, (ii) a certified copy of a Certificate of Existence issued by the
Secretary of State of Texas and the Secretary of State of North Carolina, dated
no earlier than three (3) days before the Closing Date, and (iii) a certified
copy of a Certificate of Tax Good Standing issued by the Secretary of State of
Texas and the Secretary of State of North Carolina, dated no earlier than three
(3) days before the Closing Date. ▇▇▇▇▇▇ shall have delivered to Purchaser a
certificate of its Secretary with attached to such certificate (i) a copy of the
Articles of Incorporation and Bylaws of ▇▇▇▇▇▇, (ii) a certified copy of a
Certificate of Existence issued by the Secretary of State of North Carolina,
dated no earlier than three (3) days before the Closing Date, and (iii) a
certified copy of a Certificate of Tax Good Standing issued by the Secretary of
State of North Carolina, dated no earlier than three (3) days before the Closing
Date.
Section 3.18. Account Receivable Schedule. Seller shall have delivered to
Purchaser a schedule of all notes and accounts receivable of Seller which have
arisen in the ordinary course of the Business (the "Accounts Receivable"),
together with an aging schedule of such Accounts Receivable, and such schedule
shall show that there are Accounts Receivable not more than 30 days past due
which aggregate at least the greater of (a) $1.5 million or (b) an amount equal
to twice the amount of Trade Payables included on Schedule 8.6.
IV. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller under this Agreement to consummate the sale of
the Assets at the Closing shall be subject to the satisfaction, at or prior to
the Closing, of all of the following conditions, to the reasonable satisfaction
of Seller:
Section 4.1. Representations and Warranties Accurate. All representations
and warranties of Purchaser contained in this Agreement qualified as to
materiality shall be true, complete and correct in all respects, and those not
so qualified shall be true, complete and correct in all material respects, as of
the date when made and on and as of the Closing Date, with the same force and
effect as though such representations and warranties were made on and as of the
Closing Date.
Section 4.2. Performance by Purchaser. Purchaser shall have performed and
complied in all material respects with all agreements, covenants and conditions
required by this Agreement to be performed and complied with by Purchaser prior
to or on the Closing Date.
Section 4.3. Authorization. All action necessary to authorize the
execution, delivery and performance of this Agreement by Purchaser and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken, and Purchaser shall have full power and right to acquire the
Assets and assume the Assumed Liabilities as contemplated hereby.
17
Section 4.4. Certificate. Seller shall have received a certificate, dated
as of the Closing Date, signed by an authorized officer of Purchaser, to the
effect that the conditions set forth in Sections 4.1, 4.2 and 4.3 have been
satisfied.
Section 4.5. Opinion of Counsel. Seller shall have received from Fulbright
& ▇▇▇▇▇▇▇▇ L.L.P., counsel to Purchaser, a written opinion, dated the Closing
Date, substantially in the form of Exhibit 4.5 hereto.
Section 4.6. Legal Prohibition. On the Closing Date, no injunction or
order shall be in effect prohibiting consummation of the transactions
contemplated hereby or which would make the consummation of such transactions
unlawful and no action or proceeding shall have been instituted and remain
pending before a Governmental Entity to restrain or prohibit the transactions
contemplated by this Agreement.
Section 4.7. Delivery of Secretary's Certificate. Purchaser shall have
delivered to Seller a certificate of its Secretary with attached to such
certificate (i) a copy of the Certificate of Incorporation and Bylaws of
Purchaser and (ii) a certified copy of a Certificate of Existence issued by the
Secretary of State of Delaware, dated no earlier than three (3) days before the
Closing Date.
V. REPRESENTATIONS AND WARRANTIES OF SELLER
AMT and ▇▇▇▇▇▇ jointly and severally represent, warrant and agree that:
Section 5.1. Organization and Qualification/Ownership of Seller. (i)EAMT
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Texas, and has all requisite corporate
power and authority and all material licenses and permits necessary to conduct
the Business as presently conducted, and to own, lease and operate the
properties and assets owned, leased or operated by it and used in connection
therewith. ▇▇▇▇▇▇ is a corporation duly organized, validly existing and in good
standing under the laws of the State of North Carolina, and has all requisite
corporate power and authority and all material licenses and permits necessary to
own the Real Property. AMT is qualified as a foreign corporation in each
jurisdiction required to conduct the Business as presently conducted or to own,
lease or operate the Assets which are owned, leased or operated by it, all of
which jurisdictions are listed in Schedule 5.1 hereto. ▇▇▇▇▇▇ is not qualified
as a foreign corporation in any jurisdiction, and ▇▇▇▇▇▇ is not required to
qualify or otherwise be authorized to do business as a foreign corporation in
any jurisdiction. Seller has not knowingly taken any action, or failed to take
any action, which action or failure will preclude or prevent Purchaser from
conducting the Business substantially in the same manner in which Seller has
heretofore conducted the same.
Section 5.2. Due Authorization. (a) Seller has all requisite corporate
power and authority to execute and deliver this Agreement, and all other
agreements to which it is a party, to perform its obligations hereunder and
thereunder and to consummate
18
the transactions contemplated hereby and thereby. The execution and delivery by
Seller of this Agreement, and the other documents contemplated hereby, the
performance by Seller of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of Seller.
This Agreement has been duly and validly executed by Seller and this Agreement
is, and each other agreement contemplated hereby to which Seller is a party will
be, upon execution and delivery thereof by Seller, a legal, valid and binding
obligation of Seller, enforceable against it in accordance with its terms
(except as the enforceability thereof may be limited by any applicable
bankruptcy, insolvency or other laws affecting creditors' rights generally or by
general principles of equity, regardless of whether such enforceability is
considered in equity or at law).
(b) Seller has complete and unrestricted power and the unqualified
right to sell, convey, assign, transfer and deliver the Assets to Purchaser
(subject to any consents or waivers of third parties required in connection with
such sale, conveyance, assignment, transfer and delivery of the Assets or any
part thereof, all of which consent(s) or waiver(s) have been duly obtained by
Seller, or have not been duly obtained and are set forth in Schedule 5.3), and
the instruments of transfer, conveyance and assignment to be executed and
delivered by Seller to Purchaser at the Closing will be, upon execution and
delivery thereof, valid and binding obligations of Seller, enforceable in
accordance with their respective terms, sufficient for purposes of recordation
and filing where permitted by law, sufficient to transfer, convey and assign to
Purchaser all right, title and interest of Seller in and to the Assets, and,
except for the permits and registrations set forth in Schedule 5.3, sufficient
to vest in Purchaser the full right, power and authority to conduct the Business
as currently conducted.
Section 5.3. No Conflict. Except as set forth in Schedule 5.3, neither the
execution and delivery by Seller of this Agreement, the ▇▇▇▇ of Sale or the
Warranty Deed or any of the other documents contemplated hereby nor the
consummation by Seller of the transactions contemplated hereby or thereby, nor
compliance by Seller with any of the provisions hereof or thereof, will (a)
conflict with, result in a breach or violation of or constitute (or with notice
or lapse of time or both constitute) a default under, in any material respect,
(i) the Articles of Organization and Operating Agreement of AMT, (ii) the
Articles of Incorporation or Bylaws of ▇▇▇▇▇▇, (iii) any law, statute, rule,
regulation, order, judgment, decree, writ or injunction applicable to Seller,
any of the Assets or the Business, or (iv) any of the terms, conditions or
provisions of any note, bond, lease, mortgage, indenture, license or other
instrument, contract or agreement to which Seller is a party or by which Seller
(or any of the Assets) is subject or bound; (b) result in the creation of, or
give any party the right to create, any lien, charge, option, security interest
or other encumbrance upon the Assets; (c) terminate or modify, or give any third
party the right to terminate or modify, the provisions or terms of any Assumed
Contract; (d) require Seller or, to the best of Seller's knowledge, Purchaser to
obtain any authorization, consent, approval or waiver from, or to make any
filing with, any Governmental Entity or to obtain the approval or consent of any
other Person; or (e) result in any suspension, revocation, impairment,
forfeiture or
19
nonrenewal of any permit, license, qualification, authorization or approval
applicable to Seller or the Business. No authorization, consent or approval by,
or waiver from, or notification of or filing with, any Governmental Entity or
approval or consent of any other Person is required to be obtained by Seller in
connection with the execution, delivery and performance by Seller of this
Agreement, the ▇▇▇▇ of Sale, the Warranty Deed or the other documents
contemplated hereby or thereby or the consummation by Seller of the transactions
contemplated hereby and thereby, except as set forth in Schedule 5.3 and except
for such authorizations, consents, approvals, waivers, notifications or filings,
the failure of which to obtain or make will not have a material adverse effect
on the Business or Seller's ability to consummate the transactions contemplated
hereby and thereby.
Section 5.4. Equity Investments. AMT does not own any capital stock or
other proprietary interest, directly or indirectly, in any corporation,
association, trust, partnership, joint venture or other entity which conducts a
business constituting any portion or aspect of the Business except for ▇▇▇▇▇▇.
▇▇▇▇▇▇ does not own any capital stock or other proprietary interest, directly or
indirectly, in any corporation, association, trust, partnership, joint venture
or other entity which conducts a business constituting any portion or aspect of
the Business.
Section 5.5. Title to Properties. Seller has good and valid title to, or
valid and subsisting leasehold interests in or valid licenses to use, all of its
properties and assets, real, personal and mixed, included in the Assets, free
and clear of all mortgages, liens, pledges, security interests, charges, claims,
restrictions and other encumbrances and defects of title of any nature
whatsoever, except for (i) liens for current real or personal property taxes not
yet due and payable, and (ii) liens disclosed on Schedule 5.5 hereto ("Permitted
Liens"). None of the Assets are owned, leased or used by any Person other than
Seller.
Section 5.6. Real Property; Encumbrances. (a) Seller has not transferred
any air rights or development rights relating to the Real Property. Except as
set forth on Schedule 5.6, there are no outstanding contracts made by Seller for
any improvements to the Real Property which have not been fully paid for. At the
Closing, Seller shall cause to be discharged all mechanics' or materialmen's
liens arising from any labor or materials furnished to the Real Property prior
to the time of Closing.
(b) Except as set forth on Schedule 5.6, and except for those
matters which would be revealed by a reasonably diligent visual inspection
(which Seller and Purchaser agree Purchaser has conducted), all buildings,
structures, improvements, fixtures, facilities, equipment, all components of all
buildings, structures and other improvements included within the Real Property,
including but not limited to the roofs and structural elements thereof and the
heating, ventilation, air conditioning, plumbing, electrical, mechanical, sewer,
waste water, storm water, paving and parking equipment, systems and facility
included therein, and other material items of tangible property and assets
included in the Assets are, in the aggregate, in good operating condition and
repair, subject to normal wear and maintenance, are usable in the regular and
ordinary
20
course of business, and conform in all material respects to all applicable
statutes, rules, regulations, ordinances, orders, writs, injunctions, judgments,
decrees, awards and restrictions of every Governmental Entity having
jurisdiction over any of the Real Property or the Business, and every
instrumentality or agency thereof (including, without limitation, applicable
statutes, rules, regulations, orders and restrictions relating to zoning, land
use, safety, health, environment, hazardous substances, pollution controls,
employment and employment practices and access by the handicapped)
(collectively, "Laws"). Except as set forth on Schedule 5.6, there are no
unsatisfied requests for any repairs, restorations or improvements to the Real
Property from any Person, including without limitation any Governmental Entity,
there are no ongoing material repairs to the Real Property being made by or on
behalf of Seller, and no maintenance or repair to the Real Property has
knowingly been deferred. No person other than Seller owns any equipment or other
tangible assets or properties situated on the Real Property or necessary to the
operation of the Business, except for leased or licensed items and the Rally
Buildings disclosed in Schedule 5.6 hereto. Except as set forth in Schedule 5.6
and except for those matters which would be revealed by a reasonably diligent
visual inspection (which Seller and Purchaser agree Purchaser has conducted),
the walls, roof and subterranean portions, if any, of the improvements on the
Real Property presently are, and as of the Closing will be, sound and watertight
and presently there is, and as of the Closing there will be, no water, chemical
or gaseous seepage, diffusion or other intrusion into said buildings, including
any subterranean portions which would impair Purchaser's beneficial use of the
Real Property.
(c) Except as set forth on Schedule 5.6, the construction, use and
operation of the Real Property by Seller is in full compliance in all material
respects with all Laws, covenants, conditions, restrictions, easements,
disposition agreements and similar matters affecting the Real Property and,
effective as of the Closing, Purchaser shall have the right under all Laws to
continue the use and operation of the Real Property in the conduct of the
Business in the manner it was conducted by Seller without dependence on the
granting of any special permit, exception, approval or variance. Seller has not
received any notice of any violation (or claimed violation) of or investigation
regarding any Laws which has not been remedied or cured.
(d) Except as set forth on Schedule 5.6, none of the buildings,
structures and other improvements located on the Real Property, the
appurtenances thereto or the equipment therein or the operation or maintenance
thereof by the Seller in the conduct of the Business violates any restrictive
covenant or encroaches on any property owned by others or any easement, right of
way or other encumbrance or restriction affecting such Real Property in any
manner which would have a material adverse effect on the ability of Purchaser to
use such buildings, structures, improvements, appurtenances or equipment or to
conduct the Business, nor does any building or structure of any third party
encroach upon the Real Property or any easement or right of way benefitting the
Real Property. The Real Property and its continued use, occupancy and operation
as used, occupied and operated in the conduct of the Business do not constitute
a nonconforming use under any Law.
21
(e) Except as set forth on Schedule 5.6, Seller has not received
notice of, or otherwise has knowledge of, any condemnation, fire, health,
safety, building, environmental, hazardous substances, pollution control, zoning
or other land use regulatory proceedings, either instituted and currently
pending or planned to be instituted, nor has Seller received notice of any
special assessment proceedings affecting any of the Real Property.
(f) Except as set forth on Schedule 5.6 hereto, all water, sewer,
gas, electric, telephone and drainage facilities, and all other utilities
required by any applicable law or by the use and operation of the Real Property
in the conduct of the Business are installed to the property lines of the Real
Property, are connected pursuant to valid permits to municipal or public utility
services or proper drainage facilities, are fully operable and are adequate to
service the Real Property in the operation of Business and to permit full
compliance in all material respects with the requirement of all Laws and normal
usage of the Real Property. No fact or condition exists which could result in
the termination or material reduction of the current access from the Real
Property to existing roads or to sewer or other utility services presently
serving the Real Property.
(g) All licenses, permits, certificates, easements and rights of
way, including proof of dedication, required from all Governmental Entities
having jurisdiction over the Real Property for the use and operation of the Real
Property in the conduct of the Business and to ensure vehicular and pedestrian
ingress to and egress from the Real Property have been obtained, except such
thereof which, if not obtained, would not have a material adverse effect on the
ability of the Purchaser to use and operate the Real Property and conduct the
Business.
(h) Seller has not received written notice and has no knowledge of
any pending or threatened condemnation proceeding affecting the Real Property or
any part thereof or of any sale or other disposition of the Real Property or any
part thereof in lieu of condemnation.
(i) Except as set forth on Schedule 5.6, no portion of the Real
Property has suffered any material damage by fire or other casualty which has
not heretofore been completely repaired and restored to its original condition
in all material respects.
(j) Except as set forth on Schedule 5.6, there are no encroachments
or other facts or conditions affecting the Real Property that would be revealed
by an accurate survey thereof which would, individually or in the aggregate, (i)
interfere in any material respect with the use, occupancy or operation thereof
as used, occupied and operated in the conduct of the Business or (ii) interfere
in any material respect with receiving a title insurance policy. Seller has
delivered to Purchaser true, correct and complete title policies and surveys in
its possession with respect to the Real Property. Except as set forth on
Schedule 5.6, no portion of any improvement encroaches upon
22
any property not included within the Real Property or upon the area of any
easement burdening the Real Property.
(k) Seller does not lease any real property in connection with the
conduct of the Business.
(l) Except as set forth in Schedule 5.6, Seller does not owe any
money to any architect, contractor, engineer, subcontractor or materialman for
labor or materials performed, rendered or supplied to or in connection with any
Real Property. There is no work being done at, or materials being supplied to,
any parcel of Real Property on the date hereof other than routine maintenance
projects having an aggregate cost through completion of not more than $25,000.
Section 5.7. Environmental Matters. (a) Seller has obtained all permits,
licenses and other authorizations which are required to conduct the Business
under all Federal, state, county and local statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, concessions, grants, franchises,
agreements or governmental restrictions relating to the environment or the
general treatment, storage, recycling, transportation, release or disposal of
any materials into the environment (collectively, "Environmental Laws"). The
Business is in compliance (i) with the terms and conditions of all such permits,
licenses and authorizations and (ii) with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in any Environmental Law applicable to it in connection
with the conduct of the Business or in any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder. In addition, except as set forth on Schedule
5.7, (i) no notice, notification, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending or, to the best of
Seller's knowledge, threatened by any Federal, regional, state, county or local
government or any executive, legislative, judicial, regulatory or administrative
entity, or other Governmental Entity with respect to any alleged failure by
Seller to have any permit, license or authorization required in connection with
the conduct of the Business or with respect to any generation, treatment,
storage, recycling, transportation, release or disposal, or any release as
defined in 42 U.S.C. Section 9601(22) ("Release") of any hazardous substance,
waste or material regulated under Environmental Laws or other Hazardous
Materials generated by Seller in the conduct of the Business. For the purposes
of this Agreement, "Hazardous Materials" shall mean substances defined as
"hazardous substances", "toxic substances" or "hazardous wastes" in the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"); the Federal Hazardous Materials Transportation Act, as
amended; the Federal Resource Conservation and Recovery Act, as amended; oil and
underground storage tanks; asbestos and material containing asbestos; those
substances defined as "hazardous wastes", "hazardous materials" or "hazardous
substances" under the laws of the State of North Carolina; and as such
substances are defined under the regulations adopted and publications
promulgated pursuant to said laws.
23
(b) Except as set forth on Schedule 5.7, Seller has not handled any
Hazardous Material on any property now owned or leased by Seller with respect to
the Business; and to the best of Seller's knowledge:
(i) no PCB is or has been present at any property now owned or
leased by Seller with respect to the Business;
(ii) no asbestos is or has been present at any property now
owned or leased by Seller with respect to the Business;
(iii) there are no underground storage tanks for Hazardous
Materials, active or abandoned, at any property now owned or leased
by Seller with respect to the Business;
(iv) no Hazardous Materials have been released by Seller, in a
reportable quantity, where such a quantity has been established by
statute, ordinance, rule, regulation or order, at, on or under any
property now owned or leased by Seller with respect to the Business;
and
(v) no Hazardous Materials have been otherwise released by
Seller at, on or under any property now owned or leased by Seller
with respect to the Business, and no Hazardous Materials have ever
been released at, on or under any property adjoining any property
now or previously owned or leased by Seller with respect to the
Business.
(c) Except as set forth on Schedule 5.7, Seller has not transported
or arranged for the transportation of any Hazardous Materials generated by
Seller in the conduct of the Business to any location which is listed on the
National Priorities List under CERCLA, listed for possible inclusion on the
National Priorities List under the Comprehensive Environmental Response,
Compensation and Liability Information System ("CERCLIS") by the Environmental
Protection Agency or on any similar state list or which is the subject of
Federal, state or local enforcement actions or other investigations which may
lead to claims against Seller for clean-up costs, remedial work, damages to
natural resources or personal injury claims, including, but not limited to,
claims under CERCLA.
(d) No Hazardous Material generated by Seller in the conduct of the
Business has been recycled, treated, stored, disposed of or released by Seller
at any location(s) other than those listed in Schedule 5.7 attached hereto.
(e) Except as set forth as Schedule 5.7, no written or, to the best
of Seller's knowledge, oral notification of a Release of a Hazardous Material
has been filed by or on behalf of Seller with any Governmental Entity with
respect to the Business and no property now or previously owned or, to the best
of Seller's knowledge, leased by Seller with respect to the Business is listed
or, to the best of Seller's knowledge, proposed for listing on the National
Priorities List promulgated pursuant
24
to CERCLA, on CERCLIS or on any similar state list of sites requiring
investigation or clean-up.
(f) Except as set forth as Schedule 5.7, there are no encumbrances
in favor of any Governmental Entity for (A) any liability under Environmental
Laws or (B) damages arising from or costs incurred by such Governmental Entity
in response to a Release or threatened Release of Hazardous Waste or any toxic
waste, substance or constituent or other substance into the environment
(collectively, "Environmental Encumbrances") arising under or pursuant to any
Environmental Laws, and, to the best of Seller's knowledge, no governmental
actions have been taken or are in process which could reasonably be anticipated
to subject the Business to such Environmental Encumbrances.
Section 5.8. Financial Statements and Related Matters. (a) Attached hereto
as Schedule 5.8 are the unaudited balance sheets of Seller as of May 31, 1996
and September 30, 1996 (the "Interim Balance Sheet Date") and the unaudited
income statements of Seller for the year ended May 31, 1996 and the four-month
period ended on the Interim Balance Sheet Date (collectively, the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods covered by such statements, are true, correct and complete in all
material respects in accordance with generally accepted accounting principles,
are in accordance with the books and records of Seller, and present fairly, in
accordance with generally accepted accounting principles consistently applied,
the financial position of Seller on the dates as of which such statements are
presented and the results of operations of Seller for each of the periods
covered by such statements, subject to normal audit adjustments and the absence
of footnotes normally associated with audited financial statements. The
statements of operations included in the Financial Statements do not contain any
material items of special or non-recurring income or other income not earned in
the ordinary course of business of the Seller except as expressly specified
therein. The balance sheet dated as of September 30, 1996 included in the
Financial Statements is sometimes referred to herein as the "Interim Balance
Sheet".
(b) The inventory of the Business consists of raw materials and
supplies, manufactured and purchased parts, goods in process, and finished
goods, all of which is merchantable and fit for the purpose for which it was
procured or manufactured, and none of which is slow-moving, obsolete, damaged,
or defective, except as set forth on Schedule 5.8.
(c) All properties and tangible assets reflected in the Interim
Balance Sheet have a fair market or realizable value at least equal to the value
thereof as reflected therein.
(d) The books, records, and accounts of Seller accurately and fairly
reflect, in reasonable detail, the transactions and their assets and
liabilities. Neither Seller nor any of its Affiliates has engaged in any
transaction with respect to the
25
Business, maintained any bank account for the Business or used any of its funds
in the conduct of the Business except for transactions, bank accounts and funds
which have been and are reflected in its normally maintained books and records.
Section 5.9. Absence of Undisclosed Liabilities. Except as set forth on
Schedule 5.9, Seller has no liabilities or obligations with respect to the
Business, either direct or indirect, matured or unmatured or absolute,
contingent or otherwise, except:
(a) those liabilities or obligations set forth on the Interim
Balance Sheet (or liabilities or obligations which arose in the ordinary course
of business (none of which is a liability for breach of contract, breach of
warranty, tort, infringement claim or lawsuit) but are not required under
generally accepted accounting principles to be disclosed on the Interim Balance
Sheet) and not heretofore paid or discharged;
(b) those liabilities or obligations arising in the ordinary course
of business under any agreement, contract, commitment, lease or plan
specifically disclosed on any Schedule hereto; and
(c) those liabilities or obligations incurred, consistent with past
business practice, in or as a result of the normal and ordinary course of the
Business since the Interim Balance Sheet Date.
Section 5.10. Absence of Certain Changes or Events. Except as set
forth on Schedule 5.10, since the Interim Balance Sheet Date, Seller has not:
(a) suffered any material adverse change in its condition (financial
or otherwise), the Assets, the Business or the results of operations or
prospects of the Business, and, to the knowledge of Seller, no fact or condition
exists or is contemplated or threatened which could reasonably be anticipated to
cause such a change in the future other than a result of changes which affect
the economy generally;
(b) suffered any damage, destruction or casualty loss, whether
covered by insurance or not, which could materially and adversely affect the
Assets, the Business or the results of operations or financial condition of the
Business;
(c) except in the ordinary course of business and consistent with
past practice, increased the compensation payable to, or entered into any
employment, bonus or compensation agreement with, any employees or consultants;
(d) incurred any obligation or liability (absolute or contingent) in
excess of $25,000, except liabilities and obligations incurred in the ordinary
course of the Business and obligations under contracts entered into in the
ordinary course of the Business;
(e) made or suffered any amendment or termination of any Assumed
Contract;
26
(f) sold, transferred or otherwise disposed of any assets or
properties which, if the Closing had occurred on the date hereof, would have
been included in the Assets, or entered into any agreement or commitment
therefor, other than sales, transfers or other dispositions, or agreements or
commitments therefor, entered into in the ordinary course of business and
consistent with past practice;
(g) received written notice of any actual or threatened labor
dispute which could have an adverse effect on the conduct of the Business;
(h) created, incurred, assumed or guaranteed any indebtedness or
liability for money borrowed (other than trade payables incurred and leases of
equipment entered into in the ordinary course of business), for itself, any
Affiliate or others, or any commitment to borrow money, or to become obligated
in any manner in respect of borrowed money, or mortgaged, pledged or subjected
any of its Assets to any mortgage, lien, pledge, security interest, conditional
sales contract or other encumbrance of any nature whatsoever, except for
Permitted Liens;
(i) made any payment, discharge or satisfaction of any claim in
connection with the conduct of the Business outside of the ordinary course of
business;
(j) had any write-off in excess of reserves as uncollectible of any
accounts or notes receivable of Seller, or any portion thereof, relating to the
Business;
(k) made any amendment, termination or waiver of any rights of the
Business having a value in excess of $25,000;
(l) relating to the Business, made any change in the accounting
methods or practices followed by Seller relating to the Business or any change
in depreciation or amortization policies or rates theretofore adopted;
(m) issued or sold any stock, notes, bonds or other securities, or
any option to purchase the same, or entered into any agreement with respect
thereto; or
(n) entered into any agreement or commitment outside of the ordinary
course of the Business.
Section 5.11. Insurance. Schedule 5.11 contains a true and complete list
of all policies of liability, theft, fidelity, life, fire, product liability,
medical coverage, workmen's compensation and other forms of insurance held by or
applicable to the Business (specifying the insurer, amount of coverage, type of
insurance and renewal or expiration date), and any pending claims thereunder.
The policies listed on Schedule 5.11 are outstanding and duly in force and all
premiums currently due and payable with respect to such policies have been paid.
Except as set forth in Schedule 5.11, Seller has no reason to believe that, on
the respective renewal dates thereof, any such policy of insurance will be
canceled or subject to a material increase in the premium payable thereunder or
a material reduction of the coverage provided thereby. Except as set
27
forth in Schedule 5.11, Seller has not, during the past three fiscal years, been
denied or had revoked or rescinded any policy of insurance or made a claim in
excess of $10,000 in resect of any such agreements or policies. Seller has
heretofore made available to Purchaser true and correct copies of all policies
set forth in Schedule 5.11.
Section 5.12. Contracts, Obligations and Commitments. In connection with
the Assets and the operation of the Business, Seller has no existing contract,
obligation, commitment, agreement or other instrument (written or oral) of any
nature including, without limitation, the following, except as set forth on
Schedule 5.12 hereto:
(a) contracts or commitments for the employment or severance of any
employee or consultant or any other type of contract or understanding with any
current employee or consultant;
(b) profit-sharing, bonus, stock option, stock purchase, pension,
retirement, disability, medical coverage, hospitalization, insurance or similar
plan or agreement, formal or informal, providing benefits to any current or
former employee or consultant;
(c) loan or other agreements, notes, indentures, or instruments
relating to or evidencing indebtedness for borrowed money or mortgaging,
pledging or granting or creating a lien or security interest or other
encumbrance on any of the Assets or any agreement or instrument evidencing any
guaranty by Seller of payment or performance by any other person;
(d) agreements with any labor union or collective bargaining
organization or other labor agreements;
(e) any contract or series of contracts with the same person for
the furnishing or purchase of equipment, goods or services;
(f) any contract or commitment for capital expenditures in
excess of $25,000 in the aggregate;
(g) any agreement or arrangement for the sale of any assets,
properties or rights requiring the consent of any party to the transfer and
assignment of such assets, properties and rights;
(h) any joint venture contract or arrangement or other agreement
involving a sharing of profits or expenses to which Seller is a party or by
which it is bound;
(i) any lease under which Seller is either lessor or lessee
relating to the Assets or any property at which the Assets are located;
28
(j) any contract, commitment or arrangement not made in the ordinary
course of business; or
(k) any agreements with the federal government or any state or local
government or any agency thereof.
For purposes hereof, each purchase order, contract, agreement, arrangement,
plan, lease or similar instrument listed in clauses (e) and (i) of Schedule 5.12
and each other contract, agreement, arrangement, plan, lease or similar
instrument listed in Schedule 5.12 and designated as an Assumed Contract are
collectively referred to herein as the "Assumed Contracts." Except as set forth
on Schedule 5.12, each Assumed Contract is a valid and binding obligation of
Seller and, to the best of Seller's knowledge, the other parties thereto,
enforceable in accordance with its terms (except as the enforceability thereof
may be limited by any applicable bankruptcy, insolvency or other laws affecting
creditors' rights generally or by general principles of equity, regardless of
whether such enforceability is considered in equity or at law), and is in full
force and effect (except for any Assumed Contracts which by their terms expire
after the date hereof or are terminated after the date hereof in accordance with
the terms thereof; provided, however, that Seller shall not terminate any
Material Assumed Contract after the date hereof without the prior written
consent of Purchaser), and, to the best of Seller's knowledge, neither Seller
nor any other party thereto has breached any material provision of, nor, to the
best of Seller's knowledge, is in default in any material respect under the
terms of (and, to the best of Seller's knowledge, no condition exists which,
with the passage of time, the giving of notice, or both, would result in a
default under the terms of), any of the Assumed Contracts. Except as set forth
in Schedule 5.12 hereto, each of the Assumed Contracts is validly assignable to
the Purchaser without the consent of any other party thereto so that, after the
assignment thereof to the Purchaser pursuant to this Agreement, the Purchaser
will be entitled to the full economic and other benefits thereof. Seller shall
give Purchaser prompt written notice of each Assumed Contract which is
terminated after the date hereof. Seller has heretofore made available to
Purchaser copies of all Assumed Contracts.
Section 5.13. Litigation. Except as set forth on Schedule 5.13, (a)
neither Seller, nor any current director, manager, officer, or employee of
Seller, is a party to any pending or threatened action, suit, proceeding or
investigation, at law or in equity or otherwise in, before or by any court or
governmental board, commission, agency, department or office, or private
arbitration tribunal related to the Business, nor does Seller know, after due
inquiry, of any basis therefor, (i) arising in connection with the conduct by
Seller of the Business, (ii) to restrain, prohibit or invalidate, or to obtain
damages or other relief from Seller, or any of its current officers, directors,
managers or employees, or equitable or other relief in respect of this Agreement
or the transactions contemplated hereby, (iii) which arises out of any contract,
agreement, letter of intent or arrangement alleged to have been entered into or
agreed to by Seller and which conflicts with this Agreement or the transactions
contemplated hereby, or gives rise to a claim or right of any kind of any person
as a result of the execution of this Agreement or the consummation of the
transactions contemplated hereby, (iv)
29
which, if successful, could adversely affect the right of Purchaser after the
Closing Date to own any of the Assets or to conduct the Business as currently
conducted, or (v) to suspend, revoke, annul, limit, terminate, amend or modify
any permit, license, consent, qualification, authorization or approval
applicable to the Business as currently conducted; and (b) Seller is not a party
or subject to any order, ruling, judgment, decree or stipulation which affects
the Business, or which would prevent the transactions contemplated by this
Agreement. To the best of Seller's knowledge after due inquiry, except as set
forth on Schedule 5.13, no facts exist, and no investigation has been instituted
by any Governmental Entity, which might result in any such action or proceeding.
True, correct and complete copies of all pleadings and correspondence relating
to each matter set forth on Schedule 5.13 have previously been delivered to
Purchaser.
Section 5.14. Compliance with Law. The Business has been conducted, and is
now being conducted, in compliance with all applicable laws, rules, regulations
and court or administrative orders and processes (including, without limitation,
any that relate to consumer protection, health and safety, products and
services, proprietary rights, anti-competitive practices, collective bargaining,
ERISA, equal opportunity, improper payments and environmental regulation).
Seller, and its current officers, directors and managers and the Employees, (i)
are not, and during the past two years were not, in violation of, or not in
compliance with, all such applicable laws, rules, regulations, orders and
processes with respect to their conduct of the Business; (ii) have not received
any notice from any Governmental Entity and, to the best of Seller's knowledge
after due inquiry of its current officers, directors and managers and the
Employees, none is threatened, alleging that Seller has violated, or not
complied with, any of the above; and (iii) are not a party to any agreement or
instrument, or subject to any judgment, order, writ, rule, regulation, code or
ordinance which could adversely affect the Business.
Section 5.15. Licenses; Registrations; Permits; Etc. Seller now has and,
in a manner consistent with good business practices, will maintain in effect
through the Closing Date all Licenses necessary to carry on, as currently
conducted, the Business, which necessary Licenses are set forth on Schedule 5.15
hereto, and true, complete and correct copies of which Licenses have been made
available to Purchaser. All such Licenses are in full force and effect as of the
date hereof and, to the best of Seller's knowledge, no suspension or
cancellation of any of them is threatened. Seller has complied in all material
respects and will comply in all material respects with all terms of such
Licenses and will take any and all actions necessary to ensure that all such
Licenses remain in full force and effect and that the terms of such Licenses are
not violated in any material respect through the Closing Date. To the best of
Seller's knowledge, it is not in default in any material respect under any of
such Licenses which default would result in the forfeiture of any such License
necessary to carry on the Business as currently conducted and no event has
occurred and no condition exists which, with the giving of notice, the passage
of time, or both, would constitute a default thereunder the effect of which
would result in a forfeiture thereof. Except as set forth in Schedule 5.15, all
of such Licenses can be transferred to Purchaser.
30
Section 5.16. Labor Matters. Except as set forth on Schedule 5.16, there
are not in existence or, to the best of Seller's knowledge, threatened any (a)
work stoppages or material labor disputes respecting Employees; (b) unfair labor
practice complaints against Seller in respect of Employees; or (c) any material
grievance between Seller and its Employees. Except as set forth on Schedule
5.16, Seller is not delinquent in payments to any Employee for any wages,
salaries, commissions, bonuses or other compensation for services performed by
them prior to the date hereof or for amounts required to be reimbursed to such
Employee, other than compensation to be paid at the end of the payroll period
ending after the date hereof. Seller is in compliance in all material respects
with all federal, state and local laws and regulations respecting labor,
employment and employment practices, terms and conditions of employment and
wages and hours. No representation question exists respecting the Employees nor,
to the best of Seller's knowledge, has any application been filed, submitted or
initiated with respect to the certification or recognition of the Employees as a
collective bargaining unit, and no collective bargaining agreement is currently
being negotiated by Seller with respect to the Employees. True and complete
copies of the current written personnel policies, employee manuals and/or
employee handbooks of Seller used in the Business have been made available to
Purchaser.
Section 5.17. Personnel; Employee Plans. Schedule 5.17 comprises a
complete and correct list of (i) the names, titles, and current annual salary
rates (as of November 15, 1996) and all other compensation and fringe benefits
of each of the Employees or consultants of Seller who is engaged in the conduct
of the Business, (ii) the amount of accrued bonuses, vacation, earned time, sick
leave, maternity leave and other leave for such personnel as of November 15,
1996 and (iii) the persons who are currently on the Seller's payroll but not
actively engaged in the conduct of the Business, indicating such persons. The
Seller has not instituted any "freeze" of, or deferred or delayed the grant of,
any cost-of-living or other salary adjustments for any of the Employees. With
respect to each Employee hired after November 6, 1996, a copy of the Form I-9
completed pursuant to the Immigration Reform and Control Act of 1986, and the
rules and regulations promulgated thereunder, has been made available to
Purchaser. Except as set forth on Schedule 5.17, there are no employee benefit
plans, contracts or arrangements of any type (including, without limitation,
employee benefit plans described in Section 3(3) of ERISA and insurance, stock
option, bonus, severance, incentive or other compensatory plans, contracts or
arrangements which are not so described) which cover any current or former
Employee or under which the Seller has or in the future may have, directly, or
indirectly through any other person, firm or entity which is aggregated with the
Seller under Section 414 of the Code (an "ERISA Affiliate"), any liability with
respect to any current or former Employee or an ERISA Affiliate (each of which
employee benefit plans, contracts and arrangements is herein referred to as an
"Employee Plan"). With respect to each Employee Plan, Seller has made available
to Purchaser correct and complete copies of the plan documents and agreements,
as well as related trust agreements, insurance contracts, collective bargaining
agreements and amendments of same. There are no pending claims against any
Employee Plan (other than for benefits in accordance with its terms), nor has
Seller received any written threat of a claim by any participant thereof or
beneficiary
31
thereunder. Without limiting the generality of the foregoing, all Employee Plans
are in compliance in all material respects with all applicable reporting,
disclosure, filing and other administrative requirements pertaining to employee
benefit plans set forth in the Code and ERISA and rules and regulations
promulgated under either. Except as set forth on Schedule 5.17, neither Seller
nor any ERISA Affiliate is or was at any time obligated to contribute to or is
or was otherwise a party or subject to any employee pension benefit plan which
is or was a pension plan covered by Title IV of ERISA, including, without
limitation, a multiemployer plan within the meaning of Section 3(37) of ERISA.
With respect to each Employee Plan which is an "employee benefit plan" within
the meaning of Section 3(3) of ERISA or which is a "plan" within the meaning of
Section 4975(e) of the Code, there has occurred no transaction which is
prohibited by Section 406 of ERISA or which constitutes a "prohibited
transaction" under Section 4975(c) of the Code and with respect to which a
prohibited transaction exemption has not been granted and is not currently in
effect.
Section 5.18. Intellectual Property. Except as set forth on Schedule 5.18,
Seller owns or is licensed or otherwise has the right to use all Intellectual
Property necessary to permit Purchaser to carry on the Business as currently
conducted by Seller. All licenses, if any, of Seller to use all Intellectual
Property necessary to permit Purchaser to carry on the Business as currently
conducted by Seller are in full force and effect and neither the Seller nor, to
the best of Seller's knowledge, any of the other parties to such licenses are in
breach in any material respect of any provision of, or in default in any
material respect under any of the terms of, such licenses. Except as set forth
on Schedule 5.18, Seller does not pay royalties to anyone for use of the
Intellectual Property. Except as set forth on Schedule 5.18, Seller has not
granted or otherwise transferred to any person any license or other right to use
any of the Intellectual Property necessary to permit Purchaser to carry on the
Business as currently conducted, whether requiring the payment of royalties or
not. To the best of Seller's knowledge, no person is infringing upon, or is in
violation of, any of Seller's Intellectual Property or rights thereto, except as
set forth on Schedule 5.18. Except as set forth on Schedule 5.18, subsequent to
the Closing, Seller shall not own or have the right to use any Intellectual
Property which has been utilized in the Business. Schedule 5.18 sets forth all
patents, trademarks, copyrights and service marks and applications for patents,
trademarks, copyrights and service marks owned by or licensed to Seller for use
in the Business and whether or not Seller has the exclusive right to use all
such patents, trademarks, copyrights and service marks. To the best of Seller's
knowledge, no product or service marketed or sold by Seller which utilizes any
of the Intellectual Property violates or infringes any rights of another party,
except as set forth on Schedule 5.18. There is no pending or, to the best of
Seller's knowledge, threatened claim or litigation against Seller contesting the
right to use its Intellectual Property in the conduct of the Business, asserting
the misuse of any thereof or asserting that Seller has violated or infringed the
rights of another party. This Agreement and the transactions contemplated hereby
will not in any manner affect Purchaser's rights with respect to, or ability to
use, the Intellectual Property necessary to permit Purchaser to carry on the
Business as currently conducted, assuming all required consents, if any,
32
to assignment thereof are obtained. Seller shall deliver to Purchaser all
documents relating to such Intellectual Property promptly after the date hereof.
Section 5.19. Property to Operate Business. The Assets constitute, in the
aggregate, all the assets and property (other than working capital) necessary
for the conduct of the Business as currently conducted. All of the Assets are
located at the Real Property, except as set forth on Schedule 5.19. The ▇▇▇▇ of
Sale, Warranty Deed, assignment(s) of Intellectual Property, agreements,
contracts and other arrangements, and other instruments delivered to Purchaser
by Seller on the Closing Date will be in form and substance sufficient to vest
in the Purchaser good and marketable title to, and all rights necessary to
utilize, the Assets, free and clear, except as otherwise permitted by this
Agreement, of all liens, mortgages, pledges, encumbrances, charges, restrictions
or rights of any other party whatsoever.
Section 5.20. Related Transactions. Except as set forth in Schedule 5.20,
and except for compensation to Employees for services rendered, no current
officer or Employee or, to the best of Seller's knowledge former officer or
employee, of Seller is, in each case in their individual capacity, presently a
party to any material transaction with Seller (including, but not limited to,
any contract, agreement or other arrangement providing for the furnishing of
services by, or rental of real or personal property from, or otherwise requiring
payments to, any such officer or Employee).
Section 5.21. Brokers. Seller has not paid or become obligated to
pay any fee or commission to any broker, finder, investment banker or other
intermediary in connection with the transactions contemplated by this Agreement.
Section 5.22. Accounts Receivable. All Accounts Receivable have arisen in
the ordinary course of the Business and are collectible in the ordinary course
of the Business (recognizing Seller's usual experience for uncollectible
accounts), in each case in the aggregate recorded amounts thereof, less the
applicable reserves with respect thereto reflected on the Accounts Receivable
Schedule delivered pursuant to Section 3.18 hereof. Seller has not factored,
discounted or agreed to factor or discount any Accounts Receivable, except as
set forth on Schedule 5.22. The values at which the Accounts Receivable are
carried reflect the accounts receivable valuation policy of Seller that Seller
has consistently applied.
Section 5.23. Product Warranties. Schedule 5.23 sets forth Seller's
standard form of product warranties and guarantees with respect to the products
sold or leased by the Business. Except as set forth on Schedule 5.23, there are
no outstanding claims of any Person against Seller, or to the best of Seller's
knowledge any threatened claims, based on any warranty or guarantee or on any
contention that products sold or leased in connection with the Business failed
to meet quality standards with respect to such products.
Section 5.24. Taxes. (a) Except as specifically set forth in Schedule
5.24, (i) Seller has filed on a timely basis (taking into account any extensions
received from the
33
relevant taxing authorities) all returns and reports of all Federal, state,
local and foreign income, profits, franchise, unincorporated business, capital,
general corporate, sales, use, occupation, property, excise and any and all
other taxes (all such taxes, irrespective of the period for which such taxes are
payable or attributable, hereinafter referred to as "Taxes") relating to the
Assets or the Business that are or were required to be filed by Seller
(including any predecessor) with the appropriate taxing authorities in all
jurisdictions in which such returns and reports are or were required to be
filed, and all such returns and reports are true, correct and complete in all
material respects, (ii) all Taxes (including interest, additions to tax and
penalties thereon together with interest on such additions to tax and penalties)
relating to the Assets or the Business that are due from or may be asserted
against Seller (including deferred taxes) in respect of or attributable to all
periods ending on or before the Closing Date have been fully paid, deposited or
adequately provided for on the books and financial statements of Seller or are
being contested in good faith by appropriate proceedings, (iii) no issues have
been raised (or are currently pending) by any taxing authority in connection
with any of the returns and reports referred to in clause (i) which might be
determined adversely to Seller and which would have a material adverse effect on
the Business, (iv) Seller has not given or been requested to give waivers or
extensions of any statute of limitations with respect to the payment of Taxes
relating to the Business, and (v) no tax liens which have not been satisfied or
discharged by payment or concession by the relevant taxing authority or as to
which sufficient reserves have not been established on the books and financial
statements of Seller and the Business are in force as of the date hereof with
respect to any of the assets of Seller and the Business.
(b) Schedule 5.24 describes all adjustments to the returns and
reports of Taxes relating to the Assets or the Business filed, or required to be
filed, by Seller and the resulting deficiencies proposed with respect thereto in
writing by the relevant taxing authorities which would have a material adverse
effect on the Business. To the best of Seller's knowledge, all deficiencies
proposed in writing by such taxing authorities which would have a material
adverse effect on the Business have been paid, reserved against, settled or are
being contested in good faith by appropriate proceedings.
(c) All Taxes relating to the Assets or the Business that Seller is
or was required by law to withhold, to deposit or to collect have been duly
withheld, deposited or collected and, to the extent required, have been paid to
the relevant taxing authority.
(d) Seller is not acting as nominee or trustee for any person,
corporation, partnership, trust or estate, but is acting solely in its
individual capacity.
Section 5.25. Suppliers and Customers. Schedule 5.25 lists all suppliers
and customers of the Business since June 1, 1995. Seller does not have any
information which might reasonably indicate that any of the customers or
suppliers of the Business listed on Schedule 5.25 intend to cease purchasing
from, selling to or dealing with the Business, nor has any information been
brought to its attention which might reasonably
34
lead it to believe any such customer or supplier intends to alter in any
material respect the amount of such purchases, sales or the extent of dealings
with the Business or would alter in any material respect such purchases, sales
or dealings in the event of the consummation of the transactions contemplated
hereby. Seller does not have any information which might reasonably lead it to
believe that, (i) any supplier will not be able to fulfill outstanding or
currently anticipated purchase orders placed by the Business which, individually
or in the aggregate, exceed $25,000, or (ii) any customer will cancel
outstanding or currently anticipated purchase orders placed with the Business
which, individually or in the aggregate, exceed $50,000.
Section 5.26. ▇▇▇▇▇▇ Corporation. AMT owns all the issued and outstanding
capital stock of ▇▇▇▇▇▇ Corporation, free and clear of all liens, security
interests, pledges, restrictions on transfer and other encumbrances. Except as
set forth on Schedule 5.26 hereto, ▇▇▇▇▇▇ currently conducts no business, has no
assets other than the Real Property, and has no liabilities (direct or indirect,
matured or unmatured or absolute, contingent or otherwise).
Section 5.27. Disclosure. Seller has not failed to disclose to Purchaser
any material information adverse to the Assets, liabilities, business, financial
condition or results of operations of the Business, and no information furnished
by or on behalf of Seller to Purchaser, contains any untrue statement of a
material fact or omits to state a material fact necessary to make such
statement, in the light of the circumstances under which it was made, not
misleading. All such written information, in whatever form, furnished by Seller
to Purchaser was true and correct as of its date and, except as the accuracy
thereof is affected by the passage of time, remains true and correct as of the
date hereof.
VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
Section 6.1. Organization. Purchaser is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has all requisite corporate power and authority to own or lease its
properties and carry on its business as presently conducted; and Purchaser has
all requisite corporate power and authority to enter into this Agreement, the
▇▇▇▇ of Sale and all other agreements contemplated hereby to which it is a party
and to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. Purchaser is, or prior to the
Closing Date will be, licensed or qualified to transact business in the State of
North Carolina.
Section 6.2. Due Authorization. The execution and delivery by Purchaser of
this Agreement, the ▇▇▇▇ of Sale and the other documents contemplated hereby,
the performance by Purchaser of its obligations hereunder and thereunder, and
the consummation of the transactions contemplated hereby and thereby have been
duly and
35
validly authorized by all necessary corporate action on the part of Purchaser.
This Agreement has been duly and validly executed by Purchaser, and this
Agreement is, and each other document contemplated hereby, when executed and
delivered by Purchaser, will be, a legal, valid and binding obligation of
Purchaser enforceable against it in accordance with its terms (except as the
enforceability thereof may be limited by any applicable bankruptcy, insolvency
or other laws affecting creditors' rights generally or by general principles of
equity, regardless of whether such enforceability is considered in equity or at
law).
Section 6.3. No Conflict. Except as set forth on Schedule 6.3, neither the
execution and delivery by Purchaser of this Agreement or any of the other
documents contemplated hereby nor the consummation by Purchaser of the
transactions contemplated hereby or thereby, nor compliance by Purchaser with
any of the provisions hereof or thereof, will (a) conflict with, result in a
breach or violation of or constitute (or with notice or lapse of time or both
constitute) a default under, in any material respect, (i) the Certificate of
Incorporation or Bylaws of Purchaser, (ii) any law, statute, rule, regulation,
order, judgment, decree, writ or injunction applicable to Purchaser or (iii) any
of the terms, conditions or provisions of any note, bond, lease, mortgage,
indenture, license or other instrument, contract or agreement to which Purchaser
is a party or by which it (or any of its properties or assets) is subject or
bound and which is material; (b) result in the creation of, or give any party
the right to create, any lien, charge, option, security interest or other
encumbrance upon any property or asset of Purchaser or which would have a
material adverse effect on the business of Purchaser; (c) terminate or modify,
or give any third party the right to terminate or modify, the provisions or
terms of any material agreement or commitment to which Purchaser is a party or
by which it (or any of its properties or assets) is subject or bound; or (d)
require Purchaser to obtain any authorization, consent or approval by, or waiver
from, or notification of or filing with, any Governmental Entity, or the
approval or consent of any other Person, in connection with the execution,
delivery and performance by Purchaser of this Agreement or the other documents
contemplated hereby or thereby or the consummation by Purchaser of the
transactions contemplated hereby and thereby, except such authorizations,
consents, approvals, waivers, notifications or filings, the failure of which to
obtain or make will not have a material adverse effect on Purchaser's
obligations hereunder and under the other documents contemplated hereby.
Section 6.4. Disclosure. No representation or warranty by Purchaser in
this Agreement or set forth in any document, instrument, certificate or schedule
furnished pursuant hereto contains any untrue statement of a material fact or
omits to state a material fact necessary to make such statement, in the light of
the circumstances under which it was made, not misleading.
36
VII. AGREEMENTS PENDING CLOSING
Section 7.1. Conduct and Preservation of Business. Except as contemplated
by this Agreement, during the period from the date of this Agreement to the
Closing Date, Seller will cause the Business to be carried on in the ordinary
course consistent with past practice. Seller shall not cause or allow to occur
any of the events or occurrences described in Section 5.10 hereof. Without
limiting the generality of the foregoing, (i) Seller shall use its reasonable
best efforts to keep available the services of the present Employees for the
Purchaser, to maintain the Business intact and to maintain the relations and
goodwill with the Seller's suppliers and customers; (ii) Seller shall comply in
all material respects with all laws, ordinances, rules, regulations and orders
applicable to the Business or the Assets; (iii) Seller shall not take any action
or omit to take any action which act or omission would result in the inaccuracy
in any material respect of any of its representations and warranties made in
Article V hereof if such representation or warranty were to be made immediately
after the occurrence of such act or omission; and (iv) Seller shall repair and
replace the Assets in accordance with the normal and customary requirements of
the Business.
Section 7.2. Access to Information. Between the date of this Agreement and
the Closing Date, Seller will (i) permit Purchaser's authorized representatives
and financing parties reasonable access, during normal business hours and upon
reasonable notice, to all of the books, records, tax returns, reports and other
tax related materials, offices and other facilities and properties of the
Business; (ii) permit free and full access, during normal business hours and
upon reasonable notice, to the work papers of the independent certified public
accountants of Seller; (iii) permit Purchaser to make such inspections and
copies thereof as Purchaser may reasonably request; and (iv) furnish Purchaser
with such additional financial and operating data and other information with
respect to the business, operations and properties of the Business as Purchaser
may from time to time reasonably request; provided, however, that any such
investigation shall be conducted in such a manner as not to interfere
unreasonably with the operations of the Business.
Section 7.3. Filings and Authorizations. Each of Seller and Purchaser, as
promptly as practicable, (i) will make, or cause to be made, all filings and
submissions under laws, rules and regulations applicable to it, or to the
Business, as may be required for it to consummate the transactions contemplated
hereby; (ii) will use its reasonable best efforts to obtain, or cause to be
obtained, all authorizations, approvals, consents and waivers from all Persons
and Governmental Entities necessary to be obtained by it in order for it so to
consummate such transactions; and (iii) will use its reasonable best efforts to
take, or cause to be taken, all other actions necessary, proper or advisable in
order for it to fulfill its obligations hereunder and to fulfill each closing
condition contained in Articles III and IV hereof. Seller and Purchaser will
coordinate and cooperate with one another in exchanging information and
supplying such reasonable assistance as may be reasonably requested by each in
connection with the foregoing. Purchaser shall use its reasonable efforts to
assist Seller in obtaining all
37
consents required under the Assumed Contracts as a result of this Agreement
and the transactions contemplated hereby.
Section 7.4. Public Announcements. Each party hereto will agree in advance
prior to the issuance by either of any press release or the making of any public
statement (including, without limitation, statements to Employees, customers and
suppliers) with respect to this Agreement and the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed. In the event that either party is
required to issue a press release or make such a public statement by law, it
will notify the other party of the contents thereof in advance (at least two
days to the extent practicable) of the issuance or making thereof and will
reasonably consider any comments received thereon.
Section 7.5. Schedules. Seller shall have the continuing obligation to
promptly supplement or amend the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date hereof,
would have been required to be set forth or described in the Schedules. No
supplement or amendment of the Schedules made pursuant to this Section shall be
deemed to cure any breach of, affect or otherwise diminish any representation or
warranty made in this Agreement unless Purchaser specifically agrees thereto in
writing. Notwithstanding anything in this Section 7.5 to the contrary, Purchaser
shall have the right, in accordance with Section 10.1 hereof, to terminate this
Agreement in the event that any amendment or supplement to any Schedule in
accordance with this Section 7.5 shall, individually or in the aggregate with
other amendments or supplements to the Schedules, constitute a material adverse
change in the condition or operations of the Assets or the Business after the
date hereof.
Section 7.6. Notice of Developments. Each of Purchaser and Seller shall
give prompt written notice to the other of any material adverse development
causing a breach of any of its own representations and warranties in Articles V
or VI above. No disclosure by any party pursuant to this Section 7.6., however,
shall be deemed to amend or supplement any Schedule or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant.
Section 7.7. Updated Financial Statements. As soon as available and in any
event within 30 days after the end of each month prior to the Closing Date,
commencing with October 31, 1996, Seller shall deliver to Purchaser a balance
sheet and related statements of operations and cash flows of Seller. All such
financial statements shall be covered by and conform to the representations and
warranties set forth in Section 5.8 hereof and shall be included in the term
"Financial Statements" for purposes of this Agreement.
Section 7.8. No Shopping. (a) From and after the date hereof until the
earlier of (i) November 30, 1996 or (ii) termination of this Agreement, without
the express written consent of Purchaser, Seller shall not, directly or
indirectly, (i) solicit,
38
initiate discussions or engage in negotiations with any person (whether or not
such negotiations are initiated by Seller), other than Purchaser, relating to
the possible acquisition, whether by way of merger, reorganization, purchase of
capital stock, purchase of assets or otherwise of a majority interest in the
Business or the Assets (an "Acquisition Transaction"), (ii) provide information
with respect to the Business or any Asset to any person, other than Purchaser,
in connection with a possible Acquisition Transaction or (iii) enter into a
transaction with any person, other than Purchaser, concerning a possible
Acquisition Transaction.
(b) The parties hereto recognize and acknowledge that a breach by
Seller of this Section 7.8 will cause irreparable and material loss and damage
to Purchaser as to which it will not have an adequate remedy at law or in
damages. Accordingly, each party acknowledges and agrees that the issuance of an
injunction or other equitable remedy is an appropriate remedy for any such
breach. In addition, in the event of a breach of the foregoing which results in
the consummation of an Acquisition Transaction, Seller shall promptly pay to
Purchaser a breakup fee of $150,000.
Section 7.9. Rally Buildings. On or before the Closing Date, Seller
shall remove the Rally Buildings from the Real Property or Rally's Hamburgers,
Inc. shall have entered into an agreement with Purchaser, reasonably
satisfactory to Purchaser, regarding the continued storage of the Rally
Buildings on the Real Property.
VIII. POST-CLOSING MATTERS
Section 8.1. Hiring of Employees. As of the Closing Date, Purchaser shall
offer employment to, and Seller shall use its reasonable best efforts to assist
Purchaser in employing as new employees of Purchaser, all persons presently
engaged in the Business who are employed by Seller (the "Employees") as of the
Closing Date, on terms and conditions not substantially less favorable in
aggregate than those on which such Employees were employed by Seller immediately
prior to the Closing Date. Seller shall assign to Purchaser, and Purchaser shall
assume, effective as of the Closing Date, those employment agreements listed on
Schedule 5.17 that Seller has with any of the Employees and that Purchaser has
designated as Assumed Contracts. Nothing herein shall obligate Purchaser to
retain in its employ from and after the Closing any Employee who accepts
Purchaser's offer of employment, except to the extent of any such employment
agreements. From and after the date hereof until the Closing, Seller shall
continue to pay in the ordinary course of business the salaries and wages and
provide the same benefits to its Employees. Notwithstanding anything in this
Section 8.1 to the contrary, Purchaser shall not be obligated to offer
employment to any Employee, including any Employee who is party to an employment
agreement listed on Schedule 5.17, designated by Purchaser to Seller in writing
at least three business days prior to the Closing Date.
39
Section 8.2. Use of Name. From and after the Closing Date, Seller will
sign such consents and take such other action as Purchaser shall reasonably
request in order to permit Purchaser to use the names "American Modular
Technologies," "▇▇▇▇▇▇ Corporation" and variants thereof.
Section 8.3. Non-Competition/Non-Solicitation. Seller agrees that it will
not, for a period of three (3)Eyears from the Closing Date, directly or
indirectly, (i)Eown or operate any person, firm, corporation, business or other
organization or enterprise engaged, directly or indirectly, primarily in the
construction of modular buildings, (ii)Esolicit for employment any employee of
Purchaser, or (iii)Einterfere with, disrupt or attempt to disrupt the
relationship between the Purchaser and any of its respective licensors,
licensees, customers or suppliers with respect to the Business. Seller expressly
waives any right to assert inadequacy of consideration as a defense to
enforcement of the non-competition provisions of this SectionE8.3 should such
enforcement ever become necessary. Seller acknowledges that a remedy at law for
any breach or attempted breach of this Section 8.3 will be inadequate and
further agrees that any breach of this Section 8.3 will result in irreparable
harm to the business of Purchaser; and Seller covenants and agrees not to oppose
any demand for specific performance and injunctive and other equitable relief in
case of any such breach or attempted breach. Whenever possible, each provision
of this Section 8.3 shall be interpreted in such manner as to be effective and
valid under applicable law but if any provision of this Section 8.3 shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Section 8.3. If any provision of this Section 8.3 shall, for any reason, be
judged by any court of competent jurisdiction to be invalid or unenforceable,
such judgment shall not affect, impair or invalidate the remainder of this
Section 8.3 but shall be confined in its operation to the provision of this
Section 8.3 directly involved in the controversy in which such judgment shall
have been rendered. In the event that the provisions of this Section 8.3 should
ever be deemed to exceed the time or geographic limitations permitted by the
applicable laws, then such provision shall be reformed to the maximum time or
geographic limitations permitted by applicable law.
Section 8.4. Subrogation of Purchaser. In the event Purchaser shall become
liable for or suffer any damage with respect to any matter occurring on or
before the Closing Date which was covered by insurance maintained by Seller on
or prior to the Closing Date, Seller agrees that Purchaser shall be and hereby
is, to the extent permitted under such policies, subrogated to any rights of
Seller under such insurance coverage, and, in addition, Seller agrees to
promptly remit to Purchaser any insurance proceeds which they may receive on
account of any such liability or damage.
Section 8.5. Payments Received. Except as set forth herein, Seller and
Purchaser each agree that after the Closing they will hold and will promptly
transfer and deliver to the other, from time to time as and when received by
them, any cash, checks with appropriate endorsements (using their best efforts
not to convert such checks into cash), or other property that they may receive
on or after the Closing which
40
properly belongs to the other party, including without limitation any insurance
proceeds, and will account to the other for all such receipts. Notwithstanding
anything herein to the contrary and without limiting the foregoing, effective
upon the Closing, Seller hereby constitutes and appoints Purchaser, its
successors and assigns, the true and lawful attorney of Seller with full power
of substitution, in the name of Purchaser, or the name of Seller, on behalf of
and for the benefit of Purchaser, to collect, at Seller's expense, (i) all items
being transferred, conveyed and assigned to Purchaser as provided herein, and
(ii) all Accounts Receivable, to endorse, without recourse, checks, notes and
other instruments in the name of Seller, to institute and prosecute, at Seller's
expense, all proceedings which Purchaser may deem proper in order to collect,
assert or enforce any claim, right or title of any kind in or to the Assets and
the Accounts Receivable, although Purchaser shall have no obligation to do so,
to defend and compromise any and all actions, suits or proceedings in respect of
any of the Assets and the Accounts Receivable, and to do all such acts and
things in relation thereto as Purchaser may deem advisable. Seller agrees that
the foregoing powers are coupled with an interest and shall be irrevocable by
Seller, directly or indirectly, whether by the dissolution of Seller or in any
manner or for any reason.
Section 8.6. Collection of Accounts Receivable/Payment of Trade Payables.
Seller hereby constitutes and appoints Purchaser to collect the Accounts
Receivable and to use the proceeds thereof to pay the Trade Payables set forth
on Schedule 8.6. (the "Specified Trade Payables"). Any direct expenses incurred
by Purchaser which have been approved in advance by Seller shall be reimbursed
by Seller. All funds received by Purchaser or Seller in respect of the Accounts
Receivable shall immediately be transferred to the Account. From time to time
Purchaser shall use the proceeds from the Accounts Receivable to pay the
Specified Trade Payables. Purchaser shall, in collecting the Accounts
Receivable, use the same methods it uses to collect its own receivables. Seller
hereby agrees not to take any action to collect any Accounts Receivable without
the prior written consent of Purchaser. Following payment in full of the
Specified Trade Payables, Purchaser shall promptly deliver to Seller any
proceeds from the collection of Accounts Receivable.
Section 8.7. Payment of Warranty Liabilities. Purchaser shall
fulfill each Warranty Liability and be reimbursed from the Warranty Deposit as
follows:
(i) Purchaser shall use reasonable efforts (which shall not
require litigation) to first collect any amounts due under
warranties from third parties, provided, however, that
such amounts are collected by December 31, 1997; and
(ii) Purchaser shall then be entitled to reimbursement from the
Warranty Deposit at a rate equal Purchaser's cost of
repair plus 10%, less any amounts collected from third
parties.
If any portion of the Warranty Deposit shall remain on December 31, 1997 then
such portion of the Warranty Deposit shall be paid to Seller with interest
earned thereon on
41
such date, provided, however, that Purchaser shall be entitled to retain in the
Account any outstanding claims against the Warranty Deposit on such date. In all
instances, funds may only be disbursed from the Warranty Deposit upon the
signature of one each of the Seller's Representatives and the Purchaser's
Representatives. Purchaser's claims for reimbursement from the Warranty Deposit
shall not be disputed by Seller unless Purchaser does not act in good faith. For
purposes hereof, the "Seller Representatives" shall be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the "Purchaser's Representatives" shall be ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇. or R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
Section 8.8. Payment of Liabilities. Following the Closing Date each of
Purchaser and Seller agrees to discharge in accordance with their terms the
Assumed Liabilities and the Excluded Liabilities, respectively.
Section 8.9. Sharing of Data. Purchaser shall have the right following the
Closing Date to have reasonable access to those corporate minute books, stock
books, tax returns and other corporate records and files of Seller that are
retained by Seller pursuant to the terms of this Agreement to the extent any of
the foregoing relates to the Business, is necessary in connection with the
conduct of the Business or is otherwise needed by Purchaser in order to comply
with its obligations under applicable securities, tax, environmental, employment
or other laws and regulations. Seller shall have the right following the Closing
Date to have reasonable access to those documents and records included in the
Assets to the extent any such documents or records are needed by Seller in order
to comply with its obligations under applicable securities, tax, environmental,
employment or other laws and regulations. Seller, its insurers and their
respective attorneys shall have the right following the Closing Date to have
reasonable access to, and upon request, Purchaser shall provide Seller with
copies of, medical records necessary to defend any litigation to which Seller
may become a party.
Section 8.10. Change in Name. Seller shall have delivered to Purchaser
prior to December 6, 1996 (i)Ea certified copy of a Certificate of Amendment to
the Certificate of Incorporation or Certificate of Formation, as the case may
be, of each of ▇▇▇▇▇▇ Corporation and Seller and such other appropriate
certifications, pursuant to which Seller has changed the name ▇▇▇▇▇▇ Corporation
and its name to another name bearing no similarity to the name ▇▇▇▇▇▇
Corporation and "American Modular Technologies" and (ii)Ewritten evidence of
Seller's abandonment of any similar assumed name(s).
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IX. INDEMNIFICATION
Section 9.1. Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive the
Closing and shall remain in full force and effect until March 31, 1998,
regardless of any investigation made by Purchaser or Seller or on their
respective behalf, except as to any matters with respect to which a bona fide
written claim shall have been made or an action at law or in equity shall have
commenced before such date, in which event survival shall continue (but only
with respect to, and to the extent of, such claim) until the final resolution of
such claim or action, including all applicable periods for appeal.
Section 9.2. Seller's Indemnity. Subject to the limitations set forth in
Section 9.4 hereof, Seller shall indemnify and hold harmless Purchaser and its
successors and assigns at all times after the Closing Date against and in
respect of:
(a) any damage, loss, cost, expense or liability (including
reasonable attorneys' fees) resulting to Purchaser from any false,
misleading or inaccurate representation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of Seller under
this Agreement or from any misrepresentation in or any omission from any
certificate, list, schedule or other instrument to be furnished to
Purchaser hereunder;
(b) all liabilities and obligations of Seller (other than the
Assumed Liabilities) of any kind or nature whatsoever, whether accrued,
absolute, fixed, contingent, known or unknown, including without
limitation the Excluded Liabilities;
(c) any and all liabilities arising out of or in connection with (i)
any violation of Environmental Laws existing on or in respect of the Real
Property on or prior to the Closing Date; (ii)Ethe operation or ownership
of the Business on or before the Closing Date; (iii) the handling,
storage, treatment or disposal of any Hazardous Materials generated by the
Business on or prior to the Closing Date; or (iv)Eany breach by Seller of
any representation or warranty contained in SectionE5.7 hereof;
(d) any loss, damage, cost or penalty incurred by Purchaser as a
result of non-compliance by Seller with any applicable bulk transfer or
similar law or by virtue of common law, statute or regulation imposing or
attempting to impose transferee liability on Purchaser other than with
respect to the Assumed Liabilities; and
(e) all claims, actions, suits, proceedings, demands, assessments,
judgments, costs and expenses incident to any of the foregoing.
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This indemnity agreement in this Section 9.2 shall be in addition to any
liability which Seller may incur to Purchaser and shall not foreclose any other
rights or remedies Purchaser may have to enforce the provisions of this
Agreement.
Section 9.3. Purchaser's Indemnity. Subject to the limitations set forth
in Section 9.4 hereof, Purchaser shall indemnify and hold harmless Seller and
its successors and assigns at all times after the Closing Date against and in
respect of:
(a) any damage, loss, cost, expense or liability (including
reasonable attorneys' fees) resulting to Seller from any false, misleading
or inaccurate representation, breach of warranty or nonfulfillment of any
agreement or covenant on the part of Purchaser under this Agreement or
from any misrepresentation in or any omission from any certificate, list,
schedule or other instrument to be furnished to Seller hereunder;
(b) all Assumed Liabilities;
(c) any liability or obligation arising out of the operation by
Purchaser of the Assets following the Closing Date; and
(d) all claims, actions, suits, proceedings, demands, assessments,
judgments, costs and expenses incident to any of the foregoing.
This indemnity agreement in this Section 9.3 shall be in addition to any
liability which Purchaser may incur to Seller and shall not foreclose any other
rights or remedies Seller may have to enforce the provisions of this Agreement.
Section 9.4. Limitations. Notwithstanding anything to the contrary
contained herein, no Indemnified Party shall be entitled to indemnification from
an Indemnifying Party for a breach of any representation or warranty until the
aggregate losses suffered by such Indemnified Party and for which
indemnification is available hereunder exceeds $50,000, whereupon the
Indemnified Party shall be entitled to claim indemnification for all losses
suffered by such Indemnified Party and for which indemnification is available
hereunder.
Section 9.5. Notice and Defense of Claims. Each party entitled to
indemnification under this ArticleEIX (the "Indemnified Party") shall give
notice to the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume, at the Indemnifying Party's expense, the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
44
Indemnifying Party of its obligations under this Article IX. The Indemnifying
Party, in the defense of any such claim or litigation, shall not, except with
the consent of the Indemnified Party, consent to entry of any judgment or entry
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to the Indemnified Party of a release from
all liability in respect to such claim or litigation. The Indemnified Party
shall furnish such information regarding itself or the claim in question as the
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with defense of such claim and litigation resulting
therefrom.
Section 9.6. Payment/Reimbursement. At the time the amount of any
liability on the part of the Indemnifying Party under this ArticleEIX is
determined (which in the case of payment to third persons shall be the earlier
of (i)Ethe date of such payments or (ii)Ethe date that a court of competent
jurisdiction shall enter a final judgment, order or decree (after exhaustion of
appeal rights) establishing such liability) (such loss or amount being
hereinafter referred to as the "Indemnity Claim"), the Indemnifying Party shall
forthwith, upon notice from the Indemnified Party, pay to the Indemnified Party
the amount of the Indemnity Claim. If such amount is not paid forthwith, then
the Indemnified Party may, at its option, take legal action against the
Indemnifying Party for reimbursement in the amount of its Indemnity Claim. For
purposes hereof the Indemnity Claim shall include the amounts so paid, or
determined to be owing, by the Indemnified Party together with costs and
reasonable attorney's fees associated with collecting such Indemnity Claim and
interest on the foregoing items at the Prime Rate (as defined in the next
paragraph) from the date the Indemnity Claim is due from the Indemnifying Party
to the Indemnified Party as hereinabove provided, until the Indemnity Claim
shall be paid.
In addition to its other obligations under this Section 9.6, the
Indemnifying Party agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding for which
indemnification for attorney's fees and expenses may be required pursuant to
this Article IX, it will reimburse the Indemnified Party on a monthly basis for
all reasonable legal fees or other out-of-pocket expenses reasonably incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Indemnifying Party's obligation to indemnify the Indemnifying Party for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Indemnified
Party shall promptly return it to the Indemnifying Party, together with interest
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by
Citibank, N.A. (the "Prime Rate"). Any such interim reimbursement payments which
are not made to the Indemnified Party within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.
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X. TERMINATION
Section 10.1. Termination Events. Subject to the provisions of Section
10.2, this Agreement may, by written notice given at or prior to the Closing in
the manner hereinafter provided, be terminated and abandoned:
(a) By either Seller or Purchaser if a material default or breach
shall be made by the other party with respect to the due and timely performance
of any of its covenants and agreements contained herein, or with respect to the
due compliance with any of the representations and warranties contained in
Article V or VI, as the case may be, and such default cannot be cured and has
not been waived;
(b) By written mutual consent of Seller and Purchaser;
(c) By either Seller or Purchaser if the Closing shall not have
occurred, other than through failure of such party to fulfill its obligations
hereunder, on or before November 30, 1996 or such later date as may be agreed
upon by the parties;
(d) By Purchaser, if the conditions set forth in Article III hereof
shall not have been met (or shall not, in the reasonable judgment of Purchaser,
be capable of being met), and Seller, if the conditions set forth in Article IV
hereof shall not have been met (or shall not, in the reasonable judgment of
Seller, be capable of being met), in each case by November 30, 1996;
(e) By Purchaser if (i) Seller gives notice to Purchaser that it
will not or cannot remove any Title Exception and (ii) within ten (10) business
days after the date such notice is given Purchaser does not waive the
requirement that Seller remove such Title Exception; or
(f) By Purchaser if Seller amends or supplements any Schedule hereto
in accordance with Section 7.5 hereof and such amendment or supplement
constitutes, individually or in the aggregate with other amendments or
supplements to the Schedules, a material adverse change in the condition or
operations of the Assets or the Business after the date hereof.
Section 10.2. Effect of Termination. In the event this Agreement is
terminated pursuant to Section 10.1, all further obligations of the parties
hereunder shall terminate and no party shall have any right against the other
party hereto, except as set forth in this Section 10.2 and in Sections 3.13, 7.8
and 7.9, and each party shall bear its own costs and expenses, except that if
this Agreement is so terminated by one party because one or more of the
conditions to such party's obligations hereunder is not satisfied as a result of
the other party's failure to comply with its obligations under this Agreement,
it is expressly agreed and understood that the terminating party's right to
pursue all legal remedies for breach of contract or otherwise, including,
without limitation, damages relating thereto, shall survive such termination
unimpaired.
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XI. MISCELLANEOUS
Section 11.1. Expenses. Except as provided in Section 10.2, each party to
this Agreement shall pay its own costs and expenses (including all legal and
accounting fees incurred by it) relating to this Agreement, the negotiations
leading up to this Agreement and the transactions contemplated by this
Agreement, whether or not the transactions herein contemplated shall be
consummated.
Section 11.2. Risk of Loss. The risk of loss or damage to any of the
Assets, transfer of which is contemplated hereby, shall remain with Seller until
the Closing and the Seller shall maintain its insurance policies covering the
Assets through the Closing. With respect to the Assets:
(a) If, prior to the Closing, all or any part of the Assets are destroyed
or damaged by fire or the elements or by any other cause, Seller shall within
ten (10) days provide written notice thereof to Purchaser and shall also provide
Purchaser, together with such notice, copies of all insurance then in force
relating to such Assets, whereupon Purchaser may, by written notice to Seller
within twenty (20) days after receipt of notice of the occurrence, elect in
writing not to purchase such Assets if such damage exceeds $50,000 and if Seller
does not agree to repair, restore and replace such Assets to Purchaser's
reasonable satisfaction and in compliance with all state licensing requirements
and Laws within 60 days of the notice of the casualty delivered to Purchaser.
Purchaser's election to so terminate may be exercised, however, if after Seller
agrees to so repair, restore and replace, Seller fails to effect such repair,
restoration and replacement within such 60 day period. Upon such election, this
Agreement shall wholly cease and terminate. If all or any part of the Assets are
so destroyed and Seller has not made the required repairs or restoration but
this Agreement is not so terminated by Purchaser, this Agreement shall not be
affected, but Seller, at the Closing, shall assign, transfer and set over to
Purchaser all of Seller's right, title and interest in and to the policies of
insurance insuring against the loss and Seller's interest in sums payable
thereunder and Seller shall pay to Purchaser the amount of any deductibles under
such insurance policies and any payments theretofore made on account of the
destruction or damage.
(b) In the event of the institution of any proceeding involving the
proposed taking by eminent domain or a taking by eminent domain of all or any
portion of the Real Property, which Purchaser, in its reasonable discretion
deems relevant or which would materially alter the grade, or access to any
street or would, in the reasonable judgment of Purchaser, otherwise injure,
damage, or decrease the value of the Real Property or adversely affect the
ability of Purchaser to conduct the business contemplated by it following the
Closing, Purchaser shall have the right and option to elect to cancel and
terminate this Agreement by giving Seller notice to such effect within thirty
(30) days after its receipt of written notice of any such occurrence, whereupon
this Agreement shall be deemed to be terminated. Seller shall within ten (10)
days furnish Purchaser with written notice of any such occurrence and all
available
47
data related thereto. Should Purchaser so terminate this Agreement, this
Agreement shall cease and terminate. If Purchaser does not so terminate this
Agreement, Purchaser shall accept conveyance of the Real Property subject to
such proceeding or without the portion of the Real Property taken, and Seller
shall thereupon, at the Closing, assign and transfer to Purchaser all of the
right, title and interest of Seller, as owner of the Real Property, in and to
such proceeding and the proceeds of the award to be made in such proceeding, and
turn over to Purchaser the proceeds of any award (or payment made pending the
making of the award) already received by Seller.
Section 11.3. Brokers' and Finders' Fees. Seller shall indemnify and hold
harmless Purchaser against any and all claims, losses, liabilities and expenses
which may be asserted against or incurred by Purchaser as a result of Seller's
dealings, arrangements or agreements with any Person who may be entitled to any
brokerage or finder's fee or other commission in respect of the transactions
contemplated hereby. Purchaser shall indemnify and hold harmless Seller against
any and all claims, losses, liabilities and expenses which may be asserted
against or incurred by Seller as a result of Purchaser's dealings, arrangements
or agreements with any Person who may be entitled to any brokerage or finder's
fee or other commission in respect of the transaction contemplated hereby.
Section 11.4. Amendment. This Agreement shall not be amended or
modified except by a writing duly executed by Seller and Purchaser.
Section 11.5. Entire Agreement; Assignment. This Agreement, including the
Exhibits and Schedules hereto and the other instruments, agreements and
documents delivered pursuant to this Agreement contain all of the terms,
conditions and representations and warranties agreed upon by the parties
relating to the subject matter of this Agreement and supersedes all prior
agreements, negotiations, correspondence, undertakings and communications of the
parties, oral or written, respecting such subject matter including, without
limitation, that certain letter agreement, dated September 19, 1996, between
American Building Company, parent company of the Purchaser, and Seller. This
Agreement and all of the provisions hereof will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Neither this Agreement nor any of the rights, interests or obligations
of any party hereunder may be assigned by such party without the prior written
consent of the other party hereto; provided, however, that Purchaser may assign
its rights, interests and obligations hereunder to any Affiliate of Purchaser,
but no such assignment shall relieve Purchaser of its obligations hereunder if
such assignee does not perform such obligations.
Section 11.6. Headings. The headings contained in this Agreement are
intended solely for convenience and shall not affect the rights of the
parties to this Agreement.
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Section 11.7. Notices. All notices, requests, demands and other
communications made in connection with this Agreement shall be in writing and
shall be deemed to have been duly given (a) on the date of delivery, if
delivered to the persons identified below, (b) seven calendar days after mailing
if mailed, with proper postage, by certified or registered mail, return receipt
requested, (c) on the date of receipt if sent by telex or telecopy, and
confirmed in writing in the manner set forth in (b) on or before the next day
after the sending of the telex or telecopy, or (d) one business day after
delivered to a nationally recognized overnight courier service marked for
overnight delivery, in each case addressed as follows:
IF TO SELLER: American Modular Technologies, LLC
c/o ▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
2200 Allianz Financial Center
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
IF TO PURCHASER: AMT/▇▇▇▇▇▇ Corporation
c/o American Buildings Company
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO: Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Such addresses and numbers may be changed, from time to time, by means of a
notice given in the manner provided in this Section.
49
Section 11.8. Severability. If any provision of this Agreement is held to
be unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to the
extent possible. In any event, all other provisions of this Agreement shall be
deemed valid and enforceable to the full extent possible.
Section 11.9. Waiver. Waiver of any term or condition of this Agreement by
any party shall only be effective if in writing and shall not be construed as a
waiver of any subsequent breach or failure of the same term or condition, or a
waiver of any other term or condition of this Agreement.
Section 11.10. Counterparts. This Agreement may be signed in two or more
counterparts with the same effect as if the signatures to each counterpart were
upon a single instrument, and all such counterparts together shall be deemed an
original of this Agreement.
Section 11.11. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Alabama.
Section 11.12. Third Parties. Except as specifically set forth or referred
to herein, nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any person other than the parties hereto and their
successors or assigns any rights or remedies under or by reason of this
Agreement.
[Signature Page follows]
50
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
of the date set forth above.
PURCHASER: AMT/▇▇▇▇▇▇ Corporation
By:_____________________________
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
SELLER: AMERICAN MODULAR TECHNOLOGIES, LLC
By:______________________________
Name:____________________________
Title:___________________________
▇▇▇▇▇▇ CORPORATION
By:______________________________
Name:____________________________
Title:___________________________
51